Don King Productions Inc. v Warren
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MORRITT,LORD JUSTICE ALDOUS,LORD JUSTICE HUTCHISON |
| Judgment Date | 21 December 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J1221-24 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CHANF 98/0418/3 |
| Date | 21 December 1998 |
[1998] EWCA Civ J1221-24
Lord Justice Morritt
Lord Justice Aldous
Lord Justice Hutchison
CHANF 98/0418/3
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2
MR A STEINFELD QC and MR H TOMLINSON (Instructed by Park Nelson, 1 Bell Yard, London WC2A 7YB) appeared on behalf of the Appellant
MR M BRIGGS QC, MR N LE POIDEVIN AND MR D CLOSE (Instructed by Dibb Lupton Alsop, 6 Dawgate Hill, London EC4R 2SS) appeared on behalf of the Respondent
The first defendant, Mr Warren, is a manager and promoter of professional boxers primarily in the United Kingdom. Mr Don King is a promoter, but not a manager, of professional boxers primarily in the United States of America. In September 1994 Mr Warren and Mr King, through their respective corporate vehicles, entered into a partnership for the promotion of professional boxing in Europe. The terms of the partnership were contained, first, in an agreement dated 16th September 1994 and, second, in an agreement dated 25th April 1995 which superseded the first agreement. The partnership was dissolved on 27th November or 5th December 1997, it matters not which, and the question arose how, in the winding up of the partnership, agreements for the management or promotion of professional boxers made between them and Mr Warren, Mr King or their respective companies should be applied. On 30th April 1998 Lightman J declared that the entire benefit of such agreements, including any renewals thereof concluded before the completion of the winding up of the affairs of the partnership, is held by Mr Warren, Mr King and their respective companies on trust for the partnership. This is an appeal by Mr Warren, his associate, Mr Roberts, and his corporate vehicle, Sports Network USA Inc., from that declaration. In short they contend that the Partnership was only ever entitled to the benefits to be derived from the exploitation of such agreements before the dissolution of the partnership with the consequence that since the dissolution Mr Warren has been entitled to exploit all such agreements, and any renewals thereof, to which he is party for his own benefit.
The background to this dispute was explained by Lightman J in his judgment ( [1998] 2 All.E.R.608) in terms with which the parties agree. My description of the background is therefore derived primarily from the judgment of Lightman J to which I have added further aspects on which one or more parties relied.
In Europe boxing is regulated by national sporting bodies, which register boxers and license managers, promoters and other participants in boxing matches. The most significant national body for present purposes is the British Boxing Board of Control ("BBB of C"). The BBB of C (like the equivalent boards of other countries) maintains a register of boxers and grants licences to managers and promoters. Though management and promotion are distinct functions, in Great Britain, unlike in the USA, it is permissible for the same person to be both the manager and the promoter of the professional boxer. It is not in practice possible for a person to operate as a manager or promoter in Great Britain unless he or his partner has the relevant licence. In view of the fact that Mr Warren has at all times held licences both as a manager and a promoter, there is and has been no obstacle to his partnership with Mr King in the promotion of professional boxing in Great Britain.
A manager has a management agreement with a boxer for the management of the boxer's career. The duration of a management agreement may be anything up to three years plus eighteen months from the date that the boxer has won a championship. The contract obliges the manager to arrange and supervise an appropriate programme of boxing and other engagements and entitles the manager to a proportion (normally 25%) of the boxer's earnings (or "purses"). In cases where the manager is also the promoter it is according to Mr. Warren usually agreed that he will forego his management fee in respect of purses for fights of which he is the promoter.
A promoter promotes a particular event or series of events, paying the costs of the event or events (including the purses). A promoter may enter into a promotional agreement with a boxer, typically for two years and never more than three, conferring on the promoter for consideration (which may take the form of a substantial payment) promotional rights in respect of that boxer. The promotional rights may be to promote events involving that boxer; but typically they engage the boxer for a given number of fights without specifying the venue or opponent which are decided by the promoter subsequently. They ordinarily contain undertakings by the boxer to fight no other fight during the period of the agreement. It is usual, if the boxer is successful, for the promoter and the boxer to enter into further promotional agreements either during the term of the initial agreement or upon its termination.
