Metalnrg Plc Regulatory News (MNRG)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

17 October 2022 

Litigation Update

MetalNRG plc ("the Company") announces that it has received High Court's written judgements in the Company's application for summary judgement against BritEnergy Holdings LLP and BritNRG Ltd, the first and third defendants, in its action for recission of certain contracts and restitution referred to as the "April Transaction". As previously announced, the Company was advised that the claims against the second defendant (Mr Rocco) required the Court to hear oral evidence, so were not suitable for summary judgment at this juncture.

Highlights:

* Company's application for summary judgement against BritEnergy Holdings LLP and BritNRG Ltd has been granted.

* The Judge refused an application for leave to appeal made to her on the day by the Defendants 

* The Judge dismissed the application for a stay of execution as being "without merit".

Noting that representatives of the Defendants appear to have been posting on social media that they achieved some measure of favourable outcome at the hearing, we have set out below a summary of the Court's findings and Orders as actually made and have extracted what we believe to be key points from the full written judgements delivered by the Court,

We have also made the full judgements available on the Company's web site www.metalnrg.com under a special section entitled "Summary Judgement". so that interested parties can draw their own conclusions. The Judge delivered a very detailed judgment on the case before her for summary judgement and also dealt with an additional application, made by all three defendants on the day of the hearing, for a stay of execution, pending the hearing of yet another claim made by Mr Rocco by way of a petition for unfair prejudice under section 994 of the Companies Act 2006.

Key Points from the Summary Judgement

The Judge (1) granted the Company's application for summary judgement against BritEnergy Holdings LLP and BritNRG Ltd, the first and third defendants; (2) refused an application for leave to appeal made to her on the day; and (3) dismissed the application for a stay of execution as being "without merit".

These judgements follow the Company's successful defence of Mr Rocco's claims in the Scottish Court which he is now appealing.

We understand that Mr Rocco and associates have publicly stated that BritEnergy Holdings LLP and BritNRG Ltd will appeal the latest judgements against them. We would suggest that this merely shows a refusal to accept the reality of the situation in which the first and third defendants now find themselves; namely that payment of the sum of £1,019,999 must now be made to the Company by 4pm on 26 October 2022 together with a further £65,000, by way of an interim costs award, and interest on the judgment sum at a rate of 2% over Bank of England Base rate from the 23 September 2021. Further costs will be assessed in the Company's favour in due course (including the Company's costs of dealing with the meritless stay application, which costs have been awarded on the indemnity basis - see below). Any appeal (should permission to appeal even be granted) will not (by itself) delay or curtail the requirement for these payments to be made.

We should stress that if full payment is not made in accordance with the Court Orders on the due date, MetalNRG will proceed immediately to take enforcement action.

We are equally dismissive of Mr Rocco and his associates' public statements that BritEnergy Holdings LLP and BritNRG Ltd have an excellent case for an appeal. The Judge refused leave to appeal at the hearing and, in the event that BritEnergy Holdings LLP and BritNRG Ltd seek leave to appeal, they will have to deliver compelling written arguments to the Court of Appeal in seeking such leave to appeal. Given the clarity and comprehensive nature of the judgement of the Judge, we do not believe that an application to appeal stands, in the words of the Judge, "any reasonable chance of success"; it is merely, once again, indicative of an unwillingness to accept reality and part of a pattern of denial to accept responsibility.

In respect of the application made by all three defendants for a stay of execution, the Judge not only dismissed the application as being "without merit" but also ordered that BritEnergy Holdings LLP and BritNRG Ltd should pay MetalNRG's costs of that application, such costs to be subject to detailed assessment on the indemnity basis if not agreed. Costs are generally only awarded on an "indemnity basis" if the judge feels that there is a feature of a party's conduct which takes its actions 'outside of the norm' - which in this case was the hopelessness of the argument being run.

