Key takeaways
Commission claims
Brokers earn commission only for effective introductions resulting in a completed deal.
Binding agreement
Key terms must be agreed to avoid mere ‘agreement to agree’.
Unjust enrichment
Unjust enrichment may succeed where contract claims fail, but not always.
DMA Resources Limited -v- Brazilian Nickel Limited [2026] EWHC 833 (Ch)
The above was a claim for an introduction fee relating to an investment in a nickel mining project in Brazil. The contractual claim failed because the Court found that the parties had not entered into a binding agreement for the payment of an introduction fee with regard to this particular investor (there was no meeting of minds and, at its highest, the discussion was no more than an unenforceable “agreement to agree”). However, the introducer was entitled to claim a reasonable fee as a quantum meruit claim in unjust enrichment because it was the effective cause of the investment and the services were not intended to be gratuitous.
The case highlights the normal arrangement where brokers receive commission only if there is an effective introduction (i.e. the effective cause of an investment), calculated as a percentage of the sum invested. The commission is paid by the company seeking investment, although it is effectively funded out of the sums invested. That dynamic is equally familiar in other deal driven sectors, including shipping, shipbuilding and offshore/onshore EPC projects.
As this dispute shows, brokers and introducers should ensure that the terms of their agreement with a client are committed to writing and there is express provision for when and how much they should be paid.
For other contract formation issues, please see our related articles:
The background facts
The parties
DMA Resources Ltd (DMA) was a UK investment introducer for energy and mining projects in South America. Its two directors and shareholders were Mr Read and Mr Nwankwo, who previously operated a similar business through a Brazilian company, DMA Brazil.
Brazilian Nickel Ltd (BRN), a London-based mining company, operated a nickel mining project in Brazil (the Project) through its Brazilian subsidiary. BRN’s Director and CEO was Mr Oxley.
Investment in the Project
For some years, BRN had sought investment from numerous sources, including Resource Capital Funds (RCF), a specialist mining investment fund. BRN had engaged a number of agents and brokers over the years to find investors for the different stages of the Project, usually under written contracts. Mr Read and others had approached RCF a number of times from 2013 onwards, but RCF was not interested.
Agreements
In September 2018, BRN entered into a three-month consultancy agreement with DMA Brazil, whereby DMA Brazil would approach a number of potential investors on an approved list and would receive 5% commission on any new sources of capital brought in. RCF was not on the approved list because it had already declined to invest.
In February 2019, BRN entered into a new Intermediary Services Agreement with DMA (ISA 1), which provided for approaches to be made to a number of potential investors, to be listed in an annex, again not including RCF. ISA 1 was extended but eventually expired on 31 December 2019. ISA 1 provided for commission at different rates, depending on the value of any investment or debt financing.
Negotiations to extend or replace ISA 1 continued between DMA and BRN in the first few months of 2020, but in May 2020, BRN informed DMA it could not accept DMA's counteroffer for a services agreement because BRN had received investment proposals from a technology metals fund from TechMet Limited (TechMet) and needed to focus on those.
In September/October 2020, BRN and DMA discussed a revised services agreement that focused only on investment from Mitsui, a Japanese investor, with whom DMA had good contacts, and at a reduced commission rate. Drafts were exchanged and, in January 2021, Intermediary Services Agreement 2 (ISA 2) was agreed.
ISA 2 stated expressly that: "… BRN now wishes DMA to focus on a single potential investor, Mitsui Group or any subsidiary company…". By clause 3.1 of ISA 2, BRN agreed to pay a success fee of (among other things) 2% of any equity investment up to US$30M and 0.375% of any debt financing up to US$100M.
RCF transaction
In the meantime, in November 2020, DMA had contacted RCF telling them of TechMet’s investment in BRN and also of Mitsui’s interest in the Project and Mitsui’s wish to have a commercial collaboration with RCF on any investment. BRN were made aware of these discussions and had no objection to RCF’s participation.
Communications and exchanges continued between all the parties but ultimately, in April 2021, BRN indicated that it was likely to do a full equity deal with RCF and that DMA did not need to get involved any longer. Nonetheless, DMA continued to contact RCF, particularly because it believed it was entitled to some fee for its efforts. RCF always made it clear it was not responsible for any fee and that was a matter between DMA and BRN.
