CL-2022-000025 - [2025] EWHC 2331 (Comm)

There were certain points at issue between the parties at the trial which it is convenient to deal with out the outset.

The first of these concerns the mechanics for the transfer of PGC shares. The Court directed (first in an Order of Foxton J dated 22 July 2022, and later in an Order of Andrew Baker J dated 23 February 2024) that the parties exchange letters setting out their position in relation to a number of points concerning the transfer of PGC shares. From this, a fair degree of common ground emerged.

Mr Kerr’s then solicitors, BCLP, set out his case as to the process for transferring Mr Perelman’s PGC shares, in circumstances where the shares existed as paper share certificates and if the paper share certificates were to be dematerialised, as follows:

In response, Mr Perelman’s solicitors, Mishcon de Reya, agreed that the details of the processes of dematerialisation and electronic transfer were as thus set out. They in turn set out Mr Perelman’s case on the process for transferring his PGC shares on a paper basis as follows:

BCLP subsequently (by their letter dated 7 February 2025) confirmed on behalf of Mr Kerr that he did not dispute the above as a summary of the process to transfer paper shares in PGC.

BCLP did initially suggest that the process of transferring paper shares would require an escrow arrangement. However, BCLP subsequently clarified Mr Kerr’s position in this respect, to the effect that it was said that an escrow arrangement was not required as a matter of Guernsey law when transferring paper shares, but rather as a matter of practicality. It is clear that an escrow arrangement is not necessaryfor the transfer of paper shares to take place. What Mr Kerr was suggesting was that it (or something similar) would in practice be needed in the case of a sale of shares when the share transfer would be in paper form, to ensure both sides performed their respective obligations.

It was, therefore, common ground that it was (and remains) possible for Mr Perelman to transfer his shares in PGC to Mr Kerr either electronically or in paper form. It was also common ground that the only step Mr Perelman needed to take in relation to a paper transfer of his PGC shares was to sign a share transfer form and deliver it to Apex together with his share certificates. The rest of the steps to complete the transfer would be taken by PGC.

It is also the case that, if the shares were transferred to Mr Kerr in paper form, he could arrange for them to be dematerialised after they had been transferred to him if he preferred to hold them in electronic form. Indeed, given that it appeared that Mr Kerr already held other PGC shares in electronic form, the process of dematerialising the PGC Shares would potentially be faster than it would be for Mr Perelman to dematerialise them before transfer, because Mr Kerr would already have an intermediary in place.

Mr Kerr also made certain points by reference to the Listing Rules of TISE (“the Listing Rules”), which was (and is) the exchange on which PGC’s shares are listed. He made particular reference to the model code for security transactions by persons discharging managerial responsibilities in respect of issuers (“the Model Code”) which appears at Schedule 6 to the Listing Rules. Pursuant to rule 3.1.4 of the Listing Rules, an issuer must comply with the Model Code.

As it sets out in its opening words, the Model Code imposes restrictions on dealing in the securities of an issuer beyond those imposed by law. Its purpose is to ensure that Persons Discharging Managerial Responsibilities (“PDMRs”) do not abuse, and do not place themselves under suspicion of abusing, inside information which they may be thought to have, especially in periods leading up to an announcement of the issuer’s results. There was no dispute that Mr Kerr was, due to his position as Managing Director of PGC, a PDMR in respect of PGC.

Mr Kerr argued that the restrictions placed on a PDMR in dealing in securities in a “prohibited period” were relevant to the question whether he and Mr Perelman could have intended to be legally bound by the SPA. The parties were given permission, in an order of Knowles J dated 7 April 2025, to rely on expert evidence from a Guernsey lawyer addressing certain issues relating to this. I will refer to their respective views later in this judgment. It is convenient to set out at this point some of the relevant provisions of the Model Code and the common ground between the parties in relation to them.

In summary, under the Model Code, a PDMR must not deal in any securities of the issuer without obtaining clearance to deal in advance in accordance with the requirements of the code. That clearance must be sought and obtained from an individual or a body internal to the company, depending on the identity of the PDMR seeking the clearance. That may, for example, be the chair or the chief executive, a designated director or (where the PDMR seeking clearance is both the chair and chief executive) the board of directors. A PDMR who is given clearance under the code must deal as soon as possible and in any event within 2 business days of clearance being received.

A PDMR must not be given clearance to deal in any securities of the issuer during a prohibited period, save for identified exceptional circumstances. Those exceptional circumstances include if the PDMR is in severe financial difficulty or there are other exceptional circumstances, in which case clearance may be given for the PDMR to sell securities, and in that event the “Authority” (i.e. the International Stock Exchange Authority Limited, also known as TISEA) has to be consulted at an early stage regarding an application so to deal. The ability to give clearance to deal in a prohibited period in exceptional circumstances does not extend to giving clearance to purchase securities in the issuer.

For these purposes, a “prohibited period” means any “closed period” or any period when there exists any known inside information in relation to the issuer by a PDMR. A closed period, in turn, means a period of 30 calendar days immediately preceding certain identified announcements or publications by the issuer, for example the publication of its annual accounts.

The above is all clear from the Model Code, and there was no dispute between the parties, or their Guernsey lawyers, as to the above matters. Mr Bamford, who was Mr Kerr’s expert in Guernsey law, also explained that in the event of breach of the Model Code, i) the only party against which the Authority could take action was the issuer of the securities, under paragraph 4 of the Operational Matters section of the Listing Rules; and ii) there would be no sanction against a PDMR for breach of the Model Code. That point was adopted in Mr Perelman’s closing submissions.

I refer below to the key issue between the Guernsey law experts, which was whether the execution/settlement of a previously agreed contract to sell shares fell within the definition of “dealing” under the Model Code.

One other related point of background to mention at this stage is that Mr Kerr also relied upon the Share Trading Policy of PGC. This was a two page document, which explained it had been adopted by the PGC board, and developed in accordance with the Model Code “to provide guidance on when it is likely to be in order to trade and in what circumstances directors cannot trade in the Company’s shares.” The key point in it which Mr Kerr relied upon was that it required him, before dealing in PGC shares, first to notify the board and to receive clearance to deal from the board.

I now turn to deal with the issues between the parties.