Giving you the exclusive: Rosalina Investments Ltd & anor v New Balance Athletic Shoes (UK) Ltd

Giving you the exclusive: Rosalina Investments Ltd & anor v New Balance Athletic Shoes (UK) Ltd

Date of the judgment: 04 May 2018

The sportswear manufacturer New Balance Athletic Shoes (“New Balance”) made a successful application to strike out claims brought by Rosalina Ltd and Rosalina UK Ltd (“Rosalina Company”). New Balance held the rights to the image of Marouane Fellaini (“Mr Fellani”), a Manchester United football player. New Balance is the UK branch of a global group that manufactures and sells sportswear called Warrior Sports UK Limited (“Warrior”).Â

Background

This dispute involved an original contract between the Rosalina Company and New Balance which was dated 23 March 2013. This contract saw the Rosalina Company grant Warrior the exclusive rights to use certain images rights associated with Mr Fellaini, in exchange for procuring commercial services from him. The contract officially concluded on 31 July 2016 between the Rosalina Company and New Balance, but New Balance still provided Mr Fellaini with their products (mainly sport boots) until 11 January 2017. New Balance acknowledged this date as the official end of the contract and  financially compensated the Rosalina Company accordingly. Then New Balance provided written confirmation to the Rosalina Company that they would not approve an extension of this contract. The Rosalina Company acting in the belief that the contract would be extended, claimed for £2 million  in lost retainers and damages  from New Balance as they saw the following:

1)Â Â Â Â Â There was an extended contract had been concluded on 16 August 2017 via email correspondence and

2)Â Â Â Â Â New Balance has breached its obligation to negotiate in faith by New Balance.

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New Balance denied the existence of an extended contact as it had not signed  a final agreement on an extended contract.

As a result, New Balance brought an application to the High Court to strike out the Rosalina’s  claim/ or obtain a summary judgment for the finding of that there was no contract in the first place.Â

Judgment

Mrs Justice May DBE found that an extended contract had not been concluded, as the emails between both parties revealed that reference to further ‘amendments’ instead of ‘variations’ which was ‘highly suggestive of a contract that is not yet over the finishing line.’[1] Furthermore,  the fact that that a contract was never sent by the Rosalina Company meant that there could be no breach of an obligation to act in good faith by New Balance, as they were not sent an extended contract to sign. This meant that the Rosalina Company could not rely on the argument that New Balance had led them to believe what they would sign the extended contract.

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