The Court of Appeal has upheld the High Court's decision to refuse an interim injunction that would have prevented a company from implementing a "transformation plan" for its struggling business, pending resolution of a dispute as to its ownership.

In Yodel Delivery Network Limited v Corlett & Ors [2025] EWCA Civ 1108, the Court of Appeal has again endorsed the English court's broad jurisdiction to grant injunctions, finding that a relatively novel injunction such as this would in theory be possible. However, on the facts of this case, it was not appropriate to grant one.

The case stands as a useful reminder of the English court's power to grant injunctive relief. If it might be necessary to preserve the status quo pending trial, the court may consider a request for an injunction. But it remains the case that the relief is discretionary, and not available if damages would be an adequate remedy or the balance of convenience tilts the other way.

Background facts and underlying claim

Yodel Delivery Network Limited (Yodel) is a UK home delivery and logistics company. Yodel has for some time faced financial difficulties.

In February 2024, Yodel was acquired by YDLGP Limited, a special purpose vehicle wholly owned by Jacob Corlett, the founder of the Shift logistics group. Following the acquisition, Mr Corlett became a director of Yodel until 21 June 2024.

On 21 June 2024, YDLGP sold Yodel to Judge Logistics Limited (JLL), a special purpose vehicle owned by InPost SA. Since then, InPost has advanced substantial funds to JLL (and in turn, Yodel) and has embarked upon a transformation plan for Yodel's business.

Mr Corlett claims that prior to the sale to JLL, Yodel issued warrant instruments to Shift Global Holdings (Shift) and Corja Holdings Limited (Corja), entitling them to subscribe for shares in Yodel. Mr Corlett says that he intended his own merger of the Yodel and Shift businesses. Shift and Corja sought to exercise their alleged subscription entitlements in January 2025, but Yodel refused to allot the shares.

Yodel issued proceedings against Mr Corlett (and companies associated with him). Yodel claims Mr Corlett breached his directors' duties, and that the associated companies benefitted from this. Yodel also disputes the authenticity of the warrant instruments. It alleges that the warrants were never enforceable, and in any event would have lapsed before they were exercised.

Shift and Corja have brought a counterclaim seeking specific performance of the warrant instruments. If Shift and Corja are successful, they would be the majority shareholders in Yodel, displacing JLL.

In the midst of this ongoing battle for the ownership of Yodel, as an interim matter Shift and Corja sought injunctive relief to prevent JLL from furthering its plan to transform Yodel's business.

Injunction - first instance decision

At first instance, David Mohyuddin KC (sitting as a Deputy Judge of the Chancery Division) found that the court had jurisdiction under section 37 Senior Courts Act 1981 to make the order sought by Shift and Corja. Section 37 provides that the court can grant an injunction in all cases in which it appears to be just and convenient to do so. This means that the categories of injunction available are not closed. Therefore, although the injunction Shift and Corja were seeking was relatively unusual, because it was not seeking to restrain wrongful conduct by Yodel, but simply to prevent a course of conduct which was not that which the applicants would themselves choose, the court had the power to grant the injunction if it deemed it appropriate.

The Court's discretion to grant or refuse the injunction was to be exercised in accordance with the usual principles described in American Cyanamid Co v Ethicon Ltd [2975] AC 396 (HL). If the underlying dispute presents a serious issue to be tried (which in this case was satisfied, as the warrant claim gave rise to a serious issue to be tried), the court must consider whether damages would be an adequate remedy, and where the balance of convenience lies. Deciding these points, the court reasoned the below.

