STOBART CAPITAL LIMITED v ESKEN LIMITED

STOBART CAPITAL LIMITED v ESKEN LIMITED

The Management Agreement was validly terminated by Esken on 12 March 2019 under clause 8.2.2, as SCL had ceased to carry on its business or substantially the whole of its business. SCL was not in material breach prior to this date, so Esken was not entitled to recover paid retainer fees. SCL was entitled to retainer and management fees up to termination, but not to transaction fees for the Flybe investment or follow-on Airportr investment, as these were made via SPVs and SCL was not involved at the relevant time. Esken was entitled to recover a proportion of helicopter flight expenses from SCL.

Parties
Claimant: Stobart Capital Limited; Defendant: Esken Limited
Jurisdiction
England and Wales
Judgment Date
06 May 2022
Procedural Posture
Commercial Contract Dispute / Final Judgment
Outcome
Management Agreement validly terminated by Esken on 12 March 2019. SCL entitled to retainer and management fees up to termination. Esken entitled to partial recovery of helicopter flight expenses. No transaction fees payable for Flybe or Airportr follow-on investment.
Legal Topics
Termination of Contract, Material Breach, Management Agreement, Implied Terms, Reasonable Endeavours, Confidential Information, Corporate Finance, Remedies
Contract Law Commercial Law Termination of Contract Material Breach Management Agreement Implied Terms Reasonable Endeavours Confidential Information +2 more

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Parties

Stobart Capital Limited

Claimant

Esken Limited

Defendant

Procedural Posture

Commercial Contract Dispute / Final Judgment

Legal Issues

  1. 1 Whether Esken Limited validly terminated the Management Agreement with Stobart Capital Limited under clauses 8.2.2, 8.2.3, or 8.3.4
  2. 2 Whether SCL was entitled to retainer, management, and transaction fees under the Management Agreement
  3. 3 Whether Esken was entitled to recover paid fees and expenses from SCL

Ratio Decidendi

The Management Agreement was validly terminated by Esken on 12 March 2019 under clause 8.2.2, as SCL had ceased to carry on its business or substantially the whole of its business. SCL was not in material breach prior to this date, so Esken was not entitled to recover paid retainer fees. SCL was entitled to retainer and management fees up to termination, but not to transaction fees for the Flybe investment or follow-on Airportr investment, as these were made via SPVs and SCL was not involved at the relevant time. Esken was entitled to recover a proportion of helicopter flight expenses from SCL.

Court Disposition

Management Agreement validly terminated by Esken on 12 March 2019. SCL entitled to retainer and management fees up to termination. Esken entitled to partial recovery of helicopter flight expenses. No transaction fees payable for Flybe or Airportr follow-on investment.

Orders

  • Esken to pay SCL £300,000 (inclusive of VAT) in retainer fees for 1 August 2018 to 31 January 2019.
  • Esken to pay SCL £172,603 (inclusive of VAT) in management fees for Airportr investment up to 14 February 2019.