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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 [2018] EWHC 1697 (Comm) (02 July 2018)
URL: http://www.bailii.org/ew/cases/EWHC/Comm/2018/1697.html
Cite as: [2018] EWHC 1697 (Comm)

 

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Neutral Citation Number: [2018] EWHC 1697 (Comm)

	
	Case No: HC-2016-002358

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION



	
	Royal Courts of Justice
7 Rolls Buildings
Fetter Lane
London EC4A 1NL

	
	02/07/2018


B e f o r e :

MR. JUSTICE BRYAN
____________________
Between:

	SDI RETAIL SERVICES LIMITED	Claimant

	- and -	

	DAVID KING
PAUL MURRAY
THE RANGERS FOOTBALL LIMITED
RANGERS RETAIL LIMITED	


Defendants

____________________

MR. SA'AD HUSSAIN QC and MR. JAMES PETKOVIC (instructed by Reynolds Porter Chamberlain LLP) appeared for the Claimant.
MR. WILLIAM McCORMICK QC (instructed by Kingsley Napley LLP) appeared for the Defendants.
____________________

HTML VERSION OF JUDGMENT�
____________________

Crown Copyright ©


MR. JUSTICE BRYAN :





Legal Principles


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;

    and

    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 [2015] 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.



    The parties appear before this afternoon on the hearing of an application for an interim injunction by the claimant against the defendant. The claimant is SDI Retail Services Limited ("SDIR"), which provides retail and related business services as an indirect subsidiary of Sports Direct International Plc. The defendant is the Rangers Football Club Limited ("Rangers"), a company incorporated in Scotland which operates Rangers Football Club in Glasgow, whose home ground is the Ibrox Stadium, a subsidiary of Rangers International Football Club Plc ("RIFC").
    Broadly, the present dispute arises out of a retail operations distribution and IP licence agreement, dated 21st June 2017 between SDIR and Rangers ("the Agreement"). Under that agreement SDIR sells Rangers replica kit, as well as other Rangers branded products such as clothes at the Ibrox Stadium, through operating the Rangers Megastore and also through SDIR's retail shops and online.
    The application is made on short notice for interim injunctive relief, which arises out of statements that have been made by Rangers that it will, as soon as practicable after 4th July, i.e. as and from the 5th July, Thursday of this week, enter into an agreement with a third party that has made an offer for the provision of services, such services to be provided after the expiry of the Agreement, in what is said, or alleged by the claimant, to be breach of the contractual obligation of Rangers to give SDIR an opportunity to match some or all of that third party's offer, the "matching right". It is said that if Rangers is not restrained from doing so by this court its actions will thereby wrongly deny SDIR the opportunity to continue to provide some or all of the services to Rangers after the expiry of the initial term.
    The applicable principles are common ground. They are set out in the claimant's skeleton argument and no issue is taken by those acting for the defendants in relation to those principles, at least in general terms, and for the purpose of this interim application for relief..
    Under section 37(1) of the Senior Courts Act 1981 the court may grant an interlocutory injunction in all cases where it appears to the court to be just and convenient to do so. CPR 25.1(1)(a) confirms that court may grant an interim injunction. The court must, in exercising its powers under CPR25.1(1)(a) seek to give effect to the overriding objective of dealing with cases justly and at proportionate cost - see CPR 1.1(1) and CPR 1.2(a).
    The current application involves the application of the well-known guidelines for the granting of an interim injunction which are set out in American Cyanamid Co v Ethicon Ltd [1975] AC 396. As noted in Gee on Commercial Injunctions, 6th edition at paragraph 2.017, "…the [American Cyanamid] principles are "guidelines", and not a "straightjacket", where the function of the court is to hold the position as justly as possible pending trial."
    First of all, the court asks if there is a serious question to be tried. In this regard the court is not seeking to conduct a preliminary trial of the issue (see Lord Diplock in Cyanamid at page 407H) As Lord Diplock said at 407G the test is whether there is a serious issue use to be tried:
    If there is a serious question to be tried then court considers the balance of convenience.
    In that regard the court first in that inquiry considers whether, if the claimant were to succeed at trial in establishing his right to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained by the defendant's continuing to do the act which was sought to be enjoined between the time of the application and trial.
