'144. The main point of disagreement between the Parties is whether both contractual parties, thus including [Claimant], had the right to commence the exit procedure pursuant to Article 13.1.4 of the Joint Venture Agreements or whether such right was provided in the Agreements for the sole benefit of [Respondents].

2.1. Applicable principles of interpretation

145. The governing principle with respect to contract interpretation is spelled out in Article 1156 of the Belgian Civil Code, according to which:

On doit dans les conventions rechercher quelle a été la commune intention des parties contractantes, plutôt que de s'arrêter au sens littéral des termes.

Or in English:

In agreements, one should ascertain the common intention of the contracting parties rather than adhere to the literal meaning of the words.1

146. The Parties agree that the literal meaning of the words constitutes the starting point for the purpose of determining the content of the Parties' respective contractual obligations.2 As will appear from the analysis below, the Tribunal is of the opinion that, in the case at hand, the wording of the relevant provision is ambiguous with regard to the Parties' common intention as to which Party or Parties could trigger the relevant exit clause and therefore, the Parties' common intention should be ascertained by means of a broader inquiry than the literal reading of the text.3

147. The Parties disagree on which elements can be taken into account in order to determine the Parties' common intention on this matter.

- It is the Claimant's contention that the Tribunal can look to "extraneous elements […] that are not inherent and intrinsically present in the text already" only if the text is obscure … By obscure, the Claimant means wording that does not provide for a clear solution … Only then, according to the Claimant, can the Tribunal resort to such elements of interpretation as the negotiation history and trade usages.

- According to the Respondents, the purported distinction between internal and external elements on interpretation is "arbitrary" … The Tribunal should adopt a step-by-step analysis, along these lines: "looking at the contract in its entirety, and, if that is not enough, the history of the negotiations, and, again, if that is not sufficient, then you may want to turn to the usages" …

148. In the application of Article 1156 of the Belgian Civil Code, the Tribunal is free to consider whatever elements may be relevant to determine the real intent of the Parties.4 It will therefore examine, in turn, the text of Article 13.1.4, separately and within the broader framework of Article 13.1, and the Agreement in its entirety. It will then consider the business rationale, the negotiating history and the Parties' conduct under the Agreements.

2.2. Is the wording of Article 13.1.4 unambiguous?

149. The Parties disagree as to whether Article 13.1.4 is clear and unambiguous with respect to of the Parties' common intention as to which Party can commence the exit procedure.

150. In relevant part, Article 13.1.4 reads as follows:

The exit procedure may also be commenced if [Claimant's parent company] is no longer involved in [Claimant] in a similar way as at the time of the Closing or is no longer, directly or indirectly, the largest shareholder of [Claimant] or is no longer responsible for its management.

151. According to the Claimant, this wording is clear and does not require interpretation, since the normal reading of its plain text leads to the conclusion that either Party can commence the exit procedure. In this respect, the Claimant relies upon [a professor]'s expert evidence according to which:

the use of the passive opens this right to both parties, since it excludes neither of them from such a right. To deny this would be like to ignore the common sense of the words as they are grammatically articulated in Art. 13.1.4., on which both parties agreed.

152. The Claimant feels strengthened in its conclusion by the fact that, unlike Article 13.1.4, the three other triggering events set forth in Article 13.1, which are all structured in the same way, identify which of the Parties may commence the exit procedure:

13.1.1. […] the exit procedure may also be commenced at any time after the fifth anniversary of the Closing, by (i) [Claimant] … or (ii) [Respondent] if [exit event]

13.1.2. The exit procedure may also be commenced by [Respondent] within … following [exit event]

13.1.3. The exit procedure may also be commenced by the non-defaulting Party in the case of [exit event]

13.1.4. The exit procedure may also be commenced if [exit event] …

153. Thus, according to the Claimant, since Article 13.1.2 limits the right to commence the exit procedure to [Respondents] and Article 13.1.3 to the non-defaulting Party, the fact that Article 13.1.4 does not limit such right to any specified Party, means that either Party is entitled to exercise the right. According to the Claimant, this is the conclusion that results from the "normal reading of the text" …

154. For their part, the Respondents rely inter alia on [a professor]'s expert evidence to submit that the fact that Art. 13.1.4. does not specifically state which of the Parties may commence the exit procedure in the same way as Articles 13.1.1, 13.1.2 and 13.1.3 , is inconclusive as to who may initiate the procedure.

