A company wanted to undo five related agreements because they lacked necessary approvals. A judge agreed the agreements were all part of one big deal, so they were all invalid. A higher court said the judge was right and wouldn't overturn the decision.
Key Facts
- •Metal NRG PLC (Claimant) sought a declaration that five April 2021 agreements (April Transaction Documents), including a Share Purchase Agreement (SPA), were ineffective due to lack of shareholder approval under s.190 Companies Act 2006.
- •The Deputy ICCJ Kyriakides found for the Claimant, ruling the five documents constituted an 'arrangement' under s.190, requiring shareholder approval.
- •The First and Third Defendants appealed, arguing the 'arrangement' question was a factual issue unsuitable for summary judgment.
- •The April Transaction Documents included the SPA, a Company Option, a First Defendant Option, a charge, and a variation to the original Shareholders' Agreement.
- •The Claimant argued the agreements were interdependent, while the Defendants argued they were separate.
- •Ongoing proceedings against the Second Defendant, Mr. Rocco, were also noted.
Legal Principles
Section 190 Companies Act 2006 requires shareholder approval for substantial property transactions.
Companies Act 2006
The definition of 'arrangement' in s.190 is flexible and can include understandings without contractual effect.
Murray v Leisureplay Plc [2004] EWHC 1927 (QB); In re Duckwari Plc [1999] Ch 253
Outcomes
Mr Justice Adam Johnson refused permission to appeal.
The Judge found the April Transaction Documents constituted a single 'arrangement' due to their interconnectedness, timing, and overall commercial purpose of resetting the parties' relationship. The Judge's interpretation of the evidence was reasonable and the Defendants failed to present counter-evidence.