Judgment summaries for the Commercial Court

2025

Iankov v Kantchev & others (Cockerill J)

Jurisdiction, Cryptocurrency, Ownership Dispute, Trust, Fiduciary Duty

Summary: The case involves a dispute over the ownership of Nexo, a crypto-asset lending platform valued at over $4 billion. The claimant, Mr Iankov, alleges that he is entitled to 20% of the Nexo Group based on an oral Shareholding Agreement made in 2017. The defendants, including Mr Kantchev, challenge the jurisdiction of the court (originally based on the “necessary and proper party” gateway using NPEM a UK Nexo subsidiary) and deny the existence of such an agreement. The court considered applications to strike out the claim, set aside orders for alternative service, and consolidate the proceedings with another related case, the Shulev Proceedings. The court concluded that the claim against NPEM should be struck out, the jurisdiction applications succeed there being no other tenable basis for establishing jurisdiction, and the consolidation applications were dismissed. To the extent that the authorities establish that consolidation can itself form a basis for jurisdiction, this case was not one where that course could be appropriate.

The full judgment [2025] EWHC 495 (Comm) may be found on the National Archives website (external link).

Deutsche Bank AG v Sebastian Holdings Inc and Vik (No 7) (Cockerill J)

Enforcement,  CPR  Jurisdiction, Service validity

Summary: Deutsche Bank AG (“DB”) sought an order under CPR 71 requiring Alexander Vik to attend court for examination about the assets of Sebastian Holdings Inc. (“SHI”). Mr. Vik was previously examined under CPR 71 a decade ago, during which examination he lied and withheld information. Mr Vik was found in contempt of court and sentenced to a suspended sentence conditional on appearing at a further examination. The examination did not take place within the period of suspension. DB applied for a further order under CPR Part 71.

Held:  The court does not have jurisdiction to make the order sought by DB. It has no jurisdiction to make an order de novo against Mr Vik who is no longer a director and resides outside the jurisdiction. The order sought is not ancillary to the original order. Even if the court had the power, it would not exercise discretion to grant the order due (inter alia) to the futility of further examination. The purported service via solicitors on the record for the purposes of costs is not valid.

The full judgment [2025] EWHC 283 (Comm) may be found on the National Archives website (external link).

MSH Ltd v HCS Ltd (Foxton  J)

Section 67 – agency – undisclosed principal – whether putative agent entered into contract intending to act as HCS’s agent and with its authority – whether terms of contract precluded undisclosed principal doctrine

CTW entered into a contract to buy Colombian nut coke from MSH. HCS contended that MSH acted as agent for it as an undisclosed principal. An arbitral tribunal (by a majority) upheld HCS’s contention, and MSH brought a challenge to the award under s.67 of the AA 1996. The issues  were:

• Whether CTW  was intending to act as HCS’s agent, and had actual authority from HCS, when it entered into a contract with MSH to buy the coke?
• If not, whether as a matter of law it was sufficient that those conditions were satisfied when the parties’ written document, with an entire agreement clause and additional terms, was signed by MSH and CTW?
• Whether the terms of the contract precluded the operation of the undisclosed principal doctrine?

Held:

• Having regard to the inherent probabilities, CTW had intended to act as HCS’s agent and had actual authority to contract for HCS, when it first concluded a contract with MSH.
• In any event, assuming CTW and MSH had agreed a contract with further terms to be agreed, and to be reduced into a signed document, before the two conditions for the operation of the undisclosed principal doctrine were satisfied, those conditions were satisfied before CTW and MSH reduced the contract (with additional terms) into a signed written contract which was provided to supersede all prior agreements, and that was sufficient.
• Having regard to the terms and nature of the contract, the confidentiality clause, limitation on assignment and entire agreement clause did not preclude the operation of the undisclosed principal doctrine.

The full judgment [2025] EWHC 915 (Comm) may be found on the National Archives website (external link).

Chugga Chugg PTY LTD v Privinvest Holding SAL (Dias J) (14 March 2025)

Claim under parent company guarantee – Yacht construction contract – when and on what basis contract terminated – whether demand guarantee or secondary liability – whether ‘contested’ or ‘uncontested’ breach

D was the parent company of a German shipbuilding company (N) and the guarantor of its obligations under a contract concluded in November 2018 with C for the construction of a superyacht.  The contractual delivery date was 31 August 2022.  It was common ground that (i) in April 2020, following the advent of the Covid pandemic, C’s beneficial owner approached N to explore the possibility of a consensual termination of the project and (ii) the contract was subsequently terminated in circumstances where each accused the other of having renounced or repudiated the contract.  N commenced arbitration proceedings against C seeking damages for repudiation while C counterclaimed for sums already paid under the contract.  During the proceedings, N went into administration in Germany and C lodged a claim in the insolvency proceedings. 

Thereafter C obtained a final award from the arbitrator on its counterclaim on the basis of which it brought a claim against D under the guarantee.  The parties disagreed as to whether the guarantee was a demand guarantee or an instrument of second liability.  If the latter, the triggers for payment differed according to whether the alleged breach or termination by N was “contested” or “uncontested”.  However, D further argued that in the circumstances N’s alleged breach was neither “contested” nor “uncontested”.

Held:

The claim succeeded.

1. C did not unequivocally renounce the contract prior to N’s termination notice.  Even if it had done, N had affirmed the contract before it sent its notice of termination.

2. On its true construction, the guarantee was an instrument of secondary liability but contained a clause which set out the parties’ contractual agreement as to how N’s underlying liability should be established for the purposes of a claim under the guarantee, depending on whether the alleged breach was “contested” or “uncontested”. 

3. The intention of the parties was that this should be a binary matter and there was no scope for a breach to be neither “contested” nor “uncontested”.

4. On the facts, the breach in this case was “contested” and on that basis it was not disputed that the conditions for payment under the guarantee were fulfilled.

The full judgment [2025] EWHC 585 (Comm) may be found on the National Archives website (external link).

Redwood Holdings Ltd v Renhe Sports Management Co Ltd; Prestige Fortune Asia Ltd & RFC Bearwood Ltd v Redwood Holdings Ltd. (Mr Justice Jacobs) 21 March 2025

Reading Football Club – mandatory injunction – release of securities

In 2024, an American buyer, Mr Robert Couhig, was interested in buying Reading Football Club which was ultimately owned by Mr Yongge Dai, a Hong Kong-based businessman. Reading FC plays in the Championship, the second tier of the English football league structure. A letter of intent (LOI) was signed between Mr Couhig’s company, Redwood Holdings Ltd, and Rehne, which owned the shares in Reading FC. The LOI contained binding terms which gave Redwood exclusivity for a period of time. Redwood lent money to the club secured by charges over various assets, including the shares in the club, its stadium (owned by Prestige) and training ground (owned by Bearwood). The parties were close to finalising an agreement for the sale of the club, but Mr Dai did not wish to proceed with the sale to Mr Couhig. Redwood claimed that Renhe was in breach of exclusivity provisions in the LOI, that this breach had caused the sale to fall through, and sought substantial damages. Rehne denied that the LOI was breached. The loans having been repaid, Rehne, Prestige and Bearwood sought mandatory injunctions against Rehne seeking the release of the securities, in order to enable a sale to take place to a different buyer.

Held: the application for mandatory injunctions would be dismissed. There was a serious issue to be tried as to whether or not the securities extended to Redwood’s claim for damages for breach of the exclusivity provisions. The court did not have a high degree of assurance that the applicants claim, that the securities did not so extend, would succeed at trial. If the securities were released, Redwood would be left with a claim against a company without any substantial assets. This would be unjust, in circumstances where Redwood had an arguable claim that it had security for its claim, and release of the securities would mean that there would be no point in pursuing that claim. Although it was appropriate for the court to have in mind wider considerations concerning Reading FC, including the importance of a league football club to the local community and the desire of its supporters to see a sale of the club, the balance of convenience did not favour the grant of an injunction which would have such severe consequences for Redwood. If the securities were not released, there were other mechanisms potentially available for a sale to proceed, such as the grant of substitute security to Redwood.

CL-2020-000869 GI Globinvestment Ltd, Matteo Cordero di Montezomolo and Luca Cordero di Montezemolo v XY ERS UK Limited & Ors (Mr Justice Jacobs) 28 March 2025

Investment in structured products and in a Luxembourg Reserved Alternative Investment Fund –  claims for fraud, breach of fiduciary duty, dishonest assistance, conspiracy, breach of contract, negligence and under the Financial Services and Markets Act 2000 s 138D

The 2^nd Claimant (MDM) and the 3^rd Claimant (LDM) were son and father. LDM had been chairman of Ferrari for 20 years and was a well-known Italian industrialist. MDM ran a substantial private equity business. The 1^st Claimant (GIG) was a family investment company. The Claimants engaged the 1^st Defendant, XY, to provide strategic advice in relation to their investments. Pursuant to that advice, the Claimants invested, directly, and via a Luxembourg Reserved Alternative Investment Fund called the Skew Base Fund, in structured products. The products were derivatives related, principally, to the performance of equity indices such as the S&P 500 and the Euro Stoxx 50. The products paid a coupon which was in excess of the then market rates for high grade investment bonds, provided that a “barrier” was not breached. If the barrier was breached, investors would potentially lose some or all of their capital. The products delivered good returns prior to the Covid-19 pandemic. However, the very significant market falls caused by the pandemic resulted in substantial losses being suffered by the Claimants. The Claimants alleged various causes of action against 10 Defendants.

Held: the Claimants’ claims would be dismissed.

• The Claimants had understood the essential risks which the products entailed, and they considered that the products were consistent with their investment objectives. They had not been fraudulently misled into investing in the Skew Base Fund by reason of representations as to the nature of the investments.
• The Claimants had been told that the owner of XY, Mr Daniele Migani, was the entrepreneur behind the Skew Base Fund and was the owner of its general partner. The Claimants had not been fraudulently misled into investing in the Skew Base Fund by reason of representations concerning the independence of XY.
• XY owed fiduciary duties to the Claimants. The fiduciary duties owed were the usual proscriptive (not prescriptive) duties. Since the Claimants knew that Mr Migani was the entrepreneur behind the fund, and was the owner of its general partner, the Claimants had given informed consent to the fiduciary acting in a way that would otherwise be a breach of its fiduciary obligations.
• The claim in conspiracy failed because (amongst other reasons), the Claimants had failed to establish: (i)  the underlying wrongs upon which the claim in conspiracy was based; (ii) that there was an agreement to maintain an alleged façade that the Skew Base Fund was independent of XY and managed by its portfolio manager (a subsidiary in the VP banking group) without any connection to or involvement from XY or related persons; (iii) that the alleged conspirators intended to injure the Claimants.
• The Claimants’ “non-fraud” contractual, tortious and regulatory claims against XY also failed. The Claimants understood that there was a risk with the investments being made: the risk being, in essence, that the barrier would be reached and that this would potentially expose their investment to significant capital loss, including a total loss of capital. It was the eventuation of that known risk, rather than any failings on the part of XY, which caused the Claimants’ losses.  Other reasons why the non-fraud claims failed were as follows.
• GIG, an investment company, was not a “private person” and could not therefore advance a claim under FSMA 2000 s 138D. XY’s contractual terms did not enable GIG to do so.
• The exclusion clause in XY’s contractual terms, which limited liability unless there was “gross negligence”, was effective against all of the common law claims in contract and tort. Although they were private individuals, LDM and MDM were not “consumers” under the Consumer Rights Act 2015, bearing in mind the significant volume and type of investment transactions in which they engaged, the use of borrowing to finance those investments, and the use of the services of the di Montezemolo “family office”: AMT Futures Ltd v Marzillier [2014] EWHC 1085 (Comm) and Ang v Reliantco Investments Ltd [2019] EWHC 582 (Comm) considered. The exclusion was not invalidated by the Unfair Contract Terms Act 1977: Watford Electronics Ltd v Sanderson CFL Ltd [2001] EWCA Civ 317 applied.
• LDM and MDM were both “private persons”, and could in principle advance a claim based on FSMA s 138D. In that context, no reliance could be placed on the exclusion clause which limited liability to “gross negligence”: Parmar v Barclays Bank PLC [2018] EWHC 1027 (Ch) applied.  However, the claim failed on the facts. MDM and LDM  sufficiently understood the risks of the investments which they were making, and both they and XY took the view that (notwithstanding those risks) the investments were suitable.

The full Judgment [2025] EWHC 740 (Comm) can be found on the National Archives website (external link).

Commercial Bank of Dubai v Almheiri (Malicious Prosecution) (Foxton J)

Article 4 of Rome II – applicable law – tort of malicious prosecution

The Claimants alleged that the Defendants had maliciously instituted civil proceedings against them in the DIFC and sought to bring claims for the tort of malicious prosecution. An issue arose as the applicable law, and whether it was (a) the law of the place where the bank account from which legal fees were located under Article 4(1) of Rome II; (b) UAE law to the extent that any claimants and defendants were all resident in the UAE under Article 4(2) or (c) DIFC as the law of the place of the proceedings.

Held:

1. For Article 4(1) purposes, the place of damage for the purposes of the tort of malicious prosecution was the place where the claimant was improperly made the subject of malicious process, namely the court where the proceedings were brought.
2. Article 4(2) was engaged in respect of claimants and defendants resident in the UAE, even in different Emirates. On the evidence there was a single law of tort in the UAE, even though not all of the Emirates had a common court system.
3. However, the connections between the claim and the place where proceedings were maliciously brought was sufficiently strong to justify the application of Article 4(3) in favour of the law of that place.

The full judgment [2025] EWHC 400(Comm) may be found on the National Archives website (external link).

Abudantia BV v Fastron Ltd and Rillius Holdings Ltd (Dias J)

Contract – Construction of duration/termination provisions in Trademark Licensing agreement – Whether, when and how agreement had terminated – Calculation of termination payment – application to amend to plead obvious mistake in formula for calculation – Whether defendant conspired to injure claimant by unlawful means

The parties entered into a joint venture to provide online gaming services to the Turkish-speaking market.  As part of the joint venture, D licensed C to use its trademark and logo.  The licensing agreement provided for a one-year lock-in period “which thereafter, subject to positive performance of the business venture and Parties mutual understandings of the same business goals” should be extended for a further 3 years.  D contended that the agreement expired at the end of the lock-in period on the basis that the subjectivities were not satisfied and took steps thereafter to restrain C’s allegedly unlawful continuing use of the trademark and logo.  C contended that (i) the agreement continued and had never been effectively terminated; (ii) if it had been terminated, D was obliged to pay a termination sum to C; (iii) D’s actions were taken pursuant to a conspiracy to steal the business by unlawful means (malicious falsehood, inducing breach of contract and malicious prosecution).  If a termination sum was payable, there was a further dispute as to the amount.  D argued that there was an obvious mistake in the calculation formula and applied to amend its defence.

Held:

1. On their true construction, the subjectivities were not satisfied and the agreement expired at the end of the lock-in period. 
2. If that was wrong, the agreement was nonetheless effectively terminated by D.
3. There was no obvious mistake in the formula for calculating the termination sum.
4. There was no conspiracy as alleged and C failed to establish the individual torts relied upon as unlawful means.

The full judgment [2025] EWHC 234 (Comm) may be found on the National Archives website (external link).

Barry Maloney v Falcon VII Investment SARL (Bright J)

Contract – construction of shareholder agreement

Dispute between BM, the Chairman of a successful software company, and FVII, an investment SPV involved in financing BM’s acquisition of an interest in the company.  The relationship between BM and FVII was governed by a shareholder agreement (SHA) and various other governing documents.  FVII asserted that BM had acted in breach of contract by seeking to change the company’s articles and reduce the company’s capital, with a view to ousting FVII as his financier.  Both sought declaratory relief from the court.  The dispute turned on the meaning of cl. 5.4 of the SHA and whether BM required the consent of FM for various actions.

Held whether cl. 5.4 was considered by itself, with the other governing documents, in the context of the overall factual matrix, or by reference to its commercial purpose, BM was not permitted to act as he had without FVII’s consent.

The full judgment [2025] EWHC 240 (Comm) can be found on the National Archives website (external link).

Tanga Pharmaceuticals Plastics Ltd v Emirates Shipping Line FZE (Bright J)

Carriage of goods by sea – bills of lading – Hague Rules – clauses on reverse of bill affecting timebar – Art III Rule 8

D carried C’s cargo under bills of lading that expressly incorporated the Hague Rules, by cl. 2 on the reverse.  The vessel broke down and received salvage services on LOF terms.  The cargo was ultimately delivered after salvage security and general average security had been provided.  C settled with the salvors then claimed against D.  D applied for summary judgment dismissing the claim, relying on express timebar provisions in cl. 18 of the bills of lading.  C contended that those timebar provisions were nullified by Article III Rule 8.

Held:

1) The incorporating provision (cl. 2) was headed Clause Paramount and was intended to make the Hague Rules prevail over the other clauses in the bills of lading, in the event of inconsistency.

2) The provision in cl. 18 that suit should not be considered to have been brought in time unless process was actually served and/or jurisdiction obtained was inconsistent with Article III Rule 6 and so was nullified by Article III Rule 8

3) (Obiter) Even if cl. 18 prevailed over cl. 2/the Hague Rules, the claim was “for loss or damage to Goods”.  A separate provision in cl. 18, which required notice in writing within 20 days for any other claim other than for loss or damage to Goods, was not applicable.

The full judgment [2025] EWHC 368 (Comm) can be found on the National Archives website (external link).

RRY v NKX (Andrew Baker J)

Arbitration Act 1996 – applications for leave to appeal against refusal of leave to appeal under s.69 and against summary dismissal of a s.68 claim – what (if any) time limits applied, and whether court had power to grant leave, in respect of appeals against decisions made without a hearing

Applications were made for leave to appeal to the Court of Appeal against (i) a refusal of leave to appeal under s.69 of the 1996 Act and (ii) the dismissal of an application to set aside the summary dismissal of a serious irregularity claim under s.68 of that Act. There was also an application to extend time for the first of those applications. All applications were dismissed.

Held, in relation to the extension of time application, that there was no time limit for an application for leave to appeal against a refusal (or grant) of leave to appeal under s.69, where (as will usually be the case) the decision to be appealed was made without a hearing. Promptness was to be expected and delay would ordinarily count against an application, but there was no time limit as such that might require to be extended, and there was power to grant leave to appeal in such cases: CPR 52.1(4) applied to prevent CPR 52.3(2)(a) from excluding the right implicitly granted by the 1996 Act to seek such leave.

The full judgment, [2025] EWHC 41 (Comm), may be found on the National Archives website (external link).

Magomedov v TPG Group Holdings (SBS) LP (Mr Justice Bright)

Unlawful act conspiracy – strike-out/summary judgment – jurisdiction

Mr Magomedov and companies associated with him alleged all 22 Defendants conspired against him, by two separate unlawful act conspiracies which led to him losing his interests in two substantial business in Russia – NCSP and FESCO. The Defendants (variously) applied to have the claims struck out and/or for summary judgment and/or challenged jurisdiction.

The court reviewed the principles of unlawful act conspiracy, including the role of inference and the pleading requirements. The court also reviewed the principles relating to jurisdiction, in particular in respect of the English law contract gateway CPR PD 6B paragraph 3.1(6)(c), and in respect of when an alternative foreign jurisdiction can be said to be “available”. In addition, the court considered the principles as to when an earlier interlocutory decision is binding, per Harrington v Mehta [2023] EWHC 2420 (Ch).

Held: The claims against those Defendants who had been served in the jurisdiction had no real prospect of success. In relation to the other Defendants, either there was no serious issue to be tried, or no available jurisdictional gateway, or both. Furthermore, England was not the appropriate forum.

In relation to some Defendants, the Claimants were also found not to have presented the case fairly when applying ex parte for permission to serve out of the jurisdiction and/or for an extension of validity for service and/or alternative service.

The full judgment, [2025] EWHC 59 (Comm), can be found on the National Archives website (external link).

Alta Trading UK (formerly Arcadia Petroleum) v Bosworth and others (Mr Justice Henshaw) 22 January 2025

Fraud; alleged dishonest diversion of profits and opportunities; West African crude oil trading

The claimants alleged that the defendants, who included their former chief executive (Mr Bosworth), former chief financial officer (Mr Hurley) and a former trader who later set up his own business (Mr Kelbrick), had engaged in a fraudulent scheme to divert money away from the group into companies owned or controlled by them. A major focus of the allegations was a company known as Arcadia Lebanon, which the claimants alleged was a vehicle used by the defendants for the purposes of their diversion scheme, but which Bosworth and Hurley said was used by the Arcadia Group as an intermediary company for commercial reasons and used as a profit centre. There were also major issues about whether payments to Mr Kelbrick’s companies formed part of the alleged fraudulent scheme, or were bona fide payments either for service or the purchase of oil on transactions in which Kelbrick’s companies acted as independent counterparties. Expert evidence was adduced on West African oil trading practices, forensic accounting and Swiss law.

Following an eight-week trial, the Court concluded that the claimants had failed to prove their case, and that no dishonest diversion or other wrongdoing had been established in relation to any of the defendants. A counterclaim by Mr Bosworth succeeded in part and a counterclaim by Mr Hurley succeeded.

The full judgment [2025] EWHC 91 (Comm) may be found on the National Archives website (external link).

Google LLC and Google Ireland v Tsargrad Media and others (Mr Justice Henshaw) 22 January 2025

Anti-enforcement injunctions; proceedings brought in Russia in breach of exclusive jurisdiction clauses and arbitration; submission to jurisdiction; delay

Google LLC and Google Ireland Limited applied for final relief against the Defendants, three Russian entities known as Tsargrad Media, NFPT and TV-Novosti. The main remedy sought was anti-enforcement injunctive (“AEI”) relief, with ancillary anti-anti-suit injunctive (“AASI”) relief, in order to prevent the recognition or enforcement of a series of judgments of the Russian courts in any jurisdiction outside Russia. The Russian proceedings were alleged to have been commenced and pursued in breach of London arbitration or exclusive English jurisdiction agreements. The judgments had led to the seizure in Russia of assets worth more than £50 million belonging to a subsidiary (Google Russia), and the defendants had embarked on a series of attempts to enforce the Russian judgments in various other jurisdictions around the world.

The court analysed the principles applicable to anti enforcement injunctions, in particular considerations of comity and delay. It concluded that (i) contrary the defendants’ submissions, the jurisdiction in the YouTube Terms of Service provided for exclusive English jurisdiction in the circumstances of the present cases; (ii) the claimants had not submitted to the jurisdiction of the Russian courts by challenging jurisdiction, and subsequently addressing jurisdiction and merits simultaneously as required by Russian procedural rules, whilst actively challenging the Russian courts’ jurisdiction at all stages; and (iii) in all the circumstances, final relief should not be refused on the grounds of delay or comity.

The full judgment [2025] EWHC 94 (Comm) may be found on the National Archives website (external link).gov.uk/ewhc/comm/2025/94

2024

The Public Institution for Social Security v Al-Wazzan & Ors (Jacobs J)  16 December 2024

Service out of the jurisdiction on the basis of “necessary or proper party” – joinder of heirs of deceased Defendant with alleged Swiss domicile – whether permissible in the light of English law relating to succession

The Claimant had brought proceedings against Farhad Al-Rajaan, its former Director-General, in relation to alleged corrupt receipt of bribes. The trial was scheduled to last for approximately 1 year, beginning in March 2025. Mr Al-Rajaan had died and his widow had been appointed to represent his estate pursuant to CPR 19.12(1)(b). Subsequent orders appointed his widow as administrator by way of a “limited” grant: limited to Mr Al-Rajaan’s estate in England and its representation in the proceedings.

The Claimants sought to join the children of Mr Al-Rajaan to the proceedings. The Claimants contended that there was a valuable claim against the children, pursuant to Swiss law which was the alleged domicile of Mr Al-Rajaan: i.e. a claim that the children were liable to the Claimants as successors to Mr Al-Rajaan’s liability. The Claimants also contended, in the alternative, that joinder was appropriate in order to bind the heirs to the outcome of the decision at trial.

The heirs contended that it was wrong to attempt to add successors as defendants where Mr Al-Rajaan’s estate was properly constituted in England with Mr Al-Rajaan’s widow as the personal representative of her late husband. To do so would collapse the principled distinction, which exists under English law, between succession and administration: see Viegas v Cutrale [2024] EWCA Civ 1122.  It was legally impossible for the court to apply Swiss law of succession and give a judgment against the heirs at the forthcoming trial. The correct party, the administrator, had been sued, and there was no justification for joining anyone else.

Held: there was considerable force in the heirs’ argument that it would be inappropriate for the court to decide the question of whether or not, applying Swiss law, the heirs were jointly and severally liable. It was, however, unnecessary to express a final view on that argument since joinder was appropriate in order to ensure that the heirs were bound by the result of the forthcoming trial: a trial which would decide whether Mr Al-Rajaan, and now his estate, had a significant liability to the Claimants. Unless the heirs were joined as parties, a judgment of the English court in the trial may not be enforceable in Switzerland or in other civil law jurisdictions. The heirs had given no undertaking, or indication, that agreed to be bound by the judgment following the forthcoming trial.

The full Judgment [2024] EWHC 3321 (Comm) can be found on the National Archives website (external link).

Investcom Global  v PLC Investments (Mr Justice Henshaw) (3 October 2024)

Arbitration; anti-suit injunction; jurisdiction; ICC arbitration

The defendants commenced proceedings in Liberia in breach of an arbitration clause in a Shareholders Agreement that covered the parties’ dispute. The defendants also brought further proceedings in Liberia which should have been referred to arbitration pursuant to a management agreement between the parties. The Commercial Court had granted interim anti-suit injunctions (ASIs) in relation to both sets of proceedings at a without notice hearing in July 2024.

On the return date, the ASI in respect of the first set of Liberian proceedings was discharged. The arbitration clause provided for ICC arbitration but did not specify the seat. At the interim stage, the parties to the ASI had agreed that the seat should be London, and it was therefore anticipated that the seat of the arbitration “is or will be” in England & Wales for the purposes of the jurisdictional gateways in CPR 62.5(1)(c) and/or CPR 62.5(2A). However, not every party to the arbitration had agreed on the seat, so the ICC Court was empowered to fix the seat under Article 18(1) of the ICC Rules. The ICC Court subsequently fixed the seat as Toronto. As a result, by the return date the English court had no jurisdiction, under those or any other gateways, to grant relief. Any court intervention would have to be a matter for the courts of Ontario.

The ASI in respect of the second set of Liberian proceedings was continued. The arbitration clause in the management agreement likewise provided for ICC arbitration but specified the seat as London. The court therefore had jurisdiction to grant relief. Further, the continuation of the ASI would serve a useful purpose: the relevant Liberian proceedings had been discontinued, but expressly on a “without prejudice” basis “with reservation of the right to re-file”; and on the facts there was reason to believe that discharge of the ASI would lead to the proceedings being refiled.

The full judgment [2024] EWHC 2505 (Comm) may be found on the National Archives website (external link).

Serious Fraud Office v Dr Gerald Smith (Mr Justice Henshaw) 6 December 2024

Contempt of court; breaches of undertakings to deliver up real properties and of restraint order made under Criminal Justice Act 1988.  Sentencing

Following a hearing on 29 October 2024, the court concluded that Dr Smith was guilty of three contempts of court. Two of these related to failing to comply with (and attempting to obstruct) the delivery up of two London flats, vacant possession of which Dr Smith had formally undertaken to provide. The third contempt comprised spending more than the permitted living expenses amount under a Restraint Order under the Criminal Justice Act 1988. The Restraint Order had been made in 2005 on the SFO’s application in connection with charges of theft and false accounting, to which Dr Smith later pleaded guilty, relating to Izodia Plc (a company which had owned a portfolio of hotels and other assets).

The contempts were committed during the operational period of a suspended sentence which the court had imposed on Dr Smith in July 2022 for previous similar breaches of the Restraint Order. In addition, Dr Smith was already serving a prison sentence for an unrelated offence, under which he would (but for the court’s present custodial sentence) have become eligible for release on Home Detention Curfew on or about 8 January 2025.

The court imposed immediate (non-suspended) custodial terms totalling 11 months for the contempts, consecutively to a reactivation of two months of the suspended sentence previously imposed. The court directed that the resulting term of, in aggregate, 13 months’ custody should commence on 8 January 2025.

The full judgments [2024] EWHC 3154 (Comm) (liability) and [2024] EWHC 3161 (sentence) may be found on the National Archives website: case numbers 2024/3154 (external link) and 2024/3161 (external link).

Banco de Sabadell, S.A. v Cerberus Global NPL Associates, L.L.C. and others (Andrew Baker J)

Contract – Construction – Joint Venture Investment Agreements governed by Spanish law – Principles of interpretation under that law – Whether deferred payment amounts due and payable.]

The Third Party Investor, some of whose obligations were guaranteed by the Defendants, contracted with the Claimant Bank to establish and conduct joint venture business under which Spanish real estate owned assets (‘REOs’) would be transferred to the joint venture vehicle. There were three Investment Agreements, governed by Spanish law, for an aggregate total price of c.€4 billion, payment of 21% of which was deferred. A dispute arose over how much of the deferred portion of the price had become due and payable. The Bank claimed under the Defendants’ guarantees, which required any litigation of disputes to be brought in the English court. Principles of Spanish law for interpreting commercial contracts were established at trial through expert evidence. They required effect to be given to the evident contractual intent of the parties established on all the available evidence, including extrinsic evidence. Applying those principles, the Bank’s claim was upheld and judgment was entered, including interest to the date of judgment, for c.€406m.

The full judgment [2024] EWHC 3022 (Comm) may be found on the National Archives website (external link).

Collins v Wind Energy (Mr Justice Henshaw) 14 January 2025

Arbitration; application to set aside award; alleged serious procedural irregularities

The claimants applied to set aside an LCIA arbitration award on the ground of serious procedural irregularity, pursuant to section 68 of the Arbitration Act 1996. They claimed that the arbitrator breached her duties under section 33 of the Act (i) by refusing to adjourn an evidential hearing in order to allow further time for the claimants to obtain legal representation and/or prepare for the hearing, and for the first claimant to recover from a breakdown; (ii) by declining to admit certain evidence at the hearing, or to test the evidence tendered by the defendant; and (iii) by taking an inappropriate approach to various matters in her Final Award. The court concluded that no serious irregularity occurred and that the claim should therefore be dismissed.

The full judgment [2025] EWHC 40 (Comm) may be found on the National Archives website (external link).

Czech Republic v Diag Human SE (Foxton J) 9 August 2024

CR brought challenges under s.67 AA 1996 to the award of an investment treaty tribunal in favour of Ds.

1. The challenge that Ds had made no qualifying investment failed. Even assuming in CR’s favour that there was some minimal level of substance and commitment before an investment was made for the purposes of the investment treaty, that test was satisfied on the facts.

2. The challenge that the dispute arose before the treaty came into force and therefore fell outside the temporal scope of the investment treaty failed. The Bojar letter created a new dispute which came into existence after the investment treaty had come into force.

3. The issue of whether Diag Human SE had Swiss nationality by virtue of being under the control of a Swiss national raised a difficult issue. The court concluded that the test of control for this purpose embraced de facto control as well as control arising from legal rights such as share ownership. On the court’s findings as to Liechtenstein law and the facts, that test was satisfied, Diag Huma SE remaining under Mr Stava’s control after it was settled by him into a Liechtenstein trust, such that it retained Swiss nationality for the purposes of the investment treaty.

4. Accordingly the s.67 challenge failed.

The full judgment, reported at [2024] EWHC 210, can be found on the National Archives website (external link).

4VVV Ltd and ors v Kewley, Spence and others  (Foxton J) 27 September 2024

The Cs were 435 investors in a number of holiday property and student accommodation schemes promoted by the Alpha Defendants, in which they acquired units in particular projects in return for the promise of a guaranteed income for defined periods. They brought claims in deceit, unlawful conspiracy and for relief under the Financial Services and Markets Act 2000. The Court tried the claims of a number of Lead Claimants.

1. The Lead Claimants’ claims in deceit were established, as was the claim by certain Lead Claimants to rescission.
2. The investment schemes promoted by the Alpha Defendants were unauthorised collective investment schemes for the purpose of s.235 of FSMA 2000 with the result that the contracts with the relevant Alpha entities are unenforceable and the Lead Claimants were entitled to relief under s.26 of FSMA 2000.
3. The Lead Claimants’ claims for unlawful means conspiracy succeeded, both by reference to deceit and by reference to the contravention of FSMA 2000.

The full judgment, reported at [2024] EWHC 2434 (Comm), can be found on the National Archives website (external link).

TAQA Bratani Ltd and others v Fujairah Oil and Gas UK LLC (Dias J) 6 December 2024

Declaration of dividend – Insolvency Act 1986 ss 238, 423 – relevant “transaction” – whether company insolvent – whether statutory defence under s. 238(5) applied – unlawful means conspiracy

The Cs and D1 were partners in a joint venture for the exploitation of assets in the North Sea. D2 (owned and controlled by D2-6) acquired D1 when irreconcilable differences had already emerged between C1/2 and D1 as to the future operation of the joint venture. The JV partners were required to post security for future decommissioning costs but D1 was unable to raise the full amount by the due date. D1 offered a bond from a Fujairah state-owned entity (F) which was refused by the other partners on the grounds that it did not comply with the conditions of the JV agreement. D2 then agreed to sell D1 to F on cash and debt free terms in order that the latter could put up a parent company guarantee to cover the security requirement. Immediately before completion, D1 declared a dividend of US$84m in favour of D2 in order to clear an inter-company balance which had come to light. D1 subsequently defaulted on its obligations and was eventually wound up.

Cs alleged that the declaration of the dividend was part of an asset-stripping exercise designed to extract all value from D1 before removing it from D’s group, so as to put its assets beyond the reach of its creditors. Ds asserted that the sale of D1 to F was undertaken in good faith in order to break the deadlock regarding the operation of the joint venture and that they at all times reasonably believed that the sale was in the best interests of D1 since F had undertaken to stand behind and support D1 and there were good prospects that it could improve the relationship with C1/2 and eventually even sell D1 to C1/2. The declaration of the dividend was simply part and parcel of the sale, the need for which was only appreciated after the sale had already been agreed on cash and debt free terms.

It was conceded that D1 had entered into a transaction at an undervalue with a connected person such that the presumption of insolvency in s. 240(2) applied.

Held, dismissing all the claims:

• On the evidence, the sale of D1 to F was agreed for a legitimate commercial purpose and was not conceived or executed with the intention or purpose of prejudicing D1 or its creditors. The dividend was declared solely as a necessary adjunct to that sale.
• In the circumstances of the particular case, the relevant transaction to look at for the purposes of ss 238 and 423 was not the dividend in isolation but the overall arrangement by which D1 was sold to F, including all the linked steps taken to facilitate the sale, which included the dividend. D1 participated in that transaction by declaring the dividend.
• D1 was balance sheet insolvent at the date of the transaction.
• D1 entered into the transaction in good faith, for the purpose of carrying on its business and there were reasonable grounds for believing that the transaction would benefit the company. Accordingly, the statutory defence applied and the claim under s. 238 failed.
• The transaction was not entered into for the purpose of putting D1’s assets beyond the reach of its creditors and the claim under s.423 likewise failed.
• In the absence of any intention to injure, no claim could like for unlawful means conspiracy.

The full judgment [2024] EWHC 3146 (Comm) may be found on the National Archives website (external link)

Hapag-Lloyd AG v Skyros Maritime Corp (Mr Justice Bright)

Arbitration Act s. 69 appeal – time charter – late redelivery – quantum – whether recoverable loss could be reduced by Owners’ onward contracts

Two vessels under time charters were redelivered a few days late. Unknown to Charterers, Owners had contracted to sell them under MOAs. Despite the late redelivery, Owners were still able to and did immediately deliver the Vessels to the purchasers under the MOAs. Owners claimed damages for the late redelivery, at the prevailing market rate of hire for the short overrun period. Charterers said that Owners had suffered no loss, because they would not and could not have let the Vessels out at the market rate, if there had been no breach – Owners would still have delivered the Vessels directly to the purchasers.

Arbitrators found that Owners were entitled to recover damages at the market rate, as quantum meruit and/or user damages and/or negotiating damages.

The court considered these remedies. It also considered The Achilleas [2008] UKHL 48, Rodocanachi v Milburn [1886] 18 QBD 67, Slater v Hoyle & Smith Ltd [1920] 2 KB 11 and the doctrine of res inter alios alia. The court also enjoyed an old joke.

Held:

• The test of assumption of responsibility, per Lord Hoffmann in The Achilleas at [23], limits the recoverability of loss actually suffered.  It does not make damages recoverable for loss not actually suffered
• The normal measure of damages for delayed delivery/redelivery is the difference between market price/rate when the goods should have been delivered and when they were actually delivered
• The normal measure is not applicable where the claimant could not have taken the opportunity to profit from the market at the contractual date of delivery/redelivery
• The doctrine of res inter alios acta was not applicable

The full judgment [2024] EWHC 3139 (Comm) can be found on the National Archives website (external link)

Walter Oil and Gas UK Ltd v Waldorf NS II Limited (Foxton  J)

North Sea oil royalty deed – applications for summary judgment

C and D each sought summary judgment in respect of four disputes of the construction of a Deed under which D sold “Royalty Petroleum” as C’s agent (being 3% of all the production from the Relevant Field) but was entitled to deduct certain expense:

Held: (1) D succeeded on the first issue: on its true construction, D was entitled to deduct amounts paid to another party to the Deed for the processing and transportation of Royalty Petroleum which was not an affiliate of D; (2) C succeeded on issues two and three: amounts paid by D to third parties for (i) failing to ship the total amount of petrol which it had indicated to the pipeline operator it would ship and (ii) to instal certain equipment on a pipeline to settle a claim for tendering off-specification fuel for transportation was not an amount paid “for” transporting Royalty Petroleum; (iv) D succeeded on the last issue: while certain environmental costs incurred by a platform operator which were passed on to those shipping petrol through the platform by reference to their proportion of the total petroleum shipped did not meet the definition of “Taxes”, they were amounts paid for the transportation and processing of Royalty Petroleum to the extent of the proportion allocated to Royalty Petroleum.

The full judgment [2024] EWHC 3183 (Comm) may be found on the National Archives website (external link).

Star Hydro Power Ltd v National Transmission & Despatch Company Ltd (Dias J) 29 November 2024

Anti-suit injunction to restrain proceedings in Pakistan for partial recognition/enforcement of an arbitration award under the New York Convention

Following an English-seated arbitration, C was awarded various monetary sums against D. D brought proceedings in Lahore seeking partial recognition of certain findings in the award and a declaration of non-enforceability of other parts of the award (on grounds, inter alia, of Pakistani public policy) as a necessary consequence of that recognition.

C applied for an injunction to restrain the Pakistan proceedings arguing that they were a disguised challenge to the award and, as such, in breach of an implicit ancillary agreement that such challenges should only be brought under English law as the curial law of the arbitration and in the English courts.

Held, refusing the application but granting permission to appeal:

(1) It must be assumed that a court asked to recognise or enforce an award under the NYC will do so only in compliance with the provisions of the Convention.

(2) The losing party is not bound to bring any jurisdictional or other challenge to the award in the courts of the seat, but is entitled to wait until the winning party seeks recognition/enforcement and then resist on any of the grounds set out in Art V of the NYC.

(3) The right to resist recognition/enforcement on Art V grounds is a substantive right which may be asserted pre-emptively even if the winning party has not itself sought recognition/enforcement.

(4) D was entitled to seek recognition of the finding in the award on which it relied.  Whether or not that had the consequence that the remainder of the award was unenforceable in Pakistan as a matter of Pakistani public policy or because the issues raised were non-arbitrable was a matter for the Pakistani court to determine.

(5) Comity dictated that the English court should not arrogate to itself the power to determine what issues should or should not be left to the Pakistani court whose jurisdiction had been properly invoked.

Commercial Bank of Dubai PSC v Al Sari and others (Foxton  J)

Service out – serious issue to be tried – issue estoppel and abuse of process – judicial proceedings immunity – arguability of claims – applications for freezing order and Chabra order

Cs sought to serve a variety of tort claims on D10 out of the jurisdiction arising from allegations of the forgery of documents and their deployment in legal proceedings in various jurisdictions, and alternative claims if the documents were genuine. C also sought WWFO relief against D10 both in support of its claims against D10 (the Conduct WWFO) and in as a Chabra defendant in respect of Cs’ claims against D1. D7, 9 and 10 argued that the forgery claim was precluded by issue estoppel or abuse of process by reason of a Sharjah judgment and that various other claims did not disclose a serious issue to be tried for other reasons. It also denied that C was entitled to the Conduct WWF or Chabra relief (in the latter instance also because the clam could not be served out of the jurisdiction under the “necessary or proper party” gateway, judgment having already been entered against D1).

Held: (1) It was arguable that no issue estoppel or abuse of process arose. (2) If judicial proceedings immunity (“JPI”) applied, some of the claims were barred by JPI. (3) Following Erhard-Jensen Ontological v Rogerson [2024] EAT 135, while expressing doubts as to the position where there was no doctrine of JPI in the law of the relevant court, JPI applied to proceedings before foreign as well as domestic courts. (4) D10’s challenges to the arguability of the deceit, and one of the formulations of the claims under s.423 of the Insolvency Act 1986 succeeded, the malicious prosecution claim would have to be restored for further argument, otherwise the claims were arguable. (5) Cs were entitled to the Conduct WWFO, the requirements for such relief having been made out. (6) Given the inadequate time at the hearing for the argument as to quantum, the court would fix an interim Maximum Sum, which would be further considered at an additional hearing. (7) Cs were not entitled to the Chabra WWFO, gateway (3) not being available on the facts of this case, alternatively it not being appropriate to give permission to serve out as a matter of discretion.

The full judgment [2024] EWHC 3304 (Comm) may be found on the National Archives website (external link).

FWA Aviation v VietJet (Mr Justice Bright)

Aircraft finance leasing – EJC – ASIs sought by assignees

VietJet was sub-lessor of aircraft under finance leasing arrangements, subject to EJCs. VietJet defaulted.  FWA commenced proceeding in England, as the current assignee under the Sub-leases. VietJet commenced proceedings in Vietnam against Banks that had formerly been the assignees under the Sub-Leases, before the assignment to FWA. The Banks sought ASIs.

Held: The Banks were entitled to rely on the EJCs, despite having assigned away their rights under the Sub-Leases. Accordingly they were entiled to ASIs.

The full judgment [2024] EWHC 3337 (Comm) can be found on the National Archives website (external link).

4 VVV Limited and others v Spence and others (Foxton J)

Costs – indemnity principle – Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013/3134 – whether costs irrecoverable by reason of assumed breach; whether liability for costs several or joint and several

Ds resisted a costs order on the basis that the Claimants’ solicitors had not complied with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013/3134 (“the 2013 Regulations”). The Claimants conceded that it was arguable that there had been non-compliance with the 2013 Regulations so far as natural person claimants are concerned (the 2013 Regulations not applying to companies). However, they denied that the assumed non-compliance rendered the agreement to pay costs invalid or unenforceable. Alternatively, they submitted that the corporate claimants could recover all of the costs because they were jointly and severally liable for them.

The court accepted the Claimants’ primary argument: the relevant breaches of the 2013 Regulations did not render the agreement to pay costs invalid or unenforceable. The alternative argument would have failed. Although the corporate claimants had joint and several liability to the solicitors, the effect of the court’s costs-sharing order was that they could not seek a costs order from the Defendants for all of the costs, only their individual proportion.

The full judgment [2024] EWHC 3035 (Comm) may be found on the National Archives website (external link).

Standard Chartered Bank v Guaranty Nominees Ltd (The Chancellor and Foxton J)

This was a test case brought under the Financial List Test Case scheme to determine the effect on perpetual Preference Shares in which the amount of divided payable was linked to USD 3-month LIBOR from time to time of the cessation of the publication of that rate. The claimant (“SC”) alleged that the reference in the definition of Three Month LIBOR to “three month US dollar LIBOR in effect” on a particular date should be interpreted as a rate that effectively replicates or replaces three month USD LIBOR.  SC’s alternative case was that the Preference Shares’ terms contain an implied term that allows SC to use a reasonable alternative rate to three month USD LIBOR. In either case, SC submitted that the rate should be based on SOFR with a Spread Adjustment which had been recommended by the International Swap Dealers’ Association and endorsed by a number of regulators and market participants (together the “Proposed Rate”). The Funds disagreed with SC’s case and argued that the Preference Shares’ terms contain an implied term that required SC to redeem the Preference Shares in the event that LIBOR was discontinued.

Held: 

1. SC’s case on the interpretation of the express term failed. The words “in effect” in the definition of Three Month LIBOR were used to mean “in force” or “operative” rather than “in substance”.

2. It was an implied term of the arrangements governing the Preference Shares that if the definition of three-month USD LIBOR ceased to be operable, the dividends were to be calculated at the reasonable alternative rate to three-month USD LIBOR at the date of the relevant calculation.

3. The Funds’ proposed implied term was rejected. It was not necessary to give business efficacy to the contractual arrangements or so obvious to go without saying, it conflicted with the express terms and the term was unclear.

4. The Proposed Rate is the reasonable alternative to USD three-month LIBOR at the next calculation date.

The full judgment [2024] EWHC 2605 (Comm) may be found on the National Archives website (external link).

BM Brazil I v Sibanye BM Brazil (Butcher J)

Share Purchase Agreements, Material Adverse Effect clauses, geotechnical event, wrongful termination

The defendants had entered into a Share Purchase Agreement to buy two mining companies, Atlantic Nickel and Mineração Vale Verde (MVV), which were owned by the claimants.

Following a geotechnical event the defendants sought to terminate the SPAs on the basis that the geotechnical event constituted a Material Adverse Effect (MAE). The claimants contended that the defendants had wrongfully repudiated and/or renounced the SPAs and that the defendants were guilty of wilful misconduct in doing so.

The court, having reviewed both US and English authorities, concluded that an event must itself be material and adverse to constitute an MAE, rather than merely revelatory. The court also concluded that an MAE should be consequential for a company’s earnings power over a commercially reasonable period.

The court held that: i) the geotechnical event was not a MAE, ii) there was no other basis for the defendants to terminate the SPAs when they did, iii) the claimants’ case that the defendants were guilty of wilful misconduct was not made out.

The full judgment [2024] EWHC 2566 (Comm) may be found on the National Archives website (external link). 

URE Energy Ltd v Notting Hill Genesis (Dias J)

Waiver by election/conduct; breach – whether “material” and remediable; when, by whom and on what basis contract was terminated; correct calculation of contractual termination payment – whether “remaining value of this Contract to the Supplier” means future income or net profit

In 2017, U (a start-up company) and G concluded an energy supply contract. In April 2018, G merged with another housing association to create the defendant (NHG) which succeeded to G’s rights and obligations under the contract. The contract came to an end in November 2018, but precisely when, on what grounds and by which party it was terminated and the consequences which thereby ensued were hotly disputed.  U claimed to have terminated the contract pursuant to a contractual right arising from the amalgamation, alternatively a contractual right arising from NHG’s material breach of contract, alternative for repudiatory breach at common law. It claimed a contractual termination payment and/or damages. NHG claimed that U’s purported termination was itself a repudiatory breach (which it accepted) and counterclaimed for damages.

In prior summary judgment proceedings, Moulder J held that the amalgamation gave U a contractual right to terminate and that although did not seek to do so for a further six months, there was no estoppel because NHG failed to establish detrimental reliance. Nonetheless, NHG had an arguable case that U had affirmed the contract by its conduct and thereby elected to waive its right to terminate.

Held at trial that: 

1. U’s conduct following the amalgamation was affirmatory and capable of constituting an election.  Nonetheless it did not have the requisite knowledge of its right to terminate and so had not waived its right to terminate.
2. Although NHG was in breach of contract in the respects alleged by U, the breaches were not material and accordingly did not give rise to a right of termination.
3. U validly terminated the contract on grounds of the amalgamation and was not in repudiatory breach.
4. As a matter of construction, the “remaining value of this Contract to the Supplier” referred to anticipated future income over the remaining life of the contract and not to anticipated net profit. The contractual termination payment was to be calculated accordingly.

The full judgment [2024] EWHC 2537 (Comm) may be found on the National Archives website (external link).

Jaffe v Greybull Capital (Cockerill J)

Contract – Fraudulent misrepresentation – “active presence to mind” – applicable law – witness recollection

C’s alleged Ds had made fraudulent misrepresentations about the source of funds being injected into Monarch Airlines and that had these representations not been made Cs would not have continued the commercial relationship and hence not been exposed to losses when the airline failed.

Aside from interesting issues as to the facts, and issues of German Law, the judgment considers the developing scholarship on witness recollection, as discussed in Popplewell LJ’s 2023 lecture and the cases on the meaning of the “country in which damage occurs” in  Article 4 of Rome II in the context of misrepresentations.

The full judgment [2024] EWHC 2534 (Comm) can be found on the National Archives website (external link).

Invest Bank plc -v- Ahmad El-Husseini

1. This case concerns the application of section 423 of the Insolvency Act 1986 to various transactions carried out by the First Defendant  (“Ahmad”) by which he transferred between 2016 – 2018 a number of valuable assets and interests to his family members, companies under their control and a discretionary trust of which they were beneficiaries. The court was called upon to determine whether at least one of his purposes in doing so in respect of each of the relevant transactions was to put the asset in question beyond the reach of the Claimant (“the Bank”) as a potential creditor?

2. The court determined that the Bank had failed to prove its case in respect of each of the relevant transactions (# 155ff).

3. The case also concerns an analysis of:
(i) The relevant legal principles concerning what needs to be pleaded and proved in order to satisfy the statutory requirements of section 423 (# 18-21).
(ii) When the court may draw an inference that a defendant had the purpose of putting his assets beyond the reach of a creditor (# 22).
(iii) Is a section 423 claim an allegation of discreditable conduct which requires a clear pleading of the primary facts said to give rise to the inference and a case proved by cogent evidence (#23-39)?
(iv) The circumstances in which a court may draw adverse inferences and in particular whether the court should, on the facts of this case, draw adverse inferences against Ahmad and the other defendants by reason of Ahmad’s failure to engage with the proceedings, attend trial and disclose documents (# 115-151).
(v) Whether the Bank was entitled to run a case that Commodore UAE (whose debts to the Bank Ahmad had personally guaranteed) was in financial difficulties in late 2016/early 2017 in the light of its pleaded case (#40-81).
(vi) The consequence of the Claimant failing to apply to adduce expert accountancy evidence in a case where it is alleging that a company, whose debts Ahmad had personally guaranteed, was balance sheet insolvent or suffering from serious illiquidity (#82-102).
(vii) The relevance of contemporaneous documents in assessing where the truth lies in a dispute such as the present one (# 152-154).

The full judgment [2024] EWHC 2976 (Comm) can be found on the National Archives website (external link).

Magomedov and others v. TPG Group Holdings (SBS), LP and others

Norwich Pharmacal orders – need for originating process – proper purpose of Norwich Pharmacal application – whether in the interests of justice to make an order in the light of foreign law – whether a sufficient case that respondents were “mixed up” in wrongdoing – alternative service

The claimants in existing proceedings sought Norwich Pharmacal (“NP”) orders from three Respondents (R1, R2 and R3), all part of the “1291” group which provided financial services. The application was for the disclosure of information as to the identity of the persons who were behind an enquiry made by R1 concerning a proposed payment of monies. The claimants allege that the proposed payment was a bribe. Each respondent advanced arguments as to why service of the application should be set aside and/or relief should be refused.

Held: R1: (1) It had been appropriate for the court to make an order for alternative service on R1 via R3. There was no material non-disclosure which justified setting aside that part of the order.

(2) It was appropriate for the claimants to make their application by service of an application notice in the existing proceedings. It was not therefore necessary for the claimants to issue fresh originating process, either by joining R1 as a defendant to the existing action, or issuing a separate Claim Form against R1.

(3) It was permissible, in principle, for NP relief to be sought in order to obtain information, as to the identity of the persons behind the alleged bribe, that might assist the claimants in resisting forthcoming jurisdictional challenges by various defendants.

(4) However, NP relief would be refused because there was a strong case that the provision of the relevant information, as to the identity of the alleged wrongdoer, would involve a breach of the laws of Liechtenstein, where R1 was incorporated and carried on business. The proposed NP order would also not be readily enforceable in Liechtenstein. It was not therefore in the interests of justice to grant NP relief.

R2 and R3: both companies had only been incorporated after the critical communications relating to the proposed payment. Those communications had involved R1, not R2 or R3. Also, R3 (when ultimately incorporated) was a dormant company which had never carried out any business. There was no sufficient basis for alleging that either company had been “mixed up” in the wrongdoing. Service of proceedings against R2 was therefore set aside. The application against R3 (who had been served in the jurisdiction) was dismissed.

The full Judgment [2024] EWHC 2527 (Comm) can be found on the National Archives website (external link).

Russian Aircraft Operator Policy Claims: Jurisdiction (Henshaw J)

Exclusive Russian jurisdiction clauses – whether strong reasons to refuse a stay – prospect of fair trial in Russia – aviation insurance

Seventy-eight claims were brought for losses of around US$9.7bn following the alleged detention or other loss in the Russian Federation of 208 aircraft and 31 engines after Russia’s invasion of Ukraine in February 2022.  The claims were made under reinsurances procured by the Russian airlines who had leased the aircraft/engines (and under which the Claimants claimed to be entitled to sue under ‘cut-through clauses).  It was accepted for the purposes of the applications that the reinsurances contained exclusive Russian jurisdiction clauses.  The Defendants challenged the English court’s jurisdiction.  The Claimants contended that, despite the jurisdiction clauses, there were strong reasons not to grant a stay.

The Commercial Court held that (i) on the evidence, and in view of the likely substantive issues, it was unlikely that the Claimants would receive a fair trial in Russia; (ii) that factor was not undermined to any significant degree by the Defendants’ arguments that a risk of unfairness was foreseeable when the jurisdiction clauses were entered into; (iii) even after taking account of the importance of comity between courts of different nations and the importance attached by the English courts to jurisdiction clauses, the unlikelihood of a fair trial was a strong reason for declining to stay the proceedings in this case; and (iv) considerations relating to multiplicity of proceedings, risks of inconsistent judgments and, in some cases, personal safety were further factors supporting the view that strong reasons existed to refuse a stay.

The full judgment [2024] EWHC 734 (Comm) may be found on the National Archives website (external link).

Onecom Group v Palmer (Henshaw J)

Strike-out/summary judgment – breach of warranty claim – contractual limitation period – interpretation

The Defendant applied to strike out a claim for alleged breaches of warranties concerning aspects of the operating costs of a company whose shares he had sold to the Claimant.  He alleged that the claims were brought outside a contractually agreed deadline for warranty claims.  The Claimant contended that the period was extended, under the relevant provisions, because the claim was based on liabilities that were contingent and not capable of being quantified. 

The court held that the Claimant was correct.  The warranty claims could not be quantified until the outcome of a contractual process by which an independent accountant determined an ‘Earn-Out Consideration’ forming part of the consideration payable by the Claimant for the shares in the company.  That exercise involved a price adjustment potentially affected by (among other things) the same categories of operating costs as were the subject of the warranty claims.  To avoid a risk of double counting, the warranty claim could not be quantified until after the independent accountant had reported.  The claims were not time-barred and the strike-out application was dismissed.

The full judgment [2024] EWHC 867 (Comm) may be found on the National Archives website (external link).

Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden v Société Bengaz (Henshaw J)

Summary judgment – loan agreement – security – diversion of funds – proprietary claims

The Claimant (FMO) is a Dutch state-owned company which lends funds to promote economic growth in emerging markets.  It lent money to Bengaz, a special purpose vehicle holding investments in the Second Defendant, West African Gas Pipeline Company Limited (WAGPCO).  As a shareholder in WAGPCO, Bengaz received substantial sums from time to time from WAGPCO.  It granted security in favour of FMO over its entitlements to such sums, as security for the loans. 

The court granted summary judgment for approximately US$56 million due to FMO under the loan agreement, declarations as to its proprietary interests and other entitlements in relation to certain funds, and mandatory injunctive relief against Bengaz and WAGPCO to enforce FMO’s entitlements under the security arrangements.

The full judgment [2024] EWHC 901 (Comm) may be found on the National Archives website (external link).

Ukrainian Aircraft Operator Policy Claims: Jurisdiction (Henshaw J)

Exclusive Ukrainian jurisdiction clauses – whether binding on Claimants under Ukrainian law – whether strong reasons to refuse a stay – aviation insurance

Six claims were brought under insurance and reinsurance contracts in relation to aircraft that have remained in Ukraine following the Russian Federation’s invasion of Ukraine in February 2022.  The claims were made under insurances and reinsurances procured by the Ukrainian airlines who had leased the aircraft.  The Claimants claimed to be entitled to sue as additional insureds under or assignees of the insurance policies, and/or under ‘cut-through clauses in the reinsurance contracts, and/or pursuant to collateral contracts.  It was accepted for the purposes of the applications that the insurance and reinsurance contracts themselves contained exclusive Ukrainian jurisdiction clauses.  The Defendants challenged the English court’s jurisdiction.  The Claimants contended that (i) under the Ukrainian governing law, they were not bound by the Ukrainian jurisdiction clauses and were entitled to pursue their claims in England, and (ii) there were in any event strong reasons not to give effect to the jurisdiction clauses, by reason of the effects of the war on litigation in Ukraine. 

The court held that (i) the Defendants had the better of the argument that under Ukrainian law the Claimants were not entitled to pursue their claims under the insurance and reinsurances contracts (or under contracts allegedly collateral thereto) without abiding by the exclusive Ukrainian jurisdiction provisions, and (ii) the evidence about the effect of the war on litigating in Ukraine was insufficient to demonstrate strong reasons for the court to decline to give effect to the jurisdiction clauses.

The full judgment [2024] EWHC 1365 (Comm) may be found on the National Archives website (external link).

MS Amlin Marine MV v King Trader Ltd (Foxton J)

Charterers’ liability policy – “pay first” clause – whether clause incorporated into policy of marine insurance – whether “pay first” clause to be read down so as not to apply to claim brought by third party and/or where insured insolvent

C provided charterers’ liability insurance to D2. D2 became liable to D1 and D3 after a vessel under charter grounded near the Soloman Islands. D1 and D3 established D2’s liability to them in respect of the grounding in LMAA Arbitrations. After D2 became insolvent, D1 and D3 sought to bring claims against C under the charterers’ liability policy relying on the Third Parties (Rights against Insurers) Act 2010. C relied on the “pay first” clause. D1 and D3 challenged the incorporation of the “pay first” clause into the policy and/or its application in the circumstances.

The court held (i) The “pay first” clause appeared in the policy booklet and was incorporated into the policy. It could not be said to be repugnant to the main provisions or purpose of the policy. (ii) There was no legitimate process of construction by which the “pay first” clause could be read down so as not to apply to third parties bringing claims under the 2010 Act or where the insured was unable to discharge the liability. Nor could a term to that effect be implied into the policy.

The full judgment [2024] EWHC 1813 (Comm) may be found on the National Archives website (external link).

MOK Petro Energy FZC v Argo (No. 604) Ltd and others (Dias J)

All-risks marine open cover – claim under policy for loss caused by water contamination to a cargo of M15 gasoline during carriage from Oman to Yemen – certificates of quality at loadport purported to show that cargo was on-spec – defence that (i) C suffered no loss because the cargo would always have been off-specification (ii) claim barred by breach of a survey warranty.

The cargo was a blend of gasoline and methanol.  It was common ground that the contamination was probably due to tank washing residues in the vessel’s cargo tanks and lines and had the effect of increasing the phase separation temperature (PST) of the cargo to 29°C making it unmarketable.   Pre-and post-loading certificates of quality indicated that the cargo had a PST of less than 1°C.  D’s case based on subsequent joint testing was that the cargo as blended probably always had a PST of around 17°C.  C challenged the reliability of the joint analysis.

Alternatively, C argued that even if D’s case on PST was accepted, the choice of blending proportions by the supplier to produce an off-specification cargo was nonetheless fortuitous and resulted in damage to the resulting blend.

D further argued that C had failed to comply with a survey warranty requiring the the shorelines to be inspected and certified as to cleanliness.

Held:

• On C’s primary case, the legal burden was on C to show that the cargo was damaged by a fortuity and that loss was caused as a result.  C prima facie discharged that burden by relying on the loadport certificates.  D accordingly had an evidential burden of raising matters sufficient to cast doubt on the certificates.  If that evidential burden was discharged, the legal burden nonetheless remained with C to establish on a balance of probabilities that the cargo was in the condition as certified.

• On the evidence, D’s case was to be preferred.  On a balance of probabilities the cargo as blended would always have had an excessive PST.  The subsequent joint analyses gave a reasonable indication of the cargo quality on loading notwithstanding C’s criticisms.  In any event, the post-load certificate could not have been correct given the accepted mechanism of contamination.

• As to C’s alternative case on fortuity, even if the choice of blending proportions by the supplier was fortuitous, it did not cause any relevant damage to the cargo since (a) phase separation is reversible and cannot be regarded as damage; (b) even if actual phase separation could be regarded as damage there was no evidence that the cargo as a whole had ever separated; (c) propensity to separate is not “damage” as the cargo did not exist for the purposes of the policy until it had been blended and a propensity to separate is simply a characteristic or attribute inherent in any methanol/gasoline blend. The case was entirely analogous in this respect to Bacardi-Martini v Thomas Hardy.
  
  
• As to D’s breach of warranty defence, an inspection as to cleanliness required only that the inspector take steps to be satisfied that any residues are compatible with the cargo to be loaded.  On the evidence the requisite inspection had been carried out.  However, certification of cleanliness was an independent and discrete part of the warranty which, in the absence of contrary provision, had to be provided within a time reasonable in the industry.  The certificate in this case was not provided until 6 years after the event and after the commencement of proceedings.  In no sense could this be said to be a reasonable time.  D was not estopped from relying on the breach of warranty and it was not precluded by s.11 of the Insurance Act 2015.

The full judgment [2024] EWHC 1935 (Comm) may be found on the National Archives website (external link).

Republic of Korea v Eliott Associates LP (Foxton J)

Investor state dispute settlement – Korea-USA Free Trade Agreement – whether Article 1.1(1) created jurisdictional bar for the purpose of s.67 of the Arbitration Act 1996

Article 11.1(1) of the Korea-USA FTA contains a “scope and coverage” clause providing “this Chapter applies to measures adopted or maintained by a Party relating to: (a) investors of the other Party; (b) covered investments; and  (c) with respect to Articles 11.8 and 11.10, all investments in the territory of the Party.”  Article 11.15 and Article 11.16 contained the Contracting Party State’s offers to arbitrate investment disputes. The arbitral tribunal found the requirements of Article 11.1(1) were satisfied and award Elliott LP damages for breaches of Article 11.4.

There was a dispute between the parties as to whether Article 11.1(1) created a threshold to the substantive protections provided by Chapter 11 of the BIT, or whether it created pre-conditions to Korea’s offer to arbitrate investment disputes, such that the tribunal’s finding that Article 11.1(1) was satisfied was in the nature of a jurisdictional finding which was subject to de novo review before the Court under s.67 of the 1996 Act.

Held:

(1) Article 11.1(1) was not a condition of Korea’s offer to arbitrate investment disputes, but a condition of relief on the merits which was a matter for the tribunal. Accordingly the tribunal’s determination that Article 11.1(1) was satisfied was not a jurisdictional finding for the purposes of s.30 of the 1996 Act and could not be challenged under s.67.

(2) Having found that the issues raised by Korea’s challenge based on Article 11.1(1) was not jurisdictional for the purposes of the 1996 Act, it would not be appropriate for the court to make contingent findings on that challenge.

The full judgment, reported at [2024] EWHC 2037 (Comm), may be found on the National Archives website (external link).

LAX v JBC (Foxton J) 1 August 2024

LAX obtained a without notice worldwide freezing order against JBC. It had no assets in the jurisdiction and adduced evidence that it could not fortify an undertaking in damages due to a financial restructuring forced on it by JBC’s breach. JBC applied for fortification.

Held:    

(1) JBC had not established a good arguable case of loss on the material before the court or adduced an intelligible estimate of loss. Accordingly the application for asset disclosure was refused, albeit a further application would be permitted if JBC’s circumstances changed.

(2) The court was concerned at the apparent asymmetry in the fact that LAX had obtained an injunction, and come under a contingent liability under the undertaking in damages, without adducing any evidence as to its assets, while obtaining a coercive order for disclosure of JBC’s assets, and a freezing order, in support of its own claim.

(3) After further argument, the court required LAX to provide a form of disclosure of its own assets as a condition of maintaining the injunction.

The full judgment [2024] EWHC 2042 (Comm) may be found on the National Archives website (external link).

Aiteo Eastern E & P Company Limited v Shell Western Supply and Trading and Others (Jacobs J)

ICC arbitration – arbitrator removed by the ICC Court after challenge on the basis of doubts as to her independence or impartiality – subsequent application by Claimant under the Arbitration Act 1996 s. 68 to set aside 4 partial awards – whether a sufficient case of apparent bias – whether there was “substantial injustice” – whether to grant an extension of time to make the s. 68 application

The arbitrator (Dame Elizabeth Gloster – “DEG”) was a former judge of the Commercial Court and English Court of Appeal. She was appointed as arbitrator in a dispute between the Claimant (“Aiteo”) and the Defendants (“the Lenders”) on a claim relating to Aiteo’s failure to repay loan facilities. The dispute was subject to arbitration pursuant to the rules of the International Chamber of Commerce (“ICC”). At the time of her appointment, DEG disclosed two previous appointments as arbitrator by Freshfields, the solicitors to the Lenders. DEG failed, through inadvertence, to disclose to Aiteo or to the ICC, a prior professional engagement by Freshfields to provide legal advice to a client unrelated to the Lenders. Thereafter, she failed to disclose a further instruction by Freshfields to provide an expert report in the context of foreign litigation. She also failed to make timely disclosure of a third professional engagement by Freshfields, although she did disclose it subsequent to completion of the engagement. After DEG had made that disclosure, and answered questions from Aiteo’s lawyers, Aiteo applied to the ICC Court to remove DEG as arbitrator on the basis of Article 11 of the ICC Rules, concerning independence and impartiality. The ICC Court removed DEG as arbitrator. Aiteo subsequently sought to set aside 4 awards to which, with co-arbitrators, the arbitrator had been party. Aiteo alleged apparent (not actual) unconscious bias. Aiteo also sought an extension of time to make the application, since more than 28 days had passed since the dates when the awards were rendered.

Held:

1. The question was whether the fair-minded and informed observer, having considered the facts, would consider that there was a real possibility that DEG was biased: Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48.
2. The decision of the ICC Court to remove DEG as arbitrator did not create a res judicata or issue estoppel. The ICC Court was not determining a legal right: Unite the Union v McFadden [2021] EWCA Civ 199 applied. Also, its decisions were of a procedural character: The Sennar [1985] 1 WLR 490. Accordingly, the Lenders were not precluded by res judicata or issue estoppel from disputing Aiteo’s case, namely that the fair-minded observer would conclude that there was a real possibility of bias.
3. In answering the relevant question, the observer would pay regard to the decision of the ICC Court to remove DEG, including the fact that this was a rare example of a challenge succeeding before the ICC Court. However, the observer would recognise that he or she should make up his or her own mind on the basis of the underlying facts, and that it would be wrong to reach a conclusion simply by reference to what the ICC Court had decided.
4. On the facts, the observer would conclude that, in view of the number of professional contacts between DEG and Freshfields, and DEG’s failure to make timely disclosure of three of those professional contacts, there was a real possibility of unconscious bias, notwithstanding that there were some factors which would favour a different conclusion. Any possible doubt, on the part of the observer in answering the relevant question, would be resolved by consideration of the ICC Court’s decision, which would strike the observer as rational and well-founded.
5. Where there is bias which affects an arbitrator, an applicant under s. 68 still needs to establish “substantial injustice” in order to obtain relief. In a case of apparent bias, substantial injustice will normally be inferred or anticipated, but there is no absolute rule that it will always be held to exist: Africa Sourcing Cameroun Ltd v LMBS [2003] EWHC 150 (Comm) (Sir Ross Cranston) followed. An inference of substantial injustice can be rebutted, even in a case of bias.
6. In the present case, any inference of substantial injustice was rebutted in relation to 3 of the 4 awards.
   a. The arbitral tribunal’s first award was concerned only with jurisdictional issues. Aiteo had lost its jurisdictional challenge before the arbitrators, and there had then been a challenge under the 1996 Act s. 67 before the Commercial Court: Aiteo Eastern E&P Company Ltd v Shell Western Supply and Trading Ltd [2022] EWHC 2912 (Comm) (Foxton J). The s. 67 challenge involved a re-hearing, and Aiteo’s jurisdictional arguments were rejected. The jurisdictional issue had therefore been fully considered afresh by a court which was unaffected by apparent bias on the part of the DEG. The re-hearing had a “curative” effect, and substantial injustice was not shown: Royal & Sun Alliance Ltd v Tughans [2022] EWHC 2589 (Comm) (Foxton J) applied.
   b. The same applied to the tribunal’s second award dealing with costs, which was consequential on the first award.
   c. The tribunal’s third award involved, unusually and because of the nature of the parties’ contentions, separate consideration by each arbitrator individually of the relevant arguments concerning whether two arbitration references should be consolidated. The other two members of the tribunal were unaffected by apparent bias, and came to their decision independently of the views of DEG. Substantial injustice was not shown.
7. In relation to the 4th award, the inference of substantial injustice was not rebutted. The appropriate order was to remit that award for reconsideration by the tribunal which had now been reconstituted.
8. It was appropriate to grant Aiteo an extension of time in order to make its s. 68 challenge. Aiteo’s case had merit, and other factors also favoured the grant of an extension.

The full judgment [2024] EWHC 1993 (Comm) can be found on the National Archives website (external link).

Barclays Bank Plc v Sovcombank (Foxton J)

Anti-suit injunction; anti-enforcement injunction – claim for negative declaratory relief 

B was party to a facility agreement with S which contained an English law and exclusive jurisdiction clause. UK sanctions made it a criminal offence for B to pay S. S commenced proceedings in Russia for damages. Interim anti-suit injunctions were granted. At the trial B applied for final ASI and AEI injunctions and for a declaration that the UK sanctions excused it from payment: 

Held (granting the relief sought): 

1. The court was satisfied that the Russian proceedings were being pursued in breach of contract and that there was no good reason not to grant final relief. 
2. Applying SAS Institute Inc v World Programming Ltd [2020] EWCA Civ 599, and Deutsche Bank v RusChemAlliance LLC [2023] EWCA Civ 114 it was appropriate to grant a final AEI. The effect of the expert evidence was that the Russian court might enter judgment even if S sought to comply with the ASI. Further, in this case that AEI was sought prior to the entry of judgment in Russia when the Russian proceedings were in their early stages, the Russian court had yet to pronounce on the issue and S had yet to acquire a judgment debt. 
3. It was appropriate for the English court, as the parties’ chosen court and the court best placed to determine the effect of UK sanctions on an English law contract, to grant the negative declaratory relief sought. 

A full copy of the judgment ([2024] EWHC 1283 (Comm) can be found on the National Archives website (external link).

Moonbug Entertainment Ltd v CCM Touring LLC et al (Andrew Baker J)

Challenge to jurisdiction – law and jurisdiction clause for “the law and jurisdiction of the party bringing the claim” – lis pendens – submission to the jurisdiction at common law

Disputes having arisen under a licence agreement relating to the claimant’s intellectual property in “CoComelon” (the YouTube channel for children):

– the first defendant sued in New York claiming breach of contract in relation to activity in the US and Canada by a third party licensed by the claimant, the main issue there being whether that licence clashed with the first defendant’s licence such that the first defendant’s exclusivity rights had been infringed;

– the claimant later sued in England for a declaration that in respect of every country other than the US, Argentina and Canada, rights licensed to the first defendant reverted to the claimant in November 2023.

The possibility of claims relating to different aspects of the parties’ contract being governed by different laws and determined in different jurisdictions was part of the parties’ bargain, and in any event the defendants had submitted to the jurisdiction at common law by steps taken prior to bringing the application to challenge jurisdiction. The application was dismissed with directions for a speedy trial under the Shorter Trials Scheme.

The full judgment, [2024] EWHC 793 (Comm), may be found on the National Archive website (external link).

The London Steam-Ship Owners’ Mutual Insurance Association Ltd v Trico Maritime (Pvt) Ltd and others (Bright J)

Contract of insurance – London arbitration clause, pay-to-be-paid clause – claims by third parties against insurer in Sri Lanka – final anti-suit injunction

The Claimant (“Club”) insured the vessel ‘X-Press Pearl’, under terms including a London arbitration clause and a pay-to-be-paid clause. The vessel sank off Sri Lanka with the loss of all cargo. Various parties asserting interests in the cargo (“the Cargo Claimants”) commenced proceedings in Sri Lanka. The Cargo Claimants’ claims against the Club were brought solely on the basis that it was the insurer of the vessel.

Held: The claims against the Club in Sri Lanka were derived from and sought to enforce the contract of insurance.  They did not advance an independent right of recovery. The Cargo Claimants were treated as bound by the contract of insurance including the arbitration clause and the pay-to-be-paid clause. The Club was entitled to a final anti-suit injunction and a declaration re the effect of the pay-to-be-paid clause.

The full judgment, [2024] EWHC 884 (Comm), may be found on the National Archive website (external link).

Upham v HSBC UK Bank plc (Bright J) 

Tort – Deceit/unlawful means conspiracy – quantum – limitation

The Claimants were individuals who invested in ‘Eclipse’, a film-related tax-deferral scheme devised by HSBC’s employee, Mr Bowman. The scheme was successfully challenged by HMRC. The Claimants said they had invested in reliance on representations that the Eclipse structure had been approved by a tax QC, and that these representations were false and were made dishonestly by and/or with the knowledge and intention of Mr Bowman.  

The claims failed because:

1. The Claimants had failed to analyse properly the legal significance of the statements made to them before they invested in Eclipse.
2. Properly analysed, the statements that related to the advice of the tax QC did not constitute misrepresentations. The Eclipse promoter (Future Films) and Mr Bowman had reasonable grounds for believing that the scheme as implemented was consistent with the basis on which the tax had advised.
3. Neither Future Films nor Mr Bowman was dishonest.
4. The Claimants’ Sample Witnesses failed to prove the quantum of their loss (with the one exception).
5. The claims were time-barred.

The Court made observations as to how claims in misrepresentation/deceit should be analysed and pleaded: [310]-[312]; cf. [322], [336], [494]-[498]. The full judgment, [2024] EWHC 849 (Comm), may be found on the National Archives website (external link).

ING Bank v Technimont SA (Cockerill J) 

[Contract- Indemnity – Jurisdiction – Part 20 – Intervener.]   

Tecnimont was required under a Facility Agreement to indemnify ING on demand in respect of any sums ING was required to pay out under bonds issued at Tecnimont’s request.  The Facility Agreement was governed by Italian law and contained a clause stating that the Courts of Milan “shall have exclusive competence for any dispute” but also permitting the Bank to bring proceedings “before any other competent court”. ING were sued on the bonds. Tecnimont applied to join the proceedings as an interested party. It then resisted being joined as a Part 20 Defendant with an indemnity claim being made against it.

The challenge failed. Tecnimont had submitted to the jurisdiction. In any event the clause was an asymmetric jurisdiction clause and  conferred jurisdiction not only on the Italian courts but on any court that was jurisdictionally apt, whether domestic or foreign. Consequently, ING would not be in breach of the jurisdiction clause by making a claim in the English Court and England was the forum conveniens.

The full judgment [2024] EWHC 1084 (Comm) may be found on the National Archives website (external link).

Ziyavudin Magomedov v TPG Group Holdings (SBS) LP (Bright J) 

Anti-anti-suit injunction – whether  criteria for anti-suit injunctions apply fully to an anti-anti-suit injunction 

Cs commenced proceedings in England.  D20 acknowledged service and challenged English jurisdiction.  D20 also commenced proceedings in Russia for a Russian anti-suit injunction (“ASI”). Cs applied without notice for, and obtained, an anti-anti-suit injunction (“AASI”).  Prior to the return date, the Russian court granted the Russian ASI, on terms that breach by Cs would entitle D20 to payment of (in total) US$7.5 billion. 

AASIs have historically been granted applying the same criteria as those applicable to ASIs – per Lord Goff in Airbus Industrie GIE v Patel and Toulson LJ in Deutsche Bank AG v Highland Crusader Offshore Partners LP.  These normally require the English court to decide that England is the natural forum. The Russian ASI sought to prevent Cs from resisting D20’s challenge to English jurisdiction, and thus to prevent the English court from deciding its own jurisdiction, including the question of natural forum. 

Held: Interim AASI granted, until determination of D20’s jurisdictional challenge. The English court must have the power to give itself the chance to decide the natural forum.  

The full judgment [2024] EWHC 1176 (Comm) may be found on the National Archives website (external link). 

OCM Maritime Nile LLC v Abdul Jalil Mallah (Cockerill J)

Contempt of Court

The defendant had been joined to proceedings post judgment and a third party costs order made against him. A worldwide freezing order against him had been obtained. The Claimants contended that the disclosure part of that order had not been complied with in that full disclosure had not been given. Further it was contended that lies had been told to excuse non-compliance including his assertions that he had been unaware of the order and that he had never instructed his previous solicitors of record. The majority of contempts were found to have been established and the Defendant was sentenced (in absentia) to 18 months imprisonment.

The full judgment [2024] EWHC 1226 (Comm) may be found on the National Archives website (external link).

Gordiy v Dorofejeva (Foxton J)

Permission to amend – permission to serve out of the jurisdiction – deceit – pro bono representation

C applied for permission to amend to advance claims in deceit, unlawful interference and causing loss by unlawful means, and for permission to serve the claim on D2 out of the jurisdiction. C was a litigant in person, and was provided with pro bono legal representation under the COMBAR Pro Bono Scheme by Mr Andrew Fulton KC, and also by Howard Kennedy LLP. 

Held: with the benefit of the extensive contemporaneous documents before the court, C’s claims were not arguable. The Court concluded: 

“Although I suspect this will provide very limited consolation to Ms Gordiy, she can rest assured that all that could possibly be said in support of her claims has been said, and that the issues and evidence raised in answer to her complaints by the Defendants have now been fully tested. The court is extremely grateful for the time given by Mr Fulton KC and Howard Kennedy LLP which has made this possible.” 

