Yodel Delivery Network Limited v Jacob Corlett & Ors

On an interim injunction application concerning disputed control of a company, the High Court held that it had jurisdiction to grant effective ancillary relief under Senior Courts Act 1981, section 37. The jurisdiction had to be exercised by reference to the circumstances of the case.

Applying the American Cyanamid principles, the court found a serious issue to be tried concerning the validity and continuing effect of warrants. Nevertheless, damages were an adequate remedy for the alleged shareholders. The proposed cross-undertaking was also inadequate, and the balance of convenience favoured allowing the company’s urgent transformation to continue. The injunction was therefore refused.

Yodel Delivery Network Limited applied for interim relief in proceedings concerning warrants allegedly entitling Shift Global Holdings Limited and Corja Holdings Limited to subscribe for shares which would give them control of Yodel. The applicants sought to restrain Yodel from conducting its business other than in the ordinary course pending an expedited trial of the warrant claim.

The applications also concerned amendment of Corja’s claim, determination of the warrant claim as a preliminary issue, expedition, and security for costs. The central issues were whether the court had jurisdiction to grant the proposed injunction, whether the applicants satisfied the interim relief requirements, and whether the warrant claim raised a serious issue to be tried.

1. Jurisdiction. The court held that section 37 of the Senior Courts Act 1981 conferred jurisdiction to grant the injunction sought. The jurisdiction was broad and flexible, but the separate question was whether it was just and convenient to exercise it. The court took account of Dilato Holdings Pty Ltd v Learning Possibilities Ltd [2015] EWHC 592 (Ch) and applied the approach explained by Lord Leggatt in Convoy Collateral Ltd v Broad Idea International Ltd [2021] UKPC 24; [2023] AC 389.
2. Serious issue to be tried. Applying the low threshold described in Unitel SA v dos Santos [2024] EWCA Civ 1109, and the approach in SportsDirect.com Retail Ltd v Newcastle United Football Co Ltd [2024], the court found a serious issue on each principal defence. There was a sufficiently arguable case that the director had not breached his duties when issuing the warrants, that the quorum issue had been addressed by the shareholder resolution, and that the warrants had not lapsed before exercise. No final findings were made.
3. American Cyanamid factors. The court considered the interim application by reference to the American Cyanamid principles, while also bearing in mind the broader jurisdictional approach in Convoy Collateral. Damages would adequately compensate the applicants because, even after transformation, Yodel would continue as a business in which they could become majority shareholders, and any financial loss caused by delay could be compensated.
4. The cross-undertaking was inadequate. Corja had no substantial assets, and Shift’s balance sheet was unreliable. The court would, if necessary, have required fortification. It was unnecessary to decide whether the undertaking should extend to JLL.
5. The balance of convenience would in any event have favoured Yodel. The injunction would have required its directors to subordinate their decision-making powers, would not merely have preserved the status quo, and risked impeding a transformation which had a prospect of improving Yodel’s financial position. The Injunction Application was dismissed. Permission was granted for Corja’s amendment, and the warrant claim was ordered to be tried as an expedited preliminary issue.