155. Furthermore, [the same professor] points out that, under the customary interpretation and operation of a change-of-control clause, as a rule, only the unchanged party is entitled to invoke the clause … 5 However, as pointed out by the Claimant and acknowledged by the Respondents at the hearing,… the language of Article 13.1.4 is far from that of a so-called boilerplate change-of-control clause. Article 13.1.4 is a tailor-made clause.

156. The Respondents have a point when they argue that "[Claimant] also appears to agree that the clause must be interpreted, given that it implies into Article 13.1.4 the words 'by any party, at any time' in order to explain who can exercise that clause"… Moreover, the fact that Claimant refers a contrario to Articles 13.1.1, 13.1.2 and 13.1.3 - which clearly provide who can commence the exit procedure - is in itself an indication that the clause requires interpretation. These arguments indeed rebut the Claimant's contention that the Respondents could have added the words "by [name of Respondent]" if they intended the meaning they claim today… In other words, if the Claimant wanted a bilateral exit right, it could have added wording to that effect.

157. The fact that Article 13.1.4 is drafted in the passive form does not allow to draw any definitive conclusion as to which Party or Parties is or are entitled to exercise the right set forth in the clause. As a matter of fact, the passive voice is also used in Articles 13.1.1, 13.1.2 and 13.1.3, where the intended beneficiary or beneficiaries of the exit rights are clearly spelled out.

158. Hence, the Tribunal cannot agree with the Claimant's contention that, because the plain meaning of Article 13.1.4 shows that the exit right is bilateral, the Respondents have the burden to prove a common intent to the effect that the exit right under Article 13.1.4 is unilateral and for the benefit of [Respondents] only.

159. Similarly, contrary to the Claimant's assertions at the hearing, the fact that the agreements were negotiated and reviewed with the assistance of counsel … does not mean that the Respondents need to meet a particularly high standard of proof in order to establish that the common intention of the Parties was for Article 13.1.4 to be unilateral.

160. As a consequence, it is this Tribunal's conclusion that the wording of Article 13.1.4 is not in and of itself conclusive for the purpose of determining the Parties' common intention as to which Party or Parties had the right to commence the exit procedure under said article.

161. Since it follows from the above reasoning that the wording of Article 13.1.4 is unclear as to the Parties' common intent regarding the beneficiary or beneficiaries of the exit right, the argument advanced by Claimant based on the risk that third parties would be misled by a "clear" text which is reduced or supplemented by contextual factors, is irrelevant in the case at hand. Moreover, the reasonable expectations of third parties are not recognized as a general principle of law ("algemeen rechtsbeginsel"/"principe général du droit") in the jurisprudence of the Belgian Supreme Court.6 The Tribunal has, nevertheless, considered the argument advanced by Claimant and is of the opinion that the alleged risk cannot influence its interpretation of the relevant contractual provision, in particular given the lack of clarity of the text.

162. The "four corners" clause contained in Article 17.6 of the Joint Venture Agreements does not imply that ambiguities or gaps in the Joint Venture Agreements should be resolved by a purely textual interpretation without taking into account external elements (such as the negotiating history).7 Therefore, the Tribunal cannot agree with the Claimant's argument that the four corners clause expresses the agreement of the Parties that their intent should be interpreted in accordance with the literal meaning of their written agreement.

2.3. What can be inferred from the contract in its entirety?

163. The Respondents strongly emphasize the fact that a central assumption underlying the Joint Venture Agreements was that, as a rule, the Claimant would acquire the Respondents' participation in the Joint Ventures only once the investment had stabilised or reached maturity. In [the words of one of the negotiators for Respondents]:

We intended from the beginning to have a minimum five-year hold. Our money and our investor's money was fully expected to be invested and exposed to the risks of the investment for at least five years and we wanted to get that exposure and get the returns from that exposure.

164. It is undisputed that the Parties anticipated that the properties would reach maturity within a period of approximately five years. The contractual time period after which [Claimant] can exit the Joint Venture Agreements coincides with that time horizon.