    Shift and Corja could be compensated in damages for any loss they may suffer in the absence of an injunction. Whilst Shift and Corja asserted that the imminent transformation of Yodel's business by InPost would result in it being dependent upon InPost's financial support for survival, and that the new, transformed business of Yodel would frustrate the intended Yodel/Shift merger, the judge was not persuaded by these arguments. In particular, he was not persuaded that the InPost restructuring would result in the dismantling of Yodel's business. As such, should Shift and Corja succeed on their warrant claims, there would still be a company with a business in which Shift and Corja would be the majority shareholders.
  • Further, whilst damages would be an adequate remedy for the applicants, the cross-undertaking in damages that would be required from Shift and Corja to protect Yodel if it were the successful party at trial was essentially worthless. Corja conceded that it has no substantial assets by which a cross-undertaking could be satisfied, and Shift is a newly-incorporated company which had not filed its first set of statutory accounts. No fortification was offered by Shift or Corja (being the party obliged to offer in support of an otherwise worthless cross-undertaking), but the judge was satisfied that had he granted the injunction, he would have ordered the provision of fortification in this case.
  • Finally, the terms of the injunction sought by Shift and Corja essentially required Yodel's directors to subordinate their decision-making to Shift and Corja, which would stray well beyond the bounds of preserving the status quo. This suggested the balance of convenience lay with refusing the injunction. Further, the judge noted that the transformation plan already underway does have a prospect of turning around Yodel's fortunes, and so should not be restrained by an injunction of this nature.

    • Injunction - appeal

    On appeal, Shift and Corja sought to overturn the judge's findings as to the adequacy of damages, the cross-undertaking in damages and the balance of convenience. However, the Court of Appeal upheld the judge's decision on all the following points.

      The Court of Appeal dismissed the argument that the judge failed to take into account (i) Yodel's supposed inability to meet a damages award and (ii) the alleged inadequacy of damages as a remedy. On the first point, InPost had offered to guarantee any damages ordered against Yodel, so recovery was not realistically in doubt. On the second, although Corja and Shift claimed they needed specific performance because they wanted to implement their own transformation plan on the business as currently constituted, otherwise they would suffer unquantifiable loss, the Court of Appeal held that there was no good reason to doubt that they could be properly compensated for any assessable loss.
    • The Court of Appeal likewise rejected the argument that the judge had not properly evaluated the nature and scale of Yodel's potential loss in deciding that Shift and Corja would be unable to satisfy the cross-undertaking in damages. A respondent's failure to produce detailed evidence of prospective loss may count against it, but it does not oblige the court to assume that no uncompensatable loss will arise where the evidence is insufficient to allow an intelligent estimate to be made. In any event, the Court of Appeal found that if the injunction were granted, Yodel probably would suffer substantial losses, because it would be unable to complete its transformation plan in time for the pre-Christmas peak, and risked losing major customers.
    • Finally, the Court of Appeal held that the judge was 'plainly' entitled to find that the balance of convenience favoured Yodel. Applying the American Cyanamid suggestion that preserving the status quo may be the most prudent course, the Court of Appeal observed that the integration of Yodel's business with InPost's is already underway, with much of the work effectively irreversible; that state of affairs therefore constitutes the status quo. The judge had had to choose between allowing Yodel to proceed with a transformation plan which might rescue the business, or imposing an injunction which could force Yodel to keep incurring large losses, merely so Shift and Corja could attempt their own, uncertain, plan.

      • Comment

      As the Court of Appeal explained, the court's role was to balance the competing factors and choose the course that would cause the least irremediable prejudice to one party or the other. In doing so it has demonstrated the breadth of the court's jurisdiction to grant novel injunctions and the factors it will consider in deciding whether to grant them.

      In particular, this decision demonstrates the court's caution in granting invasive relief that would subordinate the directors' decision-making of a company to third parties, and jeopardise the chances of turning around a company's prospects that on the evidence bear a realistic chance of success. In circumstances where a company is in financial distress, it appears the court will be reluctant to hold the ring for the benefit of its shareholders to the detriment of other stakeholders.

      The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Ms Lois Horne
Macfarlanes LLP
20 Cursitor Street
London
EC4A 1LT
UNITED KINGDOM
Tel: 207831 9222
Fax: 20 7831 9607
URL: www.macfarlanes.com

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