United Company Rusal Plc v Crispian Investments Ltd & Anor [2018] EWHC 2415 (Comm) (14 September 2018)

United Company Rusal Plc v Crispian Investments Ltd & Anor [2018] EWHC 2415 (Comm) (14 September 2018)

The Contested Notice was invalid and ineffective because the ROFR mechanism in clause 2.5(5) of the Framework Agreement could only be triggered by an offer from a bona-fide third party purchaser, which does not include Whiteleave or its affiliates. The ROFR is a joint right exercisable only by both Rusal and Whiteleave together. An offer from Bonico, an affiliate of Whiteleave, could not trigger the ROFR, and Crispian was precluded from disposing of shares pursuant to the Contested Notice.

Citation
[2018] EWHC 2415 (Comm)
Parties
Claimant: United Company Rusal PLC; First Defendant: Crispian Investments Limited; Second Defendant: Whiteleave Holdings Limited
Jurisdiction
England and Wales
Judgment Date
14 September 2018
Procedural Posture
Commercial Court Claim (shareholder Dispute) / Judgment After Expedited Trial of Preliminary Issues
Outcome
Claimant succeeds; declaration granted that the Contested Notice is invalid and ineffective.
Legal Topics
Shareholders' Agreements, Right of First Refusal (rofr), Interpretation of Contracts, Transfer of Shares, Pre Emption Rights
Contract Law Company Law Shareholders' Agreements Right of First Refusal (rofr) Interpretation of Contracts Transfer of Shares Pre Emption Rights

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Parties

United Company Rusal PLC

Claimant

Crispian Investments Limited

First Defendant

Whiteleave Holdings Limited

Second Defendant

Procedural Posture

Commercial Court Claim (shareholder Dispute) / Judgment After Expedited Trial of Preliminary Issues

Legal Issues

  1. 1 Whether Crispian validly commenced a right of first refusal (ROFR) procedure under the Framework Agreement by notice dated 6 February 2018
  2. 2 Whether an offer from Whiteleave or its affiliate Bonico can trigger the ROFR mechanism as a 'bona-fide third party purchaser' under clause 2.5(5)
  3. 3 Whether the ROFR is a joint right exercisable only by both Rusal and Whiteleave or can be exercised severally

Ratio Decidendi

The Contested Notice was invalid and ineffective because the ROFR mechanism in clause 2.5(5) of the Framework Agreement could only be triggered by an offer from a bona-fide third party purchaser, which does not include Whiteleave or its affiliates. The ROFR is a joint right exercisable only by both Rusal and Whiteleave together. An offer from Bonico, an affiliate of Whiteleave, could not trigger the ROFR, and Crispian was precluded from disposing of shares pursuant to the Contested Notice.

Court Disposition

Claimant succeeds; declaration granted that the Contested Notice is invalid and ineffective.

Orders

  • Declaration that the Contested Notice dated 6 February 2018 is invalid and of no effect.
  • Crispian is precluded from disposing of shares in reliance on the Contested Notice.