165. The Respondents accept the possibility that the investment might not reach maturity within this five-year period or might otherwise not achieve the anticipated return, recognizing that such risk is inherent in their investment in the joint venture … This risk was partially dealt with by a clause in Article 13.3.1 that gives [Respondents] the right to delay the exit if the fair market value price arrived at does not produce a minimum return.

166. It is clear from an analysis of the Agreements in their entirety that an early exit was considered by the Parties as an exceptional event. Exceptions should, in principle, be interpreted narrowly.8

167. In this context, [Respondents'] failure to seek the inclusion of a contractual mechanism ensuring a minimum return in the event of an early exit … is irrelevant, since it is undisputed that the contractual protection mechanism provided in the Agreements was precisely not meant to operate in case of early exit.

2.4 The business rationale

168. In substance, the Respondents deny that the Claimant's own change of control would give the Claimant a unilateral opportunity to terminate the joint ventures prior to the expiration of the five-year period:

no rational investor would put themselves in a position where, through no fault of their own, so to speak, they are kicked out of a relationship that they negotiated to be in. …

169. [Claimant]'s attempts to justify the bilateral interpretation of the change-of-control clause are not convincing. First of all, [Claimant] admits that it did not request reciprocal exit rights "with a very clear anticipated scenario in mind"… [Claimant]'s argument that it had considered the reciprocal exit right to be "the opposite of a 'poison pill' […] put[ting] the company in a better contractual position after a take-over and hence increas[e][ing] the liquidity of the shares for its shareholders" … is counter-intuitive and was not confirmed at the hearing … In similar vein, the Claimant's argument based on equal treatment … is not compelling because the Agreements contain several other provisions that do not offer equal treatment …

170. To the contrary, [Claimant's negotiator] observed that a bilateral change-of-control would be at odds with [Claimant]'s traditional position to resist acquisition by third parties:

If that was benefitting [Claimant] as well, that would not have been benefitting [Claimant's parent company], actually; it would have been benefitting potentially someone acquiring [Claimant's parent company]. It would have become a sweetener ( which, really, throughout the whole history of [Claimant] trying to build poison pills in the joint venture and so on, would not make sense. …

171. According to the Respondents, the absence of any credible commercial motive for [Claimant] to have a right to exit "contrast[s] with strong considerations motivating [Respondents'] request" …

172. As will be discussed in section 2.5 below when dealing with the negotiations, it is undisputed that the main factors motivating [Respondents'] request for a change-of-control clause were [Respondents'] desire to integrate and secure [Claimant]'s operational know-how in the joint ventures and the need for the investment to be in continued compliance with Shari'ah principles in case of change of control over [Claimant].

173. Since [Claimant] did not have similar concerns, one cannot seriously contest that the change-of-control clause was meant for the sole benefit of [Respondents], at least initially.

174. The negotiation history does not show that the Parties' intent subsequently changed towards a bilateral change of control clause. To the contrary, as will be discussed in the following section, the negotiations show that the change-of-control clause was inserted at the Respondents' request, which supports the present analysis on the business rationale.

2.5 What can be inferred from the history of the negotiations?

175. Until the last day of the evidentiary hearing, it appeared to be undisputed that the principle of the insertion of a change-of-control clause was agreed at a meeting between the negotiating teams which took place on or around 11 November 2002 … However, in his closing oral arguments, Counsel for the Claimant argued that there was no conclusive evidence on record to support the contention that a meeting between the negotiating teams of [Claimant] and [Respondents] actually took place on that date …

176. The Tribunal need not make a determination as to whether the meeting of 11 November 2002 actually took place, who attended that meeting if it took place, and what was effectively discussed or agreed on that occasion.

177. Indeed, [an email from Respondents' counsel] suffices to demonstrate that the request for a change-of-control clause came from [Respondents]. That e-mail also shows the reasons for such request. In its relevant part, it reads as follows:

Change of control - [Respondent] would like to see a mechanism which would enable it to have some flexibility to exit the joint venture in the event that [Claimant] is taken over or merges with another entity with which [Respondent] would find it inappropriate to continue in partnership. See new wording at Clause 13.1.4. (… emphasis added)

178. The persons involved in the negotiations all testified that it was clear to both Parties that [Respondents] sought protection against a change of control over [Claimant], because [Respondents] intended to enter into a joint venture with an organisation that had a proven track record in the … industry and also because it needed a possibility to exit the venture if [Claimant] were acquired by parties who were unacceptable for reasons related to compliance with Shari'ah principles.