Whilst we have no desire to give any potentially biased slant to the judgements (the full judgements available on the Company's web site www.metalnrg.com (under the general heading investors section and a special section entitled "Summary Judgement"), we note that representatives of the defendants have always asserted that they would easily prevail in this case and we accordingly consider that it is important to demonstrate that the claims made by MetalNRG were not considered by the Judge to be "purely technical" or "contrived", as has been asserted by the defendants.

The following are extracts from the judgements:

"I would mention at this stage that originally, as part of their Defence, the Defendants contended that [section 190 of the Companies Act 2006] was not engaged because the April Transaction was not with a connected party. However, shortly before the hearing, the Defendants conceded that this point was not correct and did not pursue it. In my judgment, that concession was rightly made".

"If I accepted the arguments of Mr Levey KC (Counsel for the Defendants), this would, in my judgment, drive a coach and horses through [section 190 of the Companies Act 2006] and defeat the legislative purpose of that provision. Mr Levey KC admitted that, if he were right and no approval by the shareholders was required under [section 190 of the Companies Act 2006], no such approval of the transaction would subsequently be required if ultimately the condition was satisfied. His concession must be correct, because pursuant to [section 190 of the Companies Act 2006] approval of an arrangement must take place at the inception of the arrangement".

"In conclusion, I accept the submissions of the Claimant and find that the Defendants have no real prospect of establishing at trial that the SPA was not subject to requirements of [section 190 of the Companies Act 2006]. It is, therefore, unnecessary for me to consider Mr Dougherty's (Counsel to MetalNRG) alternative argument, although had it been necessary to do so, for the reasons set out above and also for reasons similar to those relating to the Company Option, I would have found that the SPA created a right over the Sale Shares."

"The application for a stay is refused. In brief, my reasons are as follows: although this application is made by all three Defendants, the reality is that it is an application by the Second Defendant (Rocco), against whom no judgment has been entered in these proceedings, in order to protect the remedies that he seeks in the [Petition brought under section 994 of the Companies Act 2006], to which neither the First nor Third Defendant (BritEnergy LLP and BritNRG Ltd) are a party. In my judgment, this is not the right forum to make an application, which effectively seeks to prevent the Claimant from enforcing its judgment against the First and Third Defendants."

"I am concerned about the purpose of the application for a stay. The purpose of the [Petition brought under section 994 of the Companies Act 2006] is to protect the Second Defendant's (Rocco's) interest as a member of the Claimant. However, it would appear that what the Second Defendant [Mr Rocco] is seeking to do by relying on his [Petition brought under section 994 of the Companies Act 2006] in this application to stay the Judgment is to confer an indirect and collateral benefit on the First and Third Defendants who are not members of the Company and, as already stated, are not parties to the [Petition brought under section 994 of the Companies Act 2006]. It is difficult to see how it is in the interests of the Claimant, and, therefore, in the interests of the Second Defendant as a member of the Claimant, for there to be a stay of the Judgment. No evidence has been adduced before me to show that the Claimant's interests would be advanced if the rescission of the April Transaction were to be reversed. On the evidence before me, the only interests that would be served if I were to order a stay (which, in any event, could only be a stay on the rescission order and not on any liability to account) would be those of the First and Third Defendants".

Rolf Gerritsen commented:

"MNRG successfully obtained dismissal of Mr Rocco's claims in Scotland and we have now obtained the summary judgement in the High Court which we sought; summary judgement is only granted in cases where there is no real prospect of a case being defended at trial.

We have also obtained dismissal of the attempts by all three defendants to secure additional delays to avoid repayment of funds that would never have been paid to them had the full facts been known at the time.

The Board sees the appeals and threats to appeal as merely being a tactic to delay the inevitable need to account to MetalNRG, in full, in respect of a transaction that was not lawful. Despite their best efforts the defendants must now repay the funds to MetalNRG by 4pm on 26 October 2022, together with interest and an interim costs award.

If payment is not received, we are already prepared to take immediate enforcement action to give effect to the orders made by the High Court.

We hope that the Company can now focus on building its core business and that this distracting sideshow will finally be at an end for all involved."

END

Contact details: