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Do you still have to pay your adviser’s success fee if they weren’t involved when the deal was actually done? You may well have to, if the engagement letter says the fee is payable when a transaction completes and doesn’t say the adviser has to have brought it about. That’s the effect of Moelis & Company UK LLP v Emirates Petroleum Company [2026] EWHC 2756 (Comm), a High Court judgment handed down on 27 October 2026, in which an investment bank that had been told to stop work in June 2023 was still held entitled to its minimum US$3m fee for a restructuring its client carried out afterwards.
Most business owners assume a success fee is a reward for success, so that if the adviser didn’t find the buyer or get the deal over the line, they don’t get paid. That’s broadly how it works with estate agents, where the courts have long treated commission as earned only if the agent was the “effective cause” of the sale. This judgment shows that outside that setting the court starts with what the engagement letter says, and in this case the letter said nothing about the adviser having to cause anything.
What happened
Emarat, a state-owned fuel company in Dubai, had about AED 4.75 billion of bank debt maturing between 2023 and 2026 and ran a tender for a financial adviser to help restructure it. Moelis won the pitch, and after several weeks of negotiation (with lawyers on both sides) the parties signed an engagement letter in April 2023. It provided for a monthly retainer of US$110,000 and a restructuring fee of 0.25% of the existing debt restructured, with a minimum of US$3m.
Moelis built the financial model and advised on the options, and Emarat’s shareholder approved a strategy informed by that advice. In June 2023 Emarat used a clause in the letter allowing it to stop the work and pause the retainer, and the pause was never lifted. Over the following months Emarat extended and amended its loans with three banks without Moelis being involved, and it refused to pay anything beyond the retainer for the months before the pause.
Moelis sued, and although its claim for further fees on what it said was new borrowing failed, its claim for the restructuring fee succeeded.
The fee didn’t depend on Moelis making the deal happen
Emarat’s main defence was that commission was only payable if Moelis had been the effective cause of the transactions, and Moelis had nothing to do with the loan extensions agreed after the pause. The judge accepted that the effective cause rule exists, but said it’s a default which applies mainly to agents engaged to bring about a particular transaction (an agent instructed to find a buyer is the obvious example), that even then it gives way readily to what the contract says, and that the question to ask is what the adviser had to do under the contract to earn its fee.
Here the letter appointed Moelis in general terms as “financial advisor with respect to a Restructuring”, the fee was payable on debt “that is restructured”, the definition of a restructuring applied “however implemented”, and the fees were expressed to be paid for Moelis’s “services hereunder”, so nothing in the letter tied the fee to a result Moelis had to achieve. The judge also refused to imply a term requiring Moelis to have caused the transactions, as the test for implying terms into a carefully negotiated commercial contract is strict (the term has to be necessary to make the contract work, or so obvious it goes without saying) and this term was neither. Nor would he read Emarat’s tender document into the letter as a list of services Moelis had to perform, because the letter deliberately didn’t define the services and had an entire agreement clause, so what Moelis had promised in its pitch carried no contractual weight once the letter was signed.
Pausing the work didn’t pause the fee
Emarat’s last argument was that the pause suspended all of Moelis’s rights to payment, including the success fees. The pause clause sat in the paragraph dealing with the retainer and only referred to stopping the retainer, and nothing in the fee paragraphs said they were affected, so the judge held that the right to the restructuring fee survived. He also pointed out that if Emarat had terminated rather than paused, the tail clause (which kept fees payable where, within 12 months of termination, Emarat agreed a transaction that had been contemplated during the engagement) would have caught the 2023 transactions anyway, and it would make little commercial sense if pausing indefinitely let Emarat avoid the fee altogether.
Where the fee depends on an introduction
The position is likely to be different where the letter only pays the adviser for a buyer it introduced, which is how a lot of business broker agreements are written. The judge discussed Foxtons Ltd v Pelkey Bicknell [2008] EWCA Civ 419, a Court of Appeal case about an estate agent’s sole agency agreement which made commission payable on a sale to a “purchaser introduced by us”. Foxtons had introduced the buyer to the property while it was sole agent, and the question was whether that was enough to earn commission on her later purchase. Neuberger LJ decided it by interpreting those words, and held that Foxtons had to show it had introduced the buyer to the purchase, and not just to the property. The judge in Moelis took from Foxtons and the other cases that the word “introduction” usually carries the idea of effective cause with it, so an adviser whose fee depends on an introduction may well have to show that what it did actually led to the deal.
I was recently asked to look at this for a client who had signed up with a large, well-known business broker and then agreed a deal with a buyer whose name was on a list of potential buyers the broker had drawn up. Whether the broker is owed its fee in that situation comes down to the exact words of the agreement. If the fee is payable on a sale to a buyer “introduced” by the broker and the agreement says no more than that, Foxtons suggests the broker would need to show more than that it had put a name on a list. Broker agreements often go further, though, and define an introduced buyer widely, for example to include anyone the broker has identified, contacted or sent information to during the engagement, and with wording like that a name on a target list may be enough whoever made the first approach.
How much weight it carries
This is a first instance decision of a deputy High Court judge, and it turned on the wording of one engagement letter between two sophisticated parties who both had lawyers. It doesn’t decide that success fees are always payable whoever did the work, and as Foxtons shows, a letter that ties the fee to an introduction can produce a different answer. The judgment is very recent, so an appeal is possible.
What this means if you’re selling your business
Business brokers and corporate finance advisers usually charge a retainer or upfront fee plus a success fee worked out as a percentage of the price (I’ve written separately about what it costs to sell a business). Their engagement letters often have the same features as the one in this case: a wide definition of the transaction, a fee payable on completion and a tail period after termination. It’s worth reading the letter properly before you sign it, ideally while you’re still planning the exit rather than once a buyer has appeared.
Start with what triggers the fee: if it’s payable on any sale of the business, rather than a sale to a buyer the adviser introduced, you could owe it on a deal with a buyer you found yourself or with your own management team, so ask for buyers you already know to be named and excluded. If the broker is going to draw up a list of target buyers, check whether everyone on it counts as introduced, as that can catch a buyer you’d have found anyway. Then look at the tail, both how long it runs after you end the engagement and which buyers it covers, as a tail covering any sale within two years is very different from one limited to buyers the adviser actually approached. Check the definition of a transaction too, because if it includes a refinancing, an investment or a sale of part of the business, a deal you do instead of a sale could still trigger a fee. Finally, see what happens to the fee if you pause or terminate, and whether there’s a minimum fee payable come what may.
If you’ve already signed and you’re thinking about putting the adviser on hold or ending the engagement, read the fee and tail clauses before you do, because this decision suggests that a pause may not get you out of a fee you’d otherwise owe.
I review engagement letters from brokers and corporate finance advisers as part of my contract review work, and I act for owners selling their business from heads of terms through to completion. Get in touch if you need some help.
Written by Steven Mather, a business solicitor acting on company sales and purchases. This is general information about the law, not legal advice on your situation. Law correct as at .
