BL-2024-000734 - [2025] EWHC 3003 (Ch)

The seventh ground is that I erred in law in holding that an implied term, restricting the exercise of the power of appointment, of the type described by the Supreme Court in Braganza v BP Shipping Ltd [2015] UKSC 17 did not arise in connection with the exercise of the power of appointment in this case.

Braganza is authority that a discretionary power conferred on one party to an agreement must, in certain circumstances, be exercised honestly and in good faith, and must not be abused (per Baroness Hale [17] to [31]). It is clear that such an implied term does not arise as regards a unilateral right given to a chargee (such as a right to terminate) (I cite the authorities for this position in [81] to [84]). The Claimants argue that these authorities apply only to a right to terminate, and do not apply to a power to request information which arises during the course of a charge, since the exercise of a right to terminate that involves no co-operation or involvement of the other party and is entirely unilateral in nature, whereas a right to provide information requires co-operation from the chargeor. This is, I think, simply wrong – the exercise of a right to require information is every bit as unilateral as the exercise of a right to terminate. In each case, the exercise of the right places certain obligations on the Chargee, but in neither case is the position analogous to the sort of position envisaged in Braganza, where the decisions affects the rights of both parties to the contract, and where the decision-maker has a clear conflict of interest.

I therefore do not think that it is in any way arguable that a Braganza duty on a chargee in deciding whether or not to exercise a power under the charge to appoint an office-holder. This ground of appeal therefore has no reasonable prospect of success.