High Court orders specific performance in share sale dispute

In Perelman v Kerr [2025] EWHC 2331 (Comm), the Commercial Court ordered specific performance of a share purchase agreement (SPA), a remedy which is rarely granted in disputes involving listed securities. The decision serves as a reminder that parties should specify completion mechanics to avoid uncertainty and disputes about implied terms, and that courts are willing to order specific performance where damages are inadequate.

Background

The case concerned the sale of over five million shares in Pyne Gould Corporation (PGC), a Guernsey-listed company, from Mr Perelman (the claimant) to Mr Kerr (the defendant). Both parties signed the SPA in June 2021, alongside a separate Right of First Refusal Agreement (ROFR) under which Mr Kerr agreed to pay US$400,000 for access to future investment opportunities identified by Mr Perelman.

Despite both parties wanting the deal to complete, the transaction stalled over the method of share transfer. Mr Kerr insisted on electronic transfer via CREST, while Mr Perelman held paper share certificates and proposed a lawyer-to-lawyer escrow arrangement. The SPA did not specify a method of transfer, and the dispute escalated into litigation. Mr Perelman sued for specific performance of the SPA and payment of the ROFR fee (with damages in the alternative).

Decision

SPA and ROFR were legally binding

The court rejected Mr Kerr’s argument that the documents were mere term sheets and non-binding. The judgment noted that the SPA contained all essential terms (parties, price, and number of shares) and was signed with formal execution blocks. The ROFR was similarly structured and included standard contractual clauses such as governing law, severability, and an entire agreement clause.

No implied term requiring electronic transfer

Mr Kerr argued for an implied term that payment upon completion had to be via CREST, either due to necessity or as a matter of market practice or custom. The Court found no basis for implying such a term. Any convenience or avoidance of risk in using CREST fell short of the necessity required to imply a term. There was also no evidence of a trade custom mandating electronic settlement; paper transfer was a valid and recognised method under Guernsey law, and both parties had accepted that either method was possible.

Time was not of the essence

The SPA specified a 30-business-day period in which completion would take place, however, the Court held that this was not a condition entitling termination. The shares were illiquid and not subject to market volatility, and the parties continued to negotiate the completion mechanics well beyond the deadline which was consistent with ongoing performance rather than termination.

Mr Kerr’s conduct frustrated performance

Mr Kerr argued that Mr Perelman had repudiated the contracts. However, the Court found that Mr Kerr’s refusal to accept a paper transfer, despite it being a valid method, was the reason the transaction did not complete. This amounted to a breach of an implied term requiring cooperation to facilitate completion.

Specific performance was the appropriate remedy

Given the “illiquid” market for PGC shares, the Court found that damages would not have been an adequate remedy, as Mr Perelman would have been left holding shares he could not easily sell. The only realistic buyer was PCG, controlled by Mr Kerr. The Court therefore ordered specific performance, requiring Mr Kerr to pay the purchase price into escrow, after which Mr Perelman would deliver the signed share transfer form and certificates.

ROFR enforced

Mr Kerr was ordered to pay the US$400,000 consideration under the ROFR, plus interest at 14%, as specified in the agreement.

Key takeaways

Specific performance in a listed securities context

Specific performance is rarely granted for contracts involving listed shares, or where the claimant is the seller, as damages are usually sufficient. However, the Court recognised that PGC shares were effectively illiquid: there was no active market and past transactions were limited to company buybacks. This made the case more akin to a private company share sale, where specific performance is more common.

The judgment reinforces that courts will look beyond formal listing status and assess whether the shares are genuinely available in the market. Where they are not, and the contract is otherwise enforceable, specific performance may be granted.

Implied cooperation obligations

The judgment demonstrates that, where parties have a preference in relation to payment and settlement mechanics, it is crucial to ensure that this is documented clearly in a written agreement. Where, as in this case, the contract is silent, the courts may imply a term requiring the parties to take reasonable steps to facilitate completion. This is a useful reminder that, even in simple sale contracts, parties may be expected to cooperate to ensure completion. Refusing to engage with valid completion options—especially where the contract is silent—can amount to a breach and result in adverse (and expensive) consequences.

This may have wider implications for disputes involving completion logistics, particularly where one party attempts to impose conditions not found in the contract.

No shortcut via market practice

Mr Kerr’s argument that electronic transfer was standard market practice did not succeed. ‘Market practice’ will not always fill gaps in written agreements, as courts will require clear evidence of a custom before implying a term. The Court emphasised that custom must be “invariable, certain and notorious” to be implied, and that convenience or preference does not meet the threshold. This is a cautionary note for parties relying on industry norms to fill contractual gaps.

With thanks to Tara Cavan for their assistance in preparing this post.