In MTA Canada Royalty v. Compania Minera Pangea, S.A. de C.V., C.A. No. N19C-11-228 AML CCLD (Del. Super. Sept. 16, 2020), Judge Abigail LeGrow considered whether an agreement’s anti-assignment clause operated to void an assignment that occurred as a result of a subsequent merger between a contracting party to the agreement and a third party. She held that the anti-assignment clause prohibiting an assignment “by operation of law” without the other party’s consent applied to a subsequent merger in which the contracting party was not the surviving entity.
In 2016, the defendant, Compania Minera Pangea, S.A. de C.V. (CMP), purchased certain mineral rights in a mine located in Mexico from Alberta Ltd. They executed an assignment and assumption agreement that provided, in addition to a cash payment to Alberta of $5.25 million at closing, an additional $1 million payment to Alberta conditioned on the mine remaining in operation after a specified date. The agreement, which was governed by Delaware law, included an anti-assignment clause prohibiting Alberta from assigning its rights to any other party without CMP’s consent. The clause read, in part:
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