At the end of July, the Court of Appeal handed down a judgment against Carlos Ortiz-Patino on his appeal from a High Court judgment in 2023 rejecting his claim to share in the profits from the sale of the Valderrama golf course in Spain. 

Carlos Ortiz-Patino’s father, Jaime Ortiz-Patino, was the founder of the Valderrama golf club, as well as an art collector and president of the World Bridge Federation. Among other achievements, he assembled a collection of golf art and memorabilia described as “the world’s most important” when it was auctioned by Christies on 30 May 2024 (Christie’s Auction of Jaime Ortiz-Patiño Collection – The Society of Hickory Golfers).

In 2012, Mr Ortiz-Patino senior had sold two companies which owned the golf course and nearby land in Spain to an investment fund (MGI Golf and Leisure Opportunities Fund Limited), principally to enable him to repay a bank debt on which he had defaulted. In addition to repaying his bank debt, the fund agreed to allow Jaime Ortiz-Patino (and, after his death, his son Carlos Ortiz-Patino) to share in profits from the later sale of the golf course and other land. 

The trouble was that, in a change of plan, the fund decided to sell on the companies it had bought from Jaime Ortiz-Patino, rather than the real estate they (or rather, their subsidiaries) owned. While the profit-sharing agreement was complex and not entirely clear, in 2023 the High Court ruled that the relevant profit-sharing clauses did not apply to a scenario where the shares in the real estate companies were sold rather than the land itself. That was despite arguments that this made the deal virtually worthless for Mr Ortiz-Patino, allowing the fund easily to circumvent the profit-sharing provisions. A month ago, the Court of Appeal upheld the High Court’s decision.

The case illustrates, once more, the conservative approach of the English courts to contractual interpretation. Rather than giving weight to whether it would be “fair” to imply a term or what interpretation would be “fair” - which can, paradoxically, lead to arbitrary decisions - the judge will not only start with the language of the contract but will, if at all possible, remain within its limits. Harsh as that may seem, it respects the parties’ autonomy and ensures greater predictability in business disputes, making the English courts an ever-popular venue for their resolution.