On 29 June 2021, a telephone call took place between Mr Oxley and Mr Read. Mr Read subsequently contended that Mr Oxley had, either expressly or impliedly, agreed that DMA should be paid a reasonable fee. Mr Read also alleged that it had been arranged that a three-way call with RCF should take place. There was a handwritten note by Mr Read of his side of the conversation.
However, no such call took place and BRN made it clear that they had no agreement with DMA beyond the ISA 2 relating to Mitsui only and that they had not agreed any payments to DMA or any other intermediary. RCF also made it clear that their contact with BRN predated the November 2020 approach on behalf of Mitsui.
In August 2021, both RCF and TechMet entered into a formal agreement with BRN.
In November 2021, DMA sent BRN an invoice for 5% of the amount RCF invested in BRN as an introduction fee.
In September 2023, RCF sold its interests in BRN to TechMet.
DMA commenced proceedings against BRN, alleging that in the telephone call on 29 June 2021, it was agreed expressly or impliedly that if RCF invested in BRN, DMA would receive remuneration for that reintroduction and BRN would be reasonable in discussing and agreeing the amount of that remuneration.
The High Court decision
Contract claim
The Court dismissed the claim that an agreement had been reached between DMA and BRN. On the evidence and facts:
The suggestion of a three-way call with RCF came from Mr Read, not BRN. Mr Read was trying to persuade Mr Oxley to agree to a call, but Mr Oxley resisted and did not agree.
BRN had already reached a settled view internally in March 2021 that it was not obliged to pay DMA a fee and should not do so, because this was not covered by ISA 2 and/or because BRN and RCF were already known to each other and had previously been in contact. However, this was never clearly communicated by Mr Oxley to Mr Read because Mr Oxley did not want the confrontation and did not want anything to disturb closing the deal.
When Mr Read sent an email on 2 August 2021 to Mr Oxley and Mr Valdes of RCF saying that it was agreed that once the transaction was near closure, they would have a three way call to discuss and agree DMA's remuneration, this was at best wishful thinking on his part, but more likely was an attempt to nudge them into engaging with him. While Mr Read feared that BRN were not going to pay a fee, he did not wish to accept this.
Even if Mr Oxley had agreed to a three-way call and to be reasonable about agreeing a fee, this would have been no more than an invalid agreement to agree. An agreement to be reasonable in having a discussion about a fee was not the same as agreeing to pay a reasonable fee.
As the Court found there was no oral contract resulting from the phone call on 29 June 2021, there was then no scope for a contract to be implied from that same conversation. This was not a case where it was alleged that there was a combination of that conversation with other conduct.
Unjust enrichment
Where there is no contract, the correct approach to determining whether an introducer has any quantum meruit claim to payment is by reference to principles of unjust enrichment. The Court must consider whether:
The defendant has been enriched.
Whether the enrichment was at the claimant's expense.
Whether the enrichment was unjust.
Whether there were any defences available to the defendant.
The Court stated that DMA's claim in unjust enrichment succeeded, because it made a reintroduction of RCF to BRN which was the effective cause of RCF investing in August 2021, and it would be unjust for DMA not to be paid a fee, in particular because Mr Oxley knew of and approved the approach in November 2020, and BRN knew that any such services were not intended to be gratuitous.
Therefore, DMA was entitled to receive commission on RCF’s equity investment in BRN in August 2021, as well as on certain share subscriptions in August 2022. The appropriate rate of commission was 5%, primarily based on the previous agreements, the consultancy agreement with DMA Brazil and ISA 1, as well as on expert evidence.
Comment
The case shows the challenges of relying on exchanges of correspondence and witness evidence to demonstrate whether or not a binding agreement has been reached. It remains best practice to commit commercial agreements to writing and make express provision for key terms, including payment (including the scope of the mandate/approved investors, the fee trigger, and the commission base – e.g. actual subscriptions rather than headline figures).
DMA were fortunate to have made out their claim in unjust enrichment in this case. Others might not have similar success given how fact‑sensitive the inquiry is (approval, non‑gratuitous intent and effective causation) and because informal assurances to “discuss” or “be reasonable” may fall short of contract formation.
If you are dealing with commission disputes, intermediary arrangements or wider contract and payment issues, our Commercial Disputes Resolution team has extensive experience advising businesses and investors across complex, high value transactions. Find out how we can help.
