Sports Direct International Plc v Rangers International Football Club Plc David King (Additional Respondent)
| Jurisdiction | England & Wales |
| Judge | Peter Smith J |
| Judgment Date | 22 January 2016 |
| Neutral Citation | [2016] EWHC 85 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC2015002185 |
| Date | 22 January 2016 |
[2016] EWHC 85 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
The Honourable Mr Justice Peter Smith
Case No: HC2015002185
and
Mr David Quest QC and Mr Nathaniel Bird (instructed by Reynolds Porter Chamberlain LLP) for the Claimant
Mr McCormick and Mr Ali Reza Sinai (instructed by Kingsley Napley LLP) for the Defendant
Hearing dates: 10th and 11th December 2015
INTRODUCTION
On Thursday 10th December 2015 I had before me 3 applications in this matter namely:-
1) The Claimant Sports Direct International Plc's ("SDI") application by Notice dated 7th September 2015 inviting the court to find the Defendan ("Rangers") in contempt of court for breaching the order made by Asplin J on 11th June 2015 ("the Order") when sitting as the Applications Judge (as set out below further in this judgment). SDI also sought the committal of the Second Respondent David King the chairman of Rangers for breaching the June Order by reason of an interview he gave to Sky Sports News in July 2015 ("the Interview") and to commit him to prison and fine Rangers in punishment for that contempt.
2) Rangers' application by Notice dated 30th October 2015 seeking an order discharging or varying the June Order.
3) SDI's application by Notice dated 20th November 2015 for summary judgment on its claim for a permanent injunction against Rangers.
The committal application naturally has precedence and I dealt with that first.
Mr David Quest QC assisted by Mr Nathaniel Bird appeared for SDI. At the conclusion of his submissions on the committal application on behalf of SDI I indicated that I did not require any submissions from Mr William McCormick QC who appeared for the Respondents with Mr Ali Reza Sinai and I dismissed SDI's application for reasons to be given later.
In this judgment I set out the reasons why I dismissed that application.
OTHER APPLICATIONS
I indicated at the close of that part of the applications before me that the issues in relation to the underlying Confidentiality Undertaking ("the Confidentiality Undertaking") which was the subject matter of the cross applications ought to be dealt with by a speedy trial. The parties agreed with that stance and on Friday 11th December 2015 with some assistance from me they agreed directions for a speedy trial commencing on 25th January 2016 with variations of the June Order in the interim. The terms of and the enforceability of the Confidentiality Undertaking remain therefore for consideration at trial which is now to start on 8th February 2016. It follows that at this stage I should say very little about issues which will be fully argued at that trial.
BACKGROUND
The issue relates to a written Confidentiality Undertaking dated 5th September 2014 given to the SDI Group (comprising SDI and its subsidiaries). It relates to the well known Glasgow football team Glasgow Rangers. The Background to the Confidentiality Undertaking is set out in Mr Forsey's witness statement provided in support of SDI's application for the June Order.
In summary in or around 2012 SDI was approached by The Rangers Football Club Ltd ("the Club") which is now a wholly owned subsidiary of Rangers to explore potential commercial opportunities.
As a result of those discussions members of the SDI Group entered into a number of written agreements with the Club as follows:-
1) A shareholders agreement dated 31st July 2012 ("the SHA") between SDI Retail Services Ltd ("SDR") a member of the SDI Group and the Club relating to the establishment and operation of a joint venture company named Rangers Retail Ltd ("RRL"). Its shareholders were SDR and the Club.
2) Further to the joint venture RRL and the Club entered into an Intellectual Property Licence Agreement ("the IPLA") granting RRL certain rights to exploit the Club's brand.
3) On 31st October 2012 the Sponsorship Agreement ("SA") between SportsDirect. com Retail Ltd ("SD. com") a further member of the SDI Group and the Club was entered into relating to certain sponsorship and marketing rights for the Sports Direct brand at the Rangers Football Stadium.
The main mover behind the SDI Group is the well known businessman Mr Michael Ashley.