    As Lord Diplock LJ said (at page 408C):
    Accordingly, damages are not likely to be an adequate remedy if the defendant would not be in a financial position to pay them.
    In considering whether damages are an adequate remedy the fact that the claimant may recover less than it would at common law owing to the existence of exclusion clauses is a factor in favour of the granting of interim relief. As stated by Laws LJ in AB v CD [2015] 1 WLR at paragraph 33:
    Damages may be found to be inadequate where they are difficult to assess such as, for example, the loss of good will – see Foseco International Ltd v Fordath Ltd [1975] FSR 507 at page 516 and Blackstone's Civil Practice 2018 at paragraph 37.23.
    If damages would not be an adequate remedy were the claimant to succeed at trial, then the court should consider whether, on the contrary hypothesis that the defendant were to succeed at trial in establishing his right to do that which was sought to be enjoined, the defendant would be adequately compensated under the claimant's cross-undertaking. Lord Diplock in Cyanamid at page 408D stated:
    If there is doubt as to the adequacy of the respective remedies in damages available to either party or both, the court considers the balance of convenience. The factors to be considered and the relative weight attaching to them will vary from case to case (see Lord Diplock in Cyanamid at page 408F). Where other factors appear to be evenly balanced it is a counsel of prudence to preserve the status quo (see Lord Diplock in Cyanamid at 409G).
    Where one party's case is indisputably stronger, the Court may take this into account in assessing the balance of convenience, although the court is not conducting a preliminary trial (see Lord Diplock in Cyanamid at 409C).
    Following correspondence (which I will come on to in due course), this application for interim injunctive relief has been brought on at short notice. Suffice it to say that in the circumstances of this case, and in the context of the alleged imminent breach of the Agreement which is alleged, I am satisfied that this was an appropriate case for the matter to be brought on promptly, in order to seek interim relief, and that this is a case where sufficient notice has been given under CPR 23.7(4) and I so direct, and as such I was prepared to hear the application.
    In this regard I should add that no particular point has been taken by Mr. McCormick QC, on behalf of the respondents, in relation to the fact that the matter has come on before me, as a matter of urgency, today. The court has been able to accommodate this application and it has been possible, within the constraints of the time available, for the respondents both to put in a detailed witness statement and indeed detailed skeleton argument; albeit that the points raised no doubt in that skeleton argument and in that witness statement will be augmented if an injunction were to be granted between now and the return date, when there will be the more opportunity for the respondents to develop the points they wish to make.
    Turning to the Agreement itself and the American Cyanamid guidelines set against the backdrop of what has occurred to date and is threatened in the future in the context of the terms of the Agreement itself, and in particular Schedule 3 thereto, which sets out various commercial terms of the agreement.
    Paragraph 5.1 of Schedule 3 provides as follows:-
    "Offered Rights" is defined in paragraph 1.1.4 of Schedule 3 as follows:
    The words within those subclauses are themselves defined terms in the Agreement itself. So by way of example, Retail Operations is defined as meaning:
    Whilst Branded Products are defined as meaning:
    Additional products is also defined and products is defined as the products listed in Schedule 2.
    The reason why those words and those definitions are potentially important is because the defendant draws attention to the fact that Offered Right means "each of the following rights in whole or in part" (my emphasis). So although there are sub-paragraphs (i), (ii) and (iii), the defendants say that it is possible that the rights concerned can be subdivided further from (i), (ii) and (iii), and indeed subdivided on many occasions by reference to such opening words, and what is comprised within each of sub-paragraphs (i) to (iii) and the definitions contained therein.
    Paragraphs 5.2 to 5.9 and 5.11 in Schedule 3 provide as follows:
    On 4th June this year the defendant notified SDIR (the "Notice of Offer"), that they had received a third party offer to enter into an arrangement with Rangers for all of the Offered Rights. That included a provision within it, which I do not need to set out for the purpose of this hearing, in relation to the financial terms of such offer (which encompassed all of the Offered Rights).
    The response of SDIR to that was to allege that that Notice of Offer was not compliant with the terms of paragraph 5.4 of Schedule 3 which it will be recalled provided:
