Case Law: Sports Direct International v Rangers, A level playing field for contempt – Dan Tench

12 02 2016

Sports DirectThe decision of Mr Justice Peter Smith in Sports Direct International plc v Rangers International Football Club plc and another [2016] EWHC 85 (Ch) to refuse to commit the respondent for contempt for alleged breach of an injunction shows the caution that the court will sometimes show when it comes to seeking to enforce injunctive relief.

The case related to the commercial arrangements concerning Rangers FC, a Scottish football club (but litigated in England).  Sports Direct International had entered wide-ranging commercial negotiations with Rangers FC.  To support these negotiations, in September 2014 a “Confidentiality Undertaking” had been entered into which required Rangers FC (but not Sports Direct International) to keep all matters relating to the negotiations confidential.  Following the publication of an article in the Daily Record in June 2015 Mrs Justice Asplin granted an injunction against Rangers FC based on the terms of the Confidentiality Undertaking.

Following an interview with David King, the Chairman of Rangers FC, on Sky Sports and an accompanying article on the Sky website, Sports Direct International sought to commit Rangers FC and Mr King for contempt on the basis that the information in the interview and/or the article breached the terms of of the injunction.

Mr Justice Peter Smith resoundingly refused to committal application for the following reasons:

  • Whose act: The injunction bound only Rangers FC and Mr King claimed that he was not acting in his capacity as Chairman of the club when he gave the interview but in his personal capacity.  The judge stated that “it is quite plain in my view that it is a “lifestyle” interview” and accepted that he had “no authority in that capacity to make statements”.  He also said that there was “no evidence to show the Board authorised Mr King to make these statements on behalf of Rangers”.  That was slightly surprising, one would have thought that it was implicit that a chairman of a company had authority to make statements on its behalf as he would almost certainly have authority to bind the company contractually.
  • Service: The injunction had not been personally served on Mr King and the judge declined to dispense with service.  He noted that in Hydropool Hot Tubs Ltd v John Roberjot [2011] EWHC 121 (Ch) Mr Justice Arnold had dispensed with service in a reasonably similar situation but noted that there were differences in the circumstances here including that Mr King was not in court when the injunction was issued, it was not clear whether Mr King has read the terms of the injunction when it was provided to him (although why this should allow him to avoid its terms is not clear) and that the failure to serve on him personally appears not to have been an oversight on the part of Sports Direct International but a deliberate act within the tactical context at the time (again why this should matter is not obvious).
  • Breach: The judge was not satisfied that the terms of the injunction had in fact been breached by Mr King.  It was claimed that Mr King had variously disclosed the existence of discussions between parties, the contents of the discussions, the existence of planned future discussions and the anticipated contents of those future discussions.  The judge was not impressed with any of this either because the information was essentially in the public domain, it could not be proved (to the necessary criminal standard) that Mr King had disclosed this information and/or because the alleged breach had not been properly particularized.
  • Abuse: The judge noted that following the decision of Mr Justice Briggs (as he then was) in Sectorguard Plc v Dienne Plc [2009] EWHC 2693 (Ch) the pursuit of any litigation must be proportionate.  He considered that the application for committal constituted a vendetta against Mr Smith and questioned whether in any event Sports Direct International would have suffered any loss from the alleged breaches.  He also noted that the costs for the parties came to over £300,000 (not limited to the committal application, it was true).  For that reason, he considered that the whole procedure was an abuse.

This post originally appeared on The Injunctions Blog and is reproduced with permission and thanks


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