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

In respect of an intention to create legal relations, the position is even clearer in relation to the ROFR. This is apparent from the terms of the ROFR itself.

By contrast there is nothing in the ROFR to suggest that the parties did not intend it to be legally binding. Mr Kerr’s pleaded position (at paragraph 76 of his Defence) that it “was a non-binding term sheet and/or there was no intention to create legal relations” is simply not a credible position given the terms of the document he signed.

In his oral closing submissions, Mr Kerr advanced a new point. He said that, at some earlier date, he had entered into an agreement with Mr Perelman to the effect that any new investments he (Mr Kerr) undertook had to be entered into through Torchlight Fund LP (“Torchlight”) (a fund which he had described in his witness statement as “PGC’s current principal business”). This, he said, meant that he and Mr Perelman could not have intended to be bound by the ROFR, because Mr Kerr’s exercise of his right of first refusal under his own name under the ROFR would have put him in breach of that prior agreement.

Not only had this point not been previously advanced, but Mr Kerr had not disclosed any copy of this agreement (nor did he seek to do so during his closing submissions), nor had he put this point to Mr Perelman in cross-examination. In those circumstances, it is not open to Mr Kerr to advance it. I was not told what terms were in that other alleged agreement, and am not able to assess whether or not Mr Kerr’s exercise of rights in his own name under the ROFR would have breached them. It may well be there would have been a defence to a claim by Mr Perelman for breach of that other agreement in circumstances where Mr Perelman had entered into the ROFR (whether that be by way of implied amendment or of waiver or estoppel or some other route). But in any event, even on Mr Kerr’s account of matters, the point does not work, because clause 7(k) of the ROFR stated:

“Right of Nomination. Kerr may at his election … assign the rights and obligations to this deed to another party or parties. In this event, Perelman agrees to execute a refreshed agreement in the name of the party or parties.”

If the potential problem that Mr Kerr had identified had arisen and there had been no other way round it (which, as I say, seems unlikely), Mr Kerr could have assigned his rights and obligations under the ROFR to Torchlight. (Footnote: ⁵)

In summary, this new point did not suggest that the parties had not had an intention to create legal relations in entering into the ROFR.

There was no separate point taken by Mr Kerr in relation to the ROFR that it was too vague or uncertain to be enforceable, and certainly no specific points were advanced in relation to any of the terms of the ROFR as to any alleged vagueness. If any such point had been advanced, I would have rejected it. The terms were obviously sufficiently clear and detailed to be legally enforceable, particularly bearing in mind the court’s reluctance to find as too vague a contract that the parties had intended to be legally binding (as they clearly did in relation to the ROFR). In his written opening, Mr Kerr stated, in support of his submission that the ROFR (which he referred to as the “ROFR Term Sheet”) was not a binding and legally enforceable contract, that it “was negotiated at the same time and subject to the same uncertainty as the SPA Term Sheet.” The fact that it was negotiated at the same time as the SPA does not make it unenforceable (even if I had concluded that the SPA was unenforceable, which I have not). The suggestion that the ROFR was “subject to the same uncertainty” as the SPA does not follow – they were different documents with different terms such that, even if I had concluded the SPA was too uncertain to be binding (which I have not), the same conclusion would not necessarily or automatically follow for the ROFR.