The promoter may exploit these promotional rights by promoting an event or by jointly doing so with a co-promoter or by releasing these rights for a consideration so as to enable another promoter to promote an event in which the boxer takes part. The promoter who promotes an event exploits his promotional rights (and derives his earnings and profits) by entering into "associated agreements" with third parties, e.g. for the sale of tickets, broadcasting and merchandising rights.
It is apparent from this brief description that the management and promotion agreements are the necessary keys with which to unlock the profits to be derived from those who pay to see, by personal attendance or on television, the fights in which the boxers are engaged. As such agreements are of relatively short duration it is essential to the business of a manager and promoter that his management and promotion agreements are extended or renewed, as opportunity occurs, with those boxers who are successful and that new management and promotion agreements are entered into with boxers the manager/promoter considers will be successful in the future.
The first agreement to which I have referred ("the First Agreement") was made on 16th September 1994 and was governed by English law. The parties were Mr King's corporate vehicle, the plaintiff Don King Productions Inc. ("DKP"), Mr Warren and Mr. Roberts' then corporate vehicle, Sports Network Ltd. Mr Warren and his company were defined separately as FW and SNL and together as the UK Partner. The relevant provisions were as follows:
"WHEREAS
The parties have agreed to collaborate together through the medium of a UK partnership for the promotion and/or management of professional boxing in Europe ('the Joint Venture') all upon the terms and conditions hereinafter set out.
NOW IT IS HEREBY AGREED as follows:-
1. Commencement and Duration
The Joint Venture shall commence on the date hereof and shall continue thereafter unless and until determined by DKP or the UK Partner upon not less than three months' notice in writing to the other to expire at the earliest on the third anniversary on the date hereof or any subsequent anniversary thereof ('the Term').
2. Business of Joint Venture
2.1 The business of the Joint Venture ('the Business') shall be as follows:-
2.1.1 to manage on a world-wide basis all European registered boxers in which the UK Partner has an existing interest or in which the Joint Venture has or is able to secure an interest: and
2.1.2 to promote on a world-wide basis all boxing bouts staged in Europe to which DKP, the UK Partner or the Joint Venture has or is able to secure the promotional rights.
2.2 Unless otherwise agreed between DKP and the UK Partner the Joint Venture shall not be engaged or interested in any business other than the Business.
3. Joint Venture Vehicle
DKP and the UK Partner shall conduct the business through the medium of a UK partnership ('the Partnership') which shall be structured as follows:-
3.1 Partnership Interests
DKP shall hold a 50% interest in the Partnership. FW and SNL shall together hold the remaining 50% interest in the Partnership in such proportions (as between themselves) as they shall determine. The joint interests of FW and SNL will be held via a special purpose holding company ('NewCo').
3.2 Partnership Decisions
Decisions of the Partnership shall be taken by mutual agreement between DKP and NewCo (hereinafter together referred to as 'the Partners').
The business shall be managed by the Partners in such manner as they shall from time to time agree.
No Partner shall have the right to make commitments or otherwise bind the Partnership without the prior consent of the other.
3.3 Name
The Partnership shall trade under the name and style 'Sports Network'. SNL hereby grants to the Partnership for the Term a fully paid up royalty free right and license to use the name 'Sports Network' and any of its associated logos or marks for the purposes of the Business.
3.4 Boxing Licenses
All and any licenses, permissions or consents ('Licenses') necessary for the conduct of the Business including without limitation Licenses from the British Boxing Board of Control or other European boxing authorities shall be applied for and held by the Partnership. If relevant regulation does not permit the Partnership to hold any such License then and in such event FW shall apply for and hold the same for the benefit of the Partnership absolutely without...
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