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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> SDI Retail Services Ltd v King & Ors  EWHC 1697 (Comm) (02 July 2018)
Cite as:  EWHC 1697 (Comm)
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7 Rolls Buildings
London EC4A 1NL
B e f o r e :
| SDI RETAIL SERVICES LIMITED
|- and -
THE RANGERS FOOTBALL LIMITED
RANGERS RETAIL LIMITED
MR. WILLIAM McCORMICK QC (instructed by Kingsley Napley LLP) appeared for the Defendants.
Crown Copyright ©
MR. JUSTICE BRYAN :
American Cyanamid guidelines
"The use of an expression such as "a probability", a "prima facie case" or a "strong prima facie case in the context of the exercise of discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious issue to be tried."
"If damages in the measure recoverable at commo law would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted."
"Where a party to a contract stipulates that if he breaches his obligations his liability will be limited or the damages he must pay will be capped, that is a circumstance which I justice tends to favour the grant of an injunction to prohibit the breach in the first place."
"If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction."
Service of the application for interim injunctive relief
"5 MATCHING RIGHT
5.1 From the date falling six months prior to the expiry of the Initial Term, Rangers may approach, solicit, tender for or entertain negotiations with a third party in relation to that third party providing any of the Offered Rights or all or any combination of the Offered Rights".
"1.1.4 Offered Right means each of the following rights 9i whole or in part):
(i) the right to operate and manage the Retail Operations;
(ii) the right to perform the Permitted Activities in relation to the Branded Products and/or the Additional Products; and/or
(iii) the right to perform the Permitted Activities in relation to the Official Kit and/or the Replica Kit."
"The retail sales of branded products, replica kit and additional products at the ground, including at the Rangers megastore and on the Rangers web store."
"The Products bearing any Rangers-related brands (including the Ranger of Brands."
"5.2 In the event that Rangers receives an offer from such a third party (Third Party Offer) to enter into an agreement with Rangers for any of the Offered Rights or all or any combination of the Offered Rights, Rangers shall provide SDIR with written notice (Notice of Offer) of the terms of the Third Party Offer (and a copy of any written Third Party Offer that is not subject to restrictions on its disclosure) within 5 days of receipt by Rangers of the Third Party Offer. Rangers shall reject any Third Party Offer that does not permit it to disclose the information required under this clause 5.2 and/or the Material Terms (as hereinafter defined).
5.3 The Notice of Offer shall include whether the Third Party is made for any of the Offered Rights or all or any combination of the Offered Rights (identifying which Offered Rights as applicable), in each case together with any connected commercial arrangements, and full details of:
5.3.1 any payment to be made by the third party to Rangers;
5.3.2 any revenue share or royalties to be paid between Rangers and the third party;
5.5.3 the duration of the agreement between Rangers and the third party.
(together, the Material Terms).
5.4 Where a Third Party Offer/Notice of Offer relates to all or any combination of the Offered Rights, (or where there are any connected commercial arrangements,) the Third Party Offer/Notice of Offer shall set out the details (including Material Terms) of each element separately. SDIR may request further information concerning or clarification of any Third Party Offer/Notice of Offer within 10 Business Days of receipt and Rangers shall respond in writing within 5 days of such request. SIDR's request shall be in writing (which for these purposes shall include email).
5.5 The parties acknowledge and agree that the information provided in accordance with paragraphs 5.3 and 5.4 shall be confidential information for the purpose of clause 15.
5.6 Within 10 Business Days of SDIR's receipt of the Notice of Offer (or further information/clarification from Rangers, if requested),SDIR shall provide written notice to Rangers as to whether it is willing to match the Material Terms of the Third Party Offer in all material respects in relation to any of the Offered Rights or in relation to all or any combination of the Offered Rights (and, in each case, any connected commercial arrangements if applicable).
5.7 If SDIR is so willing, Rangers and SDIR shall enter into a further agreement on the same terms as this Agreement, save only as to any variation required to effect the Material Terms and whether such agreement shall relate to any of the Offered Rights or all or any combination of the Offered Rights (and, in each case, any connected commercial arrangements if application).
