TC09562 - [2025] UKFTT 00762 (TC)

The starting point in this process must inevitably be the terms of the Agreements themselves.

At the hearing, both parties referred me to a number of decisions which related to the interpretation of contracts and, in particular, the inter–relationship between a textual and a contextual analysis of a contract and the extent to which the words in a contract should be construed in a manner which gives rise to a commercially sensible conclusion. However, I do not think that those cases are of great assistance in the context of this decision. I say that because I did not understand the parties’ disagreement in relation to identifying the legal rights and obligations to which the Agreements gave rise to be based in any way on a divergence in the meaning of the words used in the Agreements and, hence, to be a question of construing those words. Instead, their dispute turned on the conclusions to be drawn from those words.

With that introduction, I turn first to the terms of the SPA.

Both the recitals to, and the main operative provisions of, the SPA – which is to say clauses 2 and 3 – stipulated that, whilst CPW was agreeing to sell the Goodwill to BBUK, it was not selling the Businesses to BBUK but only selling the right to carry on the Businesses to BBUK. The language used in those provisions appears to have been quite deliberate and it contrasts with the language used in each of the Prior SPAs, which clearly did involve a transfer of the Businesses to CPW as a going concern and made express provision to that effect.

Moreover, only £1,000 of the aggregate consideration of £50,800,000 which was paid by BBUK to CPW under the SPA was allocated to the sale of the right to carry on the Businesses. The paucity of the amount in question is again indicative of the fact that the SPA was not contemplating a sale of the Businesses themselves (or, for that matter, ascribing much value to the right to carry on the Businesses).

In the circumstances, I can see no force in the argument that the fact that certain clauses in the SPA – notably, clauses 4.1, 7.1 and 9.2 – referred to there having been a transfer of the Businesses meant that the Businesses had been transferred. It is perfectly clear from the recitals and the main operative provisions that no such transfer was contemplated and that the references in those clauses to the Businesses’ having been transferred were simply drafting errors.