SDI Retail Services Ltd v The Rangers Football Club Ltd

Where a contract gives a party a right to match third-party offers, that right may arise repeatedly during the period for which the matching mechanism operates. An earlier exercise of the right does not, without clear contractual language, remove the obligation to notify the party of later offers concerning the same rights.

A contractual prohibition triggered by matching an offer may prevent dealings with both the original offeror and other third parties. Final injunctive relief to enforce such a prohibition will usually be granted, but remains discretionary and may be refused where it would be unjust or unconscionable. The court must assess the practical consequences of the order, rather than rely solely on whether it is described as mandatory or prohibitory.

The claimant and defendant entered into a retail agreement concerning Rangers-branded merchandise and replica football kits. Schedule 3 provided a matching-right procedure for third-party offers concerning defined Offered Rights.

The defendant later entered into an agreement with another third party concerning overlapping rights without giving the claimant a further notice or opportunity to match. The issues were whether the matching right and associated prohibition applied again after an earlier matching exercise, and whether final injunctions should be granted.

1. Construction. The matching provisions were construed by reference to the agreement as a whole, its context and commercial purpose.
2. Repeated matching rights. Paragraph 5.2 contained no exception where the claimant had already matched an earlier offer. Paragraph 5.8 prohibited dealings with the original or any other third party concerning an Offered Right for which the matching right had been exercised. Paragraph 5.9 expressly recognised that a new or amended offer could be a separate Third Party Offer. The matching right and notification obligation therefore applied repeatedly during the relevant period.
3. Breach. The defendant breached the agreement by entering into the later third-party agreement without first giving the claimant the opportunity to match it.
4. Injunctions. Under section 37(1) of the Senior Courts Act 1981, final injunctive relief remains discretionary. It will usually be granted to enforce an established contractual prohibition, but may be refused where it would be unjust or unconscionable. The court must consider the practical consequences of the order rather than its formal classification as mandatory or prohibitory.
5. The circumstances justified injunctions restraining future dealings and requiring the defendant not to perform, assist performance of, or inform the third party that it would not perform, the later agreement. The order had to be expressed clearly and precisely.

First-instance decision. No appellate history was stated in the judgment.