A full copy of the judgment – reported at [2024] EWHC 1273 (Comm) – can be found on the National Archives website (external link).

Sy Roro 1 Pte Ltd v Onorato Armatori SR (Foxton J) 

Anti-suit injunction – whether jurisdiction clause exclusive – anti-enforcement injunction

C sought an ASI against Ds under a bareboat charter (which contained a London arbitration clause) and a Multi-Party clause (containing an English jurisdiction clause). It also sought an anti-enforcement injunction the effect of which would be to nullify the outcome of relief D4 was seeking in an application to set aside arrest proceedings commenced by C in France. Held: 

1. The application for ASI relief was granted. C would be permitted to amend the claim form to include relief in respect of the bareboat charter. Properly construed, the jurisdiction clause in the Multi-Party Agreement was exclusive so far as Ds were concerned. 
2. The application for an anti-enforcement injunction was refused. The court was not persuaded that it was appropriate to injunct Ds from responding to the arrest proceedings C had commenced or which would prevent D4 from obtaining any practical benefit if its challenge to the French arrest proceedings succeeded. 

A full copy of the judgment – reported at [2024] EWHC 1283 (Comm) – can be found on the National Archives website (external link).

Royal & Sun Alliance Insurance v Kroll (Foxton J) 

CPR 31.17 – application in advance of service of Defence – whether court should hold underlying claim too weak to justify relief 

C sought CPR 31.17 relief against R1 and R2, directors of D who had been the subject of a criminal investigation which was abandoned. R1 and R2 had commenced proceedings against the prosecuting authorities which were later settled. C and D had settled a claim under a D&O policy on the basis that if R1 and R2  were “awarded any sum by way of damages, compensation or costs in respect of the Losses which are subject of payment under the terms of the Agreement (or any part thereof)” D would reimburse C to that extent (clause 6.2). C sought CPR 31.17 disclosure of documents relating to the claim commenced by R1 and R2 against the prosecuting authorities and the settlement of that claim. 

Held (granting the disclosure sought): 

1. While there might be cases in which a CPR 31.17 application prior to the service of a Defence and/or disclosure between the litigating parties was premature (Abbas v Yousef [2014] EWHC 662 (QB)) this was not one of them. The issues relating to the settlement of the litigation commenced by R1 and R2 were a key issue in the claim, and D had made it clear it had no information about the settlement or documents it could produce. 
2. R1’s argument that, given its reference to a sum “awarded”, clause 6.2 could not extend to amounts paid in settlement could not be said to be so strong that disclosure should be refused on that basis. The contrary construction was eminently arguable and “the argument that, by having a settlement of a pending claim or against the background of imminent judgment, it would be possible to avoid the application of cl.6.22 was not an altogether happy one. 

A full copy of the judgment ([2024] EWHC 1255 (Comm) can be found on the National Archives website (external link).

Maersk Guinea- Bissau, SARL (also known as “Maersk Guinea- Bissau SARL” or “Maersk Guinee- Bissau SARL” and another v. Almar-Hum Bubacar Baldé S.A.R.L. (Jacobs J)

Incorporation of contractual terms – bills of lading – enforceability of exclusive jurisdiction clause by a third party covered by a “Himalaya” clause – whether judgment of court in Guinea-Bissau gave rise to res judicata estoppel – claim by Claimants for declaration of non-liability in respect of delays in performance of contracts of carriage.

The 2^nd Claimant (“Maersk”) was the carrier under various bills of lading. The 1^st Claimant (“Maersk GB”) operated, on behalf of the carrier, locally in Guinea-Bissau, West Africa. The Defendant (“the shipper”) was the shipper of a cargo of timber from Guinea-Bissau to China. A dispute arose between the parties in relation to delays in delivering the timber in China. The shipper contended that the delays had been caused by the Claimants having wrongfully given the bills of lading to the Guinea-Bissau Judiciary Police, who had demanded the bills in relation to debts owed by the shipper to the Guinea-Bissau state. The shipper began proceedings in Guinea-Bissau against Maersk GB, and obtained judgment. The Claimants contended that the proceedings were in breach of an exclusive jurisdiction clause in favour of the English courts and a Himalaya clause, and that both Claimants could enforce those clauses and claim damages for the breach. The Claimants also claimed declarations of non-liability, contending that there were various reasons why there was no liability to the shipper. The shipper contended that the Guinea-Bissau judgment gave rise to a res judicata which precluded the Claimants from advancing their claims.

The principal issues were: whether Maersk’s standard terms were incorporated into the contracts of carriage between Maersk and the shipper; whether both claimants were entitled to judgment on liability (with damages to be assessed later) for breach of the jurisdiction clause and the Himalaya clause; whether the Guinea-Bissau judgment gave rise to res judicata estoppel; and whether the Claimants were entitled to a declaration of non-liability.

Held: The Claimants succeeded on all issues.

(1) The Claimants had drawn sufficient attention to Maersk’s standard bill of lading terms. Customers (including the shipper in this case) had to make bookings using Maersk’s online system, and for that purpose must tick a box accepting Maersk’s hyperlinked terms. The shipper had ticked the box, thereby assenting to the terms: Ebury Partners Belgium SA/NV v Technical Touch BV [2022] EWHC 2027 (Comm) applied. The shipper was also otherwise aware of Maersk’s terms when making its booking on the Maersk website. The terms were therefore incorporated. None of them were unusual or onerous.

(2) Both Claimants could enforce the jurisdiction clause and could claim damages consequent upon its breach. Maersk GB’s entitlement to enforce was a consequence of the Himalaya clause. An appropriately drafted Himalaya clause will enable a third party to rely upon an exclusive jurisdiction clause at common law: The Mahkutai [1996] AC 650 distinguished; Carver on Bills of Lading 5^th edition section 7-079 applied. There is no reason why, at common law, a third party’s entitlement to enforce the terms of a bill of lading should be confined to reliance by way of defence.

(3) The Guinea-Bissau judgment did not give rise to any res judicata estoppel for a number of reasons: (a) It was obtained in breach of an exclusive jurisdiction clause; (b) the judgment was not final because there is an outstanding appeal which has not been resolved; (c) the proceedings which resulted in the judgment now relied upon were contrary to natural justice.

(4) The Claimants were entitled to a declaration of non-liability on various grounds: (a) no claim could be made against Maersk GB, which was not the carrier; (b) any claim for breach of the contract of carriage was time-barred, since proceedings had not been commenced in the agreed jurisdiction in the 1-year permitted by the Hague Rules: The Havhelt [1993] 1 Lloyd’s Rep 523 applied; (c) the bill of lading terms protected the Claimants from claims in respect of delay; (d) the delays were attributable to breaches of contract by the shipper; (e) neither Claimant was in breach of contract; (f) the delays alleged to be attributable to the Claimants would have occurred in any event, because the shipper was not in a position to present all the documents required to take delivery of the cargo.

The full judgment [2024] EWHC 993 (Comm) can be found on the National Archives website (external link).

Delos Shipholding SA and others v Allianz Global Corporate and Specialty SE and others  (Dias J)

War risks insurance – Detention of vessel – CTL – Fortuity – Arrest under customs or quarantine regulations “or similar arrest, restraint or detainment” – Breach of duty to sue and labour – Non-disclosure – claim under s.13A

Held:

1. The loss was fortuitous.  While neither the Master nor the claimants actually knew the vessel was illegally anchored until after her arrest, the Master and the Operations Department of the managers should have realised this.  However, none of the claimants appreciated or should have appreciated that she might be arrested and detained as a result.  The obiter dictum of Hobhouse J in The Wondrous stood only for the proposition that loss was not fortuitous if it was bound to result from conduct voluntarily entered into by choice of the assured.  The assured could not be said to be exercising a choice unless it was subjectively aware that some significance attached to its decision.  In any event, on the facts, as at February 2019 arrest and detention were not bound to result and were not ordinary incidents of anchoring in Indonesian waters without permission.
2. The arrest was not “similar” to an arrest under customs or quarantine regulations.
3. The assured’s conduct in entering into discussions with the authorities was not unreasonable and there was no breach of the duty to sue and labour. 
4. The criminal charges were material and should have been disclosed but they were only known to the nominee director himself and he was not part of the senior management of either the vessel-owning company or any of the other claimants.  Accordingly, none of the claimants had actual knowledge of the charges and on the facts none of them should have known.  In any event, had they been disclosed, other exculpatory material would also have been presented which can be taken into account in relation to both materiality and inducement when postulating the counterfactual scenario.  On the facts, Insurers probably would have been prepared to write the risk on the same terms but subject to replacement of the director in question.
5. The claimants had failed to prove the loss they alleged they had suffered by reason of Insurers’ non-payment.

The claim under the policy accordingly succeeded but the claim under s.13A failed.

The full judgment [2024] EWHC 719 (Comm) may be found on the National Archives website (external link).

ABFA Commodities Trading Ltd v Petraco Oil Company SA  (Foxton J)

Part 36 offer – costs and interest rate – declarations as to beneficial ownership of amount held to the order of the court

Petraco (P) sought its costs on the basis that it had recovered more than a Part 36 offer. ABFA (A) said that it would be unjust to apply CPR Part 36(17)(4) because the court had found P had adduced dishonest evidence as to its knowledge and the Part 36 offer was not a genuine attempt to settle. P also sought a declaration A was not the beneficial owner of the sums held to the order of the court which were accordingly not subject to sanctions control.

Held:

1. The Part 36 Offer offered a discount of between 16-18% against the recoverable amount and was a genuine offer to settle.
2. The court had expressed its disapproval of P’s conduct by refusing to enforce the undertaking in damages to the extent of $1.6m but had not taken account of the consequences of P’s dishonest case on the costs of the action.
3. The appropriate order was to arrive at a costs order which reflected the consequences of ‘s dishonest case but otherwise to apply the CR 36.17(4) consequences of beating the payment in.
4. The court considered A’s argument that any costs incurred in advancing P’s dishonest case as to knowledge were necessarily unreasonably incurred and not recoverable on assessment.
5. The rejection of A’s claims and the order for payment of the sum held to the Court’s order to P necessarily extinguished any equity of redemption A otherwise had in those sums, and P was entitled to the declarations sought.

The full judgment [2024] EWHC 706 (Comm) may be found at the National Archives website (external link).

Civiello and Survey Spec Ltd v Brodahl (Foxton J)

Freezing injunction – assets of companies owned by D – whether fell within terms of England and Wales freezing order

C, who had registered a Norwegian judgment in England and Wales, sought declarations that an England and Wales Freezing Order (“EWFO”) applied to dividends and consultancy fees payable to a Norwegian company and/or a Liechtenstein company on the basis that (i) those companies received the amounts beneficially for D and/or (ii) the assets were in D’s control for the purposes of the EWFO.

Held:

1. The court was not in a position to reach a final decision and would be wary of doing so.
2. On the material before the court, C had not shown good reason to suppose the companies received the assets beneficially for D or that the assets of the companies were in D’s control for the purposes of the EWFO.
3. The court considered the circumstances in which the court might grant a freezing order in relation to assets which were not currently amenable to execution and how the court might approach cases in which the question of whether a current order extended to particular assets was in dispute.

The full judgment [2024] EWHC 707 (Comm) may be found at the National Archives website (external link).

Czech Republic v Diag Human SE and Stava (Foxton J) 

Investment treaty arbitration – permission to amend – whether challenge under s.67 of the Arbitration Act 1996 barred by s.73 – whether extension of time required

The Czech Republic sought permission to amend to bring a s.67 challenge based on the allegation C’s dominant and effective nationality was TCI not Swiss. Held:

1. It was arguable as a  matter of international law that where C held the nationality of the host state and other nationalities, he could only claim if his dominant and effective nationality was that of the other Contracting Party.
2. The court was able finally to decide the issue under s.73(1) and the Czech Republic had not persuaded the court that, if reasonable diligence had been exercised, the ground of challenge would not have become known before the award. Accordingly permission to amend would be refused.
3. The court rejected an argument that an application to amend to advance a new ground of objection did not have to comply with the time limit in s.70(2) of the 1996 Act. However, had the issue been live, the court would have granted an extension of time.

The full judgment [2024] EWHC 708 (Comm) may be found at the National Archives website (external link).

Al Aggad v Al Aggad (Cockerill J) 

[Jurisdiction – Forum Conveniens – Saudi Arabia – Jordan – breach of contract – Unlawful mans conspiracy.] 

D3 had been served in person within the jurisdiction, with Ds 1 and 2 joined as necessary and proper parties to claims in contract and conspiracy arising out of a family dispute in KSA. It was accepted that the dispute was most closely connected to KSA. It was accepted (for the purposes of jurisdiction only) that the claimant could not go to KSA. Although KSA was prima facie the convenient forum, that was displaced because on the detailed evidence there was a real risk that the claimant could not commence, pursue or participate in proceedings in KSA because she lacked the requisite documentation to produce a power of attorney which could be authenticated/legalised and because she could neither participate in remote hearings or give evidence in support of her claim. Jordan was not a forum conveniens because of the risk of multiplicity of proceedings; Vedanta v Lungowe did not preclude reliance on that argument because the choice to sue here was the claimant’s.

The full judgment [2024] EWHC 673 (Comm) may be found on the National Archives website (external link).

Czech Republic v Diag Human SE and Stava (Foxton J)

Investment treaty arbitration – whether challenges under s.67 and s.68 of the Arbitration Act 1996 barred by s.73; whether challenges jurisdictional; whether s.68 challenges succeeded

The Czech Republic brought a series of challenges under s.67 and s.68 of the 1996 Act to the damages award of a tribunal under the Switzerland-Czechoslovakia Bilateral Investment Treaty. The tribunal had found two breaches of the treaty and awarded damages. This hearing considered (i) the extent to which the s.67 challenges were barred by s.73(1); (ii) whether all of the challenges fell within s.67 and (iii) the s.68 challenges.

After reviewing the relevant principles, the court held that a number of the s.67 challenges were barred by s.73, and one of the challenges which was not so barred was not properly jurisdictional. One of the challenges under s.68(2)(d) succeeded. The other s.68 challenges failed.

The full judgment [2024] EWHC 503 (Comm) may be found at the National Archives website (external link).

Contax Partners Inc BVI v Kuwait Finance House and Others (Butcher J)

Arbitration – Enforcement of arbitration award – Award found to be fabricated

The court had previously made an ex parte order for the enforcement of an arbitration award purportedly made under the auspices of the Kuwait Chamber of Commerce and Industry Commercial Arbitration Centre.  It was then alleged by the apparent respondents in the arbitration that the award was a fabrication, and there had never been an arbitration agreement, or an arbitration or an award.  The court found that the award was a fabrication and set aside the order for its enforcement.

The full judgment [2024] EWHC 436 (Comm) may be found at the National Archives website (external link).

Oaxaca Ltd & Flat Iron Ltd v QIC Europe (Cockerill J) 

Contract – Insurance – Summary Judgment

The Claimants applied for summary judgment on liability in respect of their insurance claims arising out of Covid-19 business interruption. Judgment was granted on the issue of construction which was essentially identical to that raised in earlier cases (in particular Corbin & King Ltd & Ors v AXA Insurance UK Plc [2022] EWHC 409 (Comm), London International Exhibition Centre PLC v Royal & Sun Alliance Insurance PLC and others [2023] EWHC 1481, Gatwick Investment Ltd & Ors v Liberty Mutual Insurance Europe SE  [2024] EWHC 124 (Comm)) but summary judgment on liability and an interim payment were both refused because the issues which remained as to quantum and aggregation made it not fanciful that the claimants’ recovery would be zero

The full judgment [2024] EWHC 394 (Comm) may be found on the National Archives website (external link) 

GI Globinvestment Limited v Faleschini, Leader Logic and others  (Cockerill J) 

[Strike Out – Unlawful means conspiracy – Deceit] 

Applications to strike out claims brought against an individual and two companies in deceit and unlawful means conspiracy were dismissed in a case where there it was accepted that there was an arguable case against the other defendants. While the companies were incorporated after the original pleaded misrepresentation and reliance it was arguable that they joined the conspiracy late, that passive participation was enough to attract liability in conspiracy and that the claimants could have acted to prevent or mitigate their losses even after the companies were incorporated and took up their role. As regards the individual it was not fanciful to suggest that the pleaded representations could be ones of fact as to present intention and that his role was such that he had relevant knowledge and intent at the outset to be liable in deceit or conspiracy.

The full judgment [2024] EWHC 481 (Comm) may be found on the National Archives website (external link).

Mahtani and Others v Atlas Mara Ltd and Others (Butcher J)

Share Purchase Agreement  – Alleged breaches – Causation – Loss 

The Defendants had purchased the entire issued share capital in Finance Bank Zambia (‘FBZ’) from the Claimants under a Share Purchase Agreement.  The Claimants contended that the Defendants were in breach of that agreement in 3 respects: (1) in failing to act reasonably in and about the appointment of a Fund Raising Agent; (2) in failing to agree to the sale back to the First Claimant of a subsidiary of FBZ, FBS; and (3) in failing to release certain Escrow Shares to the Claimants. 

The court concluded that there had been no breach of contract as to (1), and that, in any event, no loss had been caused by the alleged breach; that there had been no breach as to (2); and that the Claimants’ pleaded case on breach in relation to (3) failed.

The full judgment [2024] EWHC 218 (Comm) may be found at the National Archives website (external link).

Sodzawiczny v Smith and Cochrane (Foxton J)

Anti-arbitration injunction – s.9 stay

The claimant (FS) sought an anti-arbitration injunction (“AAI”) in respect of LCIA arbitration proceedings commenced by GMS and GC. GMS sought to stay court enforcement proceedings and the AAI application under s.9 of the Arbitration Act 1996. The court reviewed the circumstances in which AAI applications are made.

Held:

1. The court enforcement proceedings and the AAI application were not matters the parties had agreed to arbitrate and the s.9 stay application was refused.
2. GMS and GC were seeking to challenge awards with a legal seat in England and Wales otherwise than in accordance with the 1996 Act. This infringed FS’s legal right that only challenges under ss.67 to 70 of the 1996 Act would be made.
3. Further, in numerous respects the claims in the proposed LCIA Arbitration fell outside the jurisdiction of any arbitral tribunal appointed in the arbitration, and, in the circumstances of this case, it was appropriate for the court to grant ASI relief rather than leave the matters to the arbitrators under s.30 of the 1996 Act.

The full judgment [2024] EWHC 231 (Comm) may be found at the National Archives website (external link).

Markel v General Reinsurance; UnipolRe v Covéa (Foxton J)

Covid 19 – business interruption losses – reinsurance cover

The court hard two appeals on points of law under s.69 of the Arbitration Act 1996 from two market arbitrations considering claims to recover losses paid out under business interruption insurance policies under catastrophe excess of loss reinsurance cover.

In the Markel award, the tribunal held that the claims could be aggregated because they have been directly caused by one catastrophe, but that only business interruption loss referable to the closure of the insured premises during the period of the “hours clause” could be recovered.

In the Covéa award, the tribunal held that the claims could be aggregated because they had been directly caused by one catastrophe (albeit the relevant catastrophe was identified in different terms from in the Markel award), and that all losses from the continuous closure of the premises following on from the 18 March 2020 closure order could be recovered, it being sufficient that the closure order took effect on the insured premises within the period of the hours clause.

Markel, General Re and UnipolRe appealed on the issues on which they had been unsuccessful.

Held:

1. The Markel and Covéa tribunals did not err in law in concluding that the losses claims were directly caused by “one catastrophe”.
2. The Covéa tribunal has been right to conclude that the application of the “hours” clause was dependent on whether the closure of the relevant premises occurred within the period of the “hours” clause, even if the losses flowing directly from that closure continued after the period of the “hours” clause.
3. The contrary conclusion of the Markel tribunal involved an error of law, and Markel’s appeal against that determination was allowed.

The full judgment [2024] EWHC 253 (Comm) may be found at the National Archives website (external link).

Madison Pacific Trust Limited v Sergiy Mykolayovch Groza and Volodomyr Serhiyovch Naumenko (Jacobs J)

Worldwide freezing injunction (“WFO”) – whether Claimant lenders had established a real risk of dissipation by the Defendants – whether just and convenient to grant a WFO in circumstances where the Claimant had additional security beyond the guarantees provided by the Defendants

The Defendants had provided guarantees to support lending which had been provided by lenders to a corporate group. Following default by the borrowers, the Claimant had sought to enforce its security, including by way of an arbitration claim against the two Defendants for payment under the guarantees. The Claimant obtained a WFO against the Defendants, and the Defendants contended that it should be discharged because there was no real risk of dissipation, it was not just and convenient to grant or continue the injunction, and there had been material non-disclosure by the Claimant on the without notice application for the WFO.

Held: the injunction would not be discharged.

• There was, on the facts, a very strong case of risk of dissipation.
• Although the Claimant had alternative security which it was seeking to enforce, it was nevertheless just and convenient to continue the injunction. The Claimant had independent rights against the two Defendants under their guarantees. If the Claimant was successful in the arbitration,  it would obtain a New York Convention award which had international currency. In view of the real risk of dissipation, it was appropriate to restrain the Defendants from dissipating their assets pending determination of the Claimant’s claims in arbitration and their enforcement. The existence of other possible enforcement remedies did not affect this conclusion, particularly bearing in mind that there was substantial opposition to the Claimant’s attempts to obtain those remedies.
• There was no material non-disclosure. Furthermore, the Defendants had failed to give adequate notice that they intended to rely upon non-disclosure and had failed to provide sufficient particulars to enable the Claimant to understand the case that was to be advanced. An allegation that a Claimant or his lawyers have failed in that duty is a serious allegation involving misconduct or default on the part of the Claimant or his lawyers. If it is to be made, adequate and clear notice of it must be given and full details provided of the non-disclosure or misrepresentation alleged: The Public Institution for Social Security v Amouzegar [2020] EWHC 122 (Comm) followed.

The full judgment [2024] EWHC 267 (Comm) can be found on the National Archives website (external link).

Southeaster Maritime Ltd v Trafigura Maritime Logistice Pte Ltd mv “Aquafreedom” (Jacobs J)

Charterparty recap subject to management approval and review – whether binding contract concluded between the claimant (Owners) and Trafigura (prospective charterers) – effect of provisions requiring “management approval” and detailed terms which were “sub review both sides”; whether the two “subjects” meant that there was no binding contract between the parties

The Owners and Trafigura negotiated, via brokers, the terms of a long-term charterparty. A fixture recap was sent by the brokers containing the terms which had been agreed. Two of those agreed terms were: “Terms: As per previously agreed terms, sub review both sides” and “Subs: Charterers management approval latest two working days after all terms agreed”. Negotiations took place between the parties and their brokers with a view to agreeing the detailed terms. Prior to agreement on all terms, the Owners withdrew from the discussions because they no longer wished to contract with Trafigura.  Trafigura then “lifted” its management approval subject. Trafigura contended that neither of the relevant terms operated as a condition precedent to the conclusion of a binding agreement, and that it was therefore for the arbitrators to decide whether or not the Owners had withdrawn from the discussions prior to Trafigura lifting the management approval subject, and also to decide whether or not all terms had been agreed.

Held: there was no concluded contract between the parties. The “Charterers management approval” term was a condition precedent to the formation of a binding charterparty: Nautica Marine Ltd v Trafigura Trading LLC: The Leonidas [2020] EWHC 1986 and DHL Project and Chartering Ltd v Gemini Ocean Shipping Co Ltd: The Newcastle Express [2022] EWCA Civ 1555 applied. This “subject” was not lifted prior to the Owners’ withdrawal from negotiations of the detailed terms of the charter. Agreement on the detailed terms was also, in context, a condition precedent to the conclusion of a binding charterparty, and the parties were not agreed on all terms.

The full judgment [2024] EWHC 255 (Comm) can be found on the National Archives website (external link).

The Public Institution for Social Security v Muna Al-Rajaan Al-Wazzan & Ors (Disclosure Issues) (Jacobs J)

Applications for further disclosure pursuant to paragraph 17 of CPR PD 51AD – whether applicants had shown that there had been or may have been a failure adequately to comply with an order for Extended Disclosure – applicable test under paragraph 17 – whether documents of Kuwaiti government entities other than the Public Institution for Social Security (“PIFSS”) were under the practical control of PIFSS – whether parties should be ordered to request third party documents which were not under their legal or practical control

PIFSS operated the State of Kuwait’s social security and pension scheme. The proceedings were in respect of alleged unlawful payments by various financial institutions and intermediaries of unauthorised secret commissions procured by Mr Al Rajaan, its former Director General from 1984 to 2014. The principal applications were by various defendants for further disclosure by PIFSS pursuant to paragraph 17 of CPR PD 51AD, which enables the court to order further disclosure where there had or may have been a failure adequately to comply with an order for Extended Disclosure,

Held:

(1) although paragraph 6.4 of the Practice Direction required the court to take into account “the likelihood of documents existing that will have probative value in supporting or undermining a party’s claim or defence“, an applicant for disclosure did not have to demonstrate the existence of such documents on the balance of probabilities. Disclosure orders could be made where there was a real possibility that such documents existed: Re H Minors [1996] AC 563 at 584F-G; Wallis v Bristol Water [2009] EWHC 3432 (Admin) at [18] applied.

(2) dismissing the principal applications, the applicants had failed to show that PIFSS had or may have failed to comply with orders for Extended Disclosure in respect of documents in the possession of (i) other Kuwaiti government entities, in particular the Kuwaiti Attorney General (which acted as public prosecutor) and the Department of Legal Advice and Legislation (which gave legal advice to various Kuwaiti government departments) and (ii) non-governmental entities such as the accounting/ consultancy firms KPMG and Ernst and Young. In deciding whether there was such practical control, it was relevant to consider whether it was inherently probable or conventional for such practical control to exist: Loreley Financing (Jersey) No. 30 Ltd v Credit Suisse Securities (Europe) Ltd and others [2023] EWHC 548 (Comm) followed. A failure by a party to request the production of documents in the possession of a third party could not, on its own, justify an inference that there was practical control over those documents. If, however, there other factors present, and these were are sufficiently strong, the absence of a sensible request might assist in the drawing of an inference of control.

(3) Where documents were not under the legal or practical control of a third party,  the court had no jurisdiction to make an order requiring a party to exercise best endeavours to obtain or request the third party to produce documents for disclosure: Various Airfinance Leasing Companies and anor v Saudi Arabian Airlines Corpn [2021] EWHC 2904 (Comm) followed.

(4) The decision of Beatson J in West London Pipeline West London Pipeline & Storage Ltd v Total UK Ltd [2008] EWHC 1729 (Comm) provides valuable guidance as to the circumstances in which the court will be willing to “go behind” evidence submitted by a party. That approach applies both to arguments concerning privilege and other aspects of disclosure. It is not routine for the court to make further orders in relation to claims for privilege, or in relation to other aspects of disclosure, simply because a party would wish to have more information. There are circumstances in which the court will do so, when the court is concerned that something had gone wrong or may have gone wrong. It is, however, becoming increasingly common for parties, at CMCs, to apply for orders for further information as to aspects of the disclosure work carried out by an opposing party, essentially in order to check that it had done that work properly. The court should generally not be burdened with such requests. It is different if a party can show that something has gone wrong, or may have gone wrong, in the disclosure process and to make an application on that basis.

The full Judgment [2024] EWHC 480 (Comm) can be found on the National Archives website (external link).

ABFA Commodities Trading Limited v Petraco Oil Company SA (Foxton J)

Undertaking in damages – alleged Russian law torts – “unclean hands”

Petraco (P) brought these proceedings to enforce an undertaking in damages given when ABFA (A) obtained an injunction which had the effect of preventing it from taking delivery of the cargo. A relied upon various Russian law claims to allege that P would not have acquired title to the cargo and/or was liable to A under Russian law for P’s conduct in relation to this and two other cargoes. A also alleged that P’s behaviour at the time and the manner in which P had pursued the litigation amounted to “unclean hands” and the court should refuse to enforce the undertaking,

Held:

• A’s factual case was largely made out but did not have the effect contended for under Russian law: P would have acquired the cargo but for the injunction had no liability to A in damages.
• In circumstances in which P’s conduct at the time did not give A claim, it did not provide a sufficient basis for refusing to enforce the undertaking.
• P had acted with unclean hands in the litigation by presenting a misleading case. This was not a sufficient reason to deprive P of its right to claim under the undertaking in respect of the value of the cargo and profit on resale, which would come close to forfeiting P’s rights and give A a windfall.
• The court could enforce the undertaking in part, and P’s conduct in the litigation made it appropriate not to enforce the undertaking so far as it sought recompense for certain out of pocket costs.

The full judgment [2024] EWHC 147 (Comm) may be found at the National Archives.

Macquarie Bank Limited v Banque Cantonale Vaudoise (Foxton J)

Claim under letter of credit; forum non conveniens; lis alibi pendens

C was the beneficiary of a standby letter of credit (SBLC) governed by English law issued by D. In 2020, while the Lugano Convention 2007 was still in force, C brought proceedings in Switzerland against D, a Swiss bank, to enforce the SBLC. Those proceedings were stayed by the Swiss court pending a Swiss criminal investigation in relation to possible fraud in the underlying transaction (albeit D accepted it was not in a position to make a fraud allegation against C). The proceedings remained stayed. C then brought proceedings in England which D asked the court to stay on forum conveniens grounds.

The court rejected the challenge, on the basis that the procedural course of the Swiss claim was inconsistent with C’s substantive rights under the English law SBLC, by which D had to show an obvious case of fraud to resist payment and under which any stay would be inconsistent with the status of an SBLC as “akin to cash”. C undertook to discontinue the Swiss proceedings.

The full judgment [2024] EWHC 114 (Comm) may be found at the National Archives.

SKAT (Sitting in Dubai) (Andrew Baker J)

SKAT litigation – application by DWF Defendants for the trial judge to appoint himself a special examiner under CPR 34.13(4) to take their evidence in the DIFC – application refused

The Main Trial in the SKAT litigation, Skatteforvaltningen (the Danish Customs and Tax Administration) v Solo Capital Partners LLP (in special administration) and others, is listed to commence on 9 April 2024.  Three of the principal defendants, represented by DWF Law LLP and referred to in the proceedings as the ‘DWF Defendants’, applied at a pre-trial review hearing in December 2023 for Andrew Baker J, as designated judge for the litigation and the trial judge for the Main Trial, to appoint himself a special examiner under CPR 34.13(4) and take their oral evidence, for use at trial, in the DIFC (sitting in the DIFC Court for that purpose, but as a special examiner, not as a judge).

The judge refused the application at the hearing, and subsequently handed down a judgment giving full reasons.  The judgment discusses the availability in principle of the solution proposed by the DWF Defendants, commenting on such precedents as were cited to the court (Peer International [2005] EWHC 1048 (Ch), A G of Zambia [2005] EWHC 2102 (Ch), [2006] EWCA Civ 390, [2007] EWHC 952 (Ch), and Kimathi [2015] EWHC 4116 (QB), [2015] EWHC 3684 (QB)).

The judge had “real doubt over the propriety of a trial judge appointing themselves as special examiner under CPR 34.13(4) and interrupting a trial so as to take a deposition abroad, [those] precedents … notwithstanding”, but refused the application on the basis that “without having to take a final view on that, on the facts … the disadvantages of adopting that approach for taking evidence from the DWF Defendants outweighed the supposed advantages by a clear margin, such that it would not in the interests of justice to adopt that approach” (judgment at [42]).

The full judgment, [2024] EWHC 19 (Comm), may be found on the National Archives.

Border Timbers Ltd v Republic of Zimbabwe (Dias J)

Sovereign Immunity – Enforcement of ICSID awards – Full and frank disclosure

On 28 July 2015, the Claimants were awarded some US$125m against Zimbabwe under an ICSID award.  Zimbabwe’s attempt to have the award annulled under the ICSID Convention on grounds that the ICSID tribunal did not have jurisdiction over the dispute was dismissed on 21 November 2018.  The Claimants applied without notice to the English court for registration of the award and on 8 October 2021, Cockerill J ordered that the award be recognised and entered as a judgment in the same manner and with the same force and effect as a judgment of the High Court. Zimbabwe applied to have the order set aside on grounds of sovereign immunity and/or for failure by the Claimants to disclose potential issues as to sovereign immunity on the without notice.  The Claimants argued that Zimbabwe fell within either or both of the exceptions to immunity set out in sections 2 and 9 of the State Immunity Act 1978 and that because this was clearly and obviously the case, there had been nothing to disclose to the court.

Held, dismissing the application:

1. While Article 54(1) of the ICSID Convention amounted to a waiver of state immunity in respect of recognition and enforcement of ICSID awards (but not in respect of execution), it did not amount to a submission to the jurisdiction of the English court for the purposes of enforcement within the meaning of section 2 of the State Immunity Act 1978.

2. For the purposes of section 9 of the 1978 Act, the English court was not bound by the ICSID tribunal’s decision as to its own jurisdiction but was required by the statue to be independently satisfied that the parties had agreed to submit the relevant dispute to arbitration.  Accordingly, it was in principle open to Zimbabwe to raise its jurisdiction arguments again notwithstanding that they had been rejected by both the ICSID tribunal and the annulment committee (and, indeed, any new ones).

3. Accordingly, Zimbabwe was not deprived of state immunity by the operation of either section 2 or section 9 of the 1978 Act.

4. However, the doctrine of sovereign immunity was only engaged when a foreign state was impleaded before the English court.  The bespoke procedure established under the CPR for the registration of ICSID awards pursuant to the Arbitration (International Investment Disputes) Act 1966 did not provide for service of any originating process on the foreign state.  Accordingly, the state was not impleaded until it was served with the English court’s order enforcing the award.

5. Furthermore, the 1966 Act provided that a judgment creditor under an ICSID award was entitled to have the award registered as of right (subject only to compliance with certain procedural requirements) and the English court therefore exercised no adjudicative jurisdiction over the foreign state at the registration stage. 

6. It followed that the doctrine of state immunity had no application at the time when a creditor sought registration of the award, although it could clearly be invoked thereafter in relation to any further steps taken towards execution.

7. In this respect there was a material distinction to be drawn between ICSID awards and awards under the New York Convention, where a different procedure applied which required an exercise of the court’s adjudicative jurisdiction in determining whether any of the Convention defences to recognition and enforcement was applicable.

8. The Claimants were in breach of their duty of full and frank disclosure in having failed to draw the court’s attention to potential arguments relating to state immunity.  However, in all the circumstances it was not appropriate to set aside the order for registration and it would be sufficient to penalise the Claimants in costs.

The full judgment [2024] EWHC 58 (Comm) may be found at the National Archives.

AerCap Ireland Ltd v AIG Europe SA and Others (Butcher J)

Russian Aircraft Litigation – Application for third party disclosure – Sanctions

The Claimant (‘AerCap’) applied under CPR PD57AD para. 31.17 against the brokers of insurances and reinsurances taken out by Russian aircraft operators for disclosure of those policies.  The issue was whether the making of such disclosure might contravene the Russia (Sanctions)(EU Exit) Regulations 2019, and in particular Regulations 28, 29 or 29A.

The court held that, in circumstances where the court made an order for third party disclosure, no question of breach of the Regulations arose.  In any event, even in the absence of an order, there would be no breach of the Regulations if an insurance or reinsurance broker supplied documents of the sort here requested, for the purposes of the fair disposal of an action such as that brought by AerCap here.

The full judgment [2024] EWHC 144 (Comm) may be found at the National Archives.

Skatteforvaltningen v MCML Ltd (formerly ED&F Man Capital Markets Ltd) (Mr Justice Bright)

Issue estoppel – Henderson v Henderson abuse of process

SKAT commenced proceedings against EDFM in 2018, for negligent misrepresentation. They were struck out on a preliminary point of law, which SKAT did not appeal as against EDFM, but did appeal against other Ds. The appeal succeeded against the other Ds.
SKAT then commenced fresh proceedings in December 2022, this time alleging fraud/deceit. EDFM applied for the 2022 proceedings to be struck out.
The court reviewed the law on issue estoppel and on Henderson v Henderson, and refused the application:

• Issue estoppel: the issues were not identical.
• Henderson v Henderson: SKAT could and should have raised the new allegations much earlier in 2022, in particular by a CMC at which the designated judge gave directions in multiple related proceedings, all intended to be case-managed together. However, there was no harassment or oppression or unfairness to EDFM. The Henderson principle normally requires this, to justify striking out.
• However, SKAT’s failure to bring the new claim to the court’s attention when it should, in breach of the CA guidance in Aldi Stores v WSP [2007] EWCA Civ 1260, would have a significant impact on costs.

The full judgment [2024] EWHC 148 (Comm) can be found on the National Archives here.

GLAS SAS v European Topsoho (Mr Justice Bright)

Extension of time to challenge jurisdiction – relief from sanctions – summary judgment – conditions under CPR 24.6(c

Proceedings commenced November 2021 against 3 defendants. Only D1 participated. C applied for summary judgment against all Ds. D1 did not support its pleaded defence and did not resist summary judgment. D2 and D3 sought extensions of time to challenge jurisdiction, and relied on the points previously raised by D1 in its defence. 

The applications of D2 and D3 for extensions to challenge jurisdiction were refused.  D2 and D3 were not entitled to relief from sanctions. The 2-year delay in challenging jurisdiction was a significant breach; there had been no relevant change of circumstances: cf Apollo Ventures Co. Limited v Surinder Singh Manchanda [2021] EWHC 3210 (Comm), per Teare J at [14].

Summary judgment was not granted (save on one uncontentious element) but the court imposed conditions requiring each of D2 and D3 to pay €9m into court. Not only were the prospective defences were weak, but also they had chosen not to participate for a significant period; they must show they are now in earnest by putting their money where their mouth is.

The full judgment [2024] EWHC 83 (Comm) can be found on the National Archives website.

WWRT Limited v Kostiantyn Valentynovych Zhevago (Jacobs J)

Jurisdictional challenge – effect of war in Ukraine on availability of Ukraine as a forum – allegations of a real risk of injustice in Ukraine by reason of alleged corruption of the Ukrainian judiciary

The claim concerned alleged fraud and conspiracy by the defendant in connection with the operation of a Ukrainian bank. The claimant claimed as assignee of the bank pursuant to assignments governed by Ukrainian law. The defendant challenged the court’s jurisdiction.

Held: The jurisdictional challenge succeeded on each of the grounds relied upon by the defendant. (1) The claimant did not have a real prospect of showing that it had acquired, pursuant to the assignment, the relevant rights to claim against the defendant. (2) There was no good arguable case that the defendant had committed, in England, substantial and efficacious acts in furtherance of the fraud. The case did not therefore come within the relevant gateway in CPR PD 6B paragraph 3.1(9)(b). (3) England was not the appropriate forum. Ukraine had not ceased to be an available appropriate forum by reason of the war. Permission to rely on allegations concerning corruption of the part of Ukrainian judiciary was refused, since such had been raised too late. In any event, such allegations lacked the necessary cogency required to establish a real risk that justice would not be done in Ukraine.

The full judgment handed down on 26 January 2024 can be found on the National Archives website.

Motorola Solutions Inc and another v. Hytera Communications Corporation Ltd and others (Jacobs J)

English judgment giving effect to US judgment – US judgment subject to appeal and appeal decision awaited – whether stay of enforcement of English judgment should be ordered

The claimant, Motorola, had obtained a substantial judgment in the United States against the defendant, Hytera. That judgment was under appeal: the appeal had been argued before the Seventh Circuit Court of Appeals in December 2023, and the appeal judgment was awaited. Prior to the hearing of the appeal, Motorola began proceedings in England on the US judgment, and this resulted in a judgment of Cockerill J for approximately US$ 151 million. Hytera sought a stay of enforcement of the English judgment pending the outcome of the appeal in the United States. The issue was whether, under CPR 83.7, there were special circumstances which rendered it inexpedient to enforce the English judgment

Held: a stay of enforcement would be granted on condition that Hytera paid US$ 25 million into court within 2 months. The fact that the US judgment was under appeal was not in itself a special circumstance which meant that a stay should be granted. Where a party sought a stay of an English judgment which gave effect to a foreign judgment which was under appeal, the court should apply by analogy a similar approach to that applied when a stay was sought of an English judgment which was under appeal: Moss v Martin [2022] EWHC 3259 (Comm) followed.

Payment of the entire judgment sum of US$ 151 would in practical terms require Hytera to dismantle its business, and it was inappropriate to require this in circumstances where the appeal decision was reasonably imminent. However, it was likely that Hytera could make a payment, albeit not the full judgment sum, without the need to dismantle its business. It was therefore appropriate to grant a stay of enforcement on terms that such payment (in the sum of US$ 25 million) was paid into court.

The full judgment handed down on 19 January 2024 can be found on the National Archives website.

Gatwick Investment Limited & Others v Liberty Mutual Insurance SE and others (Jacobs J)

Covid-19 business interruption insurance claims – clauses providing coverage for interruption following denial or prevention of access to premises – which bodies constitute a “Statutory Authority” or “Police Authority” for the purposes of triggering coverage – whether policyholders should give credit  for recoveries of furlough payments – issues as to policy limits.

The court addressed a number of preliminary issues in the policies of various claimants in different industries: hotels (the Gatwick and Starboard groups of claimants); pubs (Fullers); bowling alleys and other leisure facilities (Hollywood Bowl); retailers (the Liberty Retail group of claimants); racecourses (Bath Racecourse); theatres (International Entertainment Holdings or “IEH”). Most of the policies were written on the standard wording of Liberty Mutual Insurance SE. The Bath Racecourse policy was on the Bluefin/ Liberty 2016 combined wording. The IEH policy was an Allianz policy. Claims were made pursuant to policy provisions providing coverage for denial of access to premises arising from events which did not cause property damage.

Held:

Trigger

1. The interferences with the Claimants’ businesses resulting from the actions of the UK central government in 2020 were in consequence of “action by the Police or other Statutory Authority” under the Liberty Mutual standard wording.
2. The UK central government was not “any policing authority” under the Allianz wording.
3. A case of Covid-19 does not, in and of itself, amount to an “incident” likely to endanger life under the Allianz wording. Although a case is “likely to endanger life”, it does not in and of itself amount to an “incident”.
4. As far as concerns Hollywood Bowl: the regulations made on 4 July 2020 did not introduce new restrictions: their practical effect was that Hollywood Bowl’s premises remained closed.

Furlough

• The claimants were required to give credit for receipts of furlough payments under the Coronavirus Job Retention Scheme:  Stonegate Pub Company Ltd v MS Amlin Corporate Member Ltd and others [2022] EWHC 2548 (Comm) (Butcher J) followed. There was a sufficient causative link between the closure of the claimants’ premises and the receipt of payments under the scheme.

Limits and composite policies

• Liberty Mutual had issued a “composite” policy, which covered the interests of a number of different insured persons in one document, and which took effect legally by way of separate contracts of insurance. Each separate insured was entitled to a separate policy limit in relation to the denial of access coverage. New Hampshire Insurance Co Ltd v MGN Ltd [1996] CLC 1692 (CA) and Corbin & King v Axa Insurance UK Plc [2022] EWHC 409 (Comm)(Cockerill J) followed.

Other policy limits issues

• The “limit” in Liberty Mutual’s standard policy wording, in relation to the denial of access cover, was a limit for any loss or series of losses arising out of one occurrence. It was not, also, an aggregate limit. The question of how many occurrences there were is reserved for later determination.
• The “departmental” clause in the Liberty Mutual policies did not affect the policy limits available to the claimants.
• The Bath Racecourse claimants were entitled to claim a limit of £ 2.5 million for any one loss.

(The judgment covers a number of other policy limits issues which are not summarised above).

The full judgment handed down on 26January 2024 can be found on the National Archives website.

2023

Ebury Partners Belgium NV/SA v Grossiste Francochine SARL (Jacobs J)

Anti-suit injunction – English law and jurisdiction contractual agreement – whether injunction should be granted in light of provisions of French law

The claimant applied for an anti-suit injunction to prevent the continuation of proceedings in France in circumstances where the parties’ contract contained English law and jurisdiction clauses. The contract concerned  the provision of financial services by a Belgian company to the defendant, whose business related to vaping products. The defendant contended that an anti-suit injunction would result in a material injustice to the defendant because, under French law, a number of relevant clauses, including in particular, the exclusive jurisdiction agreement, would be struck down.  The French Consumer Code extended protection in the present context to companies, such as the defendant, which were treated as quasi-consumers.

Held: The anti-suit injunction would be granted. There was a clear agreement for English jurisdiction. The basic approach under English law is that the existence of mandatory provisions of foreign law, applicable in the foreign court and which override the contractual choice of jurisdiction, is not a strong reason to refuse an anti-suit injunction: QBE Europe SA/NV v Generali Espana de Seguros Y Reaseguros [2022] EWHC 2062 (Comm)  (Foxton J) applied. It is difficult to find any cases in which the courts have treated the existence of a valid English jurisdiction clause or an arbitration clause as being subservient to the approach and law taken in the foreign country where the defendant wishes to litigate.  A foreign statute which seeks to impose domestic public policy choices on international commercial transactions, in defiance of the parties’ freely chosen choice of law, is unlikely to be given weight.

This conclusion is supported by Article 3.3. of the Rome I Convention. If the requirements of Article 3.3 are satisfied, then that does provide a potential route by which certain provisions of a foreign law, here French law, could be made applicable. However, the existence of that route is not a reason to refuse an anti-suit injunction: Ebury Partners Belgium SA/NV v Technical Touch [2022] EWHC 2927 (Jacobs J) applied.

Judgment handed down on 3 October 2023 can be found on the National Archives website.

Unitel v (1) UIH (2) Isabel dos Santos (Mr Justice Bright)

Freezing order – meaning of “good arguable case”

Unitel (an Angolan company) brought claims in debt against D1, UIH.  It then added as D2 Isabel Dos Santos, a former director/CEO of Unitel, alleging that she acted in breach of duties owed by her to Unitel under Angolan law. She resisted mainly on the basis of an alleged defence under Angolan law. Unitel contended it had at least a good arguable case on the point of Angolan law. Both sides relied on written evidence from experts in Angolan law.

The court considered the meaning of “good arguable case” in this context.

The full judgment [2023] EWHC 3231 (Comm) can be found on the National Archives website.

Williams v Federal Republic of Nigeria (Mr Justice Bright)

Default judgment against sovereign state – agreement for service of proceedings on High Commission in London – State Immunity Act 1978 ss. 3 & 12 – CPR 12.

W commenced proceedings in 2016, alleging he was the victim of a fraudulent breach of trust committed by FGN and claiming US$6.25 million.  He sent the claim form to the Nigerian High Commission in London.  He applied for and was granted default judgment in November 2018, saying the FGN Solicitor General had agreed in February 2016 that service could be effected by sending the claim form to the High Commission.  In September 2020, FGN issued an application notice for the default judgment to be set aside.  It took did not then seek a hearing date until September 2023.

The Court refused the application to set aside default judgment:

• FGN had not asserted a defence to the claim or challenged the essential factual allegations.
• W had provided evidence attesting to and confirming the Solicitor General’s agreement to service by sending the claim form to the High Commission.  FGN’s evidence in response provided no reason not to accept W’s evidence on this point.
• This was an agreement within State Immunity Act 1978 s. 12(6), such that W did not have to serve FGN by diplomatic channels under SIA s. 12(1).
• FGN was not entitled to state immunity in relation to the proceedings, the case being with State Immunity Act 1978 s. 3(1)(a) and/or (b).

The full judgment [2023] EWHC 3282 (Comm) may be found on the National Archives website.

Canon Medical Systems Ltd v The Imaging Centre Assets Ltd et al. (Andrew Baker J)

Newcastle Circuit Commercial Court trial – joint venture relating to transportable medical diagnostic scanning units (‘Units’) equipped with Canon equipment (principally MRI or CT scanners) – disputes as to the meaning and effect of the parties’ written contract, signed between the claimant (‘CMS’) and one of the defendants (‘Assets’), concerning inter alia (a) the status of TICM (one of Assets’ subsidiaries) under the contract, (b) CMS’s payment obligation, if any, relating to rental income earned by Units, (c) CMS’s payment obligation relating to unrented Units, (d) the amount to be paid to CMS for warranty/servicing of Units  – claims by Assets/TICM (‘TIC’) that CMS was in breach of contract by failing to sell more Units to TICM and/or by engaging in activity competitive with TICM’s fleet

Litigation arose out of a written contract (the ‘Master Agreement’) dated 17 March 2017 signed between CMS and Assets. The Master Agreement set out the terms for inter alia a joint venture business, through TICM (in which CMS was to have an 8% shareholding), in the field of transportable medical diagnostic scanning, for a period of ten years. CMS’s shareholding was to be relinquished for nil consideration in March 2027, unless either it was sold prior to that or the Master Agreement was renewed for a further period of at least ten years. TIC alleged that a further contract (a ‘Hire Agreement’) had been entered into following, and so as to supplement, the Master Agreement, but that claim was rejected on the facts.

In March 2021, CMS asserted that it was not obliged to account to TIC for rental income earned from Units covered by the Master Agreement (the ‘First Fleet’). By then, an associated company (‘Mobile’) also had a fleet of Units (the ‘Second Fleet’), under a written waiver from CMS such that CMS could not (and did not) complain that Mobile’s activity put TIC in breach of the exclusivity provisions of the Master Agreement. In response to CMS’s message in March 2021, TIC threatened to terminate the Master Agreement, and there was also a threat by Mobile to repossess Second Fleet Units rented to CMS. The proceedings were commenced by CMS in the face of those threats. A number of issues were resolved by the parties prior to trial, and the Master Agreement had not been terminated, but the parties remained in dispute over the matters referred to in (a) to (d), above. TIC also counterclaimed inter alia damages of c.£76.5 million, alleging that but for breaches of contract by CMS the First Fleet would have grown from 11 Units (as it was on 1 July 2020) to 151 Units by the end of the Master Agreement term, and for an injunction and/or damages, alleging that, in breach of contract, CMS has rented out Units other than First Fleet Units and/or facilitated its parent company to rent out Units in the UK and/or agreed with its parent company to develop a ‘Canon Medical fleet’ that would be competitive with the First Fleet, with a view to keeping Unit rental income in the Canon group.

Held:

1. On the proper construction of the Master Agreement:
   a. TICM is privy to the contract, entitled to sue and be sued upon it;
   b. CMS’s obligation in relation to rented First Fleet Units is to pay TICM the full amount of rental income earned, so that (i) CMS owes TICM £966,495.56 for the period to 31 July 2023 and (ii) the question arises whether at the date of the judgment, further sums are owed for August to October 2023;
   c. CMS is obliged, in addition, to pay TICM for unrented First Fleet Units at the monthly rate of £17,333 (MRI) or £14,083.50 (CT), up to a maximum of six unrented First Fleet Units at any one time, but the court would require further help from the parties to identify what, if any, sum it can find to be owed by CMS to TICM;
   d. TICM is obliged to pay for warranty/servicing of First Fleet Units, in each case from the third anniversary of first commissioning, at the rate of 6.5% per annum of a recommended selling price, for a sale by CMS of the Canon scanning equipment (only, i.e. not the price for the complete Unit), that can be derived from the Salesforce software used by the Canon group when quoting to supply. Although that is not the basis on which warranty/servicing charges have been invoiced and paid to date, on the evidence at trial and given the way in which the parties had pleaded their cases, CMS failed to establish that it has not been paid (at least) all that has fallen due to date, and TIC failed to establish that it has made any overpayment (once the judgment in its favour to be given pursuant to (i) above is taken into account).
2. CMS acted in breach of the Master Agreement by ignoring a proposal by TIC to revise a price list for First Fleet Unit rentals with effect from 1 March 2021, but that breach caused no loss.
3. CMS acted in breach of contract by failing to sell TICM two new CT Units to add to the First Fleet in response to a request for new Units in March 2020, but otherwise breach of contract in relation to growing the First Fleet was not established; and damages for the proved breach are nominal only. CMS’s obligation, putting it in breach (but only to the extent proved) is to sell Units to TICM in response to a reasonable request by TICM to buy Units pursuant to and on the terms of the Master Agreement. The major allegation of breach pursued at trial was that CMS should have sold 36 new Units over three years (July 2020 to June 2023), but instead offered only terms for such a bulk order that were very different from those of the Master Agreement. But the relevant request had been to offer terms for that number of Units to be supplied at a substantial discount below the Master Agreement price. It was not a request for supply on the terms of the Master Agreement, and CMS committed no breach by its proposal in response. Nor was TIC in fact interested or prepared to buy in bulk at the Master Agreement price.
4. CMS acted in breach of the Master Agreement by failing to use an available First Fleet MRI Unit for a rental contract that ran from June 2022 to January 2023 (inclusive), for which TICM was entitled to damages of £354,383.85 (the rental income that should have been earned for the First Fleet), less the amount treated by CMS as payable to TICM in respect of that Unit, as an unrented Unit, during that period, since that amount will have been paid at the time.
5. CMS has acted, and unless restrained is likely to continue to act, in breach of the Master Agreement, in facilitating rental in the UK of Units owned by its parent company, and in having agreed with the parent company to work with it, competitively with the First Fleet, in the business of renting Units in the UK, with a view to revenues being retained within the Canon group. Damages are nominal, but a final injunction should be granted to restrain CMS from so acting in breach.

A copy of the judgment [2023] EWHC 3007 (Comm) can be found on the National Archives website.

Gordiy v Dorofejeva and Target Global (Foxton J) 

Strike out – challenge to jurisdiction – claims inappropriately commenced in the Commercial Court – duty of all parties to raise issue promptly

C, a litigant in person, brought proceedings against D1 and D2 relating to the non-completion of an SPA for the sale of her company R to F (in which D1 and D2 were shareholders). The claim was worth between £650,000-900,000. D1 applied to strike out the claim as unarguable and D2 (a Cayman Islands company) sought a declaration that the court did not have jurisdiction and that it had not properly served. Each D listed its application for a separate  ½ day hearing in the Commercial Court, without raising the issue of whether it would be appropriate to continue the proceedings there. C’s alleged  that the Ds had made misleading statements to the FCA about the shareholders in F which had the result that a condition for completion of the sale of R to F (FCA approval) was not satisfied by the Longstop Date.

Held:

• It is as much the responsibility of defendants as of the claimant to ensure that the proceedings have been commenced in an appropriate court and, if not, to raise the issue of transfer with the court promptly. If this is not done, and instead hearings are listed in the Commercial Court in cases which should never have been commenced here, then in the future those cases will be transferred out, however close to the hearing the case might be, once the proceedings come to the attention of a judge.
• D1 was right to submit that C had not sufficiently pleaded a misrepresentation made to her, nor adequately pleaded her other claims. However, there is authority which suggests that the tort of causing loss by unlawful means may be committed if A dishonestly makes an untrue statement to B with the intention of causing loss to C, and loss is thereby caused to C, even if B suffers no loss (see Costa v Dissociadid Ltd [2022] EWHC 1934 (IPEC), [104]-[111] and Clerk & Lindsell on Torts (24^th), [23-81]). While C had not pleaded  a tort in these terms, she had pleaded (i) that D1 made fraudulent statements to the FCA; and (ii) that as a result, C had suffered loss. While C has not currently pleaded  that D1 acted with the intention of causing her loss, her skeleton argument makes a number of statements to that effect.
• C had asserted in other documents filed with the court that D1 made misleading statements to her, but these were not pleaded. The requirements for a proper pleading were explained.
• The pleadings against D1 in their current form would be struck out but C would be afforded an opportunity to apply to amend the Particulars of Claim.
• D2’s challenge that it had been served out of jurisdiction without permission when permission was required was upheld. C’s reliance on the jurisdiction clause in the F shareholder agreement was misplaced when C never became a shareholder in F, no Deed of Adherence was executed and her claims did not relate the shareholder agreement in any event.
• It would be open to C to seek to formulate amended claims against D2 and to seek permission to serve them out of the jurisdiction at the same time as any amendment application against D1.

The judgment ([2023] EWHC 3036 (Comm)) can be found on the National Archives website.

Lakatamia Shipping Company Limited v Tseng Yu Hsia and Chiharu Morimoto (Foxton J) 

Judgment on the merits – absent defendant – status of judgment in separate proceedings – entitlement to default judgment

In these proceedings, Lakatamia asserted claims for unlawful means conspiracy and the Marex tort against Ms Tseng and Ms Morimoto, in relation to the alleged concealment of assets of Mr Nobu Su, a substantial judgment debtor. Neither defendant engaged with the proceedings. Lakatamia applied for judgment on the merits against Ms Tseng and default judgment against Ms Morimoto. Lakatamia had obtained judgment on the same causes of action against Madam Su in Lakatamia Shipping Co Ltd v Su & Ors [2021] EWHC 1907 (Comm) (“the 2021 Judgment”).

Held: 

1. It was open to Lakatamia to seek judgment on the merits on the basis of documentary evidence and witness statements without calling the witnesses: In Lighting and Lamps UK Ltd v Clarke [2016] EWCA Civ 5, [41]-[42] applied.

• The findings of liability in the 2021 Judgment were not admissible in themselves, but the court was entitled to rely upon the substance of evidence given in that case for the purpose of reaching its own conclusions: in JSC BTA Bank v Ablyazov [2016] EWHC 3071 Comm), [24].

• It was far from obvious to that a claimant who, in the absence of the defendant, is required to do no more than prove its case by evidence untested by cross-examination should also benefit from an adverse inference from the non-participating defendant’s failure to provide disclosure or the failure of the non-participating defendant to give evidence and the court proceeded on the basis that no such inferences should be drawn.

• The court was persuaded on the evidence that the proceedings had been validly served on Ms Tseng and that the tort claims against Ms Tseng were established on the balance of probabilities.

• So far as the default judgment was concerned, the court was satisfied that Ms Morimoto had been validly served and that Lakatamia was entitled to default judgment in respect of the proceeds of a Tokyo property transferred to Ms Morimoto by Madam Su.

• Lakatamia’s other claim against Ms Morimoto was for conspiracy to injure Lakatamia by unlawful means “in connection with Madam Su’s defence” of the proceedings which led to the 2021 Judgment, the pleaded unlawful means comprise the production of forged documents which were deployed in the case (“the Litigation Conspiracy”).

• The court had “real doubts” as to whether English law recognises a tort of unlawful means conspiracy dishonestly to defend a claim through the production of forged documents in those proceedings. Under CPR 12.12(1), Lakatamia is entitled to “such judgment as the claimant is entitled to on the statement of case”. There are a number of first instance authorities which suggest that it is not part of the court’s function to consider the viability of the claim asserted as a matter of law: Football Dataco Ltd v Smoot Enterprises Ltd [2011] EWHC 973 (Ch), [16]-[19] and Otkritie International Investment Ltd v Jemal [2012] EWHC 3739 (Comm).

• However, the Particulars of Claim only sought damages for “additional legal costs” incurred by reason of the Litigation Conspiracy. No attempt has been made to quantify the additional costs or to break down the global costs of the litigation. Further, Lakatamia was asking the court to exercise its discretion to enter default judgment in a particular form which would make the judgment enforceable in Japan.  In the circumstances, the court was not willing to enter a default judgment in respect of the Litigation Conspiracy.

A copy of the judgment ([2023] EWHC 3023 (Comm)) can be found on the National Archives website

Infinity Treasures Pte Ltd v Global Currency Exchange Network Limited (Foxton J)

Stakeholder application – claims to funds in bank account – admissibility of claims – costs of the stakeholder applicant

These proceedings concerned competing claims to some $2.6m held in a bank account (“the Fund”), which was claimed by the Claimant, with the Defendant issuing a stakeholder application. The proceedings were commenced in 2015, and the stakeholder application commenced in February 2016. Numerous investors in financial products had filed claims to the Fund. The court determined the competing applications on paper.

Held:

1. Only litigants who had filed a signed witness statement with some form of statement of truth had sufficiently complied with the court’s orders to be recognised as potential claimants to the Fund.

• The evidential threshold for a claim to the Fund was only met by those who had provided some form of contemporaneous documentation confirming their investment.

• Having regard to the documents recording the manner in which invested funds were to be held, the Claimant had no right to the Fund, which represented funds originating with the investors which could only be used for limited purposes, which did not extend to paying commission or expenses to the Claimant.

• The Fund comprised payments made into the bank account between 13 September 2013 and 17 July 2014. It was more likely that the sums removed from the investor funds to the Account were removed from those funds prior to the point of transfer to the SPVs, rather than from the proceeds of sales.  As a result, any investor who made an investment during the period between 13 September 2013 and 17 July 2014 had an interest in the Fund by reference to the proportion of their investment.

• CPR 86.5 provides that the court may make such order for costs as it thinks just on a Stakeholder Application. Global Currency seeks an order for its costs. Applying Searle v Matthews (1887) 19 QBD 77n, Field and Elder Dempster Lines v Ishag (The Lycaon) [1983] 2 Lloyd’s Rep 548, 554, it appeared that the Stakeholder Applicant had applied investor funds by paying them into the bank account without a sufficient basis for doing so. The court’s provisional view was that it was not entitled to an order that its costs be paid from the Fund.

A copy of the judgment ([2023] EWHC 2945 (Comm)) can be found on the National Archives website.

Bailey Ahmad Holdings Ltd v Bells Holdings Ltd (Andrew Baker J)

Compulsory buy-out provisions in a Shareholders’ Agreement and Articles of Association in respect of a company – forced sale, if triggered, to be at fair value determined by independent expert valuation – whether triggered by honest but mistaken view of one shareholder that the other had committed (and failed to remedy) a serious breach of the Shareholders’ Agreement

The claimant and defendant owned a limited company carrying on an accountancy business. By a Part 8 Claim, the claimant sought a declaration that it was entitled to rely on the Defaulting Shareholder mechanism of the Shareholders’ Agreement and Articles of Association (and thus to invoke the expert valuation process for a compulsory purchase by it of the defendant’s shareholding), “based on [its] honest belief in a material breach by the defendant rather than requiring prior judicial determination of the presence or absence of material breach”. The defendant objected to the use of CPR Part 8, arguing that the claimant’s construction of the parties’ contract was not arguable. It said the real dispute in the case, which could not be avoided, was whether there had been any relevant breach of contract, a dispute for which the Part 8 procedure was not suited.

Held:

1. Although the case had been listed for case management, the objection to the claimant’s claim gave rise to the question whether it had any real prospect of success. Having allowed the claimant to provide additional submissions on that point in writing following the hearing, it was in principle fair to contemplate the possibility of a summary dismissal. Summarily disposing of claims or issues is within the court’s general case management powers.

• The claimant’s claim was not arguable. The contract said there was a Defaulting Shareholder if a Compulsory Transfer Event occurred; and (so far as material) such an Event occurred if a Shareholder “commits a material or persistent breach … and fails to remedy such breach (if capable of remedy) within 14 Business Days of being given notice … to do so”. The fact that the price for a compulsory transfer, if the contract called for one, was to be fixed by a valuation process, not through litigation, did not arguably mean that a mistaken belief that a relevant breach had occurred was sufficient to trigger a transfer. That was not arguably the correct interpretation of the contract; and nothing in Barclays Bank plc v Nylon Capital LLP [2011] EWCA Civ 826 or Aiteo Eastern E&P Company Ltd v Shell Western Supply and Trading Ltd [2022] EWHC 2912 (Comm), cited by the claimant, gave any support to its proposed construction. The defendant’s construction, which was correct, did not assert that a prior judicial determination of a dispute was required before there was a Compulsory Transfer Event, it asserted only that a relevant breach must in fact have occurred, a dispute as to which, if not resolved, would require litigation, which is different.

• Both parties’ expressed preference having been, for the short term, to mediate and not litigate, the right course was to dismiss the Part 8 Claim. An appropriate Part 7 Claim could be commenced subsequently if efforts to find an amicable resolution failed. If litigation did prove necessary, any such new Claim was suitable for and ought to be commenced in the County Court.

A copy of the judgment [2023] EWHC 2829 (Comm) can be found on the National Archives website.

RSM Production Corp v Gaz du Cameroun SA (Butcher J)

Anti Suit Injunction – Whether dispute governed by arbitration clause – Whether claim for permissible interim relief

The applicants applied to continue anti-suit relief restraining proceedings brought in the courts of Cameroon said to be in breach of an arbitration agreement in a settlement agreement previously entered into between the parties.

The respondent contended: that the arbitration agreement relied upon did not cover the claim it had made in Cameroon; that its claim in Cameroon was in support of an arbitration and thus had been permissible; that the English court had no jurisdiction over it; and that there had been a lack of full and frank disclosure when the injunction was sought ex parte.

The court rejected these arguments and continued the anti-suit injunction, subject to certain modifications, on a final basis.

The full judgment, [2023] EWHC 2820 (Comm), can be found on the National Archives website (external link).

Chocolate City Ltd v WEA International Inc (Foxton J)

Summary judgment – contractual interpretation – commercial purpose

Chocolate City applied for summary judgment in respect of its claim for breach of contract against WEA, seeking declarations that it was contractually entitled to exercise a purported express right to prepay a loan made to it by WEA. WEA sought summary judgment dismissing Chocolate City’s case:

Held:

1. The plain words of  clause 8.3(a) of the contract, providing for the content and timing of “any notice of cancellation or prepayment”, did not create an express right of prepayment, but sought to regulate such rights of cancellation and prepayment as were found elsewhere in the loan facility. The other terms of the loan facility created no such right.
2. This interpretation is supported by other contemporaneous and related agreements, which were more consistent with WEA having an unconditional right to convert debt into equity on the maturity date of the loan, which right would be defeated if Chocolate City had a unilateral right of prepayment..
3. The commercial purpose of the contract (a debt-equity conversion) weighed against any right to prepayment. The right of conversion was intended to give WEA to take an equity stake rather than repayment of the loan where this suited its economic interests. If Chocolate City’s construction was right, it could take that option away by prepaying the loan in those circumstances in which it would be in WEA’s interest to exercise it.

A copy of the judgment ([2023] EWHC2874 (Comm)) can be found on the National Archives website (external link).

Litasco SA v Der Mond Oil and Gas Africa SA (Foxton J)

Summary judgment – payment obligation for cargo of oil – alleged defences of force majeure, by reason of UK sanctions or frustration – observations on Russia (Sanctions) (EU Exit) (Amendment) Regulations 2019  and Mints v PJSC National Bank Trust & Anr [2023] EWCA Civ 1132

C applied for summary judgment for the outstanding part of the price payable for a cargo of West African crude oil delivered before the Russian invasion of Ukraine. D sought to resist summary judgment relying on alleged defences of (a) fraudulent misrepresentation which had induced D’s agreement to a variation in the payment schedule; (b) breach of a collateral warranty or implied term; (c) the force majeure clause because D could not with reasonable diligence make payment through international banking channels because of concerns over sanctions; (d) the application of a contractual sanctions clause and (e) because payment would or might be contrary to the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2019 (“UK Sanctions Regulations”).

Held:

• The alleged misrepresentation case was hopeless on the facts, and in any event, would not improve D’s position because the debt would then be payable under the pre-variation timetable.

• The alleged implied term or collateral contract was hopeless as a matter of law, and D had not identified any loss said to have followed from any breach.

• If the contractual force majeure was applicable, and even allowing for the fact that it applied where performance was “hindered” as well as “prevented”, where force majeure was said to have hindered performance of an accrued payment obligation, it would take a very significant level of difficulty in paying, approaching albeit falling short of impossibility, before the force majeure clause would apply. Here it was clear to summary judgment standard that the failure to make payment was caused by D’s lack of foreign currency due to an adverse trading environment. This was not a force majeure event.

• As a matter of construction, the force majeure clause did not apply to performance of an accrued payment obligation in any event.

• As to the contractual sanctions clause:

• It did not apply to sanctions in force when the relevant contractual obligation was assumed. D had failed to point to any arguable change in the operation of the UK Sanctions Regulations since D had agreed to the revised payment schedule and promised that sanctions would not prevent it performing in accordance with that schedule.

• Nor did the UK Sanctions Regulations engage the contractual sanctions clause, because they did not apply to the contractual obligation in question.
• There was no sufficiently arguable basis in fact for the contention that C was controlled by Mr Alekperov for the purposes of the UK Sanctions Regulations.

• As to D’s case that C was arguably controlled by President Putin for the purposes of the UK Sanctions Regulations:

• Mints v PJSC National Bank Trust & Anr [2023] EWCA Civ 1132 concerned a claimant wholly owned by the Central Bank of Russia, whose directors or controllers were appointed on the recommendation or with the approval of President Putin, and which, on the appellants’ evidence (which the respondent had not challenged), was “an organ of the Russian state” and “serve[d] as an arm of the executive”.

(ii)     The statement in Mints that it “might well” the effect of the UK Sanctions Regulations that President Putin controlled every company in Russia was obiter, and had to be understood in the context of the particular factual position in that case.

(iii)    Litasco and its parents were private companies and there was no evidence arguably establishing that Litasco was presently under the de facto control of President Putin.

• As the issue of control arose  in the context of Regulation 12, the relevant “affair” for Regulation 7(4) purposes was the availability of funds, and the question was whether making funds available to Litasco amounts to “making funds indirectly available to” President Putin. There was no material which provided an arguable basis for contending that funds received by Litasco on payment of this debt would be used in accordance with President Putin’s wishes.

• Whilst it was strongly arguable that President Putin has the means of placing all of Litasco and/or its assets under his de facto control, that was true of many executive or legislative sovereign bodies in respect of companies in their jurisdiction. The better interpretation of Regulation 7(4) was that it is concerned with an existing influence of a designated person over a relevant affair of the company, not a state of affairs which a designated person has the power to bring about, where that power has not been exercised.

• The illegality defence was not arguable on the facts, and because it was clear from Mints v PJSC National Bank Trust & Anr [2023] EWCA Civ 1132 that the UK Sanctions Regulations did not prevent judgment being entered for a monetary amount.

The full judgment ([2023] EWHC 2866 (Comm) may be found on the National Archives website.

Magomedov and Others v TPG Group Holdings and Others (Butcher J)

Freezing and Notification Injunctions – Alleged conspiracy – Good Arguable Case – Risk of Dissipation

The applicants applied inter partes for freezing and notification injunctions against nine defendants.  The claim made in the proceedings is one alleging a conspiracy to deprive the claimants of their interest in a large Russian company in the transportation and logistics sector.

The court reviewed the guidance from authority as to the relevant tests.  It was concluded that in relation to three of the respondents no good arguable case on the merits had been demonstrated on this application; and that in relation to the other respondents there had not been shown, on solid evidence, to be a risk of unjustified dissipation of assets.

The full judgment, [2023] EWHC 2655 (Comm), can be found on the National Archives website.

LLC Eurochem v Societe Generale SA and Others (Butcher J)

Application for interim payment or payment into frozen account – sanctions – CPR r 25.1(1)

In the action, the claimants claimed under on demand bonds. The defendant banks declined to make payment on the basis that to make payment would breach international sanctions.  The claim is going to trial.  The claimants applied for an order that, in the interim, the sums claimed should be paid into court or into a frozen account.

It was held that the case was not one in which there could be an order for an interim payment under CPR r. 25.1(1)(k) because the court could not be satisfied on this application that the claimants would recover the sums in question. There had neither been an application for summary judgment or for a strike out, and the defendants’ defences were a matter for trial.  Nor could there be an order under CPR r. 25.1(1)(c) as the sums claimed were not ‘relevant property’ for the purposes of that rule; or under CPR r. 25.1(1)(l) because there was no specified fund.  No case had been made out for an interim injunction on American Cyanamid grounds. The applications were accordingly refused.

The full judgment, [2023] EWHC 2720 (Comm), can be found on the National Archives website (external link).

Star Axe I LLC v Royal and Sun Alliance Luxembourg SA and Others (Butcher J)

York-Antwerp Rules – Congenbill 1994 – Whether York Antwerp Rules 1994 or 2016 incorporated

The issue was whether the words in Congenbill 1994 which provided that general average is to be adjusted according to ‘York-Antwerp Rules, 1994, or any subsequent modification thereof’, meant that the York-Antwerp Rules 1994, or the York-Antwerp Rules 2016 were incorporated in to the relevant contracts of carriage.

It was held that the words, judged against the relevant background, meant that it was the York-Antwerp Rules 2016 which were incorporated.  They were a modification of the York-Antwerp Rules 1994.

The full judgment, [2023] EWHC 2784 (Comm), can be found on the National Archives website.

Chowgule & Company Private Ltd v Shirke and others (Dias J)

Freezing Injunction and associated relief – allegations of fraud – whether good arguable case

The backdrop to the dispute was an ongoing feud between two rival camps of the Chowgule family based in Goa.  Pursuant to a settlement agreement in 2021, the assets of the family were split between Group A and Group B.  C1 and its subsidiary, C2, were allocated to Group A.  D2, the former longtime Chairman and Managing Director of C1, was in Group B.  D3 (also a former director of C1) was a friend and advisor of D2.  D1 had long-standing connections to the Chowgule family and was married to one of D2’s sisters (also in Group B).   D2 and D3 were Indian citizens resident in Goa.  D1 was domiciled in the UK and D4 was a UK company under his control.

Following the transfer of Cs to Group A, they asserted that the four defendants had conspired to defraud them over a number of years of some US$128 million and dishonestly concealed their activities.  Proceedings asserting claims for breach of fiduciary duty, deceit and fraudulent conspiracy were commenced and served on D1 and D4 within the jurisdiction.  Permission was obtained to serve D2 and D3 in India as necessary and proper parties.  An application to set aside or stay the proceedings on grounds of forum non conveniens will be heard in December.

Meanwhile, Cs applied for a freezing order and ancillary disclosure orders against D1 and D4.  It was accepted that there was no direct evidence of fraud or improper dealings and that the case was based almost entirely on inference. D1 and D4 argued that there was no good arguable case on the evidence.

Held:

1. The test of good arguable case was the three-limbed test first articulated in Brownlie v Four Seasons. 

2. As explained by the Court of Appeal in Kaefer Aislamientos v AMS Drilling Mexico:

(i) A plausible evidential basis is required.  This is a relative test which requires the claimant to show that it has the better argument;

(ii) The court must try to reach a conclusion on any disputed issues of fact if it reliably can, applying judicial commonsense and pragmatism;

(iii) If it cannot decide which side has the better argument on the material available, the court can move away from a relative test and find a good arguable case provided there is sufficient plausibility of evidence to support it.

3.  Per curiam: although there is a distinction between jurisdictional challenges (where the question of jurisdiction will not be revisited after the interlocutory stage) and freezing orders, it is doubtful whether it would ever be right to grant a freezing order, particularly in a fraud case, unless the claimant had the better of the argument.

4.  The material before the court was admittedly incomplete.  While there were matters which required investigation, Cs had founded their case unequivocally on fraud and on the material available, they did not have the better of the argument.  The mere fact that the reason for a particular transaction is not immediately obvious without further investigation does not per se give rise to an inference that it must have been fraudulent.

5. The principles for assessing risk of dissipation were those summarised in Lakatamia v Su, [2019 EWCA Civ 2203. 

6. Cs’ case on dissipation depended almost entirely on inference from the alleged fraud.  Once the fraud case had been rejected, there was no evidence, let alone solid evidence, of any risk of unjustifiable dissipation.  To the contrary, the unchallenged evidence was the D1 was a man of good reputation and unimpeachable character.

The full judgment [2023] EWHC 2815 (Comm) may be found on the National Archives website.

EPISO 4 Pilgrim Holding SARL v Timothy Davies (Foxton J)

CPR 81 – false statement of truth – permission to pursue committal proceedings – whether in public interest

The Applicant applied under CPR 81 for permission to pursue committal proceedings against Mr Davies on the basis that he had made knowingly false statements as to his assets in two witness statements signed with statements of truth.

Permission would only be granted if the Applicants could show a strong prima facie case that Mr Davies made false statements knowing that they were untrue, and it is in the public interest for proceedings to be brought.

Held:

1. Mr Davies admitted to making some false statements, and there was a strong prima facie case that the other statements were untrue.
2. There was a strong prima facie case that Mr Davies made the statements knowing that they were untrue. The witness statements purported to and failed to address all of Mr Davies’ assets, corrections were made only after omissions were criticised by the Applicants, and the statements gave the false impression that Mr Davies’ assets were less than they were.
3. Notwithstanding that strong prima facie case, it was not in the public interest for proceedings to be brought. Most of the statements were corrected before the relevant court hearing, the remaining statements within a short period thereafter. At the hearing, the applicant had obtained all of the relief it was seeking and an order for indemnity costs. The judge had made public criticism of Mr Davies’ evidence. The proceedings for which the statements were made had been struck out and costs awarded to the Applicants, the Applicants had suffered little prejudice, and committal proceedings would consume excessive amounts of limited court resources.

The full judgment [2023] EWHC 2797 (Comm) may be found on the National Archives website.

Renaissance Securities (Cyprus) Ltd v ILLC Chlodwig Enterprises & Others (Dias J)

Anti-suit and anti-anti-suit injunction – hearing on urgent, private and without notice basis – permission to rely on expert evidence – service by alternative methods

C provided investment services to each of the six Ds pursuant to individual Investments Services Agreements (“ISA”) on materially identical terms.  The ISAs were each expressly governed by English law and contained an LCIA London arbitration clause.  Ds were all ultimately beneficially owned and controlled by G.  G and D1, D2, D3 and D6 were all either directly or indirectly sanctioned under US and/or UK and/or EU sanctions.  C reasonably considered that D4 and D5 were likewise indirectly sanctioned. 

Following the imposition of sanctions, D1 and D2 redomiciled to (eventually) Russia.  In apparently co-ordinated fashion, D3-D6 each requested transfer of their assets held by C to accounts of D1 or D2 in Russia.  C declined to comply so as not to breach sanctions.  In August, each D issued a letter before action referring to the relevant ISA and threatening proceedings before “the appropriate forum”.  On 13 October 2023, C discovered that each Defendant had brought a separate claim in the Russian courts effectively seeking damages in the amount of its blocked assets.  Preliminary hearings were scheduled to take place in two of the claims on 7 and 13 November 2023.  C had not been served with or notified of the proceedings.  C had some $206 million of its own assets in Russia which were blocked by the Russian authorities.

On C’s application for an ASI and AASI, held:

1.  Permission would be granted to rely on expert evidence as to Russian law on jurisdiction and procedure in the Russian proceedings; the availability of anti-suit relief in Russia and matters relating to service;

2. The expert’s evidence was that:

– the Russian proceedings were based on Article 248 of the Russian Commercial Procedure Code which had been introduced specifically to allow Russian parties to litigate in Russia, irrespective of any contractual arbitration or forum clause, where they were unable to arbitrate or litigate abroad due to “restrictive measures”;

– it would be possible for a court at a preliminary hearing to proceed to give judgment if the defendant did not appear or lodge submissions;

– Article 248 covered both sanctioned Russian entities and indirectly sanctioned non-Russian entities;

– Article 248 authorised the grant of anti-suit relief to restrain any foreign proceedings/arbitration relating to disputes within the scope of the article, including English anti-suit proceedings;

–  Such relief could be obtained within 5-15 days even in the absence of C.  The threshold for the grant of relief was low and the likelihood of its being granted was high;

–  Breach of a Russian ASI could result in C being ordered to pay the entire amount claimed in the Russian proceedings.

