Litigation Archives - EURO LIT INSIGHTS

Contract Adjustment In The Event Of Inflation And Crises: When The World Is Upside Down, What Are The Implications For Ongoing Agreements?

The economic environment has changed dramatically in recent years. COVID-19, the war in Ukraine, geopolitical conflicts, supply chain disruptions, skyrocketing prices for raw materials and energy, and natural disasters all highlight the fragility of international supply relationships. But what does this mean in concrete terms for companies and their contractual arrangements? What happens if a contracting party is suddenly no longer able to deliver or if the agreed prices are no longer sufficient for economic viability?

In this post, we explore the legal options available under German law to adjust contracts in response to changing circumstances.

Interference with the Basis of the Agreement: When the Foundation Shifts

Under German law, a contracting party may demand an adjustment to the agreement if the circumstances that formed the basis of the contract change significantly after its conclusion, and continued adherence to the contract would be unreasonable for that party (so-called “interference with the basis of the agreement”, according to Section 313 (1) of the BGB, the German Civil Code). If a contractual adjustment is impossible or unreasonable for one party, it may even request rescission of the agreement by withdrawal or termination, as codified in the BGB.

However, such an adjustment or

Analysing the Case of Krishna Holdco Ltd v Gowrie Holdings Ltd: Insights into Litigation Privilege Executive Summary

Executive Summary

In a recent judgment, the High Court in Krishna Holdco Ltd v Gowrie Holdings Ltd [2025] EWHC 341 (Ch) has found that litigation privilege did apply to a valuation report prepared for the potential sale of a subsidiary company because that sale was driven by litigation – namely a dispute between two shareholders. The court’s decision underscores the intricacies associated with determining the dominant purpose of a document for the purposes of a claim to litigation privilege, and advocates for an approach which considers the wider context in which a document has been created.

Background

The dispute between Krishna Holdco Limited (Krishna) and Gowrie Holdings Limited (GHL) centers around unfair prejudice proceedings, with Krishna having previously secured a judgment requiring GHL to purchase Krishna’s shares in their jointly owned company, LBNS. The case involves multiple parties, including individual respondents and several corporate entities, with the litigation primarily focusing on the valuation of Krishna’s shares and the associated disclosure of documents.

The conflict goes back to early 2019, when tensions arose between Krishna and GHL over the management and financial stability of LBNS. A critical issue emerged regarding the potential withdrawal of banking facilities by HSBC, allegedly due to

Contract Adjustment In The Event Of Inflation And Crises: When The World Is Upside Down, What Are The Implications For Ongoing Agreements?

Analysing the Case of Krishna Holdco Ltd v Gowrie Holdings Ltd: Insights into Litigation Privilege Executive Summary

BLOG EDITORS

STAY CONNECTED

TOPICS

ARCHIVES

RECENT POSTS