Court of Appeal clarifies operators only need benefit to be a “party to a Code agreement” for renewals: On Tower UK Limited v AP Wireless II (UK) Limited [2026] EWCA Civ 43
On 3 February 2026, the Court of Appeal handed down its judgment in On Tower UK Limited v AP Wireless II (UK) Limited, an important decision which confirms that the words “party to a Code agreement” in paragraph 33 of the Electronic Communications Code only requires the operator to have the benefit of the agreement.
The specific scenario before the Court of Appeal was that of an operator who had been assigned the benefit of a licence Code agreement (not a lease), and so, as a matter of contract law, the burden of that contract could not be assigned.
The FTT had held that only benefit was required. On appeal to the Upper Tribunal, Fancourt J held that burden was required, but could be satisfied by the operator undertaking primary responsibility for that burden, including by way of indemnity to an assignee (as opposed to the site provider). APW sought to appeal that decision on the basis that a direct covenant to the site provider was required in order that the operator had both the benefit and burden vis-à-vis the site provider.
By contrast, On Tower sought to uphold the decision, primarily on the basis that only benefit of the agreement was required. However, if burden was required, On Tower sought to uphold the decision based upon Fancourt J’s reasoning and other additional arguments.
The Court of Appeal dismissed APW’s appeal, and upheld the decision of the FTT and the Upper Tribunal, accepting On Tower’s argument that only benefit was required. Newey LJ, with whom Holgate and Foxton LJJ agreed, accepted that, in order to be a “party to a Code agreement”, and therefore able to renew under Part 5 of the Code, an operator need only have the benefit of the Code agreement. Adopting a purposive approach to the Code, Newey LJ preferred the approach contended for by the Respondent, holding (at [63]) that:
‘…Parliament was aiming to “make it easier for communications providers to deploy and maintain their infrastructure” and, more specifically, to enable operators exercising code rights conferred by expired agreements to continue to do so. Treating the operator who is now exercising the code rights in question as a “party to [a code/the] agreement” within the meaning of Part 5 serves those aims. Parliament can be expected to have wished such an operator to be able to require a change to an expired agreement under paragraph 33 and to be informed of, and in a position to object to, an attempt to terminate the agreement under paragraph 31. That understanding of Part 5 also achieves some certainty and is not unfair on site providers. While it might suit site providers better for operators to have to apply under Part 4 rather than Part 5, not least because Part 4 does not include an equivalent to paragraph 35, it is not apparent that Parliament thought that site providers should have that advantage’.
The Court of Appeal’s decision therefore confirms that the correct route to the renewal of subsisting Code licence agreements is Part 5 of the Code, and that operators in situ pursuant to such agreements can renew without needing to take further steps, such as entering into a deed of covenant or an indemnity, beforehand.
Toby Watkin KC and Wayne Clark KC acted for APW, instructed by Thekla Fellas of Eversheds Sutherland International LLP and Daniel Cuthbert of Freeths LLP, and Kester Lees KC and Taylor Briggs acted for On Tower, instructed by Martin Thomas of GunnerCooke LLP.
The judgment can be accessed here or downloaded below.
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