Right of First Refusal in UK Law

I cannot accept that, however, because a right of pre-emption gives no present right, even contingent, to call for a conveyance of the legal estate. The grantee cannot require him to do so, or demand that an offer be made to him. Moreover, even if the grantor decides to sell and makes an offer it seems to me that so long as he does not sell to anyone else he can withdraw that offer at any time before acceptance.

Thus the relationship of vender and purchaser could not be established unless the Lockwoods chose to offer the retained lands to the holder of the right of pre-caption or, in breach of covenant, contracted to sell the retained lands to a third party without first offering the lands to the option holder for £3,000, If and when there conditions were fulfilled, the holder of the right of pre-emption would be entitled to buy and therefore entitled to an equitable interest.

In some respects the drafting is extremely detailed, in others obvious situations have not been provided for. In places restrictive expressions are used —section 16 provides examples —but the reasons for the restrictions are not clear and the Act does not deal with the lacunae that result. Overall the drafting does not disclose a clear and consistent policy and it falls between the two stools of being both excessively and inadequately detailed.

By way of final comment I would add that I am strongly attracted to the view that legislation of the present kind should be evaluated and construed on an analytical basis. It should be considered which of the provisions are substantive and which are secondary, that is, simply part of the machinery of the legislation.

A third possibility is where, upon the triggering event, the landowner is not obliged positively to offer to sell the land to the pre-emption holder, but rather he is obliged to notify the pre-emption holder of the situation, leaving it for the pre-emption holder to make his own offer to purchase the land if he chooses.

And, although this court necessarily views that evidence "Under Western Eyes 21", it has to be careful about applying what it might regard as conventional Western European business standards to judge the conduct of businessmen operating in the very different, and largely unregulated, commercial and political environment of Russia at the material times. As I remind myself: "… this is not a story of the West of Europe" 22.

Where a company is insolvent or of doubtful solvency or on the verge of insolvency and it is the creditors' money which is at risk the directors, when carrying out their duty to the Company, must consider the interests of the creditors as paramount and take those into account when exercising their discretion.