1. In 2007, the 1st Appellant entered into a share purchase agreement (“the SPA”) with the Respondent under which it agreed to sell to the Respondent 370 million shares in a Hong Kong Company called Hans Energy Company Limited (“Hans”), and the 2nd Appellant guaranteed the 1st Appellant’s obligations under the SPA. The SPA included a put option under which, on the occurrence of certain specified events, the Respondent would be entitled to sell the shares back to the 1st Appellant. In 2009, the Respondent purported to exercise that option. 2. The appeal raised the issue of whether the put option was validly exercised. It concerned the construction of the put option clause in the SPA, in particular, whether the dilatoriness of the 1st Appellant in procuring or obtaining the necessary approval from the National Development and Reform Commission of the PRC (“NDRC”) in relation to the change in shareholding in a company formed specifically to carry out a petro-chemical dock construction project (the project being an attraction in the SPA to the Respondent) amounted to the occurrence of an “event”, which was “the failure [to obtain the necessary approval of NDRC]... at the fault of, or arising from an act or omission of [the 1st Appellant]”, thereby triggering the exercise of the put option. 3. At the Court of First Instance, it was held that the put option had been validly exercised, and the Appellants were ordered to pay to the Respondent the put option price, together with interest. The Appellants’ appeal was dismissed by the Court of Appeal. The Appellants appealed to the Court of Final Appeal. 4. The Court unanimously allowed the Appellants’ appeal. In relation to “event”, the Court held that giving the word its natural meaning, it is something which happens at a specific moment in time. A helpful definition was given by Lord Mustill in Axa Reinsurance (UK) PLC v Field, that “event” is something which happens at a particular time, at a particular place, in a particular way, as distinguished from “cause”, which can be a continuing state of affairs and can be the absence of something happening. Therefore, in order for there to be a triggering event for the exercise of put option in the SPA, it had to be possible to identify the date on which the event occurred. 5. In relation to “failure”, the Court held that while the continuous omission of the 1st Appellant to obtain approval could, if taken out of context, properly be described as a “failure” to obtain approval, it could not properly be described as an “event” and could not properly bear the meaning of a continuous state of affairs in the context of the put option clause in the SPA. The Respondent had been unable to point to a moment in time when the “failure” (i.e. the refusal by the NDRC to grant approval) occurred, therefore the continuing omission to obtain approval was incapable of acting as a trigger. Both in theory and in practice, it was impossible to identify the moment when the continuous omission to obtain approval had become attributable to the fault, or an act or omission of the 1st Appellant. 6. The Court came to the conclusion that the put option was never triggered, as the “event” described as “failure to obtain the necessary approval of NDRC” in the put option clause in the SPA was a refusal by NDRC to give that approval, and such event never occurred. On the contrary, NDRC finally gave the necessary approval, albeit belatedly.