    It is said by SDIR that the terms of the offer, which were recounted in 4th June letter, do not distinguish between each element, which the claimant says means each of (i), (ii) and (iii) of the Offered Rights. In contrast the defendants submit that there is no such obligation by reference to paragraph 5.4, and that such a requirement would make no commercial sense because in fact there are a whole raft of rights encompassed within the Offered Rights definition).
    In a letter on 15th June 2018 SDIR then sought further information about the Notice of Offer. Rangers responded in a letter on 20 June 2018 asserting that its Notice of Offer was compliant with its obligations under the Agreement. SDIR's solicitors (Reynolds Porter Chamberlain LLP) responded in a letter on 26th June 2018 setting out SDIR's interpretation of the Agreement, and Rangers obligations thereunder, and seeking undertakings not to enter into any agreement with any third party in respect of the Offer Rights without having first fully complied with the terms of paragraph 5 of Schedule 3.
    Those undertakings were not given and the defendant made clear in a letter dated 28 June 2018 from its solicitors Anderson Strathern that it was not willing to give any such undertakings, and in that letter it was asserted that the Notice of Offer sent on 4th June was valid and complied with the requirements of the retail agreement. It was also made clear that it was said to be vital to Rangers' business model for the next and following seasons for it to launch its retail operations from 1st August, four days before its first fixture in the FPFL, and to able to do so it required to conclude a deal with the offeror as soon as practicable after the ten day business period from 20th June expires.
    It was made clear in that letter that, "unless SDIR timeously exercises its matching right under the [Agreement], [the Defendant's] intention is to accept the Third Party Offer". It is against the backdrop of that letter that the urgent application for an interim injunction has been made before me this afternoon.
    Turning then to the application of the American Cyanamid guidelines to the facts, and first the question as to whether there is a serious question to be tried. In relation to that, it is said that there is a breach of the obligation contained in paragraph 5.4 of schedule 3 that raises an issue of contractual construction, with paragraph 5.4 being construed in the context of the provisions surrounding it, and the contract as a whole, applying the applicable principles of contractual construction most recently re-stated in Wood v Capita Plc [2017] AC 1173 in particular at [8]-[15].
    It is said on behalf of the claimant by Mr Hossain QC, that there is very much more than a serious issue to be tried. It is said that it is quite clear from paragraph 5.6 of Schedule 3 that, in order for SDIR to be in a position to give written notice as to whether it is willing to match the Material Terms of the Third Party Offer in all material respects, in respect of any of the Offered Rights, or in relation to all or any combination of the Offered Rights that there has already been compliance with paragraph 5.4 of Schedule 3, in terms of setting out details of each element separately, reference being made to the language of paragraph 5.4, which refers to "all or any combination of the Offered Rights" in relation to which it is provided that the Third Party Offer/Notice of Offer shall set out the details (including Material Terms) of each element separately" (emphasis added). SDIR submits that this paragraph contemplates that the details be set out (including, for example, in the context of financial terms) by reference to each of the Offered Rights, as without that (says SDIR) SDIR is not in a position to know (as contemplated by paragraph 5.6) whether 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.
    For its part, the defendant, represented by Mr. McCormick QC, says, in relation to that, that the construction which is placed upon paragraph 5.4 of Schedule 3 is not a commercial construction and makes no sense in the context of the definition of "Offered Rights" in paragraph 1.1.4, beginning, "each of the following rights in whole or in part", which he emphasises. He says that SDIR's stance is predicated on the basis that there are only three rights, and it is submitted that that is not correct when one looks at the composition of paragraph 1.1.4 and, indeed, the definitions within such paragraph. It is said that SDIR's construction would give rise to what Mr McCormick described as "a commercial and practical absurdity".
    This leads him to submit that paragraph 5.4 should be construed on the basis that: (i) Each "element" refers not to each Offered Right but to non-material terms; (ii) TRFC is only required to provide information it has been provided with; and (iii) Where an offer has been made for all the Offered Rights, no breakdown as between the Offered Rights is required.
