The applicants, SpaceBridge, sought declarations that an indemnity claim made by the respondents, Baylin, under an asset purchase agreement (APA) and related escrow agreement was invalidly delivered, and for the return of $1,826,512 paid out of an escrow fund.
The core dispute revolved around the interpretation of contractual notice provisions, specifically whether delivery by registered mail was a permitted method under the Escrow Agreement, which had different notice modalities than the APA.
The court found that registered mail was not a valid mode of delivery under the Escrow Agreement, meaning Baylin's claim certificate was not properly delivered, and thus SpaceBridge's 30-day objection period never commenced.
Consequently, the payment from the escrow fund was improper, and Baylin was ordered to return the funds.
The court also dismissed Baylin's arguments regarding limitation periods and estoppel, but clarified that the ruling did not invalidate Baylin's underlying indemnity claim under the APA, which could still be pursued through litigation.