Deception in Share Purchase Agreement

Facts

[D.] Holding AG, headquartered in Zug, is the parent company of [E. AG] . On 22 June 2001, [C.] (Plaintiff) and [A.] (Defendant, Appellant) concluded a purchase agreement for 25 bearer shares of [D.] Holding AG. The Defendant undertook to sell these shares to the Plaintiff for the price of CHF 50,210,000.--. On 12 July 2001, the parties concluded a second purchase agreement for the same shares, with the purchase price set at CHF 43,831,702.--. The Defendant claimed that he had invented a highly effective solar cell with an immensely high market potential. The Plaintiff then transferred CHF 38,895,000.-- and assigned properties worth CHF 11,315,000.-- to the Defendant. The Plaintiff later challenged the share purchase agreement of 12 July 2001, alleging that the Defendant had deceived her about the existence and potential of the alleged solar cell. The Cantonal Court of Zug and the High Court of the Canton of Zug upheld the claim and declared the share purchase agreement invalid.

Considerations

The Federal Court confirmed the decisions of the lower instances. It held that the Defendant had intentionally deceived the Plaintiff with his boastful solar cell project. The lower instances…