The Netherlands Commercial Court has ruled that Sega Sammy can’t back out of its €130 million ($148 million) deal to buy Dutch casino software maker Stakelogic.
In a decisive ruling, the Amsterdam District Court told Sega Sammy Creation Inc. and its parent company, Sega Sammy Holdings Inc., that they need to follow through on the agreement they signed in July 2024. The deal, a Share Purchase Agreement (SPA), was made with a group of sellers known as “Triple Bells,” which includes companies based in the Netherlands, Cyprus, the US, and the United Kingdom.
Central to the dispute was whether the conditions for the deal, particularly the required regulatory approvals, had been met. Sega Sammy said it had not, but the court strongly disagreed.
The court stated: “The purpose of including conditions precedent in a share purchase agreement is to safeguard that the most fundamental conditions for the transaction have been satisfied before the transaction is completed, and to have deal certainty if and when these conditions have been satisfied.”
Sega Sammy allegations against Triple Bells and Stakelogic
Sega Sammy claimed that Triple Bells had breached regulatory laws by allegedly letting Stakelogic’s games be accessed from countries where online gambling is banned, like Japan and Türkiye. But the court wasn’t convinced. It rejected that argument, saying that figuring out whether Stakelogic broke any regulatory rules would “require an in-depth investigation into the Target’s actions and activities in all relevant jurisdictions, which is incompatible with this purpose.”
The Japanese conglomerate also argued that it should be able to back out of the deal because Triple Bells had allegedly broken some pre-completion promises, like making staffing changes and entering a partnership with GAN Ltd. without getting the green light first. But the court wasn’t swayed. It pointed to Clause 19.9 of the SPA, which explicitly bars both “in-court and out-of-court rescission” of the agreement.
It stated: “The most obvious text-based meaning of this provision is that no rescission of the SPA is possible, either in-court or out-of-court.” It added that even if Triple Bells had breached certain obligations, “Sega Sammy must abide by its obligation under the SPA to complete the transaction. Any breaches can only be remedied by an action for damages.”
The court did recognize that under Dutch law, there are some rare situations where enforcing a waiver of rescission might be considered unfair, like if going through with the deal could lead to criminal charges or put Sega Sammy’s gaming licenses at serious risk.
But after reviewing the evidence, the court wasn’t convinced those risks were real. It pointed to a report from BDO that challenged Sega Sammy’s claim, showing there wasn’t enough proof that Stakelogic’s games could actually be played for real money in restricted markets like Japan or Türkiye. “The Court will therefore follow the BDO report where it confirms that geo-blocking for Japan was in place,” the judgment stated.
Dutch court imposes penalties
The court ultimately sided with Triple Bells on several key points. It then ordered Sega Sammy and its parent company to carry out all their obligations under the SPA which included transferring the shares, signing all necessary paperwork, and wiring the completion funds to the notary account within two weeks.
If they don’t follow through, each company faces a €10 million ($11.4 million) penalty.
Sega Sammy was also hit with legal costs of €14,200.50 ($16,152.90), as well as any post-judgment fees and interest. The court also made the ruling immediately enforceable, even if Sega Sammy decides to appeal.
As of now, Sega Sammy hasn’t said whether it plans to challenge the decision.
ReadWrite has reached out to Sega Sammy for comment.
Featured image: Sega Sammy / Canva
