Elliston v Glencore Services (UK) Ltd
2014
QUEEN’S BENCH DIVISION
United Kingdom
CORAM
- HIS HONOUR JUDGE RICHARD SEYMOUR Q.C.
Areas of Law
- Contract Law
- Employment Law
2014
QUEEN’S BENCH DIVISION
United Kingdom
CORAM
AI Generated Summary
The case involves Mr. Richard Elliston, who was employed by Xstrata and claimed a 'Prescribed Sum' upon termination after a merger. The court addressed the validity and applicability of the contractual clause, concluding it was valid and that Elliston did not agree to substitute it with a transaction bonus.
Judgment
His Honour Judge Richard Seymour Q.C. :
Introduction
Until 2 August 2013 the claimant, Mr. Richard Elliston, was employed by the defendant, Glencore Services (UK) Ltd., at that time known by the name Xstrata Services (UK) Ltd., as company secretary pursuant to the terms of an agreement ( “the Service Agreement” ) in writing dated 3 December 2007. Bearing in mind that the defendant did not change its name until after the employment of Mr. Elliston by it came to an end, it is convenient to refer to the defendant in this action as “Xstrata” . Xstrata was, at all times material to this action until 2 May 2013, a subsidiary of a company called Xstrata plc. Xstrata plc merged with Glencore International plc on 2 May 2013. Xstrata changed its name to its present name on 21 August 2013.
Clause 9 of the Service Agreement included the following provisions:-
“ 9.4 If any person obtains Control of Xstrata plc (being the power to secure that by virtue of the holding of shares, or the voting power in respect of shares, of Xstrata plc, or by virtue of the right to appoint or remove a majority of the board of directors of Xstrata plc that the affairs of Xstrata plc are conducted in accordance with the wishes of that person) as a result of:
(a) making an offer (whether a general offer or not) to acquire the whole of the issued share capital of Xstrata plc (other than that which is already owned by him) which is unconditional or which is made on a condition such that it is satisfied that the person making the offer will have Control of Xstrata plc; or
(b) making an offer (whether a general offer or not) to acquire all issued share capital (other than shares which are already owned by him) of Xstrata plc; or
(c) a Compromise or Arrangement between Xstrata plc and its members or Creditors or any class of either, which has been approved by the requisite number of shareholders or creditors, as the case may be, and sanctioned by the Court
(Change of Control) then so as to diminish the inevitable distraction to you by virtue of the personal uncertainties and risks created by such a pending or potential Change of Control and to encourage your full attention and dedication to the Company currently and in the event of any potential or pending Change of Control, you will be paid the ‘Prescribed Sum’ (defined below) if your Employment is terminated after a Change of Control event occurs.
9.5 You may, notwithstanding any other provision of this Agreement, resign and