3. In the circumstances, Ds had actively taken steps to assert claims in Russia in flagrant breach of their contractual obligations and hearings in Russia were imminent which could potentially result in a judgment.  There was a real risk that Ds would apply for their own ASI or AASI if notified of the application, thereby defeating the purpose of the application.  Accordingly, it was appropriate to proceed without notice, in private and on an urgent basis.

4.  C had demonstrated to a high probability that the disputes between the parties were covered by the arbitration agreement;

5.  There was no good reason to refuse relief on the interim basis sought.  The Russian courts were unlikely to regard sanctions as a good defence to Ds’ claims.  Allowing the Russian proceedings to continue would potentially allow Ds to avoid sanctions altogether by obtaining judgment and enforcing it against C’s assets in Russia;

6. On the facts there was no undue delay in bringing the application.  C appreciated at an early stage that proceedings in Russia were possible, but Ds threat of proceedings was expressly referred to an “appropriate forum” and it was reasonable for Cs to wait and see whether Ds in fact abided by their contractual obligations;

7.  The probability of Ds seeking to obtain their own ASI was high and it was therefore just and convenient to grant an AASI as well;

8.  To avoid tipping-off, a non-disclosure provision was appropriate preventing disclosure of the proceedings until all Ds had been served;

9.  Permission was granted to serve by alternative means.  Russia was a signatory to the Hague Convention and had entered a reservation to Article 10.  The evidence was that service under the Convention could take up to 17 months.  Given the coercive nature of the order, backed by penal sanctions, it was important that the proceedings be brought to the attention of Ds and formally constituted as soon as possible.  The circumstances were therefore sufficiently exceptional to warrant service by alternative methods;

10.  Permission was granted to dispense with personal service of the order for the purposes of CPR Part 81.  There was evidence suggesting that G (who was named in the penal notice) might seek to evade service and might direct other named individuals to do so as well.  The court was satisfied that the order would in any event come to their attention;

11.  However, the court declined to dispense prospectively with personal service of any contempt application, regarding this as premature.

The full judgment [2023] EWHC (Comm) may be found on the National Archives website.

Deutsche Bank AG v Sebastian Holdings and Vik (Mr Justice Henshaw)

Suspended committal order; interpretation; ‘slip’ rule; variation; abuse of process; estoppel

A suspended committal order was made against Mr Vik, the Defendant company’s controller, following findings of contempt of court in connection with enforcement procedures.  The custodial sentence was suspended for a period of 6 months from an ascertainable date, on terms which included provision of specified documentation and attendance at a further hearing for oral examination of Mr Vik about the company’s assets.  The order provided that the sentence and warrant of committal would then fall away unless, prior to that date, the Claimant had applied to lift the suspension.  Some documentation was provided but no further oral examination hearing was listed (or sought to be listed) for hearing within the 6-month period.  The court held that, as a matter of construction of the order, the conclusion was unavoidable that the sentence had fallen away at the end of the 6-month period (the Claimant having made no prior application to lift the suspension).  Further, having regard to the nature of the order, it was not possible to arrive at any different conclusion by application of the slip rule or variation, or the principles of abuse of process or estoppel.

The full judgment [2023] EWHC 2563 (Comm) may be found on the National Archives website.

Clifford Chance LLP and Clifford Chance Europe LLP v Société Générale (Mr Justice Henshaw)

Jurisdiction challenge; framework agreement for conduct of legal work; parties to agreement; scope of exclusive jurisdiction clause; exceptional circumstances

C1 (an English LLP) and C2 (a French LLP) commenced proceedings in England seeking declarations that neither was liable in respect of threatened claims from D (a French-headquartered international bank) relating to the conduct of litigation in the English High Court on which D had retained C1.  D subsequently commenced proceedings in France and challenged the jurisdiction of the English court, relying on an exclusive jurisdiction clause in a framework agreement between C2 and D but purportedly made entered into by C2 on behalf of all Clifford Chance entities.  The court concluded that (a) D did not have the better of the argument that C2 was authorised to contract on C1’s behalf; (b) C1 never became a party to the framework agreement; (c) in any event, as a matter of construction, the exclusive jurisdiction clause was not intended to apply to individual retainers by D of Clifford Chance entities, regardless of the nature and location of the work done; and (d) no real claim had been put forward against C2 at all, C1 alone having been the entity retained to conduct the litigation in question: that fact, and the undesirability of C1 but not C2 being able to seek relief in England in relation to this matter, provided exceptional reasons to refuse a stay as against not only C1 but also C2.

The full judgment [2023] EWHC 2682 (Comm) may be found on the National Archives website.

Sheikh Mohamed bin Issa al Jaber v Sheikh Walid bin Ibrahim al Ibrahim and Sheikh Majid bin Ibrahim al Ibrahim (Mr Justice Henshaw)

Dispute over characterisation of US$30 million payment made in January 2002; loan agreement or advisory fee; applicable law; Saudi law on oral loan agreements

C paid US$30 million in January 2002 to an account held by a company, Durango, controlled by D2 and in which, on C’s case, D1 also had an interest.  C some years later alleged that the payment represented a loan to D1 and D2, which they had sought (at least ostensibly) in order to help them finance a new Arabic television channel, which in due course became the channel ‘Al Arabiya’.  D2 said the payment reflected an advisory fee paid for his assistance in facilitating the resolution of matters between C and a Saudi prince.  The resolution included, on D2’s case, facilitating the taking over by the Saudi government of leases of compounds operated by one of C’s companies, preparing the way for a major refinancing of the company in 2001, which in turn enabled C to repay the prince.  The court concluded that C’s case that the 2002 payment represented a loan was not supported by the evidence, and the payment was much more likely to have been a fee of the kind D2 maintained.  The claims therefore failed.  The court also found that, had an oral loan agreement been proven on the facts, it would have been valid under Saudi law, since the better view (based on the majority of scholarship and available court decisions) was that Verse 282 of the Qur’an did not making writing a mandatory requirement for a loan; and, further, the claim would not have been time barred under Saudi law.

The full judgment [2023] EWHC 2831 (Comm) may be found on the National Archives website.

Capita Business Services Limited v IBM United Kingdom (Foxton J)

Services contract – whether IBM obliged to continue to provide Relevant Service after 30 August 2023

In 2022, the parties entered into a 5-year contract for the provision of services. There was a dispute as to the effect of Condition 2 of that contract, and whether it obliged IBM to continue providing a particular service (“the Relevant Service”) after 30 August 2023. Upholding IBM’s case that it was no so obliged:

1. The terms of Condition 2 were more consistent with IBM’s construction. Both as a matter of language and because of certain commercial curiosities which would arise on Capita’s construction.
2. IBM’s construction was supported by Conditions 1 and 3, introduced into the contract at the same time as Condition 2 with a sjmilar subject, and which in time, place and origin were very close to the textual epicentre of this dispute.
3. Capita’s reliance on the general introductory terms of the agreement was misplaced, the generality of those terms having to yield to the specificity of Condition 2 in relation to the Relevant Services.
4. The parties’ respective arguments as to business common sense were of no or limited assistance (Arnold v Britton [2015] AC 1619, [19]-[20]).

The full judgment ([2023] EWHC 2623 (Comm) may be found on the National Archives website.

Kalo v Bankmed SAL (Foxton J)

Service out of the jurisdiction – consumer contract – ss.15C-E CJJA 1982

C had opened a bank account with a Lebanese bank, on terms which provided for Lebanese law and the exclusive jurisdiction of the Lebanese courts. C contended that the courts of England and Wales has jurisdiction because C was a consumer and the contract fell within the scope of commercial or professional activities which D had directed to England and Wales.

Held: on the material before the court C had shown a good arguable case that D had directed commercial or professional activities relating to retail banking to England and Wales. C had the better of the argument relating to the effect of C’s website and its international retail banking account. The court was not in a position to reach a reliable view of who had the better of the evidence on other issues which depended on the conflict of witness evidence, but C’s case on these issues had a plausible evidential basis.

The full judgment ([2023] EWHC 2606 (Comm)) may be found on the National Archives website.

JOL and JWL v JPM (Foxton J)

Arbitration Act 1996 – s.44 – application for final mandatory injunctive – whether case of sufficient urgency to require court to hear application to grant injunctive relief which would be final in its effect – whether s.38(4) of the Arbitration Act 1996 gave the arbitral tribunal power to grant interim injunctive relief – whether lack of such a power should preclude arbitral tribunal from forming and expressing  a view on the merits of the application when deciding whether to grant permission for a s.44 application

C applied for urgent injunctive relief under s.44(3) of the Arbitration Act 1886 requiring D to re-deliver (or procure the re-delivery) of vessels subject to bareboat charters on the basis that the charters had been brought to an end. The application was rejected:

• While it has been held that s.44(3) permits an urgent application to the court for injunctive relief for the purpose of preserving alleged contractual rights, the existence of which is in dispute in the arbitration (Cetelem SA v Roust Holdings Ltd [2005] 1 WLR 355), particular caution is required before granting relief of this kind, particularly where the effects of any court order is likely to be irreversible.
• The order sought in this case would be irreversible, and would involve the effectively final determination by the court of issues which the parties had agreed should be determined by the arbitral tribunal, and the applicant was unable to establish a sufficient degree of urgency to require the court to take the exceptional course of making such an order.
• Section 38(4) of the Arbitration Act 1996 did not give the LMAA arbitral tribunal to order interim injunctive relief by way of enforcement of disputed contractual obligations. However, the arbitral tribunal could reach a final determination of the application on an expedited timetable without undue prejudice to the applicant.
• If the arbitral tribunal determined, for whatever reason, that the application for final injunctive relief could not be determined for a prolonged period, it could give the applicant permission to apply to the court under s.44(5). While this would still involve the court being asked to reach an effectively final decision on matters which the parties have agreed to refer to arbitration, court intervention in the arbitral process which is sanctioned by the arbitral tribunal can more readily be reconciled with the policy in s.1 of the Arbitration Act 1996 than applications made without the arbitral tribunal’s consent.
• The fact that the LMAA tribunal does not itself have the power to grant interim injunctive relief as precluding it, to the extent it thought appropriate, from expressing its views on the merits of such an application when ruling on an application by one party for permission to apply to the court for s.44 relief.

The full judgment ([2023] EWHC 2486 (Comm) may be found on the National Archives website.

International Medical Supplies Ltd v Decker & Another (Dias J)

Judgment in default – Defendant contending that claim form had never come to his attention – whether judgment should be set aside – relief from sanctions

D1 negotiated a contract for the sale by D2 of medical supplies to C.  D2 defaulted and a settlement agreement was concluded between C, D2 and a Cypriot company, P, whereby D2 undertook to repay £10m. D2 failed to pay the settlement sum.

C commenced proceedings against D2 for the amount due under the settlement and against D1 for damages for breach of warranty of authority and fraudulent misrepresentation.  No acknowledgement of service was filed and C entered judgment in default against D1 on the breach of warranty claim only for the full amount of D2’s debt (£10m plus interest).  C also issued a statutory demand.

D1 argued that (1) he had never seen the claim form and only became aware of the proceedings on service of the judgment

D1 justified the delay in bringing the application on the grounds of impecuniosity, difficulties in raising funds and the need to prioritise the statutory demand.  He argued that the delay caused by the adjournment was consensual and should not count against him.

The court held that the application to set aside succeeded in part:

1. The court could not entirely exclude the possibility that D1 had not seen the claim form for some reason, in which case there was a good reason for not acknowledging service.
2. While borderline, the delay in bringing the application was not excessive.  D1 had not provided full evidence as to his assets, but the court accepted that he had needed to raise funds to defend the litigation and that this taken time.  He also needed time to obtain Cypriot law advice. 
3. D1 should therefore be permitted to defend the claim on quantum and causation but subject to conditions.

The full judgment ([2023] EWHC 2742 (Comm) may be found on the National Archives website.

Loreley Financing Jersey No 30 v Credit Suisse Securities (Europe) Limited and others (Cockerill J)

Fraudulent misrepresentation – Limitation – 2008 Financial crisis

The Claimant purchased US$100 million of CDO Notes in late 2007. It lost the full sum in the ensuing financial crisis. In 2018 it sued the Defendants saying that it had been induced to buy the notes by CDO representations (inter alia of honesty and as to its ability to assess the transaction) which were falsified by the risk that some of the underlying residential mortgage backed securities were afflicted by systemic misconduct and fraud in the securitisation and sale of those RMBS’s.

The court held that the claim was time barred because the Claimants had known enough to plead essentially the case now run well before 2012. Further: (i) the CDO representations were not made. (ii) If they were made they were not relied on by the Claimants because they were unaware of them (iii) Nor was there any falsity – the alleged RMBS misconduct was not made out. The other issues relied on (negligence, unlawful means conspiracy and Irish Law) also failed.

The full judgment [2023] EWHC 2759 (Comm) may be found on the National Archives website.

(1) Therium Litigation Funding A IC v Bugsby Property LLC (Jacobs J)

(2) Omni Bridgeway (Fund 5) Cayman Invt. Limited v Bugsby Property LLC (Jacobs J)

Litigation funding – impact of decision of Supreme Court in R (PACCAR) v Competition Appeal Tribunal [2023] UKSC 28 (“PACCAR”) – whether claim by litigation funders can survive the PACCAR decision – application for injunction to restrain disposal of proceeds of successful litigation funded by litigation funders – whether litigation funders should fortify their cross-undertaking in damages

Following the compromise of an appeal, litigation proceeds amounting to around £27 million was paid to the solicitors for the defendant (“Bugsby”). The litigation had been funded by the applicant (“Therium”) together with another funder (“Omni”). Therium sought an injunction, on a proprietary basis pursuant to the terms of the litigation funding agreement, to restrain Bugsby from dealing with the proceeds of successful litigation funded by Therium and Omni. Bugsby argued that an injunction should be refused, because the litigation funding agreement was unenforceable following the decision of the Supreme Court in PACCAR. Bugsby also contended that any injunction, if granted, should be limited to the amount of Therium’s claim, and should not extend to the entirety of the litigation proceeds.

The Court held:

• It was common ground that the decision in PACCAR rendered unenforceable Therium’s claim to a percentage share of Bugsby’s recoveries. However, there was a serious issue to be tried as to whether the entire agreement was unenforceable, and specifically whether Therium could recover other sums to which it was entitled under the litigation funding agreement: namely the costs which it had paid out and the agreed multiple of those costs.
• The issues as to enforceability, and the question of whether there could be severance, were to be determined by arbitrators in accordance with the arbitration agreement contained in the litigation funding agreement. The balance of convenience favoured granting Therium injunctive relief in order to preserve the litigation proceeds.
• The trust arrangements contained in the relevant agreements meant that it was appropriate to preserve the entirety of the proceeds, notwithstanding that the operation the “waterfall” provisions meant that parties other than Therium would be the beneficiaries of part of those proceeds.

The full judgment, [2023] EWHC 2627 (Comm) handed down on 20 October 2023, can be found on the National Archives website.

• The court subsequently determined that it was not appropriate to order Therium and Omni to be required to fortify their cross-undertakings in damages. The potential loss sought by Bugsby, relating to its desire to participate as a funder in the litigation funding market, was speculative.
• In any event, there was no good arguable case that there was a risk that the litigation funders would default on any liability under their cross-undertakings, in circumstances where a default would be a contempt of court and would have severe reputational and other consequences for the litigation funders.

The full judgment, on the fortification issue [2023] EWHC 2755 (Comm) handed down on 3 November 2023, can be found on the National Archives website.

Michalis S A Kallakis v Achilleas M Kallakis & Allied Irish Banks plc (Andrew Baker J) 

Commercial property portfolio built up by fraudulent means – claims against mortgagee bank in relation to its disposal of the portfolio when the fraud came to light – claims brought in the name of the son of the principal fraudster, joined as co-defendant supposedly on the basis of an allegation of negligence in the management of the portfolio

Achilleas Kallakis built up a substantial property portfolio by practising fraud upon Allied Irish Banks plc (‘AIB’), using forged documents as part of his fraudulent method. The properties were acquired by special purpose vehicles, in turn owned by holding companies the sole director and legal shareholder of which was Michael Becker, a Swiss lawyer. The main fabrication within the fraud was a false claim that subsidiaries of Sun Hung Kai Properties Ltd (‘SHKP’), with their obligations guaranteed by SHKP, were participating as head lessees from the SPV owning companies on very favourable terms such that AIB would value the properties, for the purpose of mortgage lending, well above their true market value. When the global financial crisis arrived with and following the collapse of Lehman Brothers in mid-September 2008, AIB’s total lending stood at c.£710 million. Achilleas Kallakis’ fraud came to light at that time, following which, ultimately, AIB sold all the mortgaged properties pursuant to its security rights, realising c.£650 million.

In 2013, at Southwark Crown Court, Achilleas Kallakis was convicted of conspiracy to defraud AIB. He served a substantial prison term. Almost immediately upon his release from prison on licence, these proceedings were issued in the name of his son, Michalis Kallakis, principally to allege that AIB sold the portfolio at an undervalue, but also making wide-ranging allegations against the bank, including allegations of fraud or dishonesty. Purportedly to justify the claims being brought in Michalis Kallakis’ name, it was alleged that he was and is a beneficiary of a family trust called the Hermitage Syndicated Trust (‘the HST’) and that Mr Becker, allegedly sole trustee of the HST, held his shares in the parent companies of the property-owning SPVs as trust property on the terms of the HST.

After a trial in June and July 2023, held that:

• none of the claims against AIB was well founded – the bank did not misrepresent its intentions as mortgagee following the discovery of the fraud, did not sell any of the properties without legal authority or cause, and did not undersell so as to obtain less than the best price reasonably obtainable for them;
• in any event, Michalis Kallakis had no title to sue – the property-owning SPVs were indirectly owned by Mr Becker as nominee for Achilleas Kallakis, not as trustee of the HST (which, if it existed at all, was and is a sham device for pretending that assets are not beneficially owned by Achilleas Kallakis), and contentions made at trial that AIB owed duties directly to Michalis Kallakis were neither pleaded nor arguable;
• in fact, the proceedings in Michalis Kallakis’ name were a dishonest contrivance, brought at the instance of, and to pursue the interests of his father, using him (the son) as nominee – the litigation was dishonest in conception, inception and prosecution.

All the claims pursued at trial were dismissed. The full judgment, [2023] EWHC 2148 (Comm), may be found on the National Archive website.

London Steam-ship Owners’ Mutual Insurance Association Limited v Kingdom of Spain (The ‘Prestige’) (Butcher J)

Appeal against order enforcing a foreign judgment – Irreconcilable with earlier English judgments and award – Effect of CJEU decision – Appeal against arbitrator’s conclusions – Equitable compensation – Injunctions against States

The Court had to determine (1) the outcome of the London Steam-ship Owners’ Mutual Insurance Association’s (‘the Club’s) appeal against an order enforcing a judgment of the Spanish courts in favour of the Kingdom of Spain (‘Spain’), and (2) the outcome of arbitration applications made in respect of awards of an arbitrator in favour of the Club against Spain.

The Court held:

1. That the Club’s appeal succeeded.  This was for two reasons.

2. First,  the Spanish judgment was irreconcilable with earlier judgments of the English courts, and that Article 34(3) of Regulation (EC) No. 44/2001 (‘the Regulation’) was applicable. The decision of the CJEU in Case C-700/20 The London Steam-Ship Owner’s Mutual Insurance Association did not dictate a different answer, because, in part, that decision dealt with matters already res judicata and went beyond the scope of the issues referred to the CJEU.

3.  Second, because the Spanish judgment was irreconcilable with an arbitral award between the parties, and it would be contrary to English public policy (and specifically the policy of and behind res judicata) for it to be enforced, and Article 34(1) of the Regulation was applicable.

4.  Spain’s arbitration applications failed in part, but, subject to one point on which a decision has been reserved, succeeded on one issue.

5.  Specifically, the arbitrator had found that Spain was liable for equitable compensation for its failure, in having maintained its action in the Spanish courts and in having sought to enforce the Spanish judgment, to comply with its obligation to arbitrate its claims in London arbitration.  Spain’s appeal against this finding under s. 69 Arbitration Act 1996 was dismissed.

6. Further, the arbitrator had found that he had jurisdiction to grant an injunction against Spain, but in the exercise of his discretion had not done so, but had decided that it was appropriate for there to be an award of damages in lieu.  The Court found, subject to the point raised in The Resolute, that the arbitrator had not had power to award an injunction against Spain, because the court could not have done so by reason of s. 13(2) State Immunity Act, and s. 48(5) Arbitration Act did not confer a wider power on the arbitrator; and that therefore damages could not be awarded in lieu. 

7. Insofar as Spain had sought to challenge the arbitrator’s conclusions by reference to the CJEU decision in Case C-700/20, those challenges were rejected.

The full judgment ([2023] EWHC 2473 (Comm)) may be found on the National Archives website.

The French State v London Steam-ship Owner’s Mutual Insurance Association Ltd (The Prestige) (Butcher J)

Challenges under Arbitration Act s. 69 – whether there was an award – should there be an extension of time – merits of appeals – equitable compensation – injunctions against States

The French State (‘France’) sought to challenge the conclusions of an arbitrator under s. 69, whereby she had held, in summary: (1) that France was liable for equitable compensation for breach of its obligations to pursue its claims only in London arbitration; and (2) that France should be enjoined from pursuing further or seeking to enforce a judgment in proceedings other than London arbitration.

The Court held:

1. That France needed an extension of time in which to bring its s. 69 application in respect of the arbitrator’s award. 

2. An extension of time would be granted for it to bring its s. 69 application on some but not other grounds.

3.  That in those respects in which an extension of time was allowed, permission to appeal would be granted.

4. That the appeal against the arbitrator’s finding that France was liable for equitable compensation was dismissed.

5. That subject to the Resolute point, on which a decision was deferred, the arbitrator had not had power to grant an injunction against France.

The full judgment ([2023] EWHC 2474 (Comm)) is to be found on the National Archives website.

Rolls-Royce Holdings plc v Goodrich Corporation (Foxton J)

Section 35A – whether contractual interest clause made order under s.35A inappropriate – effect of claimant not adducing or seeking to prove claim to interest at the contractual rate

The contract between R-R and GR provided for what was to happen Clause 44 provides “If R-R does not make payment in accordance with this Agreement.” It provided that GR would be entitled to recover a sum from R-R equal to the interest which it pays or loses as the case may be in consequence of such late payment upon provision of evidence of such payment/loss.. The clause (clause 44) provided “The Parties acknowledge and agree that such payments are sufficient to compensate GR for any such late payment”.

GR pleaded a claim to interest under s.35A but did not plead or seek to prove a right to clause 44 interest. It recovered in debt, with a  claim for damages for failure to pay the debt, or, had the court not rejected R-R’s argument that no debt had accrued, failure to accrue a debt. R-R argued that the court should not order pre-judgment interest under s.35A.

Held:

1. Clause 44 addressed the right to recover interest in the event sums were not paid by R-R in accordance with the contract.
2. The clause applies to all amounts which were not paid “in accordance” with the contract, however small. The parties must have intended that the process of quantifying GR’s  interest entitlement would be an essentially summary and straightforward one, effectively involving little more than proof of the interest rate it paid under any bank facility or interest it received on any bank deposit.
3. The recovery of either interest paid or interest foregone is conditional upon GR providing R-R with evidence of that loss,
4. The clause provides an agreed mechanism of redress for the consequences of late payment, hence the final sentence.
5. Applying Standard Chartered Bank v Ceylon Petroleum Corp [2011] EWHC 2094 (Comm), and Starbev GP Limited v Interbrew Central European Holdings BV [2014] EWHC 2863 (Comm), where the parties had by their contract whether, in what circumstances and at what rate interest would be payable on late payments, the court would not make an statutory interest inconsistent with that agreement.
6. It was not possible to circumvent this principle by claiming damages for non-payment of a debt. The court had not made any other damages award in GR’s favour, but even if damages for-R’s failure to take a step which would have allowed a debt to accrue had been awarded, the essence of that complaint – R-R’s failure to pay sums in accordance with the contract – would still have had the effect that interest should not be awarded under s.35A where the requirements for interest under clause 44 were not satisfied.
7. GR having failed to plead or adduce the evidence necessary to establish a right to interest under clause 44, no award of pre-judgment interest under statute would be

The full judgment Rolls-Royce Holdings plc v Goodrich Corporation may be found on the National Archives website.

SQD v QYP (Bright J)

Arbitration – Interim anti-suit injunction – English law agreement – arbitration with seat in Paris – court proceedings overseas

An agreement between SQD and QYP provided for English law to apply as the governing law of the agreement, and for disputes to be referred to arbitration in Paris.  QYP commenced proceedings overseas, in its own country.

SQD applied for an interim anti-suit injunction (“ASI”), relying on s. 44 Arbitration Act 1996 and s. 37(1) Senior Courts Act 1981.

There was evidence that an ASI would not be granted by the French court.

Held, refusing the application:

1. A claim for an ASI could not be brought under s. 44 Arbitration Act 1996.  It must be brought under s. 37(1) Senior Courts Act 1981: Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant LLP [2013] UKSC 35, per Lord Mance at [48]
2. In this case, permission to serve out could not be granted under CPR 62, because the seat was not within the jurisdiction. Jurisdiction must be founded under CPR 6.36, including the requirement that England and Wales is the proper forum.
3. In cases such as Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd’s Rep 87 (external link), the court did not have in mind the situation where the seat of the arbitration is outside the jurisdiction.
4. In such a case, the court should approach the matter with “the utmost caution”: Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334, per Lord Mustill at p. 367F, p. 368B-G.
5. The DAC reports suggest that, in such a case, it will not be appropriate to grant relief if to do so might give rise to a “conflict” or “clash”
6. The evidence on the approach to ASIs in France indicated that French law has a philosophical objection to ASIs and objects not only to the grant of ASIs by French judges, but also to ASIs granted by non-French judges, unless the non-French court has substantive jurisdiction and its procedural law applies, rather than French law.
7. The fact that the governing law of the agreement was English was not, by itself, sufficient to give the English court jurisdiction or to justify the grant of an ASI.
8. To grant an ASI would be inconsistent with the approach of the court of the seat.  The English court should have deference to the approach of French law.  To do otherwise would or at least might give rise to a conflict or clash.
9. The court should also have deference to the objective intention of the parties, who chose Paris as the seat knowing that the French courts will not grant ASIs.

 The full judgment [2023] EWHC 2145 (Comm) can be found on the National Archives website.

Viking Trading OU v Louis Dreyfus Suisse SA (Bright J)

Arbitration – application for s. 69 permission to appeal – respondent’s costs of opposing

Viking applied for permission to appeal an award under s. 69 Arbitration Act 1996.  LDC opposed the grant of permission, filing a respondent’s notice, witness statement and skeleton argument.  In none of these documents did LDC ask for its costs.

The court refused Viking’s application on documents.  The court’s order did not deal with costs.

LDC then applied for its costs.  The court awarded £20,000 subject to any application to vary by Viking.  Viking applied for a variation, contending (i) that the court did not have the power to grant costs after the event and (ii) that the quantum of LDC’s costs was excessive and should be reduced.

Further submissions followed.  Each party asked for the additional costs incurred subsequent to the order refusing s. 69 permission to appeal.

The court held that it had power to order costs after the event under CPR 44.10 as explained by Timokhina v Timokhin [2019] 1 WLR 5458, but varied its assessment of quantum to £15,250.  The sum awarded took account of the fact that none of the costs after the court’s original order would have been incurred if LDC had asked for costs in its respondent’s notice.

The court gave general guidance as to how a respondent should approach costs on an application for s. 69 permission:

1. Such a respondent should be conscious of the need to control the costs incurred.
2. If the respondent wants the court not only to dismiss the application but to award the respondent its costs, it should say so in the respondent’s notice.
3. In most cases, it ought to be possible to provide a statement of costs either with the respondent’s notice and skeleton or very shortly afterwards.  The level of detail provided should be proportionate to the amounts sought.
4. Otherwise, the respondent should say that the statement will be provided later, if required.  But the respondent should have in mind that, if the court takes the view that this has unnecessarily caused further costs to be incurred, this will be reflected in the court’s decision: as happened in this present case.

The full judgment [2023] EWHC 2160 (Comm) can be found on the National Archives website.

Deutsche Bank AG v Central Bank of Venezuela (Bright J)

Sovereign state contract subject to LCIA arbitration – State Immunity Act 1978 – waiver of immunity – effect of waiver on relief under s. 44 Arbitration Act 1996

CBV entered gold bullion swap transactions with DB.  Following the imposition of US sanctions on Venezuela, substantial sums were payable by DB to CBV but it was not clear how, where or to whom they should be paid.  Two rival parties claimed to be the true representative of CBV – “the Guaido board” and “the Maduro board”.

The transactions were subject to LCIA arbitration and contained an express waiver of immunity under the State Immunity Act 1978 in sub-para. 10(ii).  DB applied under s. 44(2)(e) Arbitration Act 1996 and receivers were appointed in May 2019.  The terms of the receivership order provided for the receivers’ costs to be paid by DB.

DB now applied for the court to order new terms such that, following payment of the receivers’ costs by DB and with the relevant sums having been scrutinised and approved/ challenged/ determined (as might be the case), the receivers would reimburse DB out of the receivership funds.  The Guaido board consented.  The Maduro board objected on the ground that an order that the receivership funds be used to pay DB would infringe Venezuela’s sovereign immunity, being a form of enforcement against the property of CBV.

The Court considered the relationship between the Arbitration Act 1996 and the various claims that might be brought in court in support of arbitration, and their relationship to the State Immunity Act 1978.

The Court held as a matter of construction that sub-para. 10(ii) waived immunity from enforcement against BCV’s property and allowed DB’s application.

The Court queried whether the receivership funds were, in fact, the property of BCV.

The full judgment [2023] EWHC 1942 (Comm) can be found on the National Archives website.

Eternity Sky Investment Ltd v Mrs Xiaomin Zhang (Bright J)

Enforcement of foreign arbitration award – public policy under Consumer Rights Act 2015, Financial Services and Markets Act 2000 – s. 103(3) Arbitration Act 1996

Chong Sing, a company based in Hong Kong, held a corporate bonds issue in Hong Kong in May 2016.  Chong Sing was managed and controlled by Mr Zhang.  Eternity Sky was a major subscriber to the bonds issue, under a Subscription Agreement with Chong Sing, in the sum of HK$500 million.  A condition precedent to its payment under the Subscription Agreement was that Mrs Zhang provided a Personal Guarantee.

Mrs Zhang was resident in London.  She was asked to sign the Personal Guarantee by Mr Zhang’s PA, who sent her only the signature page.  She signed it without asking for or reading any of the substantive provisions, including cl. 2 (the guarantee clause, which defined the subject-matter as Chong Sing’s obligations under the other transaction documents, which included the Subscription Agreement, but did not set them out) or cl. 17 (Hong Kong law and arbitration).

Chong Sing defaulted and Eternity Sky called on the Personal Guarantee.  Mrs Zhang commenced arbitration proceedings in Hong Kong, alleging that the Personal Guarantee was not valid and effective for (i) lack of agreement (ii) undue influence and (iii) unconscionability.  She expressly submitted to the jurisdiction of the arbitrator, including his jurisdiction to decide his jurisdiction. Eternity Sky brought a counterclaim for HK$500 million and interest.  The arbitrator dismissed Mrs Zhang’s case, finding that she had been negligent in not asking to see the terms of the Personal Guarantee, and upheld Eternity Sky’ counterclaim.

Eternity Sky obtained, without notice, an order for enforcement of the award under s. 101 Arbitration Act 1996.  Mrs Zhang applied for it to be set aside under s. 103(3), on the basis that to do so would be contrary to public policy because of her consumer rights under the Consumer Rights Act 2015.

The Court held:

• Mrs Zhang was a consumer.
• The Consumer Rights Act 2015 did not apply, because the Personal Guarantee did not have a close connection to the UK within s. 74(1), despite Mrs Zhang being resident in London.
• The “average consumer” under Consumer Rights Act 2015 is someone who might enter into a consumer contract of this particular type, bearing in mind its nature and context.  Here, that meant an average consumer a good understanding of what a personal guarantee is and of what a bonds issue is.
• Such average consumer must not be negligent.  Not obtaining or reading the terms might not be negligent in a typical consumer contract, but this was not a typical contract.  Mrs Zhang was negligent (as the arbitrator held) and so not “circumspect” within s. 64(5).
• Transparency and prominence had to be assessed on the basis the average consumer would have taken the trouble to read and obtain the contract terms.
• Cl. 2 was transparent and prominent.  This was so, despite the fact that the obligations being guaranteed were not set out or summarised.  Their essence would have been obvious to the relevant average consumer.
• Cl. 2 was neither surprising nor objectionable, as the operative clause of a guarantee.  It was not unfair under s. 62.
• Neither the choice of Hong Kong law nor the provision for Hong Kong arbitration were unfair.  The application of Hong Kong law to the substantive issues made no difference; the outcome of the issues referred to the arbitrator would have been the same under English law.  Hong Kong arbitration was not surprising or objectionable in all the circumstances.

The court dismissed the application.  The court also refused Mrs Zhang’s application to adjourn the determination of her application, on case management grounds.

The full judgment [2023] EWHC 1964 (Comm) can be found on the National Archives website.

World Challenge Expeditions Ltd v Zurich Insurance Company Ltd – Dias J

Personal Accident and Business Travel Policy covering travel company which provided challenging expeditions for students – Construction of policy – Whether insurance company estopped by prior course of dealing from denying coverage for refunds paid to students following cancellation of trips by reason of the pandemic – Aggregation

WCE provided adventurous expeditions for school children (“Challengers”).  Challengers would typically pay for the trip in instalments over a two year period leading up to departure, during which WCE would undertake significant preparatory work with them.  However, flights, accommodation and expeditions would not be booked or paid for by WCE until  1 or 2 months before departure.  From 2016 WCE was insured by Zurich against travel risks, including cancellation, under a personal accident and business travel policy which was renewed from year to year on substantially identical terms.  The Challengers themselves were also expressly designated as insured persons.  An aggregate annual deductible applied specifically to cancellation claims under the Policy. 

In 2020, the emergence of the Covid pandemic obliged WCE to cancel nearly all of its booked expeditions for the year thereby incurring statutory and contractual obligations to refund deposits and advance payments received from Challengers.

Throughout the life of the Policy, cancellation claims presented by WCE had invariably been for the amount of the deposit refunded to the Challenger and had been agreed and adjusted by Zurich in that amount and set against the deductible.  The deductible had never been exceeded.  Following the 2020 cancellations, WCE presented a claim on the same basis for a sum in excess of £10 million.  Zurich denied that the Policy covered the refunds paid to Challengers and asserted that it only indemnified WCE’s irrecoverable third party costs which it calculated to be less than £150,000.  WCE challenged this construction but in any event asserted that Zurich was estopped from denying that refunds were covered under the policy.  A point also arose on aggregation.

(1) Construction: the Policy indemnified WCE in the event of cancellation for a cause outside its control for “deposits, advance payments and other charges which have not been and will not be used but which become forfeit or payable under contract or cannot be recovered elsewhere”.  The court held that the Policy was in standard industry-wide wording and on its natural and ordinary meaning covered costs paid by the claimant to a third party which could not be recovered or which were forfeit.  In the context of a claim by WCE, deposits received from Challengers which had to be refunded may have been “forfeit” as between WCE and the Challenger, but were not irrecoverable third party costs within the meaning of the Policy.  Nor could a claim by the Challengers have succeeded since they received refunds and their costs were accordingly not irrecoverable.

None of the factual background relied upon by WCE affected this conclusion.  WCE relied heavily on the prior course of dealing between the parties relating to the adjustment of claims but this was not inconsistent objectively with the natural and ordinary meaning of the words used.

2)  However, Zurich was estopped by convention from denying that claims were payable in the amount of the refunds paid by WCE to Challengers. There was ample conduct crossing the line which demonstrated a shared mutual assumption that the amount of any refund was covered provided it was contractually due under WCE’s terms and conditions and there was a valid reason for the cancellation under the Policy.  The reason why Zurich’s claims handlers thought that refunds were covered under the Policy, or what they thought the refunds represented was irrelevant.  In fact they assumed (without enquiry and for no good reason) that the refunds represented irrecoverable third party costs to WCE.  There was nonetheless an assumption that the insurance indemnified the amount of the refunds and this was demonstrated every time that a claim was agreed and set by Zurich against the deductible – an act which had contractual consequences for both parties. 

While WCE could not establish reliance on the common assumption in relation to the cancellation of trips due to depart prior to 31 May 2020, the evidence showed that it delayed cancelling trips departing thereafter pending clarification by Zurich of certain matters and in reliance on the assumption that, subject to those clarifications, the amount of its refunds would be covered.  Otherwise it would have cancelled all remaining trips in mid-March 2020 at which time it still had the goodwill of its customers and would have had a greater chance of persuading them to accept deferrals or other solutions instead of a refund.  In the event, it took the final decision to cancel on 20 April 2020 by which time it had no other choice.  This was sufficient detriment to found an estoppel and it was not necessary for WCE to establish affirmatively that it would have been financially better off had it cancelled in March.  In circumstances where Zurich bore almost entire responsibility for the continuation of the incorrect assumption, it would be inequitable to permit it now to resile from the assumption save to the extent of requiring WCE to give credit for any third party recoveries.

(3) A policy limit applied to all claims “for loss and expense arising out of any one event.”  “Event” was defined as a “sudden, unforeseen and identifiable occurrence” with provision for separate occurrences to be treated as a single occurrence where they arose from or were attributable to one source or original cause and occurred within a 10 mile radius and 72 hours of that source/cause.  On the facts, the cancellation of trips departing after 31 May 2020 did not arise out of any sudden, unforeseen and identifiable occurrence.  While WCE’s decision on 20 April 2020 was capable in principle of being an occurrence for aggregation purposes, the possibility of manipulation by an astute assured meant that it cannot have been objectively intended by the parties that the assured’s own decisions could qualify as relevant occurrences.  The aggregation provision accordingly did not operate in this case.

The full judgment [2023] EWHC 1696 (Comm) may be found on the National Archives website.

Saudi Arabian Airlines Corporation v Sprite Aviation No 6 Designated Activity Company (Foxton J)

Aircraft lease – claim for rent and delivery payment – summary judgment – no “set-off”

Sprite counterclaimed to recover rent under an aircraft lease and an amount payable under a redelivery certificate in lieu of meeting the physical redelivery conditions. Saudi claimed it was entitled to set-off those amounts against its claim for a contribution to maintenance work from maintenance reserves.

