TC09562 - [2025] UKFTT 00762 (TC)

Fecha: 23-May-2025

The MSA

The MSA

28.

The key terms of the MSA were as follows:

(1)

the recitals provided that:

(a)

BBUK had “acquired the right to carry on the Businesses” pursuant to the SPA;

(b)

CPW operated a retail and distribution business under various brands; and

(c)

BBUK wished to appoint CPW to operate and manage the Businesses on its behalf on the terms of the agreement and CPW had agreed to do so;

(2)

clause 2 provided that the agreement would commence on the effective date – defined in clause 1.1 as the date of its execution (which is to say 25 June 2008) – continue for an initial term of fifteen years and then be automatically extended indefinitely unless terminated by either party pursuant to clause 7;

(3)

clause 3 provided that CPW:

(a)

would perform the management services described in a schedule to the agreement (the “Management Services”) in respect of each of the Businesses with reasonable care and skill to the extent reasonably necessary for the Businesses to be operated at no lesser standard than that at which they were operated immediately prior to the date of the agreement. The Management Services were defined as:

(i)

the operation and management of each of the Businesses;

(ii)

the collection of all revenue of the Businesses;

(iii)

the payment of all creditors of the Businesses as a cost of the Businesses;

(iv)

all necessary support that might be required including the provision of professional staff, legal, tax, accountancy and IT advice, each as a cost of the Businesses;

(v)

tax services; and

(vi)

“all other matters reasonably required to operate and manage the Businesses”;

(b)

would take out (or procure the taking out of) adequate employers’ liability insurance and public liability insurance for similar amounts as applied to the Businesses prior to the date of the agreement; and

(c)

would procure that CPWUK performed the “Property Management Services” (defined in the same way as in the SPA but with the exclusion of the services described in paragraphs 27(11)(b)(v) and 27(11)(b)(vi) above)

and that BBUK would not do anything to prevent CPW from carrying out the Management Services or CPWUK from carrying out the Property Management Services;

(4)

clause 5 provided that:

(a)

in consideration of CPW’s carrying out its obligations under the agreement, BBUK would pay to CPW a management charge equal to 95% of the aggregate revenue excluding VAT of the Businesses, calculated monthly;

(b)

such amount would be paid monthly in arrear together with VAT “from all revenue of the Businesses received by or on behalf of CPW as part of carrying out the Management Services for [BBUK]”; and

(c)

the parties reserved the right to change the management charge by mutual agreement in writing. (As noted in paragraph 14 above, the management charge was subsequently reduced by mutual agreement to 91.19%. This was effected by the execution of a letter agreement between the parties on 29 January 2010 (the “Side Letter”) the terms of which are summarised below);

(5)

clause 6 related to employment contracts and was in identical terms to those set out in paragraph 27(13) above;

(6)

clause 7 provided that:

(a)

either party could terminate the agreement on six months’ written notice (provided that the earliest date on which such notice could be effective was the final day of the initial term); and

(b)

in any event, either party could terminate the agreement at any time, including during the initial term, in the event of:

(i)

a material breach by the other party of its obligations under the agreement which, if capable of remedy, was not remedied within thirty days of notice of the breach; and

(ii)

the dissolution, liquidation or administration of the other party; and

(7)

clause 8 provided, inter alia, that:

(a)

the agreement and the SPA were the entire agreement between the parties in connection with the subject matter of the agreement and the SPA;

(b)

at CPW’s request and cost, BBUK would take all such steps as were reasonably necessary or desirable to enable CPW to carry on the Management Services; and

(c)

nothing in the agreement would constitute a partnership or employment relationship between the parties.