March 1, 2016

In 2014, pursuant to various commercial discussions between the claimant, Sports Direct International plc, and the defendant, Rangers Football Club plc, Rangers gave a confidentiality undertaking to Sports Direct, which provided that Rangers (and its subsidiaries) would keep confidential: “(i) the existence of any discussions between [Sports Direct] and [Rangers]; (ii) the contents of any such discussions and/or any agreements entered into in relation to any such discussions and/or arrangements entered into, and (iii) any information provided by or on behalf of any member of [Sports Direct] to [Rangers] …”

In May 2015, the newspaper The Daily Record published a report about Rangers and its relationship with Mike Ashley, the main driver behind Sports Direct.

Sports Direct issued proceedings against Rangers, contending that the article amounted to a breach of the confidentiality undertaking.  It also applied for an interim injunction, which was granted in June 2015.  Essentially, the injunction reproduced the confidentiality undertaking.

In September 2015, Sports Direct applied to the court for committal proceedings inviting the court to find Rangers in contempt of court for breaching the June order.  It also sought the committal of the Chairman of Rangers, David King, for breaching the June order by reason of an interview he had given to Sky Sports in July 2015 and to commit him to prison and fine Rangers in punishment for that contempt.

Sports Direct alleged that Mr King had given an interview to a journalist at Sky Sports (Jim White) in Johannesburg in South Africa, in which he had disclosed: (i) the existence of discussions between Sports Direct and Rangers that had taken place at a meeting between the parties in June 2015; (ii) the contents of certain discussions at that meeting; (iii) the existence of planned future discussions between the parties; and (iv) the anticipated contents of those future discussions.

As far as the application against Rangers was concerned, Mr Justice Smith did not accept that it could be established beyond reasonable doubt that in giving the Sky Sports interview Mr King had been acting as a director of Rangers.

As for the alleged contempts, Smith J said that, on the evidence, it was at least arguable that the existence of the June meeting had in fact already been in the public domain.  As such, whilst Mr King’s revelation that a meeting was to be held might well have amounted to a breach of the June order, such breach would have been “of the most technical nature”.  The same was true of any reference Mr King might have made to any prospective meeting.

As for revealing the contents of the meetings, Smith J found that Sports Direct had not contacted the Sky Sports journalist, Mr White, to discuss the interview or to verify its contents.  Whilst it was true that, in his witness statement, Mr King did not expressly deny that he had said the words attributed to him, essentially Sports Direct was asking Smith J to make a finding of contempt based on an unverified hearsay statement of an unidentified reporter.  In Smith J’s judgment that was not a sufficient basis for persuading him, to the criminal standard, that Mr King had uttered the words said.

Finally, Smith J found that the Application Notice did not identify in what way it was alleged that Rangers and Mr King were in breach.  This was, he said, “a fatal flaw” in Sports Direct’s application.

Smith J concluded that it was “undoubtedly the case that [Sports Direct’s] whole procedure is an abuse and it should be dismissed for that reason in addition to the various failings that I have identified above”.  That did not mean that Mr King might not be found to have made the disclosures on which Sports Direct relied when the matter was tried, but even assuming that he did breach the June order as alleged, it was “inappropriate to police those breaches with the heavy hand of committal proceedings”.  Accordingly, the application was dismissed.  (Sports Direct International plc v Rangers Football Club plc [2016] EWHC 85 (Ch) (22 January 2016) — to read the judgment in full, click here).