179. [Respondents'] lead negotiators have testified that Article 13.1.4 was meant to provide an exit right for the benefit of [Respondents] only. [One of the Respondents' negotiators] also testified that he had no recollection of [Claimant] requesting that the exit right provided in Article 13.1.4 be exercisable by [Claimant] as well. He added that, had [Claimant] requested a right of exit on its own change of control, it would have been unacceptable to [Respondents] …

180. [One of Claimant's negotiators] testified that, in his recollection, Article 13.1.4 was intended to give an exit right only to [Respondents] and that there was no discussion between the Parties as to whether Article 13.1.4 would give [Claimant] an exit right … [The negotiator] stated at the hearing:

We, as such, did not care much about change of control … That was not an issue for us, as long as they were effectively living up to their funding obligations and did not have investors in the pool that would create an issue for us. …

181. Irrespective of the weight that the Tribunal is prepared to give to [the aforementioned negotiator]'s evidence given the fact that he testified against his former employer, the Tribunal cannot but note that his account of the relevant facts was credible and in any event more convincing than [another negotiator]'s testimony to the contrary.

182. In contrast, [the other negotiator]'s testimony that "[i]t was logical and consistent with the approach taken in the negotiations that both parties should be able to rely on the clause" did not withstand cross-examination … This statement is difficult to reconcile with the fact that the change-of-control clause was inserted upon the Respondents' request and that, as acknowledged by [the negotiator] himself …, change-of-control clauses are not bilateral in ordinary market practice.

183. [The above-mentioned negotiator]'s testimony even supports [Respondents'] position to the effect that the expressed common intent of the Parties was that Article 13.1.4 could only be relied on by [Respondents], when he said:

Somewhere down the line, clearly, in the language, we realised that both parties could profit from this clause, okay. Was it important for [Claimant], particularly? Do we have any scenario in mind that, hey, we need this, because this is going to happen? No. Did we see that it was passive? Yes. Did we want to give that away to [Respondents], saying, hey, it is passive, it should only be you. We did not do that, because why would you give it away if you had it? (…, emphasis added)

184. As a matter of fact, in this manner, [Claimant's negotiator] confirmed that the common intention of the Parties, as expressed and shared between them, was not that the exit right pursuant to Article 13.1.4 could also be exercised by [Claimant]. Thus, as [Respondents' counsel] observed in his closing address at the evidentiary hearing …:

The words "why should we give it away" were clearly referring to the fact that [Claimant's negotiator] had realised that the words were ambiguous and did not correspond with the common intention of the parties.

185. In light of the preceding considerations, the Tribunal cannot but conclude that the common intent of the Parties was not that Article 13.1.4 could be relied upon by both Parties but only by [Respondents].

186. The only element in the record that appears to challenge this conclusion relates to the Respondents' letter of 8 September 2006, in that it did not invoke the fact that Article 13.1.4 was for the sole benefit of [Respondents].

2.6. What can be inferred from the 8 September 2006 letter?

187. Despite the Respondents' contentions to the contrary,9 the Tribunal will consider the implications of the Respondents' letter of 8 September 2006 as it is generally accepted by the Belgian courts and scholars that the parties' actual conduct in the performance of a contract can be taken into account as an extrinsic element which may possibly shed light on the common intention of the parties.10

188. From a straightforward reading of the letter, it is plain that the Respondents did not put forward the unilateral character of the exit right when they objected to the Exit Notices … [Respondents' negotiator]'s contentions to the contrary were unpersuasive …

189. The Tribunal acknowledges that the 8 September 2006 letter raised doubts in its mind, inasmuch as it could be taken to reflect an interpretation of Article 13.1.4 by [Respondents] that contradicts the Respondents' present position.

190. This said, consistent with the principles of interpretation set out in the first section of this chapter (see above § 148), the Tribunal considers that the 8 September 2006 letter is only one of the elements that are relevant in order to determine the real intent of the Parties. When weighted against the other relevant elements, in particular the contract in its entirety (see above §§ 163 et seq.), business rationale of the transaction (see above §§ 168 et seq.), and the negotiation history (see above §§ 175 et seq.), the letter of 8 September 2006 appears as a less significant factor. As such, it is incapable of overriding the conclusions that emerge clearly from the other elements, when taken together.

