+44 (0)20 7797 8600

MENU

 

HIGH COURT ENFORCES NEGOTIATIONS LOCK-OUT CLAUSE – DAVID LASCELLES FOR SUCCESSFUL CLAIMANT

David Lascelles acted for the successful Claimant in Mercer Land Limited v Preem Limited [2016] EWHC 923 (QB). The claim arose out of heads of terms for a joint venture to develop and sell a multi-million pound site in East London owned by the Defendant.

The agreement specified that certain clauses were to be legally binding whilst others were to form the basis for discussion leading to comprehensive contractual documentation to be entered into by the parties in due course.

One of the clauses expressly stated to be binding was clause 10. It provided an exclusivity period in the Claimant’s favour, preventing the Defendant from engaging in discussions or negotiations with anyone other than the Claimant for 1 year from the date of the agreement. It obliged the Defendant to notify the Claimant if it did so engage. Clause 10 also contained an acknowledgement by the Defendant that the Claimant would incur significant costs, fees and expenses by relying on clause 10.

Clause 10 further provided that if the Defendant breached its obligations thereunder it would be obliged to indemnify the Claimant in relation to all the latter’s costs, fees, disbursements and expenses in connection with the development and sale of the site.

The Claimant incurred substantial legal, financing and project management costs in connection with the development and sale of the site.

However the Defendant entered into discussions with a third party regarding the purchase of the site. This was with a view to the Defendant and the third party progressing the sale and development of the site to the exclusion of the Claimant. The Defendant did not, however, inform the Claimant of such matters.

The Claimant then discovered the Defendant’s wrongful conduct. It brought proceedings in order to recover the sums it had expended.

The Defendant sought to defend on numerous bases. These included that the agreement was unenforceable as a mere agreement to agree. In the alternative the Defendant alleged that there had been an oral variation to the agreement by which the Claimant agreed that the Defendant would not have to indemnify the Claimant.

In behalf of the Claimant, David argued for the enforceability of the lock-out agreement and further that the Defendant had no real prospect of successfully demonstrating that the oral variations were made.

Pursuant to a judgment dated 22 April 2016, the High Court acceded to David’s submissions and dismissed the Defendant’s defences. Judgment was entered in the Claimant’s favour for the full amount of the costs incurred on the transaction, interest and the costs of the proceedings. A charging order was also granted over the site so as to provide security for the sums owing from to David’s client.

A copy of the judgment is available HERE.

David was instructed for the Claimant by Thrings LLP.

David Lascelles is recommended by Chambers & Partners for commercial litigation and contentious company law. He is also recommended as a leading barrister handling corporate disputes. He frequently acts in commission and related claims relating to the sale of properties, shares and businesses.

Posted: 25.04.2016 at 17:07
Tags:  Cases  Commercial Law
Share this page
Print page

Cookies help us deliver our services. By continuing to browse this website, you agree to our use of cookies. OK