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Red Card for Robins’ Owner as Swindon Town FC Fortification Application Denied

In the case of Standing v Power before Deputy Judge Michael Green QC, the applicant was refused fortification of a cross-undertaking in damages viz. an injunction preventing a sale of Swindon Town FC’s shares or assets.  

The applicant sought fortification before the High Court of England and Wales on the grounds that the injunction enjoined him from consummating the sale of the club’s shares for £7.5 million. In refusing the application, it was held (citing Harley Street Capital Ltd v Tchigirinski) that the Court: (1) must make an intelligent estimate of the likely loss; (2) must decide whether the applicant has shown a sufficient risk of a level of loss to require fortification; and (3) must examine causation at the fortification stage in forming an intelligent estimate of the likely loss, although causation of loss by the grant of the injunction is a matter for the stage of the inquiry as to damages on the enforcement of the cross undertaking.

In applying these principles to the facts, it was held that: (1) the sale had already fallen through with no fortification in place; (2) there was no real likelihood of achieving a sale at a price of £7.5 million, and so the court was unable to make any ‘intelligent estimate of the likely amount of the loss’; and (3) the applicant had not proved that he had an arguable case of a sufficient risk of loss that required an order for fortification or that there was the requisite causative link to the injunction.

The BVI courts have examined this risk of loss requirement (citing Sinclair Investment Holdings SA v Cushnie & Ors.) in the Court of Appeal decision of Lucita Angeleve Walton & Ors. v George de la Haye and upheld the trial judge’s decision refusing to fortify the undertaking on the grounds there was no real risk the undertaking was without value.

Red Card for Robins’ Owner as Swindon Town FC Fortification Application Denied

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