191. Hence, the Tribunal concludes that despite the troubling wording of the 8 September 2006 letter, it is clear from a careful analysis of all the relevant elements on record that the common intent of the Parties was that Article 13.1.4 is for the sole benefit of [Respondents]. Because of the ambiguity in the wording of Article 13.1.4, the Tribunal is of the opinion that its interpretation of Article 13.1.4 does not go against but is indeed in line with the evidentiary value ("bewijskracht"/"foi due à l'acte") of the text of the Agreements.11

2.7 Objective interpretation

192. Since it has established the true common intent of the Parties, the Tribunal does not need to assess of the Respondents' alternative submission with respect to the "objective intent", to the effect that, when it ascertains the subjective intent under a contract, a court takes the perspective of a reasonable businessman in the same position as the parties and asks how that businessman would have understood the relevant provision.

193. For the sake of completeness, the Tribunal nevertheless wishes to mention that it would have reached the same conclusion had it adopted an objective interpretation. On its face, Article 13.1.4 is silent on the question of the party entitled to invoke the early exit right. Under an objective interpretation, the meaning to be ascribed to such silence would depend on normal expectations. In the present case, the normal expectations relevant here would be those of a reasonable businessman or M&A professional confronted with a change-of-control clause such as the one contained in Article 13.1.4 … In the eyes of such reasonable businessman or M&A professional, the standard meaning of a change-of-control clause is that it operates in a unilateral way; it gives the right to exit a contract only to the party that does not undergo the change of control.

194. The Claimant has not succeeded in convincing the Tribunal that a reasonable professional placed in the Parties' circumstances would have interpreted Article 13.1.4 otherwise. After all, if a reasonable professional would have intended to depart from such normal expectations, he ought to have said so and used express language to this effect.'

1
As translated by the Tribunal.

2
Cass. 24 March 1998, Arr. Cass. 1987-88, 972 and Cass., 10 January 1994, Arr. Cass. 1994, 16.

3
J. Kruithof, H. Bocken, F. Dely en B. De Temmerman, "Overzicht van rechtspraak (1981-1992) Verbintenissen", T.P.R. 1994, 449; P. Van Ommeslaghe, "Les obligations", RCJB, 1986, 171.

4
See e.g. A. Guilot, "Le cadre légal de l'interprétation des conventions" in Obligations. Commentaires pratiques, pp. 63 et seq., in particular § 3 under the heading "L'article 1156 du Code civil ou la prédominance de la volonté réelle".

5
[The professor]'s expert opinion comes to the following conclusion: "[f]rom our experience and from further research done when preparing this expert opinion, we must conclude that this is overwhelmingly (if not unanimously) the case in change-of-control clauses. Such clauses are there to give protection against such events; necessarily the remedies are made available only to the other party." ...

6
Cass. 26 May 2003, available at <www.cass.be> and A. Bossuyt, "Algemene rechtsbeginselen in de rechtspraak van het Hof van Cassatie" in TPR 2004, 1639.

7
H. Dubout, « Les clauses d'entire agreement (accord complet) dans les contrats internationnaux: intérêt et précautions d'utilisation", Cahiers juridiques et fiscaux de l'exportation, G.E.C.E., 1989, no.1, 197.

8
S. Stijns, Verbintenissenrecht, Brugge, Die Keure, 2005, 58.

9
Given the conclusion reached in this section, the Tribunal does not need to make a final ruling on the argument addressed by Respondents at the hearing that "[o]nly the intention of the parties at the time the agreement was concluded is relevant" ...

10
See e.g. Cass., 12 June 1986, Pas. 1986, I, 1254, and Cass., 10 November 1988, Pas. 1989, I, 259; H. De Page, Traité élémentaire de droit civil, Bruxelles, Bruylant, t. II (éd. 1964), pp. 557-558, n° 570, and P. Van Ommeslaghe, "Les obligations: Examen de jurisprudence (1974 à 1982)", R.C.J.B. 1986, p. 170, n° 75.

11
K. Wagner, Sancties in het burgerlijk procesrecht, Antwerpen-Apeldoorn, Maklu, 2007, 590.