Union Music Ltd & Anor v Watson [2002] EWCA Civ 680 (29 April 2002)

Union Music Ltd & Anor v Watson [2002] EWCA Civ 680 (29 April 2002)

A party cannot rely on a shareholders' agreement to strike out a claim while simultaneously challenging its validity; Mr Watson must elect to accept or deny the agreement's validity before proceeding with his application.

Citation
[2002] EWCA Civ 680
Parties
Claimant/respondent: Union Music Ltd; Claimant/respondent: Arias Limited; Defendant/appellant: Russell John Watson; Defendant/appellant: Blacknight Limited
Jurisdiction
England and Wales
Judgment Date
29 April 2002
Procedural Posture
Interlocutory Appeal / Appeal From Chancery Division, Manchester District Registry
Outcome
Appeal dismissed
Legal Topics
Shareholders' Agreements, Restraint of Trade, Undue Influence, Authority to Litigate, Election Between Inconsistent Positions, Ratification of Proceedings
Company Law Contract Law Civil Procedure Shareholders' Agreements Restraint of Trade Undue Influence Authority to Litigate Election Between Inconsistent Positions +1 more

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Parties

Union Music Ltd

Claimant/respondent

Arias Limited

Claimant/respondent

Russell John Watson

Defendant/appellant

Blacknight Limited

Defendant/appellant

Procedural Posture

Interlocutory Appeal / Appeal From Chancery Division, Manchester District Registry

Legal Issues

  1. 1 Whether Mr Watson must elect to accept or deny the validity of the shareholders' agreement before proceeding with strike-out application
  2. 2 Whether Arias has authority to litigate as a claimant
  3. 3 Whether shareholders' agreement is unenforceable as restraint of trade or unconscionable bargain

Ratio Decidendi

A party cannot rely on a shareholders' agreement to strike out a claim while simultaneously challenging its validity; Mr Watson must elect to accept or deny the agreement's validity before proceeding with his application.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Costs to be subject to detailed assessment