Held:

1. Clause 5.12 of the Common Terms Agreement was a valid and effective no set-off clause which prevented Saudi from asserting a right of set-off in respect of the payments for rent.  Saudi’s argument that the clause only covered equitable and not legal set-off was without merit: In International Lease Finance v. Buzz Stansted Limited [2004] EWHC 292 (Comm) and FG Wilson (Engineering) Limited v. John Holt & Co (Liverpool) Limited  [2013] EWCA Civ. 1232 applied.
2. The no set-off clause did not apply to the payment made under the Redelivery Certificate. The redelivery certificate had expressly incorporated a number of terms from the Common Terms Agreement but clause 5.12 was not among them. It took clear words to exclude the right of set-off: Modern Engineering v. Gilbert Ash [1974] AC 689 applied.
3. Sprite’s claim under the redelivery certificate for payment in lieu of complying with the redelivery condition and Saudi’s claim for a contribution to work previously done on the aircraft were sufficiently closely connected to satisfy the test for an equitable set-off in Geldof Metaalconstructive NV v Simon Carves Ltd [2011] 1 Lloyd’s Reps 517.
4. Caution should be taken before extending the limited right of set-off against payments for hire under time charters established by The Nanfri [1978] 2 Lloyd’s Rep 132 outside of its maritime context.

The full judgment ([2023] EWHC 421 (Comm)) may be found on the National Archives website.

Delivery Hero SE v MastercardAsia/Pacific Pte Ltd (Foxton J)

Summary judgment – whether right to sign-on bonus accrued prior to termination – when valid payment request made – whether payment recoverable in unjust enrichment if paid – award of interest

Delivery Hero sought summary judgment of a Sign-On Bonus payable under a Client Business Agreement (CBA). It was common ground that the CBA had been terminated by the end of 2022 and the issue was whether Delivery Hero’s right to accrue the Sign-On Bonus had accrued prior to termination. This in turn depended on:

1. Whether Delivery Hero’s right to the Sign-On Bonus was conditional upon it not being in material breach of the CBA when a Payment Request for the Sign-On Bonus was made and/or was payable.
2. Whether the Sign-On Bonus would be recoverable, if paid, on the basis of a total failure of consideration.
3. Whether a clause providing for payment within 45 days of a valid Payment Request applied to the Sign-On Bonus, and, if so, whether the right to the Sign-On Bonus accrued on the Commencement Date, only when a valid Payment Request was submitted or only after the 45-day period had elapsed.
4. Whether the Payment Requests relied upon by Delivery Hero were valid.

There was also a dispute as to what interest rate should be award.

Held:

1. There was no provision in the CBA which made the right to the Sign-On Bonus conditional upon Delivery Hero not being in material breach of the CBA when the Payment Request was made and/or payable. The CBA had a carefully calibrated provision addressing the issue of when the Sign-On Bonus would be recoverable and the implicit condition contended for would cut across that scheme.
2. It was a defence to a claim for payment that the amount paid would immediately be recoverable on the basis that there had been a total failure of consideration – a defence of circuity of action: Fibrosa Spolka Akeyjna v Fairbairn Lawson Come Barbour Limited [1943] AC 32 applied. However, that defence was not available. The consideration for the Sign-On Bonus was the entry into the CBA (“signing on”), and the right to payment was not conditional on particular events or activity occurring post-completion. In any event, recognising a claim in unjust enrichment would cut across the carefully calibrated contractual right of recovery which did not give Mastercard a right of recovery in the prevailing circumstances: Pan Ocean shipping Co Ltd v Creditcorp Ltd [1994] 1 WLR 161, Dargamo Holdings Limited v Avonwick Holdings Ltd [2020] EWCA Civ 1149 and Barton v Morris [2023] UKSC 3 applied.
3. The CBA provided for the debt to accrue no later than the submission of a valid Payment Request, the 45-day period addressing only when the accrued debt became payable, rather than being  a condition of accrual: Boston Connecticut v European Grain and Shipping Ltd (the Dominique) [1989] AC 1056, Vagres Compania Maritima SA v Nissho-Iwai American Corporation (The Karin Vatis) [1988] 2 Lloyd’s Rep 580,  Alexander v Gardner (1835) 1 Bing N Cas 671 and Fragano v Long (1825) 4 B&C 219 applied.
4. The CBA did not permit Mastercard to impose additional requirements of a valid Payment Request, beyond those set out in the CBA, after the CBA was entered into. The various Payment Requests relied upon by Delivery Hero were valid.
5. Interest would be awarded at US Prime plus 1%: Lonestar Communications Corporation LL v Kaye and ors [2023] EWHC 732 (Comm) applied.

The full judgment Delivery Hero SE v MastercardAsia/Pacific Pte Ltd (Foxton J) may be found on the National Archives website.

LMH v EGK (Foxton J)

Arbitration award – section 68 Arbitration Act 1996 – whether serious irregularity in tribunal’s assessment of loss – effect of alleged error in tribunal’s damages assessment

LMH and EGK were parties to a Material Services Agreement, clause 3.1 of which obliged the parties to negotiate in good faith to extend the contract when its initial term expired. The tribunal found that LMH had breached that obligation and awarded EGK substantial damages.

LMH pursued five challenges under s.68 of the Arbitration Act 1996 to an ICC arbitration award in favour of EGK:

1. It alleged that the tribunal had failed to address the causation issue of whether, if LMH had negotiated in good faith, an extension would have been agreed, or had failed to give reasons for their decision (Grounds 1 and 2).
2. There was no evidence to support the tribunal’s finding that an extension would have been agreed if LMH had negotiated in good faith, and the arbitral process had been unfair because LMH’s witness’s evidence had not been challenged on the issue of whether LMH was willing to contract on particular terms (Ground 4.1).
3. The tribunal had failed to apply agreed evidence as to the appropriate measure of loss under the governing law (Ground 4.2).
4. The tribunal had acted unfairly in performing its own calculation of loss and/or had made a mathematical error in doing so (Ground 5).

Held:

1. Grounds 1 and 2 were rejected. If a tribunal has dealt with an issue in any way, that is sufficient for the purposes of s.68(d) of the 1996 Act, whether the tribunal has dealt with the issue well, badly or indifferently, nor does it matter that the tribunal might have expressed its conclusions at greater length  RAV Bahamas Ltd v Therapy Beach Club Inc [2021] UKPC 8, [43]. Here the tribunal had made a clear finding of causation. Further, it is not sufficient to establish that the award does not comply with s.68(2)(h), because it does not “contain the reasons for the award” as required by s.52(4), merely because the reasons are said to be inadequate: UMS Holding Limited v Great Station Properties SA [2017] EWHC 2398 (Comm), [134] and Islamic Republic of Pakistan v Broadsheet LLC [2019] Bus LR 2753, [22]-[23]. The award did give reasons for the tribunal’s conclusion (and, fairly read, sufficient reasons).
   1. As to Ground 4.1, a contention that the tribunal has ignored or failed to have regard to evidence relied upon by one of the parties cannot be the subject matter of an allegation of a serious irregularity within s 68(2)(a) or (d): UMS Holding Ltd v Great Station Properties SA [2017] EWHC 2398 (Comm), [28]. In any event the tribunal identified the evidence they had relied upon in reaching their conclusion. As to the second complaint, there is no absolute rule that party must challenge every part of a witness’s evidence in cross-examination if it is to invite a tribunal not to accept that evidence:  BPY v MXV [2023] EWHC 82 (Comm), [67]-[68].This is a fortiori the case when the issue does not relate to a matter of historical fact (what the witness saw, heard or understood at the relevant point), when a challenge will often carry an imputation on the witness’s honesty, but to what is essentially a matter of opinion – what would have happened in a counterfactual scenario had the parties conducted themselves differently: Rolls-Royce Holdings plc v Goodrich Corporation [2023] EWHC 1637 (Comm), [192]. The nature of EGK’s case, and its contention that if LMH had acted in good faith a deal would have been done, was clear from the filings which preceded the service of this statement, and the witness had ample opportunity to offer any observations on that case. In any event, the witness’s evidence was not directed to the particular terms of the extension which the tribunal found would have been entered into, and the tribunal had rejected the witness’s evidence that LMH had negotiated in good faith.
   1. As to Ground 4.2, there was no consensus between the foreign law experts to the effect contended for. The position for which LMH contended rested upon a particular (and somewhat unlikely) reading of an ambiguous passage in one expert’s report, and neither side had thereafter argued for a rule of law which limited the measure of recovery. At best for LMH, the tribunal had made an error in determining the content of the applicable law or misinterpreted one expert’s evidence. That did not give rise to s a..68 complaint: Secretary of State for the Home Department v Raytheon Systems Ltd [2014] EWHC 4375 (TCC),  [33(c)] and Sonatrach v Statoil Natural Gas [2014] 2 Lloyd’s Rep 252, [18] and [45]) applied.
   1. So far as Ground 5 is concerned, an arbitral tribunal will very often be faced with a complex calculation of the claimant’s case presented in its most optimistic form, and a response which either simply critiques that approach (as was the position here), or offers an assessment of loss from the polar perspective. In these circumstances, arbitral tribunals can and frequently do calculate their own measure of loss, lying somewhere between the extremes presented to them. Provided that the issues and material relied upon is “in play”, the tribunal is not required to offer the parties the opportunity to make submission on its proposed quantum calculation (Weldon Plant Ltd v The Commission for the New Towns [2001] 1 All ER (Comm) 264, [33],  Bulfracht (Cyprus) Ltd v Boneset Shipping Co (The Pamphilos) [2002] 2 Lloyd’s Rep 681, 687, Cameroon Airlines v Transnet Ltd [2004] EWHC 1829 (Comm), Republic of Kazakhstan v World Wide Minerals Ltd [2020] EWHC 3068 (Comm) and RAV Bahamas Ltd v Therapy Beach Club [2021] AC 907 considered). It must have been obvious to LMH, which had merely criticised EGK’s quantum calculation without offering its own or explaining the quantum implications of its criticisms, that if the case reached the question of damages, then unless the Tribunal either awarded the entire amount claimed or nothing (which no lawyer with experience of international arbitration would have regarded as a likely scenario), then the tribunal would have to make its own adjustments or allowances to reflect LMH’s attacks on EGK’s quantum case to the extent that they were regarded as having merit. That is what the tribunal did, using building blocks taken from the record in the case.
   1. On first analysis, there did appear to be an error in the manner in which the tribunal had adjusted EGK’s calculations to reflect on of its findings. If that error amounted to a “computational error” for the purpose of Article 36 of the ICC Rules and s.57 of the Arbitration Act 1996, then LMH’s failure to invoke Article 36 provided an absolute answer to its s.68 application: s.70(2)(b) of the 1996 Act and Torch Offshore LLC & anr v Cable Shipping Inc [2004] EWHC 787 (Com), [28]. If the complaint fell outside that Article 36/section 57, then it did not constitute a serious irregularity (Ducat Maritime Limited v Lavender Shipmanagement Incorporated [2022] EWHC 766 (Comm) considered).

The full judgment LMH v EGK (Foxton J) may be found on the National Archives website (external link).

SVF II Alpha GP (Cayman) Limited v Chimera Investment LLC – Dias J

Interim injunction – American Cyanamid

Chimera made a loan of $1 billion available to Alpha pursuant to a Loan Agreement concluded on 24 September 2021 and subsequently amended and restated on 24 December 2021.  A dispute arose between the parties as to whether Alpha was in breach of the agreement in having failed to execute a call option agreement.  The dispute turned on the construction of a particular provision of the Loan Agreement which was governed by English law and provided for the exclusive jurisdiction of the English courts.

Chimera served a purported notice of default pursuant to the Loan Agreement which, if valid,  allowed Alpha a 20 day “cure period”, failing which Chimera would become entitled to enforce its security which included taking control of Alpha and acquiring Alpha’s entire shareholding in a company called AutoStore currently worth some $2.73 billion. 

There was uncertainty as to when the notice of default was served and thus as to when the cure period expired.  If the notice was valid and the default was Despite requests in correspondence, Chimera refused to agree that it would refrain from exercising its purported rights until after the disputed question of construction had been resolved.  Alpha accordingly applied without notice for an urgent interim injunction restraining Chimera from acting on the notice of default.

The court held that there was a real possibility that the cure period would expire within days and that the urgency of the application was justified.  Applying American Cyanamid principles, the judge concluded that:

• There was a serious issue to be tried as to the construction of the contentious clause on which there were arguments to be made on both sides;
• There was a real risk of prejudice to Alpha if no injunction were granted and Chimera proceeded to act on the basis of the notice of default;
• This prejudice was not necessarily compensatable in damages;
• There was no obvious immediate prejudice to Chimera in being restrained from enforcing its security forthwith; the shares in AutoStore were already held safely in a custody account and were pledged to Chimera and Chimera had the benefit of an Equity Upside Agreement at least until March 2024.

The court accordingly granted an interim injunction for a limited period to preserve the status quo until such time as Chimera had the opportunity to appear before the court and make its case.

Siem v Windhorst – Dias J

WWFO

The Defendant was one of several defendants in three separate but overlapping claims.  The Claimants had obtained default judgments in the first two claims and the court was satisfied that they had a good arguable case in relation to the third.  The total amount owing in respect of all three claims (after allowed for any overlap) was around €143 million.

There was ample evidence that the Defendant had access to assets and lived a lavish personal lifestyle.  The evidence also demonstrated that he had a history of ignoring and disobeying court orders, including orders made in the context of a Part 71 application to examine him on his assets.  His modus operandi was to ignore any orders until it was impossible to do so any longer and then only to do the barest minimum to forestall any adverse consequences.  He had recently been found guilty of contempt in separate proceedings, following which he did attend a Part 71 hearing and disclose a limited number of documents, which were also disclosed to the Claimants in these proceedings, although the Claimant submitted that they were far from complete.

Whilst not evidence of dissipation in itself, the court accepted that the Defendant’s attitude to court orders and procedures heightened the risk of dissipation.  In addition, there was evidence that the Defendant’s activities had attracted the attention of the regulatory and prosecution authorities in other jurisdictions.  He had avoided prosecution for fraud and embezzlement by admitting a breach of trust for which he was given a one-year suspended sentence.  He had also admitted in the past to arranging his affairs so as to make himself as judgment-proof as possible.

In these circumstances, the court held that there was a real risk of dissipation and that there was insufficient material to demonstrate that the Defendant’s recent attendance at a Part 71 hearing evidenced a new compliant attitude on his part, rather than a further example of him doing the bare minimum to avoid further sanctions.

The Claimants accepted that there had been a period of delay before applying for a WWFO.  However, the time had been spent in attempting to enforce their existing judgments by conventional means, none of which had borne fruit, largely because the Defendant failed to comply fully with any compromise agreements that he had made.  The court accepted that this was not culpable delay and granted the injunction sought.

Steamship Mutual Underwriting Association Ltd v Shipowners Insurance and Guaranty Company Ltd – Dias J

Anti-suit injunction – whether third party bound by an arbitration clause in a contract between a P&I Club and its member

This was a without notice application for an interim anti-suit injunction to restrain third party proceedings brought by the Defendant (“SigCo”) against the claimant P&I Club (“the Club”) in the US Puerto Rico District Court.  The US proceedings arose out of the ground of the vessel “MARGARA” in 2006.  The vessel’s registered owner was a Cayman Islands company.  She was beneficially owned and operated by a German company, Ernst Jacob.  The owners and Ernst Jacob were jointly entered with the Club for P&I risks for the relevant policy year.  SigCo was the guarantor of the owners’ liabilities under the US Oil Pollution Act 1990, pursuant to which both owners and Ernst Jacob were potentially financially responsible for any clean-up operations or damage.

Although the grounding did not lead to any oil pollution, it caused damage to a coral reef and on 9 December 2021 the US authorities issued proceedings in the Puerto Rico court against SigCo and Ernst Jacob seeking to recover substantial sums already paid to restore the reef and declaratory relief as regards uncompensated damage.

In August 2022, both SigCo and Ernst Jacob issued separate Third Party Complaints against the Club.  SigCo’s Third Party Complaint was served on 4 November 2022.  On 25 November 2022, the Club filed an answer to the complaint and issued a motion to compel arbitration of SigCo’s claims on the basis of a compulsory dispute resolution provision in the Club’s Rules requiring any disputes to be mandatorily referred to adjudication by the Club’s directors followed, if necessary, by arbitration in London under the Arbitration Act 1996.

Three issues arose for the court’s consideration:

(1) Were the conditions for the grant of an ASI satisfied in principle?

(2) If so, was it appropriate to grant an injunction without notice?

(3) Whether an injunction should be refused on the grounds of delay since November 2022 in bringing the application.

As to (1), the court accepted that:

(a) an ASI would ordinarily be granted to restrain proceedings brought in breach of an arbitration clause unless the defendant showed strong reasons to refuse relief: see The Angelic Grace;

(b) the applicant must demonstrate to a high degree of probability that there is an arbitration clause which governs the dispute in question, whereupon the burden shifts to the defendant to show strong reasons for refusing an injunction;

(c) where no breach of contract was involved, an ASI would only be granted if the pursuit of the foreign proceedings was vexatious and oppressive.

In this case, the complication arose because SigCo itself was not party to any contract with the Club, whether under the Rules or otherwise.  The court recognised that the extent to which non-parties to a contract are bound by or entitled to rely on dispute resolution provisions in the contract is a fast-developing area of the law which has not yet been fully explored.  However, this was a relatively straightforward case since the claims asserted by SigCo were all ultimately derived from rights arising under the contract contained in the Club Rules, whether by subrogation or by assertion of rights under a direct action statute. One way or another SigCo was in substance asserting the contractual rights of the owners under the Rules.

There is ample authority that where a third party seeks to assert a right derived under or in respect of a contract, it cannot accept the benefit of those rights without also assuming the burden of abiding by any contractual dispute resolution mechanism: The Jay Bola, The Yusuf Cepnioglu; The Archangelos Gabriel; QBE v Generali. 

The arbitration clause in the Club Rules was sufficiently wide to cover the disputes raised by SigCo and on the evidence before the court, there was no strong reason to refuse an ASI.  The authorities above established that comity alone was not a sufficiently strong reason for refusing to give effect to the contractual forum clause.

As to (2), the court was satisfied that it was appropriate to proceed without notice since the Club had a legitimate concern that SigCo might be prompted to apply for its own anti-anti-suit injunction if notified of the application.

As to (3), the court was required to look at all the circumstances in deciding whether delay should defeat the application.  Mere absence of prejudice to the defendant did not automatically mean that the delay could be ignored.  In this case, however, very little had happened in the Puerto Rico proceedings since service of SigCo’s Third Party Complaint.  Moreover, it was reasonable for the Club to have sought expert advice on US law before launching the application and this took longer than had been anticipated.  Matters were further delayed because it had originally been intended to proceed against both SigCo and Ernst Jacob simultaneously.  However, discussions with the latter were expected to lead to a consensual stay and the Club was reluctant to proceed against SigCo alone in case it provoked Ernst Jacob to apply for its own anti-anti-suit injunction.  In all the circumstances, the Club could not be criticised for delaying the application until it was certain that it was necessary.

An anti-suit injunction was therefore granted on an interim basis.

HRH Princess Deema Bint Sultan Bin Abdulaziz Al Saud v Gibbs – Dias J

Application for unless order debarring defendant from defending proceedings failing compliance with orders for disclosure, service of witness statement and payment of outstanding costs orders

The Claimant’s claim concerns a sum of US$25 million which was given to the Defendant (a former partner of Linklaters) in 2011 to invest on her behalf.  She alleges that she requested its return in 2012 but received nothing.  In 2018 a settlement agreement was reached with the Defendant whereby he was to liquidate certain assets scheduled to the agreement and pay over the proceeds.  This has not been done.  Proceedings were issued on 8 January 2021 (at which time a WWFO was obtained against the Defendant) and in April 2022, the Claimant obtained summary judgement against the Defendant for breach of the settlement agreement.

The proceedings were thereafter amended to add certain misrepresentation claims in the light of further matters which had come to light.  The Defendant was given permission to serve an amended defence by July 2022 but failed to do so.

In November 2022, the CMC was held at which the Defendant represented himself.  The CMC Order contained detailed provisions as to disclosure which was to be given by 17 February 2023 (subsequently extended by consent to 21 February 2023).  If it was no possible for the Defendant to search any of the identified data sources, he was to serve a witness statement explaining the position.  The Order also contemplated the instruction of experts on valuation, investment returns and forensic accounting who would plainly require considerable disclosure in order to express any meaningful opinions on the matters required. 

No disclosure was given and no documents were actually provided pursuant to this Order save that on 3 July 2023 the Defendant provided a list of documents (mainly emails between the parties) which he said he proposed to disclose, indicating that he would provide copies when next in the UK.

At the hearing, which the Defendant attended in person, it transpired that he had in fact filed a “statement of facts” some two days previously.  In those circumstances, the Claimant did not pursue the application for a debarring order in relation to service of a witness statement.

As regards disclosure, the Defendant claimed to have already provided all the documents in his possession, custody and control and maintained that he had fully complied with an order made by Butcher J in relation to the WWFO proceedings.  The Claimant asserts to the contrary that there has been material non-disclosure in relation to his assets, both as regards value and ownership.

The court did not accept that the Defendant had provided all the documents which he was in a position to provide.  There was no attempt to list documents corresponding to many of the categories set out in the CMC Order and no witness statement explaining why (if it was the case) it was not possible to do so.  The Defendant relied on various difficulties which he said had hindered his compliance, including the fact that he has no offices or staff, has only limited IT facilities available to him, the lack of any express request for documents required by the experts, ill-health, and the alleged blocking of his Gmail account and bank accounts.

The court rejected all these excuses as either being spurious or inconsequential.  Any difficulties experienced in complying with the disclosure order should have been set out in a witness statement supported by evidence that they were really insuperable.  The lack of any express request for documents required by the experts did not justify wholesale non-compliance with the CMC Order.  No medical evidence had been adduced in support of the Defendant’s complaints of ill-health beyond a discharge certificate showing that he was admitted to hospital in the autumn of 2022 and discharged on the same day with symptoms of angina.  No evidence had been put forward to substantiate the claim that his Gmail account was blocked or to evidence any attempts to get it unblocked.  Nor was there any evidence that he was prevented from accessing banking facilities in circumstances where the WWFO permitted him to withdraw over £17,000 per week for living expenses.  In any event, substantially all of these supposed difficulties were advanced at the CMC and taken into account by Jacobs J when making the CMC Order.

It was now nearly 9 months since the CMC order and there was no indication that the Defendant was disposed to comply properly with its provisions.  This was unacceptable.  The failure to give disclosure or to explain properly why it could not be given, combined with the lack of any pleaded defence and the failure until very recently to serve any witness statement was very likely to cause significant disruption to preparations for trial (listed for January/February 2024).  The Defendant’s non-compliance with the CMC Order was serious and flagrant and in the circumstances, it was just and proportionate to make a debarring order failing compliance with the disclosure provisions of the CMC Order by 25 August 2023.

As regards non-payment of costs which had been ordered to be paid immediately, the Defendant claimed to be impecunious but there was no satisfactory evidence to substantiate this.  Moreover, the court was sceptical of this claim in circumstances where there was evidence suggesting the contrary.  On any view the Defendant had been less than transparent about his assets.  When the Claimant had attempted to enforce costs orders in her favour against assets supposedly legally and beneficially owned by the Defendant in the UK, he claimed that he had in fact put those assets in trust for his family many years ago.  He gave no explanation as to how (if that was true) they had been represented as being legally and beneficially owned by him.

The Defendant also relied on an entitlement to offset costs which would become due to him on assessment in the future following discontinuance of a claim originally brought in the proceedings by the Claimant’s brother.  However, any order in his favour would only be a fraction of what he had already been ordered to pay the Claimant under the existing costs orders and in any event there was no extant offset pending any actual order in his favour. 

The lack of transparency as to the Defendant’s assets combined with the plausible suggestion that he had materially misrepresented his asset position in the WWFO proceedings made it just and proportionate to make an unless order requiring payment likewise by 25 August 2023.

Nopporn Suppipat and others v Nop Narongdej and others – Calver J

Whether misrepresentations by various defendants which allegedly induced the Claimants to transfer shares in valuable Thai wind farm business to First Defendant’s companies under a Share Purchase Agreement actionable under Thai law – whether, as a matter of Thai law, defendants conspired to asset strip the First Defendant’s companies so as to disable them from meeting their payment obligations under the Share Purchase Agreement and whether that gives rise to a cause of action under Thai law – causation – damages – section 423 Insolvency Act 1986 – whether there existed a sufficient connection between the claim and this jurisdiction – issues of construction arising in respect of a claim  and counterclaim under an advisory services agreement; claims for breach of fiduciary duty and unlawful means conspiracy under English law.

FACTS:

The First Claimant (Mr Suppipat) is a successful Thai businessman who founded Renewable Energy Corporation Company Limited (REC) in 2006 and Wind Energy Holding Company Limited (WEH) in 2009.

On 1 December 2014, Mr Suppipat was charged with lèse-majesté (the offence of insulting the King, Queen and Heir to the Throne) under Article 112 of the Thai Criminal Code and other crimes. Mr Suppipat fled Thailand on 30 November 2014 after a tip-off in anticipation of the charges. On 15 December 2014, Mr Suppipat resigned his position as co-CEO and Director of WEH. From that point, Ms Collins (the second defendant) became sole CEO. Mr Suppipat’s involvement in REC was seen as “toxic”.  As such, with the assistance of the second, third and fourth defendants (“the WEH Managers”), Mr Suppipat began to look for an investor to buy his stake in REC. He trusted the WEH Managers to act in his best interests.

In March/April 2015, Mr Suppipat started to consider using a nominee structure whereby a third party would acquire his REC shares and work towards an IPO (Part A) with Mr Suppipat retaining the right to repurchase his REC shares at a later stage through the exercise of a call option agreement (COA) (Part B) (Part A and Part B being the Global Transaction). He identified Khun Nop, the first defendant, as a suitable nominee.

On 19 June 2015, Mr Suppipat authorised representatives of his Companies to enter into share purchase agreements for the sale of his REC shares between Symphony (his company) and Fullerton (Khun Nop’s company) (Fullerton SPA) and NGI/DLV (his company) and KPN EH (Khun Nop’s company) (KPN EH SPA) (together, the REC SPAs). The total purchase price was USD 700 million, being USD 357 million under the KPN EH SPA and USD 343 million under the Fullerton SPA. Mr. Suppipat alleged that he was induced into doing so by reason of three categories of misrepresentations: the Global Transaction representations and the Payment Representations by Khun Nop and Khun Nuttawut; and the Watabak Representations by Ms Collins.

No call option agreement was entered into, but Khun Nop and Khun Nuttawut continued to lead Mr. Suppipat to believe that they would enter into one in due course.

Also on 19 June 2015 Fullerton, KPN EH, Khun Nop, Ms Collins and Khun Thun entered into a Shareholders’ Agreement (KPN EH SHA) by which Ms Collins and Khun Thun were each to hold 20% of KPN EH. No consideration was provided for those shares. Ms Collins and Khun Thun held the KPN EH shares as nominees for Mr Suppipat pending his exercise of the call option, at which point it was understood that they would be transferred back to Mr Suppipat. The shares were allotted to them as part of the blocking mechanism under the KPN EH SHA to ensure that Mr Suppipat’s interests under the Global Transaction were protected by Ms Collins and Khun Thun.

An Advisory Services Agreement (ASA), dated 25 June 2015, but not executed until 3 August 2015, was entered into between NGI, Ms Collins, Khun Thun and Ms Siddique (Mr Lakhaney’s wife), whom Mr Lakhaney said was included for tax reasons. The ASA placed prospective obligations on the WEH Managers to protect Mr. Suppipat’s interests in the Global Transaction by (amongst other things)working to ensure that he received payment under the REC SPAs.

Fullerton failed to pay the First Instalments under the REC SPA by 26 November 2015. On 8 January 2016, Symphony issued a Notice of Rescission to Fullerton seeking recovery of the REC shares on the basis that Symphony had not received payment of the First Instalment of US$85,750,000 due by 23 October 2015, which constituted total non-performance of Fullerton’s obligations under the Fullerton SPA.

On 26 January 2016, Symphony filed a Request for Arbitration against Fullerton under the Fullerton SPA (the Symphony Arbitration). NGI/DLV filed their Request against KPN EH on 25 March 2016, with no payment having been made under that SPA.

On 17 February 2016, the Emergency Arbitrator granted Symphony’s application for emergency measures (the EA Order), ordering amongst other matters that:

“Fullerton Bay Investment Limited is prohibited from disposing of the shares, representing 49% of the share capital, it holds in Renewable Energy Corporation Co., Ltd. (now known as KPN Energy (Thailand) Co., Ltd.) (including through sale) and/or transferring such shares and/or creating any charge…and any other action having an economic effect similar to the disposal and/or transfer and/or encumbrance of the shares, pending the resolution of the present dispute between the Parties by way of the final award in the arbitration between the Parties” (emphasis added)

On 17 March 2016, being one month after the EA Order of 17 February 2016, a key meeting took place between Khun Nop, Khun Nuttawut, Khun Weerawong and the WEH Managers. It was at this meeting that the idea of a “ring-fencing strategy” was specifically proposed by Khun Weerawong. According to this, there would be a sale of the WEH shares to a connected third party in order to put the shares beyond the reach of Mr. Suppipat’s companies, the creditors under the REC SPAs.

On 18 March 2016 Mr. Lakhaney circulated to the WEH Managers and Khun Nop and Khun Nuttawut his “Project Houdini” presentation. When read alongside Mr. Lakhaney’s White Board Presentation of 7 April 2016, these documents contained each of the steps of the planned dishonest asset stripping scheme which these parties then subsequently implemented with the assistance of certain of the other defendants.

Accordingly, instead of acting in Mr. Suppipat’s best interests, the WEH managers chose, in exchange for a bribe from Khun Nop of a 1.25% shareholding in WEH each, to switch sides to assist Khun Nop. They removed Mr Suppipat’s blocking mechanisms by terminating the KPN EH SHA and the ASA for their own financial gain.

Under the share stripping scheme, the WEH shares were transferred to Dr Kasem (Khun Nop’s father) sometime in May 2016. Khun Nop, Khun Nuttawut, Khun Weerawong, Khun Thun, Mr Lakhaney and Ms Collins all knew that the shares had been so transferred and that this was designed to put them beyond the reach of Mr Suppipat’s creditor-companies. The WEH shares were sold merely for book value at THB 2.4 billion (c. USD 68 mill, THB c.37.08 per share), which was a very substantial under-value. They remained under Khun Nop’s control.

In accordance with the share stripping scheme, various false documents were created to give the impression that the sale to Dr Kasem was an arm’s length sale under a share purchase agreement approved by the Board of REC. A false agency agreement was created to give the impression that Dr Kasem had purchased the REC shares as Madam Boonyachinda’s agent, in order to prevent Dr Kasem co-operating with the court in Hong Kong which in May 2018 had issued an injunction preventing dealing in the WEH shares.

Further false documents were manufactured in October 2016, particularly by Mr. Lakhaney and Khun Thun, in the context of an abortive sale to Orix, in an attempt to give the impression to Orix that the “sale” to Dr Kasem was a genuine, arms length sale.

Pursuant to share purchase agreements dated 17 January 2017, the WEH Managers then set about transferring half of their 1.25% WEH shareholdings to each of their fellow managers’ companies, again to put the shares beyond the reach of Mr. Suppipat’s companies.

There were further transfers of tranches of shares away from Dr Kasem to recipients in different jurisdictions to ensure that Mr. Suppipat’s companies could not recover the sums owed under the REC SPAs.

HELD:

1. In a case such as this, where many of the defendants were dishonest in numerous respects, it is important to keep firmly in mind the approach of Leggatt J (as he then was) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), which was approved by Lord Kerr (in a dissenting judgment) in R (on the application of Bancoult No 3) v Secretary of State for Foreign and Commonwealth Affairs [2018] UKSC 3 at [103], that the best indicator of where the truth lies is to be found in the contemporaneous documents, save that in this case it is obviously important to distinguish between genuine, contemporaneous documents and fictitious documents which have been falsely created after the event.
2. The court applied the approach to expert evidence of foreign law set out in Deutsche Bank AG London v Comune di Busto Arsizio [2021] EWHC 2706 (Comm) at [104]-[108] (Cockerill J) and Banca Intesa Sanpaolo SpA v Comune di Venezia [2022] EWHC 2586 (Comm) at [120]-[127] (Foxton J).
3. So far as the claims in misrepresentation under Thai law are concerned, the Court found as a fact that:
   a. The Global Transaction Representations were expressly made by Khun Nop and Khun Nuttawut on three occasions – the Skype Call on or around 17 May 2015, the First Paris Meeting on 29 June 2015 and the Bangkok Meeting on 16 July 2015 – and there was a dishonest failure to correct these representations subsequently;
   b. The Watabak Representations were not made by Ms Collins on the phone call with Mr Suppipat on 24 August 2015 (still less were they made on behalf of Khun Nop);
   c. The Payment Representations were not made at the Second Paris Meeting on 26 September 2015 or during the telephone call on 6 November 2015.

4. Thus the only claim that could have succeeded was the Global Transaction Misrepresentation claim but it is time barred as a matter of Thai law.
5. There is no abuse of process (or issue estoppel) in bringing the Misrepresentation Claims.
6. So far as the asset stripping claims are concerned, the Claimants rely on s. 420 and s. 432 of the Thai Civil and Commercial Code (TCCC) to bring claims concerning the dissipation of the Relevant WEH Shares following the REC SPAs.
7. s. 420 TCCC. Only the s. 420 TCCC claim based upon s. 350 Thai Penal Code (cheating against creditors) succeeds against Khun Nop, Khun Nuttawut, Khun Weerawong and the WEH Managers. The successful claim is, however, that of Symphony, NGI and DLV, not Mr Suppipat. This claim is not time-barred.
8. s. 432 TCCC. The following defendants are liable to the same claimants as joint wrongdoers/ assisters/ instigators under s. 432 TCCC: (1) Khun Nop, Khun Nuttawut, Khun Weerawong and the WEH Managers (who committed the s. 350 principal offence), (2) Madam Boonyachinda, (3) Golden Music and Cornwallis, (4) the WEH Managers’ Companies Colome, Keleston and ALKBS, (5) Dr Kasem and (6) Khun Pradej.
9. All of the asset-stripping claims fail against the following defendants: (1) Ms Siddique, (2) SCB and (3) Khun Arthid.
10. Damages for s. 420 TCCC (based on s. 350 TPC) and s. 432 TCCC.
    a. The relevant counterfactual is that but for the wrong committed under s. 420 TCCC/ s. 350 TPC, Fullerton and KPN EH would have had sufficient value in their REC shares to pay under any arbitral awards as at the dates on which they were made.
    b. In relation to the Fullerton First Instalment Award, Symphony is entitled to recover:
    i. First Instalment under Fullerton SPA = US$85.75m; plus
    ii. Interest on $85.75m calculated at the 15% simple interest rate from 23 October 2015 to 22 September 2017 = US$ 24,667,808;
    iii. Making a total of US$110,417,808m; plus
    iv. Interest on US$110,417,808m calculated at the US Prime Rate from 22 September 2017 to 12 June 2019 (parties to calculate)
    Less:
    v. Credit for sums paid on 12 June 2019 = US$85.75m;
    Leaving:
    vi. A sum on which interest is payable calculated at the US Prime Rate from 12 June 2019 to the date of this judgment (parties to calculate).
    c. In relation to the KPN EH First Instalment Award, NGI and DLV are entitled to recover:
    i. Interest on First Instalment under KPN EH SPA calculated at the 15% simple interest rate from 25 September 2015 to 22 September 2017 = $1,532,921; plus
    ii. Interest at the US Prime Rate on $1,532,921 from 22 September 2017 to the date of this judgment (parties to calculate).
    d. In relation to the Remaining Amount Awards, Symphony, NGI and DLV are entitled to recover:
    i. Remaining Amounts under the REC SPAs = US$525m; plus
    ii. Interest on $525m calculated at the 15% simple interest rate from the relevant milestone dates to 17 March 2023 = US$279,030,649;
    plus
    iii. Interest on the relevant sum calculated at the US Prime Rate from 17 March 2023 to the date of this judgment (parties to calculate).
11. Since the damages award effectively assumes that the First Partial Awards and the Remaining Amount Awards were paid at the date they were handed down, the claimants must not be allowed to then separately claim these sums under the BVI Enforcement Judgment and any subsequent proceedings to enforce the Remaining Amount Awards. They have to give credit for the sums received under this judgment.
12. s. 423 Insolvency Act:
    a. There is an insufficient connection between the claim and this jurisdiction. The Court would have declined to exercise the discretion to apply s. 423 in any event.
    b. The argument that it would be impossible for the Claimants to get a fair trial in Thailand is unsustainable.
13. The ASA-related claims: The ASA and non-contractual obligations “arising out of or in connection with it” are governed by English law. The Court holds that:
    a. NGI’s claim against Ms Collins, Khun Thun and Ms Siddique for breach of the ASA succeeds;
    b. The counterclaim of Ms Collins, Khun Thun and Ms Siddique for non-payment of the $10m fee under the ASA fails;
    c. The loss suffered by NGI for breach of the ASA is the same as the loss claimed in the main asset stripping claim;
    d. Ms Collins, Khun Thun and Mr Lakhaney are in breach of the fiduciary duties which they owed to Mr Suppipat and NGI by assisting in the asset stripping scheme and for accepting the 1.25% bribe from Khun Nop. As a result, each of them held their 1.25% stake in WEH on trust for Mr Suppipat and NGI and continue so to hold it (or any part thereof) in so far as they have not divested themselves of it (or any part thereof). Mr Suppipat and NGI are also entitled to trace their beneficial interest in the 1.25% stake from the WEH Managers into Colome, Keleston and ALKBS (in so far as it has been so transferred) and claim a proprietary remedy over it: applying FHR European Ventures LLP Cedar Capital Partners LLC [2014] UKSC 45; Foskett v McKeown [2002] UKHL 29.
14. Ms Collins and Khun Thun committed the tort of unlawful means conspiracy in respect of the asset stripping scheme and (once again) are liable to Symphony, NGI and DLV for the sums under the relevant arbitral awards against Khun Nop’s companies which remain outstanding: applying ED&F Man Capital Markets v Come Harvest [2022] EWHC 229 at [465]-[467].

The full judgment [2023] EWHC 1696 (Comm) may be found on the National Archives website (external link).

Technip Saudi Arabia Limited v Mediterranean & Gulf Cooperative Insurance & Reinsurance Co (Jacobs J)

WELCAR 2001 Offshore Construction Project Policy – damage to offshore oil production platform caused by the negligence of owners of vessel chartered by one of the insureds – claim under Section II of the WELCAR policy in respect of liabilities of one insured to another – effect of the “Existing Property Endorsement” commonly incorporated in a WELCAR policy.

The Claimant, Technip, had chartered an anchor-handling vessel to perform certain work as part of a project to improve certain production assets in an offshore field in Saudi Arabia. Technip was engaged as the “Contractor” by the operators of the field, a joint venture known as KJO. An offshore platform, owned by KJO, was damaged by the vessel when it was returning to anchorage at the end of a working day. Technip and KJO were both insured under a WELCAR 2001 policy which Technip had obtained. The policy contained a standard form “Existing Property Endorsement”, widely used with such policies. The insurers advanced various arguments as to why Technip did not have cover under the policy in respect of any liability to KJO for the damage.

The court held that the insurers were correct in their argument based upon an exclusion in the “Existing Property Endorsement”. The damaged platform was owned by KJO, and there was an exclusion for damage to property which “the Principal Assured” owns. KJO came within the expression “the Principal Assured”, and therefore the exclusion was applicable notwithstanding that this was a “composite” policy providing cover separately to each insured. If damage to KJO’s property was to be covered, then the property needed to be included in the schedule to the endorsement which set out property subject to a “Buy-Back”. Here, some property of KJO had been included, but not the damaged platform.