    The application before me today is for an interim injunction pending a return date. If I am minded to grant an interim injunction on the basis that it is an appropriate case for an interim injunction applying the American Cyanamid guidelines, then any such injunction I grant, will only be until a short return date next week. On that return date, another judge of this court will be in a position to consider, and construe, the provisions I have identified in more detail and with the benefit of more detailed submissions, and quite possibly additional evidence (albeit in circumstances where it is not the role of this court to conduct a mini-trial at this stage).
    In such circumstances I do not consider that it would be appropriate for me to express any detailed views on the merits of the relative constructions which were advanced on behalf of the claimant and the respondent before me today. I am, however, satisfied that there is a serious issue to be tried and, for what it is worth, more than serious issue to be tried in relation to the construction advocated on behalf of the claimant. That is not to say that that is the construction that would necessarily ultimately find favour, but I am satisfied that the requirement of a serious issue to be tried is satisfied by some margin.
    In that regard I have in mind, in particular, the fact that the very interaction between paragraph 5.6 and 5.4 of Schedule 3 is such that it is strongly arguable that in order for SDIR to be able to identify whether it is willing to match Material Terms in all material respects in relation to any of the Offered Rights, or in relation to all or any combination of the Offered Rights, it is necessary, or at least strongly arguable that it is necessary, that the information provided in paragraph 5.4 is provided by reference to each of the Offered Rights individually. I would repeat, however, that the views I have expressed are purely for the purpose of satisfying myself that there is a serious issue to be tried.
    Turning on then to the next question and whether damages are or are not an adequate remedy. SDIR submits that although it would have a cause of action in damages in the event that Rangers proceeds as it plans to do, and (as SDIR would have it) breaches the Agreement and grants the Offered Rights to the relevant third party, damages would not be an adequate remedy. First, it is pointed out that were the Agreement to be properly performed (that is "properly performed" per SDIR's construction of the Agreement), SDIR would be entitled 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. Alternatively, where no valid Third Party Offer is received for any or all of the Offered Rights, SDIR would have a right to renew the Agreement on the same terms for the elements on which no offer has been received from two years from the expiry of the term. It is said, a fortiori, if no agreement were received after that renewed two year period, the Agreement could again be further renewed.
    It is submitted, therefore, that the agreement provides for the possibility of infinite numbers of renewals. It is said that were the Agreement not to be properly performed, a variety of financial losses are, in principle, likely to flow from the non-performance, and those are identified in the witness statement of Mr. Cran which I have had regard to, in particular, paragraph 54. Those can be summarised as, (a), financial loss from SDIR being denied its entitlement to match the Material Terms in the Third Party Offer, and/or from renewing the Agreement for an indefinite number of renewals. It is said that such financial loss could include, for instance, and depending on the Offered Rights matched, lost profits from selling replica kit, branded products and additional products by various means, and other financial losses such as lost sales on non-Rangers branded products as a result, for instance, of lost foot-fall arising from SDIR no longer selling Rangers' replica kit or branded products.
    In addition there are other more difficult to quantify losses such as reputational harm and/or lost goodwill arising from losing rights contained in the Agreement to a competitor. It is also submitted that damages would be difficult to assess, in particular, if Rangers refuses to issue what is alleged to be a compliant Notice of Offer which enables SDIR to know the terms offered in respect of each Offered Right. SDIR would be unable to say which rights it would have matched or what the terms on which it would have matched would have been and, for that reason, it would be difficult to determine what losses flow from SDIR being denied the opportunity to match.