5.8 Should SDIR exercise its matching right in accordance with this paragraph, Rangers shall not approach, solicit, tender for, negotiate with or enter into any agreement with that third party or any other third party in respect of the Third Party Offer and/or the any of the Offered Rights (and, in each case, any connected commercial arrangements if applicable) in respect of which the matching right is exercised. Should SDIR exercise its matching right in respect of some but not all of the Offered Rights, Rangers may enter into an agreement with that third party on the Material Terms set out in the Notice of Offer only in respect of the Offered Rights over which SDIR has not exercised its matching right only. Should SDIR not exercised is matching right over any of the Offered Rights, Rangers may enter into an agreement with that third party on the Material Terms set out in the Notice of Offer.
5.9 Subject to paragraph 5.8, any new or amended offer or indication of interest from a third party in respect of any of the Offered Rights shall be a separate Third Party Offer and the terms of this paragraph 5 shall apply.
5.11. Save as expressly permitted in this paragraph, Rangers shall not approach, solicit, tender for or enter into negotiations or any agreement with any third party in relation to any of the Offered Rights."
The course of events
"Where a Third Party Offer/Notice of Offer relates to all or any combination of the Offered Rights, or where there are any connected commercial arrangements, the Third Party Offer/Notice of Offer shall set out the details (including Material Terms) of each element separately…" (emphasis added).
Application of the American Cyanamid guidelines to the facts
"27 As for why I consider that the reasoning in Bath v Mowlem  1 WLR 785 is not only binding on us but, with respect, right, my reasons in truth go little further than how Mance LJ puts it in para 15 of his judgment. The primary obligation of a party is to perform the contract. The requirement to pay damages in the event of a breach is a secondary obligation, and an agreement to restrict the recoverability of damages in the event of a breach cannot be treated as an agreement to excuse performance of that primary obligation. I share Mance LJ's rejection of the position advanced by Mowlem that, even where a provision limited the victim of a breach to damages which bore no relation to its loss, those damages had nevertheless to be regarded an adequate remedy: see the end of para 14 of his judgment. Mr Bergin's stance was the same before us, as logically it had to be: even in the case of the most gross and cynical breach of contract, if—as was likely to be the case—the only losses suffered which would sound in damages were of a kind which were excluded by the contract, no injunction would lie and the contract-breaker would be able to walk away from his obligations with impunity. That does not seem to me to be just. The rule—if "rule" is the right word—that an injunction should not be granted where damages would be an adequate remedy should be applied in a way which reflects the substantial justice of the situation: that is, after all, the basis of the jurisdiction under section 37.
30 Mr Bergin argued that it could not be right that in every case where the victim of a threatened breach of contract sought an interim injunction he could rely on the existence of an exclusion or limitation clause to claim that damages would not be an adequate remedy. I think that that overstates the consequences of the case which I have accepted. A claimant will still have to show that if the threatened breach occurs there is (at least) a substantial risk that he will suffer loss that would otherwise be recoverable but for which he will (or at least may) be prevented from recovering in full, or at all, by the provision in question. If he does, then certainly it will not be sufficient for the defendant to say that the restriction in question was agreed; and to that extent the claimant will indeed have established that his remedy in damages may not be adequate. But that only opens the door to the exercise of the court's discretion; and in the exercise of that discretion the fact that the restriction in question was agreed may, depending on the circumstances of the case, be a relevant consideration—as may the scale of any shortfall and the degree of risk of it occurring. Mr ter Haar made it clear that he did not contend to the contrary."
"Hope everything is okay. Just a quick note regarding the retail tender.
We are now getting incredibly tight with our timeline to open the store at the end of August (if we were successful). The refit needs a complete site survey and approx. 3 weeks of manufacturing time. I'm very worried we are not going to be able to deliver for you here.
Is there anything that can be done to push things along? Thanks in advance".
As was acknowledged, that is the language of a party that is a willing party at the present stage but is simply concerned about timing.