Metal NRG Plc v Britenergy Holdings LLP & Ors

For the purposes of Companies Act 2006, s.190, an “arrangement” is inherently flexible and may include a coherent package of agreements, even where the agreements are not technically interdependent or individually contractual components of one another.

Whether documents form one arrangement involves legal characterisation informed by the factual background, commercial purpose, timing, execution and intended operation of the documents. The issue may be determined summarily where the evidence is sufficiently clear and there is no real prospect that a trial would affect the conclusion. A hypothetical inquiry into how parties might have reacted to alternative events is not essential.

The claimant obtained summary judgment before Deputy ICCJ Kyriakides on its case that five documents executed in April 2021 constituted one “arrangement” for the purposes of s.190 Companies Act 2006. One document, the SPA, was accepted to fall within s.190. The remaining documents were therefore also ineffective because the required shareholder approval had not been obtained.

The First and Third Defendants sought permission to appeal, arguing that the characterisation issue was factual, that the judge had misunderstood the commercial effect of the documents, and that the matter required a trial. Leech J refused permission on the papers. The renewed application concerned whether there was a real prospect of success or another compelling reason for an appeal.

1. Permission refused. The proposed appeal had no real prospect of success and there was no other compelling reason for it to proceed.
2. Section 190 Companies Act 2006 uses “arrangement” in inherently flexible terms. The concept is wide enough to include understandings without contractual effect: Murray v Leisureplay Plc [2004] EWHC 1927 (QB), citing In re Duckwari Plc [1999] Ch 253.
3. The five documents were properly treated as one arrangement. They were negotiated and executed together, addressed the parties’ revised commercial relationship, operated coherently as an overall package, and were intended to regulate their future interests in the Third Defendant. The Company Option made commercial sense only alongside the SPA, while the First Defendant Option operated by reference to the Company Option. It would be illogical to separate the documents.
4. The question involved both factual assessment and legal characterisation, but that did not automatically require a trial. On a summary judgment application, once the applicant has shown strong grounds that no trial is needed, the respondent must produce evidence showing a real contrary issue. Assessing the evidence in that way does not reverse the burden of proof.
5. It was unnecessary to conduct a hypothetical inquiry into how the parties might have reacted if one agreement had been repudiated. The relevant question was whether, on the known facts, the contracts could properly be characterised as one arrangement.
6. The existence of related proceedings concerning the Second Defendant did not justify reopening the s.190 issue. Overlap in subject matter is not a reason to interfere with a decision properly and finally reached, and may instead limit the issues in later proceedings.

1. High Court (Chancery Appeals): renewed application for permission to appeal refused.
2. High Court: Leech J had refused permission to appeal on the papers.
3. High Court: Deputy ICCJ Kyriakides granted the claimant summary judgment and made a declaration and consequential orders concerning the April Transaction Documents.