Court of Appeal victory for Bermans’ client in lease guarantee dispute

Bermans has successfully acted for the Appellant in a significant Court of Appeal decision (Kiko UK Limited v Pianoforte Holdings SpA [2026] EWCA Civ 513) concerning the scope of a parent company guarantee under a lease of commercial property. 

The appeal reversed the High Court’s decision at the trial in June 2025. 

The dispute arose from a lease to the Appellant of flagship retail premises on Oxford Street. When assigning the lease to Jamino Limited, the Appellant was required to enter into an Authorised Guarantee Agreement (AGA) in favour of the landlord and, in turn, obtained a guarantee from Jamino’s Italian parent company, the Respondent. 

The guarantee from the Respondent included an agreement to indemnify the Appellant against “any costs and liabilities … arising from any failure by [Jamino] … to pay any of the rents reserved by the Lease … or … to observe or perform any of the tenant covenants of the Lease”. 

When Jamino subsequently defaulted and entered liquidation, the Appellant was left exposed to substantial liabilities under the AGA, including the obligation to take a new lease following the liquidator’s disclaimer of the original lease. 

Although the Appellant succeeded on the other aspects of the claim at a summary hearing in January 2025 and at trial, the High Court held that the rent and costs associated with taking the new lease (approximately £1.16 million) were not recoverable under the Respondent’s guarantee. The Appellant appealed that decision, focusing on the proper interpretation and commercial purpose of the guarantee. 

The Appellant relied on a provision in the guarantee that read: “The liability of the Assignee’s Guarantor shall not be reduced, discharged or otherwise adversely affected by… the disclaimer of the liability of the Assignee under the Lease”.  In addition the Appellant argued that Jamino’s “failure” to pay rent under the lease, which was one of the situations covered by the Respondent’s guarantee to the Appellant, extended to a situation where the lease to Jamino had been disclaimed, as a matter of both language and common sense.  

In a robust judgment, the Court of Appeal allowed the Appellant’s appeal. The Court confirmed that Jamino’s disclaimer of the lease constituted a “failure” for the purposes of the guarantee and that the Respondent was therefore liable to indemnify the Appellant for the costs incurred as a result. 

The Court emphasised that a guarantee of the type in question was intended precisely to protect the assignor (which had given its own guarantee by way of AGA to the landlord) from the insolvency of the principal debtor and should ordinarily have this effect, unless very clear words to the contrary were inserted (which was not the case). 

The appeal was handled by Andrew Koffman, Partner and Head of Litigation at Bermans, with key support from Saffa Ahmed, a Litigation Paralegal.  The case was prepared and presented by barrister John Robb, of Essex Court Chambers, and he and Bermans worked closely with a team from Aberdein Considine, Scottish lawyers engaged by the Appellant, headed by Euan McSherry, Partner and Head of Dispute Resolution. 

This decision is likely to be good news for companies required to give AGAs on lease assignments and, more generally, reinforces the courts’ willingness to adopt a commercially sensible approach to the construction of guarantees. 

High Court judgment: Kiko UK Limited v Jamino Limited (in liquidation) & Anor – Find Case Law – The National Archives

Court of Appeal judgment: Kiko UK Limited v Jamino Limited & Anor – Find Case Law – The National Archives