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The Court of Appeal has dismissed an appeal on various points of contractual interpretation, arising out of a joint venture to re-develop the stadium of Blackpool Football Club.

Giving judgment for the Court, Lady Justice Asplin found that a clause allowing for the deduction of excess capital expenditure, before profits were distributed, did not allow one partner to recoup unilateral expenditure that it had funded by borrowing from a connected party. The clause had to be read in the context of the contract as a whole, including its recitals, so as to be consistent with a protective scheme intended to prevent the profits of the development being encumbered by unauthorised borrowing.

The dispute formed part of a broader series of proceedings following the fracturing of relations between Blackpool’s long-standing owner, Owen Oyston, and Latvian investor Valeri Belokon. Following the 5-week trial of a petition for unfair prejudice last year, the Companies Court (Mr Justice Marcus Smith) ordered Mr Oyston to buy out Mr Belokon’s shares in the Club for a price of over £27m, plus a return of his original investment of £4.5m.    

Andrew Green QC and Fraser Campbell (instructed by Chris Yates, James Cranston and Emma Mack of Clifford Chance LLP) acted for the successful respondents at first instance and on appeal, and also for Mr Belokon in the unfair prejudice proceedings.

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