    It is also said that because of the possibility for an indefinite number of renewals, that makes it harder still to determine what the quantum of loss would be. It is also said that some heads of loss are inherently difficult to quantify such as loss of reputation and goodwill and sales of non-Rangers' goods, and loss of market to a third party competitor would also be difficult to quantify.
    It is said that the sale of Rangers' kit and merchandise is closely linked to the fortunes of the club in competition, and that a level of damages applicable for this in this year and in future seasons would be dependent on difficult to make predictions.
    It is also said as an independent point, as identified by Mr. Cran at paragraph 59 of his statement, that damages are likely to be substantial, and there is a real risk that SDIR's damages which it would recover at trial would be less than its actual losses owing to a cap on damages of one million which is set out in clause 16.3 of the Agreement. Reference is also made to clause 16.2 of the Agreement which states that, "subject to clause 16.1, neither party shall be liable to the other under this Agreement in contract, tort (including negligence and breach of statutory duty) or otherwise for any indirect or consequential loss or damage (whether or not reasonably foreseeable)". It is submitted that issues could arise as to whether some of the damages that it would seek to recover would fall foul of clause 16.2, and it is prayed in aid that the language of what is "any indirect or consequential loss or damage (whether or not reasonably foreseeable)", could raise interesting questions of construction, including as to what was within, and out-with, that clause
    So far as that and any cap is concerned (whereby under clause 16.3 each party's total liability to the other shall, in aggregate, be limited to £1 million) SDIR refers to the case of AB v. CD, supra, in particular paragraphs 27 and 30 (to which I have had regard). In those paragraphs, the Court of Appeal recognised that matters such as a cap on loss may be a relevant consideration when considering whether damages are adequate. In this regard, Underhill LJ stated at paragraphs [27] and [31] as follows:
    In this case, and in relation to the points relied upon by SDIR, it is said on behalf of the defendant, firstly, that it is not at all clear that there would be substantial damages recoverable. It is said that there is evidence, and I was shown a document attached to the witness statement of Mr. Blair in opposition to the application for an injunction today, which suggests that in fact the contract to date has been loss-making. In riposte to the riposte, if I can put it like that, certain evidence in reply was referred to which suggests that after taking into account royalties from Puma, the existing contract was allegedly profit making.
    It seems to me, in fact, that the extent to which the existing contract has or has not been profitable, whilst of potential relevance, is of less relevance than it might otherwise be because the real question is what profits would have been made going forward, and what difficulties arise in relation to the calculation of the profits in that regard and the associated damages that would be claimed. I consider that there would be very considerable potential difficulty in quantifying the damages said to have been suffered by the claimant in this matter, essentially for the reasons which are identified by Mr. Cran at paragraphs 54 and 55 of his witness statement.
    Set against that backdrop, it does seem to me for the purpose of today's hearing anyway (in the context of a potential return date in the near future) that damages would not appear to be an adequate remedy for SDIR.
    Looking at the position in terms of the position of Rangers, it is said on behalf of Rangers that so far as Rangers are concerned, damages would not be an adequate remedy either. It is said that there would be adverse financial consequences which would have a far greater impact upon Rangers than would any losses on SDIR and, it is said, which would be practically impossible to assess fully. Reference is made in particular to paragraphs 30 to 39 of Mr. Blair's witness statement which I have read and bear well in mind. It is said that merchandising income is a fundamental part of TRFC, indeed, any football club's business, and being able to market a new football strip for the start of the season is essential to maximise impact and sales. It is said that if that opportunity is missed there will be a loss of income and of cash-flow, which impacts upon the ability to bring in players in the transfer window in August and, hence, on on-field performance which, in turn, impacts upon prize money. It is said that proving what sales would have been made under the arrangement in the light of the performance of the team as it would have been had TRFC had available the funds that the new arrangement would have generated will be extremely difficult.