Other arguments advanced by the insurers on liability issues were rejected. The court held that Technip did have a liability to KJO for the damage caused by the vessel. This liability did not arise from a “hold harmless” or similar provision, and therefore a further exclusion in the “Existing Property Endorsement” was inapplicable. A “Watercraft” exclusion, relied upon the insurers, was also inapplicable. The absence of insurers’ consent to Technip’s settlement did not preclude a claim under the policy on its true construction. The court would also have been strongly inclined to accept Technip’s argument that the insurers’ lack of consent could not be relied upon in circumstances where the insurers had denied liability and told Technip to act as a prudent uninsured.

The full Judgment [2023] EWHC 1859 (Comm) can be found on the National Archives website (external link).

Czech Republic v Diag Human SE, Josef Stava (Bright J)

Arbitration claim – security, arbitration Act 1996 s. 70(6), (7)

Diag Human SE and its principal, Mr Josef Stava, were awarded a substantial sum against the Czech Republic, by an arbitration seated in London.  The CR applied to challenge the award on the basis of lack of jurisdiction and serious irregularity.  DH and JS applied (a) for security for costs, under s. 70(6), and (b) for security for the award, under s. 70(7).

(a): Security for costs, s. 70(6)

DH and JS said that CR’s past conduct in relation to an adverse costs order in Luxembourg suggested that CR could not be trusted to pay any order for costs and might actively remove assets.  They also relied on other wrongdoing, found by the arbitrators in the award.

The court held that DH and JS had not shown that CR’s conduct in relation to the costs order in Luxembourg demonstrated untrustworthiness in relation to adverse costs orders.  DH and JS could not rely on the award to establish wrongdoing by CR, because the award is subject to the s. 67 and s. 68 challenges.  In any event, wrongdoing that is not related to the payment of costs orders is not sufficient under s. 70(6).

The court would nevertheless have granted security in circumstances where, prior to the hearing, CR had not said it would comply with any adverse costs order and had not identified any assets that would be readily available.  However, CR provided an undertaking to honour any adverse costs order, through its solicitors, very shortly after the close of submissions.  The court accepted this undertaking, with the result that the application for security for costs was dismissed.

(b) Security for the award, s. 70(7)

The Court held that security for the award will generally be granted only if the applicant shows that (i) that the challenge is flimsy and (ii) that the challenge prejudices his ability to enforce the award (usually by demonstrating a risk that the challenger will dissipate his assets pending determination of the challenge).  In the context of s. 68 challenges, only limb (ii) arises).

DH and JS argued that the conduct set out in the award was so egregious that neither limb should be applied.

The Court held that s. 70(7) is related to prejudice that may arise from the s. 67 or s. 68 or s. 69 challenge; specifically, the risk the award may become more difficult to enforce during the period while the challenge is pending.  This calls for a comparison between the enforceability of the award before the challenge was issued, and the enforceability by the end of the challenge proceedings.

In any event, on the limited materials shown to the court it was not possible to accept, even provisionally, the allegations made by DH and JS as to CR’s misconduct.

The full judgment [2023] EWHC 1691 (Comm) can be found on the National Archives website (external link).

Payward Inc. v Maxim Chechetkin (Bright J)

Enforcement of foreign arbitration award – public policy under Consumer Rights Act 2015, Financial Services and Markets Act 2000 – s. 103(3) Arbitration Act 1996

The Payward group operates the ‘Kraken’ global digital online cryptoasset exchange.  Mr Chechetkin is a British citizen resident in England.  In 2017 he opened a Kraken account, by contracting with Payward Ltd (incorporated in England).  The contract terms provided at cl. 23 for California law and arbitration in San Francisco.

Mr Chechetkin used the account heavily in March-May 2020, ultimately losing about £613,000.  His lawyers wrote to Payward Ltd asserting that its activities were “regulated activities” under Financial Services and Markets Act 2000 (“FSMA”), conducted without authorisation and in breach of the general prohibition in s. 19 FSMA, so the contract was unenforceable under s. 26 and he was entitled to recover his money.  He also referred to the Consumer Rights Act 2015 (“CRA”), contending that cl. 23 was inconsistent with s. 74 and that the contract was unfair.

Payward commenced arbitration in San Francisco, seeking an order enjoining Mr Chechetkin from suing in England.  Mr Chechetkin then commenced proceedings in England, bringing a claim under FSMA.

In the arbitration proceedings, the arbitrator held that cl. 23 bound the parties and California law applied, found in Payward’s favour and made the order it sought.  Payward then applied for the award to be enforced in England under s. 101 Arbitration Act 1996.  Mr Chechetkin resisted enforcement, primarily on the basis it would be contrary to public policy under s. 103(3).

The Court found that Mr Chechetkin had contracted as a consumer under the CRA, and that he could not have brought his FSMA claim in the arbitration.

The Court held:
(1) It was not bound by the arbitrator’s decision as to the effect of cl. 23 but had to form its own view of the award’s consistency with English public policy.
(2) CRA s. 71(3) and s. 74 represent UK public policy. So does FSMA.
(3) Mr Chechetkin’s contract with Payward Ltd had a close connection with England. The choice of California law in cl. 23 was inconsistent with s. 74 CRA.
(4) Cl. 23 was unfair under s. 62 CRA in that it required arbitration in San Francisco.
(5) Cl. 23 was also unfair, and contrary to UK public policy in FSMA, in that it made it impossible for him to bring his claim under FSMA.

Enforcement would be contrary to UK public policy and therefore was refused.

The full judgment [2023] EWHC 1780 (Comm) can be found on the National Archives website (external link).

Commercial Bank of Dubai PSC v Abdalla Juma Majid Al Sari (Bright J)

The First Claimant (CBD) obtained judgment in Sharjah against members of the Al Sari family and companies associated with them in Sharjah.  It and various BVI companies commenced proceedings in England (a) for enforcement of the Sharjah judgment debt and (b) bringing tortious claims against the same defendants and three additional companies (“the Globe Defendants), alleging they had acted fraudulently so as to prevent the Claimants from enforcing CBD’s Sharjah Judgment; in particular, to prevent the Claimants from obtaining possession of real property in London (“the Bridge Properties”).  The primary tortious claim was in unlawful means conspiracy.

The defendants challenged English jurisdiction. The Globe Defendants argued (i) that the applicable law of the tortious claims under the Rome II Regulation was not English law, because the original direct damage occurred in the UAE or in the BVI, and (ii) that because the claimants had not pleaded a case as to the content of the relevant foreign law(s), there was no serious issue to be tried.  They relied on Brownlie v FS Cairo (Nile Plaza) LLC [2021] UKSC 45.

The Court held:

(1) Identifying the country where the original direct damage occurred required the court to look closely at the pleaded case as to (a) the events that gave rise to the damage, (b) the damage that was caused and (c) the causative connection between them.

(2) The original direct damage alleged in relation to the claim for unlawful means conspiracy related to the Bridge Properties, in England. The unlawful means allegedly used in the conspiracy occurred in a number of different countries, but these were the events alleged to give rise to the damage alleged in relation to this claim; they were not the damage itself. English law was applicable to this claim.

(3) The other claims were subject to the law of the UAE or the BVI. However, the claimants were not obliged to plead a case as to content of foreign law in the Particulars of Claim. They were entitled to rely on the presumption that foreign law is the same was English law, wait to see if this was challenged by the defendants, then plead as to the content of foreign law in their Reply.

The full judgment [2023] EWHC 1797 (Comm) can be found on the National Archives website (external link).

Horn and others v Knott and others (SKAT litigation) – Foxton J

Joint and several costs order – claim for contribution – correct legal basis – appropriate percentages

The Court of Appeal had made joint and several costs orders and orders for interim payments on account of costs against various defendants in the SKAT litigation after rejecting their challenge that SKAT’s claims infringed the so-called Revenue Rule. SKAT recovered the payment on accounts in full from the applicants (the DWF Defendants). The DWF Defendants reached an agreement for a contribution from one group of defendants (the Sanjay Shah Defendants), and pursued a claim for contribution from other defendants who had participated in the Revenue Rule trial before Mr Justice Andrew Baker and the Court of Appeal.

There was a dispute between the parties as to (i) whether a claim for contribution between parties to a joint and several costs order was a claim for relief under the court’s costs jurisdiction, or a claim for contribution between co-obligors to be resolved on equitable principles; and (ii) in the light of that characterisation, whether it was permissible to apportion costs on any basis other than numerically by reference to the number of defendants (regardless of their legal representation or beneficial ownership) and/or by reference to factors relating to their participation in the litigation.

The court held that an application for contribution between parties to a joint and several costs order involved the exercise of the court’s costs jurisdiction, to which the factors identified in CPR 44.2 or otherwise relevant to the exercise of the court’s costs jurisdiction were potentially relevant. On that basis, the court determined levels of contribution which reflected (a) the fact that particular litigants had instructed a common legal team and (b) their roles in the litigation more generally.

The full judgment [2023] EWHC 1351 (Comm) can be found on the National Archives website (external link).

Radisson Hotels APS Danmark v Hayat Otel Işletmeciliği Turizm Yatırım Ve Ticaret Anonim Şirketi (Dame Clare Moulder DBE)

Section 73 of Arbitration Act-waiver of right to challenge under section 68; redaction of judgments

Radisson Hotels APS Danmark (Radisson) had raised a challenge against a London-seated ICC arbitration award connected with one of its hotels in Turkey managed by a Turkish Hayat entity. Radisson claimed serious irregularity on the grounds of arbitrator bias and non-disclosure of communications between a tribunal member appointed by Hayat and an individual acting on behalf of Hayat.

Hayat began the underlying arbitration proceedings against Radisson for breaches of a hotel management agreement in 2018. In March 2021, the tribunal issued a partial award on liability, finding Radisson in breach. Hayat’s former in-house counsel Dr Durman – who had previously acted in the arbitration for Hayat – offered to assist Radisson in the arbitration. Dr Durman alleged to Radisson that Hayat’s appointed arbitrator, Ms Timer, corresponded with representatives of Hayat on an ‘ex parte’ basis.

Dr Durman put Radisson in contact with Hayat’s former quantum expert, a Mr. Önkal, who was subsequently retained by Raddison to assist in the quantum phase of the arbitration. In January 2022, Mr Önkal provided Radisson with a USB stick. The device contained a Word document setting out email exchanges between members of the tribunal. Radisson continued to participate in the arbitration after discovering the emails, submitting its rejoinder on quantum the following day. It did not challenge the partial award until two weeks later, after receiving ‘native’ copies of the emails.

In its challenge, Radisson alleged that Ms Timer had engaged in serious misconduct by forwarding internal tribunal emails to Mr Önkal in March 2019. Ms Timer was then copied in on an email from Mr Önkal in April 2019 to a board member of Hayat’s holding company. Finally, in May 2019, Ms Timer sent Mr Önkal an email to Hayat’s expert attaching correspondence between Radisson and the tribunal. The April and May emails were discovered after issue of the application to challenge the award.

The Court, dismissing Radisson’s challenge, found that, as a result of its delay, Radisson had waived its right to challenge the partial award under section 73 of the 1996 Arbitration Act. This provides that, where the claimant to a s.68 challenge continued to take part in arbitral proceedings after its grounds of objection had arisen, it is for them to prove that they did not know, and could not with reasonable diligence have discovered, those grounds at the relevant time.

The Court held that section 73 applied notwithstanding the issue of the Partial Award on liability and causation.

The Court rejected Radisson’s assertion that it only acquired the requisite knowledge of the grounds on 25 January 2022. On the evidence, the Court found that by 13 January 2022 Radisson knew there were grounds for objection and the evidence dispelled any notion that Radisson needed time before it could raise the objection. It could have sent a letter to the tribunal/ ICC Secretariat raising the objection immediately following its discovery of the Word Document but for strategic reasons it chose not to do so. As the contemporaneous evidence showed, Radisson and Quinn Emanuel did not want to raise the issue immediately as that would involve revealing their hand and they were of the view that they needed to deploy it strategically.

Accordingly, Radisson had failed to discharge its burden of demonstrating that it had not had the requisite knowledge to issue the s.68 challenge while it continued to participate in the Arbitration. It was therefore precluded from objecting to the Partial Award.

Radisson also failed to show that it had used reasonable diligence to discover the grounds of objection. It had been told in September 2021 by Dr Durman that there had been contact between CD and Hayat’s representatives. Radisson regarded Dr Durman as a credible source albeit one that needed to be viewed with caution hence it contemplated instructing investigators. However Radisson took a positive decision not to pursue this as it was of the view that it would not lead anywhere without being able to discredit the chair of the tribunal. Radisson had the alternative of getting more information and/or evidence from Dr Durman and Mr Önkal. Both of them were content to be retained by Radisson and were so engaged.

As a consequence, it was also precluded from objecting to the Partial Award on this basis.

Radisson also opposed the publication of the judgment in unredacted form. This was rejected by the Court. The proposed anonymisation of the parties and the witnesses made the judgment difficult for a reader to follow. It is in the public interest that judgment should be accessible and readily understood. There is a public interest in understanding how the courts apply the law to maintain fairness in the conduct of arbitrations. That public interest exists whether or not the judgment can be said to raise matters of general importance or novelty.

The full judgment on the substantive challenge can be found on the National Archives website (external link).

The judgment concerning redaction can be found on the National Archives website (external link).

Public Institution for Social Security v Al Wazzan (Mr Justice Henshaw)

Disclosure – documents in Switzerland – Swiss Criminal Code and Criminal Procedure Code – risk of prosecution – relevance of pending criminal letter of request – interaction with Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters

The Claimant, PIFSS, is a Kuwaiti public body operating a State social security and pension scheme.  It sues a range of defendants in relation to schemes pursuant to which corrupt payments were allegedly made by financial institutions and others to its former director general, the late Mr Fahad Al Rajaan.  Ms Al Wazzan, Mr Al Rajaan’s widow, represents his estate (‘D1’) and is sued in her own right (‘D2’).  D1 and D2 applied to resist disclosure of documents to which they have access or control, being a file of documents held by the Swiss Federal Prosecutor’s Office (SFPO) arising from investigations of Mr Al Rajaan and Ms Al Wazzan, and other documents held in Switzerland. 

D1 and D2 resisted disclosure and inspection on the basis that: (i) it would expose them and their legal representatives to a real risk of prosecution and sanction under Swiss law; (ii) the Swiss courts had repeatedly refused to remove certain restrictions which apply to PIFSS’s access to the SFPO file, and (as a matter of comity) the English courts should not undermine the Swiss courts or a pending criminal mutual legal assistance (“MLA”) process arising from requests made by the State of Kuwait for the purpose of its own criminal proceedings against the applicants in Kuwait; (iii) PIFSS will in any event be entitled to obtain copies of documents from the SFPO file if and when documents are remitted by Switzerland to Kuwait pursuant to that MLA process; and (iv) PIFSS could lawfully obtain documents through letters of request pursuant to the Hague Convention.

The court concluded, in brief outline, that the evidence did not establish that the disclosure would involve any breach of Swiss law, nor in any event any real risk of prosecution or other relevant prejudice; that the documents were essential for the proper conduct of the present case; that the Hague Convention route would be a slow and unsatisfactory alternative to disclosure; and that, overall, the balance came down firmly in favour of disclosure. The court would, though, in the interests of comity be willing to put in place measures, subject to later review , to avoid any risk of the documents in question being transmitted onward to the State of Kuwait (given concerns expressed by the Swiss courts that such transmission might circumvent the pending criminal MLA process).

The full judgment [2023] EWHC 1065 (Comm) can be found on the National Archives website (external link).

Port de Djibouti v DP World Djibouti (Mr Justice Henshaw)

Arbitration – jurisdiction challenge – whether claimant ceased to be a “Shareholder” for purposes of joint venture agreement and company Articles by reason of Presidential Ordnance compulsorily transferring shareholding – arbitrator’s jurisdiction to determine that issue and related issues

The Claimant (‘PDSA’) challenged under section 67 of the Arbitration Act 1996 determinations in a final partial award of 7 July 2021 in the context of an arbitration seated in London and conducted under the 2014 LCIA Rules.

PDSA and the Defendant (‘DP World’) were shareholders in a joint venture company (‘DCT’) which constructed and owned a container port.   By a Presidential Ordinance of 9 September 2018, the Republic of Djibouti took ownership of PDSA’s shares in DCT.   The joint venture agreement, and DCT’s Articles of Association, made provision for the directors not to register any share transfer unless and until the transferee signed a deed of adherence to them.  No such deed was signed.  PDSA contended, however, that under the contracts an entity could not remain a Shareholder unless it owned equity in DCT, which had ceased to be the position upon the issue of the Ordinance.  As a result, PDSA submitted, it ceased to be bound by the joint venture agreement; and the arbitration agreements in the joint venture agreement and the Articles, which applied only to disputes “between the Shareholders”,  had no application to post-Ordinance breaches.  That in turn also meant that the arbitrator had no jurisdiction to decide whether PDSA remained a shareholder in DCT following the Ordinance.

The court rejected the challenge, holding that:

(1) whether or not it was also a jurisdictional issue, the question of whether PDSA remained a Shareholder was a substantive issue between the parties, and had been one ever since the Presidential Ordinance was issued;

(2) it was common ground that the arbitration agreements continued to apply to alleged breaches occurring before PDSA ceased to be a Shareholder; the question as to precisely which categories of matters the arbitration agreements continue to apply to had to be found in the parties’ agreements;

(3) on the correct construction of the arbitration agreements and related provisions, the arbitrator’s jurisdiction to decide whether PDSA ceased to be a Shareholder was not contingent on the answer to that question: the arbitrator had jurisdiction to decide that issue whether or not PDSA in fact (as ultimately found by the court) ceased to be a Shareholder upon issue of the Presidential Ordinance;

(4) even if PDSA did cease to be a Shareholder upon issue of the Presidential Ordinance, the arbitrator had jurisdiction to find a breach (arising from PDSA’s failure to procure execution of a deed of adherence) that began on or before the date of the Ordinance and continued thereafter; and

(5) in any event, addressing the issue for itself, the court found that PDSA did in fact remain a Shareholder following the Ordinance, for the purposes of the joint venture agreement and the Articles, with the result that the arbitrator on any view had jurisdiction to make the findings she did.

The full judgment [2023] EWHC 1189 (Comm) can be found on the National Archives website (external link).

Deutsche Bank AG v Sebastian Holdings Inc and Vik – Dias J

Limitation Act 1980 section 24(2) – recovery of arrears of interest on an order for costs to be assessed – assessment was not completed more than six years after the date of the order – whether recovery of interest limited to the six years prior to final assessment

An order for costs to be assessed was made in the Claimant’s favour on 8 November 2013 with an interim payment to be made within 14 days. The Defendant failed to pay and on 2 July 2014 a non-party costs order was made against V who was ordered to pay the amount of the interim payment together with accrued interest at the Judgments Act rate.

On 10 October 2016, V was ordered to pay the balance of the costs awarded to the Claimant by the 8 November 2013 order together with interest accrued thereon.

Detailed assessment was not completed until 11 May 2023, V having made various payments pursuant to interim costs certificates meanwhile.

Section 24(2) provides that “no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.”

The Claimant argued that interest did not become “due” for this purpose until it became due for payment after quantification and that it could therefore recover interest on the costs in full from 8 November 2013. V argued that interest on costs became due when the order was made and accrued from day to day thereafter, even if it did not fall to be paid until after assessment.

The court concluded that V’s submissions were to be preferred. The intention of Parliament as collected from the plain and ordinary meaning of the words used, and supported by the legislative history of the provision, authority and policy considerations, was that interest on an order for costs to be assessed becomes due at the date of the order and accrues from day to day thereafter, even if it does not become payable until after quantification.

The full judgment [2023] EWHC 1527 (Comm) can be found on the National Archives website (external link).

Gagliardi v Evolution Capital Management LLC (Foxton J)

Section 15C CJJA 1982 – whether claim by employee – whether court had jurisdiction over claim – whether claimant entitled to anti-suit injunction

G provided services to ECML, but his retainer was terminated by notice. G brought proceedings against ECML in the courts of England and Wales to recover an outstanding bonus and ECML brought proceedings against G in New York, seeking a declaration that it was obliged to pay the bonus, and seeking to recover amounts previously paid. ECML argued that no anti-suit injunction was required given the undertakings it had offered, and further denied that (i) the court had jurisdiction over G’s claim; (ii) G had shown a sufficiently arguable case that he was domiciled in England and Wales; (iii) that G had shown a sufficiently arguable case that he was an employee for the purposes of s.15C and (iv) whether it was appropriate to grant anti-suit injunctive relief.

Held:

1. ECML had breached the undertaking given to the court in refusing to make a joint application to move the deadline for G to file his Answer in New York. In those circumstances, it was appropriate to consider whether an anti-suit injunction was appropriate.
2. The evidence established a case to the requisite standard that the court had jurisdiction over G’s claim by virtue of s.15C(2) CJJA 1982 (Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10, [70]-[80] and Nogueira v Crewlink Ireland Ltd [2018] ICR 344, [63] applied).
3. The request for anti-suit relief in support of G’s asserted right only to be sued in the place of his domicile under s.15C(3) had to be assessed by reference to the same standard as applications for contractual and quasi-contractual anti-suit injunctions (AIG Europe SA v John Wood Group Plc and ors [2021] EWHC 2567 (Comm), [58], and [2022] EWCA Civ 781, [10] and QBE Europe SA/NV v Generali Espana de Seguros y Reaseguros [2022] EWHC 2062 (Comm), [10]-11] applied).
4. The decisions of the Court of Appeal in Samengo-Turner v J&H Marsh & McLennan (Services) [2008] ICR 18 and Petter v EMC Europe Ltd [2015] CP Rep47 in relation to the grant of anti-suit relief in support of the employee’s right under the Lugano Convention and Brussels Regulation only to be sued by their employer in the courts of their domicile applied to s.15C of the CJJA 1982, which had preserved that regime in UK law.
5. While those decisions had their detractors and defenders, they binding on the court and could not be distinguished.
6. On the evidence, G had established to a high degree of probability that he was domiciled in England and Wales when the New York proceedings were commenced. He had also shown to a high degree of probability that he was an employee for the purposes of s.15C (Arcadia Petroleum Ltd v Bosworth [2020] ICR 349 and Alta Trading UK Ltd v Bosworth [2021] ICR 1358 applied).
7. ECML had not made out any good reason for not granting a prohibitory anti-suit injunction and ECML would also be ordered to make a joint approach to the New York court to seek to extend the deadline for G to file his Answer. However, it was not appropriate to grant a mandatory injunction requiring ECML to withdraw the New York proceedings.

The full judgment [2023] EWHC 1608 can be found on the National Archives website (external link).

Rolls-Royce Holdings Plc v Goodrich Corporation (Foxton J)

Implied Novation – Call Option – Whether debt claim due and payable – damages counterfactual

RR alleged that it had validly exercised a call option originally granted to another RR company, arguing that there had been an implied novation of the option, alternatively there was a contractual estoppel which precluded G from arguing the contrary. G denied RR was entitled to exercise the call option, and put forward various reasons why the option was said to have lapsed.

G argued that RR had breached the contract between them by organising a parts availability service for aircraft engines, and/or raised issued as to the terms and amounts of the invoices. RR denied that the launch of the service involved any breach of contract. In relation to the amounts payable, RR contended that if G was correct in its contention as the applicable price per unit, RR would not have gone ahead and damages should be assessed on that basis. It also said that it had a defence to any debt claim because G had not issued invoices in the correct amount.

Held:

1. RR had validly exercised the Call Option. There had been an implied novation (Musst Holdings Limited v Astra Asset Management UK Limited [2023] EWCA Civ 128 applied), or G was precluded from arguing otherwise, and G’s construction arguments were without merit. Various complications in applying contractual estoppel clauses in three-party novation scenarios considered.
2. The parts availability service did not breach any contractual obligation owed to G.
3. In any event G had calculated its damages on the wrong basis (by reference to the position if G and RR had agreed to vary the contract to allow the service): British Gas Trading Limited v Shell UK Limited [2020] EWCA Civ 2349 and Unicredit Bank AG v Euronav AV (The Sienna) [2023] EWCA Civ 471 considered.
4. RR was obliged to pay for parts which were not acquired for a particular aircraft operator at a higher price, and was in breach of contract in including the lower price in its order.
5. G had a debt claim for the correct price. The fact that, in reliance on RR’s orders, G had included the wrong price in its invoices did not provide RR with a defence. Coburn v Colledge [1897] 1 QB 702,  Consulting Concepts International Inc v Consumer Protection Association [2022] EWCA Civ 1699 and Verizon UK Limited v Swiftnet Limited [2008] EWHC 551 (Comm) considered..
6. Approached as a damages claim, G was entitled to sue for damages for each order which had included the wrong figure. Damages were not to be assessed on the basis that, if RR had realised the correct price for the parts, it would not have ordered them. Medsted Associates Ltd v Canccord Genuity Wealth (International) Ltd [2020] EWHC 2952 (Comm) considered.

The full judgment can be found on the National Archives website (external link).

London International Exhibition Centre PLC v Royal & Sun Alliance Insurance PLC and others (and other parties) (Jacobs J)

Covid-19 business interruption insurance claims – determination of preliminary issues of policy construction in test cases – coverage for occurrences and other events “at the premises” – coverage for disease prior to Covid-19 being designated a “notifiable” disease – scope of coverage concerning “Medical Officer for Health of the Public Authority”

The court determined issues of policy construction for Covid-19 business interruption insurance losses in claims brought by various policyholders including the London International Exhibition Centre (known as the Excel Centre), the Pizza Express restaurant chain, and a number of small businesses comprising a hairdresser, gyms, restaurants and nightclubs.

The court held:

1. The test for causation applied by the Supreme Court in Financial Conduct Authority v Arch Insurance (UK) Ltd [2021] UKSC 1 was applicable to policies which provided coverage for occurrences or other events “at the premises”. The Supreme Court’s causation test was therefore not confined to policies which provided coverage for occurrences or other events within a radius of the premises. Accordingly, in order to show that loss resulting from interruption of or interference with a claimant’s business was proximately caused by closure of the premises on the order or advice of any local or governmental authority as a result of an occurrence of Covid-19 “at the premises”, it is sufficient to prove that the order or advice was made or continued in response to cases of Covid-19 which included at least one case of Covid-19 at the premises which had occurred by the date of the order or advice.
2. Where coverage was in respect of notifiable diseases “at the premises”, only occurrences of Covid-19 after it became a notifiable disease (in England, at 6.15 pm on 5 March 2020) are relevant for the purposes of coverage, notwithstanding that the closure of the premises occurred subsequently.
3. Where there was coverage for the closure of or restrictions on a business “on the advice or with the approval of the Medical Officer of Health for the Public Authority”, the “Medical Officer of Health” wording was satisfied by the restrictions imposed by the government  taken on the advice or with the approval of the Chief and/or Deputy Chief Medical Officer.  This wording was not confined to advice or approval given by officers of local authorities.
4. Where a policy provides coverage in respect of disease “suffered by any visitor or employee…at the Premises”, there was coverage if a visitor or employee was at the premises at a time when he or she had contracted Covid-19.

The full judgment [2023] EWHC 1481 (Comm) can be found on the National Archives website (external link).

Pizza Express Group Limited and others v Liberty Mutual Insurance Europe SE and another (Jacobs J)

Covid-19 business interruption insurance claims – determination of preliminary issue concerning policy limits

The Pizza Express restaurant chain claimed for business interruption losses consequent upon the closure of restaurants in March 2020 as a result of the Covid-19 pandemic. The policy, which was on the Aon Trio wording, provided that “all Limits of Liability apply any one Occurrence”. The court accepted the insurers’ argument that these words were applicable to the “sub-limits” in the policy, as well as to the main limits of liability.

The full Judgment [2023] EWHC 1269 (Comm) can be found on the National Archives website (external link).

GASL Ireland Leasing A-1 Limited v SpiceJet Limited (Foxton J)

Aircraft lease – Adjournment Application –Failure to Redeliver Aircraft in Compliance with Delivery Conditions – Scope of Conclusive Evidence Clause

G sought damages for breach of the obligation under an aircraft lease to redeliver the Aircraft in compliance with the delivery conditions. S sought to adjourn the trial, contending that it needed time to seek replacement legal representatives. G relied upon the conclusive evidence clause in the lease in relation to the quantum of its claim,

Held:

1. Dismissing the application for an adjournment, there had been repeated and unjustified delay by S, and the evidence suggested that this was the latest attempt to postpone the trial.
2. G had made out its case on the basis of the factual and expert evidence before the court as to the defects in the condition of the Aircraft on redelivery and the cost of rectifying the defects.
3. Where the expert had offered a range of figures, G had relied upon the conclusive evidence clause and certified the higher figure. In circumstances in which S had agreed to indemnify G against the costs of remedying any defects in the delivery condition, the conclusive evidence clause referring to “any amount payable under this Agreement” was engaged. It could not be said that in certifying the amount payable at the upper end of the expert’s range, there had been a manifest error.

The full judgment [2023] EWHC 1107 (Comm)] can be found on the National Archives website (external link).

Emirates Shipping Line DMCEST v Gold Star Line Ltd (Dias J)

Arbitration Act s. 67 – application to set aside Tribunal’s award that it had no jurisdiction – express/implied agreement to arbitrate – estoppel

In late 2019 Emirates was negotiating to join the shipping line consortium of which Gold Star was a member.  In December, Emirates purchased space on one of the line’s vessels and shipped cargo in respect of which it issued its own bill of lading.  Having incurred liability to cargo receivers in respect of cargo damage, Emirates commenced arbitration proceedings against Gold Star seeking an indemnity.  The question of jurisdiction turned on whether there was a binding arbitration agreement between the parties and this in turn depended on whether, when it shipped the cargo, Emirates had already become a party to the consortium MOU (which contained an arbitration clause) or whether the slot space had been purchased pursuant to a separate contract pending Emirates’ admission to the consortium.  Emirates argued that the slot purchase was expressly or impliedly concluded on the terms of the MOU.  Alternatively, it submitted that Gold Star was estopped by representation and/or convention and/or silence from denying that it was, having in 2020 itself asserted that the MOU applied to the parties’ relationship and failed to object to Emirates’ similar assertions.  The court found that there was no express agreement that the terms of the MOU should apply to the slot purchase and no conduct from which such agreement could be implied.  As regards estoppel, the court rejected Gold Star’s argument that Emirates was seeking to rely on estoppel to create a cause of action but held that (i) promissory estoppel failed because Gold Star’s own mistaken assertion that the MOU applied did not amount to a representation that it would not rely on its contractual rights; (ii) Emirates’ view as to the applicability of the MOU had been formed independently of anything said or done by Gold Star who could not therefore be said to have assumed responsibility for any common (mistaken) assumption; (iii) no duty to speak arose in circumstances where both parties were mistaken as to the applicability of the MOU; (iv) Emirates had failed to establish reliance; (v) in any event, it would not be unconscionable to permit Gold Star to resile from any representation or assumption.

The full judgment ([2023] EWHC 880 (Comm)) can be found on the National Archives website (external link).

Fibula Air Travel Srl v Just-Us Air Srl (Dias J)

Application to amend – issue estoppel – Henderson v Henderson abuse

The Claimant was a Romanian company which sold package holidays to various destinations.  In December 2019, it agreed to wet lease an aircraft from the Defendant for 6 months from 1 April-31 October 2020.  A security deposit was payable on signature of the lease followed by stage payments up to a stipulated minimum sum.  The obligation to make stage payments arose following successful completion of an audit (the “Audit Condition”).  The lease agreement further provided that it would only come into force when certain Turkish and Romanian CAA approvals had been obtained (the “Approvals Condition”). 

The security deposit was duly paid but following the outbreak of the Covid pandemic, various restrictions were imposed by the Eygptian, Turkish and Romanian authorities between 16 March and 4 April 2020 suspending or prohibiting flights between Romania and Turkey/Egypt and generally interfering with air travel.  On 17 March 2020, before the aircraft had been delivered, the Claimant purported to terminate the lease on the grounds that (i) the Defendant had ceased to have the necessary authorisations to perform flights under the lease being unable to fly lawfully between Romania and Egypt after 16 March 2020; (ii) the Claimant was entitled to terminate the lease on grounds of force majeure; alternatively, the lease had been frustrated by virtue of the various restrictions.

The Claimant sued to recover its deposit.  The Defendant denied that the lease had been validly terminated and counterclaimed for the balance of the minimum sum due.  In due course the Defendant applied for reverse summary judgment dismissing the claim.  The counterclaim was not part of the summary judgment application.  The application was heard by HHJ Pelling who held that the claim had no realistic prospect of success on the grounds that: (1) the obligation to obtain authorisations and clearances was that of the Claimant and the Defendant was not in repudiatory breach on 17 March 2020 since it was under no obligation to do anything until the Claimant had made the first of the stage payments (due on 18 March); (2) there was no contractual restriction or common assumption which limited the countries to which the aircraft could fly and the governmental restrictions accordingly did not constitute force majeure; (3) for similar reasons, the restrictions did not amount to frustrating events and performance of the lease did not become illegal.

The Claimant applied to the Court of Appeal for permission to appeal and to adduce new evidence.  Both applications were refused on the basis that the appeal would have no realistic prospect of success and that the evidence in question could have been obtained for the hearing below.

The Claimant now applied for permission to amend its defence to the counterclaim to rely on the new evidence for which the CA had refused permission and to argue that the Audit and Approvals Conditions had not been fulfilled such that the lease never came into effect, alternatively that the obligation to make stage payments never arose; alternatively that the lease had been frustrated on or about 27 March 2020.

The Defendant did not challenge the substance or authenticity of the new evidence but argued that the Claimant was precluded from raising these defences on grounds of issue estoppel and/or Henderson abuse.  It was common ground that neither defence had been pleaded or argued before HHJ Pelling.  Non-fulfilment of the Audit Condition had been tentatively floated in argument but the judge held that the point was not open to the Claimant as it had not been pleaded or foreshadowed in evidence.  He therefore accepted on the “material available” that the audit had been passed successfully.

The Court held that in these circumstances there was no issue estoppel in relation to either the Audit Condition or the Approvals Condition.  It was not necessary for the Claimant to prove satisfaction of either condition in order to succeed on its claim, and resolution of the points was accordingly not fundamental to the judge’s decision.  Read in context, the judge’s acceptance that the audit had been successfully passed was no more than an assumption as to a background fact for the purposes of considering the pleaded case.  As such it was not an “issue” for the purposes of issue estoppel.  The Approvals Condition was not mentioned or discussed in the judgment and in so far as the judgment implicitly assumed that the lease had come into effect, this again was not fundamental to the ultimate decision.

It would not be abusive to permit the Claimant to rely on the Audit Condition and the Approvals Condition as defences to the counterclaim.  The Defendant had chosen not to include the counterclaim in the summary judgment application and had to accept that there could not be finality until it had been resolved.  This was not a case of the Claimant harassing or vexing the Defendant with multiple proceedings; the counterclaim was brought by the Defendant and the Claimant was entitled to defend itself as best it could.  Even though the new evidence could have been obtained earlier by the exercise of reasonable diligence, the Claimant had paid the penalty for its delay by losing irrevocably its right to reclaim the deposit.  The balance of prejudice was clearly in favour of allowing these defences to proceed.

By contrast, an issue estoppel arose in relation to the frustration defence and the availability of new evidence which could with reasonable diligence have been obtained for the summary judgment application did not justify an exception to its operation.

The full judgment ([2023] EWHC 1049 (Comm)) can be found on the National Archives website (external link).

GOYAL v BGF INVESTMENT MANAGEMENT AND OTHERS (Butcher J)

Deceit – Misrepresentation Act 1967 – Unlawful means conspiracy

The Claimants claimed against the Defendants damages in deceit, damages pursuant to s.2(1) Misrepresentation Act 1967 and damages for unlawful means conspiracy. 

The First Claimant was one of the co-founders of a business, IBSL.  The Second Claimant is his wife.  In late 2018 / early 2019 a divestment transaction was entered into under which the shares in IBSL were sold to a new company, IBSHL, and shares in IBSHL were apportioned among many of the previous shareholders of IBSL, including the Claimants, as well as to a new investor, which was a company in the group of the First to Fourth Defendants.

The Claimants’ case was that, during the course of negotiations for this transaction the First to Fourth Defendants, as well as the Fifth Defendant who was the CEO of IBSL, made a number of misrepresentations to them which had induced them to enter into the transaction. The representations were said to relate to the First Claimant’s continued role as CFO, his suitability for it, and the representators’ intentions in these respects.

The Claimants pleaded that there were 8 occasions in which things were said or done which gave rise to implied misrepresentations.

None of the misrepresentations was found to have been made.  Both claims in deceit and under s2(1) Misrepresentation Act 1967 thus failed.  The case of dishonesty had not been made out. The claim for unlawful means conspiracy failed given that it was founded on the allegations of deceit, given the lack of evidence put before the court, and given that it had not been shown that the Defendants had an intention to injure the Claimants. In any event it was not established that the Claimants had suffered any loss by reason of entering into the transaction. 

The full judgment ([2023] EWHC 1180 (Comm)) can be found on the National Archives website (external link).

INFRASTRUCTURE SERVICES LUXEMBOURG SARL and another v KINGDOM OF SPAIN (Fraser J) 

Arbitration – ICSID Convention award – Arbitration (International Investment Disputes) Act 1966 – Order made ex parte for recognition – application to set aside – jurisdiction – non-disclosure – procedure   

The claimants were investors and claimed certain sums from the Kingdom of Spain (“Spain”) in respect of changes to tariffs for renewable energy investments made in that country.  The claims arose under the Energy Charter Treaty (“ECT”) of which Spain is a signatory, which incorporates arbitration under the ICSID Convention as its dispute resolution mechanism. The claimants commenced arbitration under these provisions and Spain challenged the jurisdiction of the tribunal. This challenge failed and the claimants obtained an award in their favour and Spain again challenged jurisdiction, this time before the ICSID ad hoc Committee. This application also failed and the Committee affirmed the award. The claimants then sought to have recognised in England and Wales under the Arbitration (International Investment Disputes) Act 1966 (“the Act”) and CPR Part 62.21 and Part 74. Cockerill J made an order on an ex parte basis recognising the award. Spain applied to have it set aside on two grounds. Firstly, Spain argued that there was no jurisdiction on the part of the court to make such an order binding a sovereign state. This was said to be because there was no binding arbitration agreement for the purposes of the State Immunity Act 1978, and also because the Court of Justice of the European Union had decided that arbitration provisions that included Member States of the EU were void and of no effect because they conflicted with the EU Treaties. It was argued that such arbitration provisions as were in the ECT were contrary to EU law and also therefore international law. The second ground was one of alleged non-disclosure on the part of the claimants in obtaining the order from Cockerill J, in particular a failure to draw the relevant EU jurisprudence to the attention of the judge who made the order, both before and after the order was made. It was also argued that the order should not have been made without an inter partes hearing.

