Cepia HK Ltd v The Character Group Plc

Cepia HK Ltd v The Character Group Plc

The Distribution Agreement referenced in the Option Agreement was the prior course of dealing between the parties, whereby the Defendant was given the opportunity to bid for distribution rights for the Claimant’s products. This course of dealing did not continue in existence from 15 October 2014, when the Claimant terminated the relationship and refused to invite the Defendant to toy fairs. Therefore, the condition precedent for exercising the share option was not satisfied, and the Defendant is not obliged to issue and allot shares to the Claimant.

Parties
Claimant: Cepia HK Limited; Defendant: The Character Group PLC
Jurisdiction
England and Wales
Judgment Date
08 December 2016
Procedural Posture
Commercial Contractual Dispute / Trial Judgment
Outcome
Claim dismissed
Legal Topics
Share Option Agreements, Distribution Agreements, Contractual Construction, Termination of Commercial Relationships, Rectification, Estoppel
Contract Law Commercial Law Share Option Agreements Distribution Agreements Contractual Construction Termination of Commercial Relationships Rectification Estoppel

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Parties

Cepia HK Limited

Claimant

The Character Group PLC

Defendant

Procedural Posture

Commercial Contractual Dispute / Trial Judgment

Legal Issues

  1. 1 What was the nature and content of the 'Distribution Agreement' referenced in the Option Agreement?
  2. 2 Did the Distribution Agreement continue in existence from 23 July 2010 to 22 July 2015?
  3. 3 Was the exercise of the share option by the Claimant valid?

Ratio Decidendi

The Distribution Agreement referenced in the Option Agreement was the prior course of dealing between the parties, whereby the Defendant was given the opportunity to bid for distribution rights for the Claimant’s products. This course of dealing did not continue in existence from 15 October 2014, when the Claimant terminated the relationship and refused to invite the Defendant to toy fairs. Therefore, the condition precedent for exercising the share option was not satisfied, and the Defendant is not obliged to issue and allot shares to the Claimant.

Court Disposition

Claim dismissed

Orders

  • The Defendant is not obliged to issue and allot shares to the Claimant.