    I can see that some difficulties may arise in relation to such matters, but certainly on the material before me I am not satisfied that damages would not be an adequate remedy for TRFC. In that regard, I should say that there is a cross-undertaking offered, not only in the standard form but, in fact, by the parent company of the claimant, and it is not suggested that that cross-undertaking would not be satisfactory.
    In the context of an interim injunction pending a return date, I also bear in mind that the earliest the defendant would have been entering into an agreement (which SDIR submits would be a breach of the Agreement) is Thursday 5 July 2018, whilst both parties agree that any return date should be within a short period of time (such as next Tuesday 10 July would be appropriate). So, in fact, we are talking about a period, essentially, between this Thursday and next Tuesday. In that regard, the evidence I have before me in relation to the third party is that that third party is, to use Mr. McCormick's own words, "hot to trot", in other words, they are still a willing party, and there is no suggestion on the evidence before me that if an interim injunction was imposed they would walk away leading to greater loss being suffered by Rangers.
    In this regard I have had regard to what is stated at paragraph 32 of the witness statement of Mr. Blair in relation to an email from the managing director of the offeror, which provides:
    There will be very limited time as between now and a return date of next Tuesday, so even assuming that there was doubt as to the adequacy of damages available to either party, the balance of convenience is in favour of preserving the status quo by injuncting the defendants in the terms sought in the draft order, pending an early return date which will be next Tuesday, 10th July.
    So, for the reasons which I have identified, and for the purpose of granting interim relief, I am satisfied that this is an appropriate case for an injunction under section 37(1) on an interim basis. I hereby grant the injunction. I will hear the parties in terms of the precise language of the order itself.
    I should say, as I have already foreshadowed in the context of the views I have expressed in relation to serious issue to be tried, that nothing that I have said today is, or is to be taken in any way, shape or form as, a binding indication as to what the position might be on a return date in relation to any of the elements of American Cyanamid or as to the appropriateness or otherwise of the continuance of the injunction. There is no doubt that this matter has come on as a matter of some urgency and that the arguments that each party has been developing have not fully matured at this stage. That is particularly true of the position of the defendants who have only had short notice of this application. Both in the witness statement of Mr. Blair and in the skeleton argument of Mr. McCormick, the right of the defendant to augment or develop the submissions on any return date is reserved. Finally, I thank both the parties for their detailed written and oral submissions on the issues that arose before me today, which have facilitated the giving of this extempore judgment at the end of such submissions. 

If you want to know anything about Rangers then go to Kerrydale Street.

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So, it looks like Rangers & SD had an agreement that, should Rangers enter into any prospective Retail Deal with any other party, notification of it would be sent to SD to allow them to match the proposed third party deal - and if they did, Rangers would be obliged by the terms to go with SD.

 

Rangers, having identified a prospective third party - have notified SD. but SD argue such notification does contain sufficient detail or breakdown.

 

Here we go again.

Edited by D'Artagnan
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15 hours ago, DevilBlue WeeThe said:

Please not again - was the SD merch debacle not supposed to be done and dusted?

 

Crazy if true about the SD first refusal and it not being made known.

Some seem to think the announcement last year was a parting of the ways between Rangers & SD - this appears to be myth and misunderstanding rather than fact WBD.

 

The coverage at the time suggested a revised deal which was more favourable to the club but still working in tandem with SD.

 

https://www.bbc.co.uk/sport/football/40358177

 

This latest spat appears to be each party's differing interpretation of the amount of detail included in the notice give to SD regarding a third party deal.

Edited by D'Artagnan
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Perhaps I am missing something here but the club are not losing out financially regardless of whether there's a deal in place with SD or a third party ?

 

Presumably JD offered better terms & SD have matched(or bettered) those terms?

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