We all know that the precise wording of contracts can have significant implications for their interpretation. This was exemplified in the case of Cantor Fitzgerald & Co v YES Bank Ltd which considered whether a single adjective qualified the entirety of a subsequent list or only the first word.

The dispute originated when YES Bank, facing financial difficulties, engaged Cantor Fitzgerald & Co (CF) for assistance in raising capital. An engagement letter was signed in December 2019 (later amended in February 2020) outlining the terms of CF’s engagement by YES and, more importantly, its entitlement to commission on capital raised through various equity instruments (namely, “one or more financing(s) through the private placement, offering or other sale of equity instruments in any form” [emphasis added]).

In March 2020, the Reserve Bank of India imposed a moratorium on YES Bank and a reconstruction scheme that provided for the State Bank of India (SBI) to acquire a 49% shareholding in YES, a “substantial capital infusion from a consortium led by SBI”, and the replacement of YES’s board by a “new board resolved to raise further funds by a public offer”. In July 2020, with the help of the new board, YES conducted a Further Public Offer (FPO) which involved “certain investors with whom [CF] had been in discussion”.

CF claimed a 2% commission on the amounts subscribed in the FPO by the investors with whom it had been in discussions. However, YES contended that the FPO did not fall under the terms of the engagement as the FPO was public and the engagement letter provided that CF would only assist YES with private financing arrangements.  

The issue went to court, where the first instance judge agreed with YES and held that the engagement letter was limited to private forms of financing.  CF appealed.

The Court of Appeal dismissed the appeal, emphasising the ordinary meaning of the contract’s language and noting that “the reader will naturally tend to assume that an adjective or determiner at the start of a list qualifies the entirety of it”. Further, the Court noted that, if all forms of equity financing were intended to be included, the contract would have simply referred to "any sale of equity instruments."  

It is worth mentioning that the Court also considered relevant contractual and factual contexts.

The decision underscores the importance of clear and precise contract drafting in commercial contracts. It also highlights the courts’ approach to contractual interpretation, focusing on the ordinary meaning of the words and the broader contractual context.