The Bottom Line
- Contractual Liability Shields Are Powerful: A carefully worded Share Purchase Agreement (SPA) can protect sellers from post-deal claims, even when they possess potentially damaging information. Clauses that require proof of fraud or wilful misconduct set an extremely high bar for buyers.
- Proving Intent Is Crucial (and Difficult): A seller’s failure to disclose a known risk is not automatically fraud. The Amsterdam court ruled that the buyer must prove the seller consciously and deliberately concealed the information with the intent to deceive them at the time of the sale.
- “Forgetting” Can Be a Valid Defense: The court found it plausible that a risk identified years before a transaction could “fall off the radar” if it never materialized. This highlights a significant gap for buyers: what a seller once knew is different from what they intentionally conceal during the deal.
The Details
This case revolves around the acquisition of childcare operator MC Child Holding by Babilou Family Netherlands (BFNL). Post-acquisition, BFNL discovered that its primary brand, “BLOS,” infringed on the pre-existing trademark “BLOSSE,” forcing a costly company-wide rebranding. BFNL sued the sellers, arguing they had knowingly concealed a 2018 trademark search report—commissioned three years before the sale—which explicitly warned that the “BLOSSE” mark was a “fatal obstacle.” This report and internal discussions about the risk were never shared in the data room during due diligence.
The case hinged entirely on the sellers’ liability limitations in the Share Purchase Agreement (SPA). The standard warranty period for such claims had already expired. BFNL’s only recourse was to invoke a specific carve-out in the SPA that nullified these time limits in cases of fraud (bedrog), wilful misconduct, or intentional concealment (opzettelijke verzwijging). The buyer argued that knowingly withholding the “fatal obstacle” report clearly met this standard. The sellers countered that the issue had become a non-event and that they had simply forgotten about it.
The District Court of Amsterdam sided with the sellers, dismissing all claims. The court reasoned that while the sellers made a conscious business decision to accept the IP risk in 2018, their state of mind at the time of the 2021 sale was what mattered. The court found the sellers’ explanation credible: after successfully registering their “BLOS” trademark without opposition and operating for years without any complaints, the initial risk was no longer a live issue in their minds. The court concluded there was no evidence of a deliberate, conscious plan to deceive BFNL during the sale process. Critically, the court interpreted wilful misconduct as requiring actual intent, not just recklessness, and noted that the incriminating documents were found in an old email account, suggesting a lack of active concealment.
Source
Rechtbank Amsterdam