In the autumn of 2014 SDI and Rangers entered into negotiations concerning the potential extension of finance by the SDI Group and the renegotiation of its agreements with the Club. These matters (like everything in football) are of great interest to the sporting press and the Club's fans. Accordingly it is contended on behalf of SDI that it obtained the Confidentiality Undertaking from Rangers. In fact the financing was not then provided to the Club. However on 12th November 2014 SD. com entered into a written partnership marketing agreement with the Club. In that agreement the most significant provision is clause 2 which provides that the agreement shall continue "until terminated by either party given to the other party no less than 7 years notice in writing…." That is a very long period of notice in a commercial agreement.
In early 2015 the SDI and Rangers Groups again entered into discussions for further financing. As a result of that on 27th January 2015 the following arrangements were entered into:-
1) SD. com agreed to make an interest free loan of up to £10m available to the Club pursuant to the terms of a written Facility Agreement ("the Facility Agreement").
2) As security for the sums lent under the Facility Agreement the Club transferred shares representing 26% of the issued shares in RRL to SD. com pursuant to a legal mortgage. SDR which is a wholly owned subsidiary of SD. com already owned 49% of the shares in RRL in its own right. SD. com and SDR entered into a written agreement entitling the Club to repurchase those shares in specified circumstances the shares transferred to SD. com as security for the loan.
3) RRL and the Club entered into a written Intellectual Property Licence in relation to the IP rights which replaced the IPLA.
4) SD. com provided £5m of that facility. On the first day of the hearing before me Mr McCormick informed me that the Club had repaid that £5m. On the second day I was informed by Mr Quest QC that the £5m had not been repaid. Repayment was in fact made on 24 December 2015.
In respect of the present application before me those various agreements are background material only; there is no argument for present purposes over any of those agreements. They are confidential agreements and when I hand down this judgment provisions will have to be made for protection of both parties' confidentiality akinto the order I made on the 10th December 2015.
THE CONFIDENTIALITY UNDERTAKING
The relevant provision which has led to the present application is clause 1.1 of the Confidentiality Undertaking which provides as follows:-
"1. Confidentiality
1.1 In connection with the commercial arrangements entered into between SDI and its subsidiary undertakings, on the one hand (together, the SD Group), and Rangers International Football Club plc (Rangers Plc) and its subsidiary undertakings, on the other hand (together, the Rangers Group), and in consideration of the SD Group and/or its representatives continuing discussions with the Rangers Group in connection with its existing and future commercial arrangements, Rangers Plc and Alexander Easdale (the Undertakers) shall treat as private and confidential, on the terms of this letter, (i) the existence of any discussions between the SD Group (and its representatives) and the Rangers Group (ii) the contents of any such discussions and/or any agreements entered into in relation to any such discussions and/or arrangements entered into, and (iii) any information provided by or on behalf of any member of the SD Group to Rangers Group and/or Alexander Easdale (save to the extent that such existing arrangements are covered by existing confidentiality provisions, which shall continue in full force and effect, notwithstanding this letter).
1.2 For the avoidance of doubt, Rangers Plc shall be responsible for the compliance by its directors, officers, employees and consultants with this letter.
1.3 The restrictions on the Undertakers in this letter shall not apply to any information which the Undertakers are required to disclose by law or the rules of any legal, regulatory or governmental authority to which the Undertakers are subject, but only to the extent required by, for the purpose of, and strictly in accordance with, the relevant law or rules and provided that to the extent it is legally permitted to do so and practicable within the time available, the Undertakers gives SDI notice of such disclosure, and takes into account the reasonable requests of SDI in relation to the content of the disclosure."
There are a number of features about the Confidentiality Undertaking which are unusual.
First the obligations as regards confidentiality are unilateral i.e. Rangers is bound by the Confidentiality Undertaking set out in clause 1 (and is responsible for any breaches thereof by its subsidiaries or any officer or employee of it or any subsidiary). However it is a unilateral obligation in the sense that the SD Group does not give any reciprocal undertakings regards confidentiality.
This can lead to surprising results. During the course of argument I asked Mr Quest QC what would be the position if the SD Group gave statements to the press about matters the subject matter...
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