Spain’s arguments on jurisdiction failed. The Act had been enacted specifically to comply with the obligations of the UK under the ICSID Convention. As such, there could be no valid objection in the High Court by Spain to the jurisdiction of the arbitral tribunal, which under the Convention was a matter reserved to the tribunal and the ad hoc Committee, both of which had considered the matter and ruled in the claimants’ favour. None of Spain’s arguments on EU law and its alleged primacy were valid ones, as this point had already been decided by the Supreme Court in Micula & Ors v Romania (European Commission intervening) [2020] UKSC 5.

The arguments on non-disclosure also failed. Whilst full disclosure was required on any ex parte application to the Court, including under the Act, in this case there had been no non-disclosure and the claimants had fully identified Spain’s likely arguments on jurisdiction. The correct method of making such an application for recognition was ex parte as had been done in this case, as this was the procedure specified in the Civil Procedure Rules. It was also in accordance with the overriding objective, given states would not necessarily challenge jurisdiction in the way adopted in this case.

In future cases, if jurisdiction had been considered and dismissed under the Convention procedure and the award were a valid and authentic one, there would be no grounds for repetition or rehearing of those objections in the Commercial Court, as this would frustrate and undermine the purposes of the ICSID Convention, international arbitration and the Act.

The full judgment ([2023] EWHC 1226 (Comm)) can be found on the National Archives website (external link).

Watchstone Group PLC v PricewaterhouseCoopers LLP v Slater & Gordon (UK) 1 Limited (Jacobs J)

Misuse of confidential information – whether confidential was passed to bidder by seller’s accountants – whether purchase paid by bidder was influenced by the confidential information

This claim arose from a substantial corporate M&A  transaction involving the sale of the legal services arm of Quindell (now Watchstone Group PLC) to Slater & Gordon (UK). PricewaterhouseCoopers LLP (PwC) had been engaged by Quindell to perform services which included financial analysis of their accounting practices and cash-flow position. Watchstone alleged there was a misuse of confidential information by PwC, by virtue of which information confidential to Quindell became known to Slater & Gordon at and following a meeting in January 2015. The key issues surrounded whether confidential information was in fact passed on to Slater & Gordon at that meeting, and if so  whether the information made a difference to the price Slater & Gordon paid for the legal services arm of Quindell.

Held: claim dismissed. On the evidence, Watchstone had failed to establish that confidential information was wrongly passed on at the meeting, and also failed to prove that the information was recognised as important, relied upon as giving a negotiating advantage and that it had any material effect on the sale.

The full judgment can be found on the National Archives website (external link).

Palladian Partners LP & Ors v The Republic Of Argentina & Anor [2023] EWHC 711 (Comm)

Construction of GDP-linked Securities – Sovereign debt restructuring – GDP rebasing

The Claimants were a group of investors who held Euro-denominated Securities issued by the Defendant, the Republic of Argentina, in 2005 and 2010. The Securities were a novel form of bond, referred to as ‘GDP-linked Securities’, under which obligations to make repayment only arose where the Republic’s GDP met agreed benchmarks for level and growth within a given year.

For the purposes of the Securities GDP was measured according to a ‘Base Year’, which was 1993 at the time of issue. In 2014, the Republic rebased its measurement of GDP, changing the Year of Base Prices to 2004. Following that rebasing, the Republic concluded that the Payment Conditions had not been met for Reference Year 2013 and that no payment was due. The Claimants, conversely, argued that an obligation to make payment arose notwithstanding the rebasing, for 2013 and every year thereafter. The Claimants sought a declaration as to the proper construction of the Securities, payment of the sums due, and an order for specific performance requiring the Republic to apply the correct construction for the remainder of the Securities. The Claimants also brought an alternative case that the Republic had acted in bad faith in producing certain GDP data in March 2014.

The matter turned on the proper construction of a single provision within the Securities, the ‘Adjustment Provision’. Relying on settled principles of construction, each side proposed alternative constructions. The Claimants advanced a construction which required an annual adjustment to Base Case GDP based on the ratio between Real GDP in the old and new Years of Base Prices. The Defendants proposed two alternate constructions: one entailing a one-off adjustment to the levels of Base Case GDP, rescaling the entire series into the new year of base prices, and a second whereby the figure published yearly in the New Year of Base Prices was adjusted for inflation only.

The Court held that the Claimants’ construction was to be preferred, given that accorded with the plain meaning of the Securities. It granted the declarations sought and awarded monetary judgment of EUR 1.330 billion. Having found for Claimants on the construction point, it was unnecessary and undesirable to address the Claimants’ alternative case.

The Trustee appeared on behalf of the Securities-holders to ensure that the entire class would benefit from any judgment. It argued that difficulties with the clearing systems made payments to individual holders practically impossible. The Court dismissed this argument, holding that any of the Claimants were entitled to bring a claim for their own beneficial interest, in addition to judgment for the Trustee.

The full judgment can be found on the BAILII website (external link).

SKATTEFORVALTNINGEN v SOLO CAPITAL PARTNERS LLP and others (Andrew Baker J)

Claims of dishonest schemes to extract tax refund payments from the Claimant tax authority to which applicants were not entitled – preliminary issues of Danish tax law – judgment determining the requirements of a valid tax refund claim for the purpose of the main trial

The Claimant (‘SKAT’) is the Danish Customs and Tax Authority.  It claims that it was induced to pay, between August 2012 and July 2015, c.DKK 12.5 billion (c.£1.5 billion) as refunds of Danish dividend tax it had no liability to pay.  SKAT asserts various causes of action against many Defendants, some but not all of whom are alleged to have acted dishonestly.  The main trial of SKAT’s claims is listed for 24 weeks commencing in April 2024.  For the purpose of that trial, the Court has determined issues arising between the parties over what was required, under Danish tax law, for SKAT to be liable to pay the dividend tax refund claims presented to it that underlie the causes of action it now asserts in these proceedings.  A principal conclusion, endorsing SKAT’s position on this point, was that the existence of a contract for the sale of shares in a Danish company did not, without more, mean that the buyer was treated for the purpose of Danish tax law as a shareholder in the company who might therefore incur Danish dividend tax liability.

The full judgment can be found on the National Archives website (external link).

LONESTAR COMMUNICATIONS CORPORATION LLC v ORANGE LIBERIA INC (Foxton J)

Approach to determining interest rate on USD; whether starting point in absence of evidence should be US Prime or USD Libor; Calderbank offer; relevance of reduction in costs recovery at trial

The Claimant obtained a USD damages award. A dispute arose as to whether interest should be calculated by reference to US Prime or USD Libor, and what uplift over that rate was appropriate. The court reviewed the authorities in the Commercial Court which had awarded one or other rate. It determined that the court should have a clear default rate, which would apply in the absence of evidence to the contrary, and that the rate should be US Prime. So far as any uplift is concerned, a court might be willing to provide for an uplift of 1-2% over US Prime by reference to the general characteristics of the borrower, without the need for evidence. Any request for a higher uplift was likely to need some supporting evidence. In this case, there was nothing which suggested that any uplift over US Prime was justified.

The effect of the award of US Prime rather than six-month USD LIBOR was that, in principal and interest terms, the Claimant had (just) beaten a Calderbank offer. However, the Calderbank letter had included an offer to pay all of the Claimants’ costs to the date of acceptance. The Court had awarded the Claimant only 40% of its costs, to reflect the fact that it had only recovered 10% of the amount claimed, and the greater part of the costs of the trial had been incurred on the unsuccessful aspects of its quantum. There was a dispute as to whether the court’s costs order was relevant to the issue of whether the Claimant had “beaten” the Calderbank. The Court held that it was appropriate to consider the issue of costs when considering whether the Claimant had obtained a more favourable result by refusing the Calderbank offer and proceeding to trial. In the circumstances, the Claimant had not obtained a more favourable outcome.

The full judgment [2023] EWHC 732 (Comm) can be found on the National Archives website (external link).

TERRE NEUVE SARL v YEWDALE AND OTHERS (Foxton J)

Application for order requiring the Defendants to hand over documents, electronic devices and access to email accounts to an independent Electronic Disclosure Provider to be subject to search terms and to review by an independent counsel

The Claimants alleged that there had been a wholesale failure by the Defendants to conduct disclosure properly. Relying on decisions such as The Nolan Family Partnership v Walsh [2011] EWHC 535 (Comm) and JD Classics Limited v Hood [2021] EWHC 3193 (Comm) , they sought an order requiring the Defendants to have over archives of hard copy documents, all of their electronic devices and to give access to their email accounts to  an independent e-disclosure provider who would run search terms on the material, with documents responding to those searches being submitted to an independent counsel for review.

The Court reviewed the cases in which orders had been made taking the disclosure exercise out of a party’s hands and handing it over to persons appointed by the court. It noted the obtrusive nature of such orders, particularly those which required the respondents to hand over their personal electronic devices for third party review. The court identified various factors which were likely to be relevant in determining whether or not to make an order of that kind, and the scope of such an order. It observed that orders of this kind should not be seen as simply another tool in the box of a litigant with legitimate complaints about the other party’s disclosure.

The full judgment [2023] EWHC 677 (Comm) can be found on the National Archives website (external link).

CRF I Limited v Banco v Banco Nacional de Cuba and Republic of Cuba (Cockerill J)

Jurisdiction – Assignment – Cuban Law – Reasonable withholding of consent – State Immunity

The defendants (debtor and guarantor respectively under/in respect of certain loan agreements) disputed the jurisdiction of the English Court when claims were brought by an assignee of the loans/guarantee. The agreements all permitted assignment with prior consent (such consent not to be unreasonably withheld). The defendants contended that they lacked capacity; or the persons purporting to act of them lacked authority under Cuban law; or that they were entitled to withhold consent on the grounds (inter alia) that CRF was a “vulture fund”. It was held that the first Defendant had capacity to consent for itself, but not for the Republic of Cuba, that there was prior consent which consent was properly authorised; and that the assignments of the loan agreements (but not the guarantee) were valid. Accordingly the First Defendant’s plea of state immunity failed and the court had jurisdiction to hear the claim against the First Defendant. Had withholding of consent arisen, the nature of CRF’s business would not have entitled the defendants to withhold consent.

The full judgment, [2023] EWHC 774 (Comm), can be found on the National Archives website (external link).

Cantor Fitzgerald & Co. v YES Bank Ltd (Bright J)

Construction of contract

YB engaged CF as financial advisor, placement agent and arranger in relation to a proposed financing.  Cantor claimed to be entitled to a fee under the Engagement Letter.

The court concluded that, properly construed, the Engagement Letter provided for CF to be paid only in the event of a specified contingency which did not occur.

The full judgment [2023] EWHC 745 (Comm) can be found on the National Archives website (external link).

The Public Institution for Social Security v Ruimy and another (Jacobs J)

The claimant, a Kuwaiti public institution responsible for Kuwait’s social security system, brought proceedings against its former director and a large number of other parties. The trial is to be heard in March 2025, estimated to last 25-30 weeks. The claim alleges that bribes were paid by various defendants to the former director on a number of different “schemes”. Two defendants (Mr Ruimy and Aerium Finance Ltd), who were alleged to be party to one of the schemes, applied for a stay of the claim against them on the ground of forum non conveniens and Article 34 of Brussels Recast.

The court rejected the argument that Switzerland was clearly a more appropriate forum for the trial of the proceedings against those defendants. The proposed stay would give rise to a significant risk of inconsistent judgments, and the parties had substantial connections to England.

Article 34 of Brussels Recast was inapplicable. Article 34 is only capable of applying to proceedings in the court of a third State (here Switzerland) which were already in existence at the time when the court in the Member State (here England) became seised of the relevant proceedings. Municipio de Mariana and others v BHP Group (UK) Ltd [2022] EWCA Civ 951 applied. Here, there were no such proceedings. The Swiss “commandements de payer” procedure did not give rise to proceedings pending in a court. Even if Article 34 had been applicable, the court would exercise its discretion so as to decline to stay the proceedings.

The full Judgment [2023] EWHC 177 (Comm) can be found on the National Archives website (external link).

King and others v Stiefel and others (Jacobs J)

Wasted costs

Following a successful strike-out application before Cockerill J (see [2021] EWHC 1045 (Comm)), the successful defendants applied for wasted costs orders against the barrister and solicitors who had advised in connection with the claim. The wasted costs applications were dismissed at the “Stage 1” stage.

There was long-standing authority that a wasted costs applications should not be allowed to go forward, if it cannot properly be dealt with by means of a simple and summary procedure and at a cost which is proportionate to the sum claimed. Cases in the Commercial Court are no exception to this principle, even though the costs incurred may be very high. The applications in the present case were inappropriate for that procedure.

Where a strike-out had succeeded on the basis of an argument that the proceedings were an abuse of process, this did not lead to the conclusion that a wasted costs application was appropriate. Counsel and solicitors can properly act for clients in cases where abuse of process arguments are raised.

In defending an application for wasted costs, counsel and solicitors are entitled to question aspects of the judgment which was adverse to their clients: to do so is not a collateral attack on the judgment so as to be an abuse of process (R (on the application of B) v X Crown Court [2009] EWHC 1149 (Admin) followed).

The full judgment [2023] EWHC 453 (Comm) can be found on the National Archives website (external link).

Aercap Ireland Limited v AIQ Europe S.A. And Others (Butcher J)

Civil Procedure – Addition of Parties – Insurance

The Claimant had issued proceedings claiming under an aircraft hull spares and equipment policy in respect of aircraft and aircraft parts which had been leased to Russian airlines and not returned following the Russian invasion of Ukraine and the imposition of EU and UK sanctions. The claim form named two insurers as representative defendants: one (the first defendant) as representative of all insurers subscribing Section One (‘All Risks’) of the Policy, and another (the second defendant) as representative of all insurers subscribing Section Three (‘War Risks’). Another insurer (Fidelis Insurance Ireland DAC), which had subscribed to both sections, sought to be joined as a further defendant. This was resisted by the first defendant and not consented to by the claimant. The court considered CPR rules 19.2 and 19.6 and the decision in PNPF Trust Co v Taylor [2009] EWHC 1693 (Ch). It was held that where a party had a significant financial interest in the litigation such as Fidelis’s here, and accepted that a judgment against it could be enforced without the leave of the court and that it would be liable for its own costs, then, exceptional circumstances apart, that party should be allowed to be joined to the proceedings as a defendant. There were no such exceptional circumstances here, and accordingly Fidelis’s application for joinder was granted.

The full judgment ([2023] EWHC 96 (Comm)) can be found on the National Archives website (external link).  

National Iranian Oil Company v Crescent Petroleum Company And Another (Butcher J)

Permission to Appeal – Conditions on Permission – Finality

After receiving both written and oral submissions on the issue, the Court had given a ruling in writing granting the claimant (NIOC) permission to appeal against the court’s grant of summary judgment in favour of the defendant (Crescent) in relation to a challenge by NIOC under s. 67 Arbitration Act. After the ruling had been given but before the order was sealed, Crescent had raised for the first time, and applied to the court for an order, that permission to appeal should be made conditional upon NIOC paying into court all or part of the amount of the award which NIOC’s s. 67 application sought to challenge. The court considered CPR rules 52.6 and 52.18, and the decision in AIC Limited v Federal Airports Authority of Nigeria [2022] 1 WLR 3223. It also made reference to recent restatements by Commercial Court judges of the need for arguments as to consequential matters to be kept within proper bounds. The Court considered that the finality principle was not outweighed by other factors and refused Crescent’s application to add conditions to the grant of permission.

The full judgment ([2023] EWHC 300 (Comm)) can be found on the National Archives website (external link).

CRO v REC and RUI (Foxton J)

Civil Procedure – Freezing Order – Legal Expenses Exception

The Claimant obtained a worldwide freezing order against the defendant on the standard Commercial Court form which provided that the Defendant could spent a reasonable amount on legal expenses “but before spending any money the Respondent must tell the Applicant’s legal representatives where the money is to come from”. The Claimant argued that the effect of the proviso was that the Defendant was also obliged to inform the Claimant of the amount it was spending on legal expenses, pointing to the decision to that effect of Neuberger J in on Cantor Index Ltd v Lister [2002] CP Rep25. Held: the Court declined to follow Cantor, on the basis that the decision was wrong (i) in concluding that the standard wording for the legal expenses exception applied to legal expenses of any kind, rather than legal expenses relating to the subject-matter of the litigation; and (ii) on the basis of the conclusion, wrongly determined that it was implicit in the standard wording that the Defendant was obliged to inform the Claimant of the amount of legal expenses it was incurring from time-to-time. The standard wording imposed no such obligation.

The full judgment ([2023] EWHC189 (Comm)) can be found on the National Archives website (external link).

Milson and Standish v Gerald Martin Smith and the Estate of Phyllis Smith (Foxton J)

Equitable Proprietary Interest – Burden of Proof – Rochefoucauld v Boustead

The Defendants argued that the estate was the beneficial owner of real property, legal title in which was vested in Dr Smith, or alternatively that Dr Smith could deny the existence of such a beneficial interest under the principle in Rochefoucauld v Boustead. Held: the holder of the legal estate was presumed to be also the sole beneficial owner, with the burden on those contending otherwise to establish that position: Stack v Dowden [2007] 2 AC 432. The principle in Rochefoucauld v Boustead [1897] 1 Ch 196 relied upon by the Defendants had no application, because this was not a case in which the putative beneficiary had transferred the legal title to the putative trustee on the basis of an oral agreement that the property will be held on trust when received: see Archibald & Archibald v Alexander[2020] EWHC 2161 (Ch), [32]. Reviewing the evidence, the Judge held that there was no evidence of any agreement, arrangement or understanding that the estate would have a beneficial interest in the property, and no evidence that the estate had acted to its detriment on any such agreement, arrangement or understanding.

The full judgment ([2023] EWHC 189 (Comm)) can be found on the National Archives website (external link).

Olympic Council of Asia v Novans Jets Ltd (Foxton J)

Committal for Contempt of Court; Body Corporates; Limited Liability Partnerships; Aiding and Abetting Breach of the Order

The Claimants applied to commit Mr Gringuz for contempt of court as the de facto director of a Limited Liability Partnership which had not complied with the disclosure obligations imposed by (a) an order for directions and (b) two worldwide freezing orders. Mr Gringuz contended that (i) the effect of the October 2020 amendments to CPR 81 was that it was no longer possible to commit the director of a body corporate for the corporation’s breach of a court order; (ii) that jurisdiction did not apply to a limited liability partnership in any event; (iii) the lack of the penal notice on the directions order and the terms of the penal notice on the freezing order precluded the committal application against Mr Gringuz. Held: (i) the jurisdiction to commit directors for breaches of court orders of companies had not been removed by the October 2020 amendments to the CPR ; (ii) that jurisdiction applied to LLPs in respect of persons who performed the same function for the LLP as a director or officer did for a company; (iii) the directions order was not a coercive order and could not be enforced by committal; (iv) the terms of the penal notices on the two injunctions were inconsistent with committal of Mr Gringuz for the LLP’s breach and (v) Mr Gringuz could not be liable for aiding and abetting the LLP’s breach merely by reason of his failure, without any positive to act, to procure the LLP’s compliance.

The full judgment ([2023] EWHC 276 (Comm)) can be found on the National Archives website (external link).

Lonestar Communications Corporation LLC v Orange Liberia Inc (Foxton J)

Dedicated Denial of Service Attacks – Claim for Damages under Liberian Tort Law – Compensatory and Exemplary Damages

The Claimant contended that certain individuals (the Individual Defendants) had organised Dedicated Denial of Service (DDOS) Attacks on its mobile data network in Liberia and that the Fifth Defendant (Orange Liberia) was vicarious liable for those attacks. It brought tort claims under Liberian law on various grounds. Orange Liberia denied that the Claimant had pleaded a cause of action known to Liberian law against the Individual Defendants and also that there could be vicarious liability for intentional wrongdoing under Liberian law or that any of the Individual Defendants were its employees for the purpose of the doctrine of vicarious liability. It also challenged the Claimant’s claim to compensatory and exemplary damages.

Held: Liberian law did not recognise the torts of lawful and unlawful means conspiracy or unlawful interference which the Claimant had pleaded, but the Claimant’s claim of action of damages for wrong was known to Liberian law and was made out. There was vicarious liability for intentional wrongful conduct under Liberian law and Orange Liberia was vicariously liable for the wrongful acts of two of the Individual Defendants. However, the Claimant’s claim for compensatory damages was seriously overstated, and exemplary damages were only appropriate against one of the Individual Defendants.

The full judgment ([2023] EWHC 421 (Comm)) can be found on the National Archives website (external link).

Re Gerald Martin Smith (Foxton J)

Adjournment Application; Applications for Transfer of Assets and to Set Aside Service; Summary Judgment

The Harcus Parker Parties applied for an order requiring SMA to transfer the legal estate in shares to new trustees, to give effect to prior orders of the Court. Minardi sought to intervene in and adjourn the application, contending that it had claims against SMA which it should be able to enforce against the shares, and seeking an adjournment to allow its new legal team to prepare to argue its case. BKV alleged that it was authorised to represent SMA, and it had challenged the jurisdiction of the court to hear the application for a transfer order. It sought to adjourn the hearing of its jurisdiction challenge. The Harcus Parker Parties sought summary judgment of the transfer order application.

Held: (1) Minardi had had more than sufficient time to prepare for the hearing, and the adjournment application was refused. (2) The claims which Minardi sought to advance were an abuse of process, being a collateral attack on the court’s prior findings, and issues which should have been raised by Minardi at an earlier trial. (3) BKV had had sufficient time to prepare for the jurisdiction application and its application on SMA’s behalf for an adjournment was refused. (4) The jurisdiction challenge brought by BKV in SMA’s name was without merit and was dismissed. (5) The Harcus Parker Parties were entitled to summary judgment on the transfer orders.

The full judgment ([2023] EWHC 428 (Comm)) can be found on the National Archives website (external link).

Sui Northern Gas Pipelines Ltd v National Power Parks Management Co (Pte) Ltd (Mr Justice Bright)

Arbitration s 68 challenge – gas supply contract – complaint Tribunal decided issue not before it – true effect of Award

SNGPL provides gas to NPPMCL, a power-supplier in Pakistan.  Disputes under the supply contract were referred to arbitration.  The Tribunal’s award was in favour of NPPMCL.  SNGPL challenged the Award on the basis that it decided that SNGPL’s monthly invoices each had to be issued before the end of the relevant month, which (a) had not been argued and (b) was unworkable.

The court concluded that the true effect of the Tribunal’s award is not that each invoice must be issued before the end of the relevant month.  SNGPL’s challenge therefore failed.

The full judgment [2023] EWHC 316 (Comm) can be found on the National Archives website (external link).

Millbrook Healthcare Bidco Ltd v Paul Croll & ors (Mr Justice Bright)

Purchase of business – breach of warranty claims – incorrect entries in financial information – quantum – sellers’ counterclaim for failure to give notice of TP claims

C purchased a healthcare equipment business from Ds, who gave standard warranties as to the accuracy of accounting information.  C claimed that a contract with important NHS group customers had been varied, and that the debt owed by another NHS group had been waived, rendering the accounts materially inaccurate.

The court upheld both complaints, finding that there was a material effect on maintainable EBITDA and on the sums given in the accounts for debtors.  Quantum fell to be assessed on the warranty true/warranty false basis: Ageas (UK) v Kwik-Fit (GB) [2014] Bus LR 1228.  The difference in maintainable EBITDA would have reduced the purchase price, on the warranty false scenario, but a reduction in the historic debts would not.  The claim succeeded, the counterclaim failed.

The full judgment [2023] EWHC 290 (Comm) can be found on the National Archives website (external link).

Evrythng Ltd v Gilbert-Rolfe (Henshaw J)

Non-competition covenant – interaction between two sets of covenants – enforceability – interim relief

The Claimant applied for interim injunctive relief requiring the Defendant to comply with a non-competition covenant in his contract of employment, due to last until 13 June 2023, pending a speedy trial. The Claimant had discovered that the Defendant was working for a competitor, in alleged breach of the covenant. The court declined to grant injunctive relief, having regard to (a) a significant doubt whether the covenant had been superseded by other covenants (in a tripartite agreement between the parties and the Claimant’s new owner) on which the Claimant did not attempt to rely, (b) the fact that pending a speedy trial the risks to the Claimant could be mitigated by undertakings the Claimant had already given and was willing to reinforce and (c) the significant risk that injunctive relief would leave the Defendant, whose financial position appeared precarious, with no employment and limited prospect of employment. The court transferred the case to the general King’s Bench Division list and gave directions for a speedy trial.

The full judgment [2023] EWHC 7 (Comm) can be found on the National Archives website (external link).

Peregrine Aviation Bravo Ltd and others v Laudamotion GmbH and Ryanair Holdings PLC (Henshaw J)

Aircraft leasing – right to terminate in event of threat to suspend payment of debts – right to claim damages based on ground not relied on when purporting to terminate – obligation to take delivery of aircraft – mitigation of damages

During the early stages of the Covid pandemic in spring 2020, the First Defendant airline and its parent company (Ryanair) sent communications to the claimant leasing companies stating that they would not be able to accept delivery of four aircraft pursuant to their respective lease agreements. The claimants purported on 1 May 2020 to tender the first aircraft for delivery on 7 May 2020, which Laudamotion declined to accept on various grounds, then purported to exercise contractual termination rights in all four leases (relying on cross-default provisions in the other three leases) and to claim the net present value of the rentals due under them. 

The court held the tender of the first aircraft to be invalid because (a) the relevant claimant did not comply with the provisions for consultation and giving of reasonable notice of delivery dates, and (b) (as Laudamotion sufficiently pointed out on the date of tender) the aircraft was not in deliverable condition since it lacked an Export Certificate of Airworthiness and other prescribed documents. The court also rejected the Claimants’ alternative claim, arising from the preceding correspondence, based on a contractual right to terminate if Laudamotion threatened to suspend payment of its debts, on the grounds that (a) the relevant provision, which formed part of a clause concerning insolvency-like events, required a clear and unequivocal threat to suspend payments of the lessee’s debts in general (or at least a category of them), indicative of financial difficulties carrying a risk of insolvency or other curtailment of creditors’ rights, and where the debts are existing (not merely contingent); and (b) not having relied on this ground when purporting to terminate, the claimants could not found a monetary claim on it (following, in this regard, the approach of Andrew Baker J in Phones 4U Ltd (in Administration) v EE Ltd [2018] EWHC 49 (Comm) and distinguishing Boston Deep Sea Fishing v Ansell (1888) 39 Ch D 352). 

The full judgment [2023] EWHC 48 (Comm) can be found on the National Archives website (external link).

Fastfreight Pte Ltd v Bulk Trident Shipping Ltd (Henshaw J)

Arbitration Act s.69 – appeal on point of law – charterparty – offhire provision – clause precluding deduction from hire without shipowners’ consent

The vessel “Anna Dorothea” was trip time chartered for a voyage from India to China under amended New York Produce Exchange terms. After three crew members had positive lateral flow Covid tests on 1 May 2021, the charterers contended that the vessel was off hire from 4 May 2021 to 28 August 2021 and made no hire payments during that period. The charterparty contained a standard provision for the vessel to be off hire in the event of loss of time from deficiency and/or default of officers or crew or by any other similar cause preventing the full working of the vessel; and a clause providing for it to be off hire if any crew member had a highly infectious or contagious disease and the vessel had to deviate, was quarantined or was barred from entering any port. 

However, the payment clause included an amendment stating that, notwithstanding the terms and provisions of the charterparty, no deductions from hire could be made for any reason under the off hire provision or otherwise (whether for alleged off-hire underperformance, overconsumption or any other cause whatsoever) without the express written agreement of Owners.

Two LMAA arbitrators held that the amendment operated as a ‘pay now, argue later’ clause, requiring the charterers to pay hire in full notwithstanding an alleged off hire event, subject to their right to establish a right to recover it subsequent (if necessary by arbitration). They distinguished the decision in Tradax Export v Dorada Compania Naviera (The “Lutetian”) [1982] 2 Lloyd’s Rep. 140 on the basis that the charterparty there had no equivalent to the amended wording in the present case. 

The court held that the arbitrators were correct. The amendment was evidently intended to act as a qualification to the off hire provisions as a whole, requiring full payment of hire (in order to protect the owners’ cash flow), absent owners’ agreement (which could be withheld only in the event of a genuine dispute), without prejudice to the ultimate outcome of any arbitration.

The full judgment [2023] EWHC 105 (Comm) can be found on the National Archives website (external link).

ADM v Grain House and others (Cockerill J)

Contempt-  Committal – Sentencing

The Claimants who had obtained an arbitration award in their favour sought to commit the First Defendant and the Second and Third Defendants (directors of the First Defendant) for contempt of court in relation to alleged breaches of a post award disclosure order and WFO. The Court found the contempts established to the criminal standard, albeit that some were minor and either purged or technical. Having allowed the Defendants a week to prepare submissions on mitigation it refused a late application to adjourn the sentencing hearing and sentenced the Second Defendant to 12 months imprisonment, with an indication that purging of the contempts would enable the sentence to be reduced and suspended.  

The full judgment [2023] EWHC 135 (Comm) can be found on the National Archives website (external link).

PJSC v Mints and others (Cockerill J)

Sanctions – civil procedure – stay of proceedings

The Defendants sought to stay proceedings on the basis that any or all of the entry of any judgment, the paying of favourable or adverse costs orders, the satisfaction of an order for security for costs or the payment of damages under a cross undertaking in damages would be unlawful under Sanctions and Money Act 2018 and Russia (Sanctions) (EU Exit) Regulations 2019. Further it was contended that the Second Claimant was subject to the sanctions regime because it was “owned or controlled” by President Putin or the governor of the Central Bank of Russia (both of whom are sanctioned). The Court concluded that on the true construction of the Act and Regulations or by reason of the presumption of legality, judgment can lawfully be entered and is not licensable, while the remainder of the acts were licensable. Further it concluded that Article 7(4) of the Regulations did not extent to control by virtue of political office (or employment).

The full judgment [2023] EWHC 118 (Comm) can be found on the National Archives website (external link).

Verlox International Ltd v Antoshin (Foxton J)

Application by Cs for permission to bring committal application against three Respondents pursuant to CPR 81.3(5)(b) and by Respondents to strike out committal application against a fourth Respondent; whether merits and public interests tests for permission satisfied; approach to be taken to committal application concerning the deployment of a forged document when this did not fall within CPR 81.3(5)(b)

The applicants sought permission to issue committal applications against three Respondents and were pursuing a further committal application (“the Fourth Application”) in relation to an allegedly forged document against a fourth respondent (“R4”) which it was said did not fall within CPR 81.3(5)(b). The committal applications related to evidence deployed for the Defendants’ challenge to the Court’s jurisdiction and for security for the costs of that application. However, the court had set aside the order for service out without either application being heard and without the evidence which was the subject of the committal applications being considered. The court held:

1. C1 (a company) could not be represented other than by a solicitor, having regard to the complex and serious nature of the allegations made, and the prior ruling in the case refusing its director, C2, permission to appear on its behalf.
2. C2 had no sufficient interest to be an appropriate person to pursue the committal applications and had shown himself to be an unsuitable guardian of the public interest which was at stake in the committal applications.
3. Permission under CPR 81.3(5)(b) would be refused for the first three applications. The committal applications were wholly without merit and there was no public interest which justified allowing the committal applications to proceed.
4. The Fourth Application fell within the spirit of CPR 81.3(5)(b). If R4 had exhibited a forged document to his own witness statement, and verified it by a statement of truth, permission would have been needed to bring a committal application. Where, as here, R4 was alleged to have permitted his solicitor to serve a witness statement confirming the authenticity of the document to the best of R4’s belief, it would not be appropriate to permit the committal application to proceed if permission would have been refused under CPR 81.3(5)(b) had R4 himself been the deponent who exhibited the document
5. It could not be said at this early stage that the allegations of forgery in the Fourth Application were without merit. However, resolving the Fourth Application would essentially involve trying the substantive dispute which the court had held should never have been brought in this jurisdiction. Given that factor, and the fact that the document in issue had never been deployed at a hearing, it was not in the public interest to permit the application to be pursued. Accordingly, the Fourth Application was stayed.

The full judgment [2023] EWHC 86 (Comm) can be found on the National Archives website (external link).

Gravelor Shipping Ltd v GTKL Asia M5 Limited (Foxton J)

Application for summary judgment for specific performance in respect of obligation to sell vessels under two bareboat charterparties; whether right to purchase had arisen; whether Cs could seek specific performance on basis most favourable to Ds while reserving right to contend more favourable contractual regime applied; whether clause of charterparties obliged Ds to nominate account for payment to which EU sanctions regime would apply and payment in Euros rather than USD; whether order for specific performance justified

C was party to two bareboat charterparties with Ds which gave two rights of purchase, one where the charterparties were terminated for C’s breach (“the Breach Basis”) and another, on more favourable terms, where there was no breach (“the Non-Breach Basis”). Ds became subject to US and EU sanctions after the Russian invasion of Ukraine leading C to stop paying hire under the charterparties. Ds terminated the charterparties for breach. C argued that it was entitled to an order for specific performance on terms which assumed in Ds’ favour that the Breach Basis applied. Held:

1. With one exception, Ds’ arguments that the conditions for C’s right to purchase on the Breach or Non-Breach Basis had yet to arise were rejected. In particular Ds’ argument that they could terminate the Charterparties and then wait to decide whether to demand payment of the amounts due in respect of any transfer was wrong – the Charterparties were drafted on the basis that Ds were obliged to make such a demand, and in any event, Ds had done so. However, C was obliged to provide a qualifying bankruptcy opinion before any obligation to transfer the Vessels arose.
2. The issue of whether C could obtain summary judgment on the Breach Basis, paying the amounts due, while at the same time reserving the right to contend that it was entitled to transfer on the Non-Breach Basis, at a lower cost, raised potentially complex issued which were not the subject of argument. However, it was appropriate for the court to make final declarations as to the conclusions it had been able to reach to a summary judgment standard. If the effect of those findings was that C was entitled to delivery of the Vessels on either the Breach Basis or the Non-Breach Basis, the court would order an interim mandatory injunction requiring delivery of the Vessels on payment of the Breach Basis amount, while reserving C’s entitlement to challenge whether that amount, or some lesser amount, is due.
3. Having regard to the language, purpose and context of clause 8.10 of the Charterparties, Ds were obliged to nominate a bank account into which C’s banks could lawfully make a payment under the EU sanctions. That was the case even if, as Ds’ contended, they were no longer subject to sanctions as a matter of law due to a (disputed) change of beneficial ownership, because the uncertainty surrounding the bona fides of the purported change had the practical effect of preventing any paying bank from paying into account which would not be subject to the EU sanctions regime.
4. The court was satisfied to the relevant standard that an order for specific performance was appropriate. The issue for the court was whether, at the time specific performance was sought, damages were an adequate remedy. That test was satisfied when there was very serious doubt as to Ds’ ability to pay any damages, and C’s ability to enforce any award of damages given the effect of damages. It was not appropriate to refuse specific performance at the summary judgment stage simply to allow for the possibility that matters might change by the time of the final hearing.

The full judgment [2023] EWHC 131 (Comm) can be found on the National Archives website (external link).

2022

BNP Paribas Trust Corporation UK Limited v Uro Property Holdings, S.A. (Jacobs J)

Bond issue – sums payable on early repayment – failure to follow calculation methodology – failure to provide timely certification – summary judgment

The Claimant, BNPP, sought €251 million alleged to be due from the Defendant, Uro as a “Bond Make Whole Premium” (“BMWP”) under a loan agreement which formed part of a substantial bond issue. The loan had become repayable because Uro had lost a particular tax status known as SOCIMI.  Uro had repaid the loan but disputed liability to pay the BMWP. Uro sought summary judgment against BNPP on the basis that the claim for the BMWP had no real prospect of success. Uro argued that there had been a failure to follow the contractual methodology for calculating the BMWP and to provide certification at the contractually agreed time. The contractual methodology required price quotations to be obtained from independent dealers in German federal bonds, and these quotations had not been obtained until after the date when the amount of the BMWP should have been certified and paid.

The court refused summary judgment. There was scope for admissible expert evidence, concerning the nature of the market for German federal bonds, which was potentially relevant to the interpretation of the contract. The Claimant had a real prospect of success on its arguments that: (i) timely certification was not a precondition to Uro’s liability to pay the BMWP; (ii) the court or tribunal could make the determination of the BMWP payable if the BNPP had not done so properly; (iii) it was contractually permissible for BNPP to seek “retrospective” quotations subsequent to the date for certification.

The full judgment [2022] EWHC 3251 (Comm) can be found on the National Archive website (external link).

Ivy Technology Ltd v Martin (Henshaw J)

Misrepresentation – authority of agent to make representations which were fraudulent – liability of business owner for representations made by agent in negotiations – unlawful means conspiracy.

The purchaser (C) sued the named vendor of a business (D1) and the other 50% beneficial owner of the business (D2).  D1 contracted as sole vendor in the Sale and Purchase Agreement. However, the court found that D2 had authorised D1 to negotiate the sale of the whole business, as part of which D2 relinquished his beneficial interest and purchase monies were remitted by D1 to a company linked with D2. D1 was held to have made fraudulent representations about the business.

The court further held that, on a correct analysis of the case law (including Lloyd v Grace Smith [1912] AC 716, Briess v Woolley [1954] AC 333 and The “Ocean Frost” [1986] AC 717), there is no rule of law that a principal can be liable for an agent’s fraudulent misrepresentation only if the principal gave specific authority to make the misrepresentation in question or fraudulent representations generally. D2 as principal was liable for D1’s fraudulent misrepresentation because they were made in the course of a negotiation which he had given D2 actual authority to conduct. In addition, D1 and D2 were liable for the tort of unlawful means conspiracy. 

The full judgment [2022] EWHC 1218 (Comm) can be found on the National Archive website (external link).

Dassault Aviation SA v Mitsui Sumitomo Insurance Co Ltd (Cockerill J)

Arbitration – s 67 – Contract – Assignment – Effect of no assignment clause on subrogation by way of assignment under foreign law

Challenge to Tribunal’s jurisdiction. Applicant disputed Tribunal had jurisdiction against the Respondent insurer, who claimed via a subrogation under Japanese Law which took effect (as a matter of general principles of Japanese law) by way of subrogation. The contract contained a clear and widely drawn no assignment clause. Held: (i) the cases on contractual prohibitions on assignment did not support the proposition that assignment “by operation of law” was excepted; the line drawn was between voluntary and involuntary assignments (ii) the clause in question did not on its true construction support assignment “by operation of law” or in all cases where insurance was concerned (the Respondent’s secondary case). On the facts this was a case where the assignment resulted from voluntary acts and was not involuntary. Accordingly it was caught by the prohibition on assignment and the Tribunal had no jurisdiction.

The full judgment [2022] EWHC 3287 (Comm) can be found on the National Archives website (external link).

LMN v Bitflyer Holdings Inc And Others (Butcher J)

Cryptocurrency – Fraud – Claims seeking to obtain information – Service out – Alternative service – Terms of orders

The Claimant is a company incorporated in England and Wales which operates a cryptocurrency exchange. It claims that it was the subject of a hack and that cryptocurrencies were fraudulently transferred away from it. It conducted an exercise to trace where the cryptocurrencies had gone. This led, in some cases, to ‘exchange addresses’, beyond which it was not possible to track what had become of the cryptocurrencies without further information from the exchanges concerned. This was because, whilst such addresses end to be associated with a particular customer, the crediting of the cryptocurrency to the customer’s account takes place ‘off-chain’, via an internal accounting exercise.

The Claimant accordingly issued a claim seeking from a number of other cryptocurrency exchanges information as to who their relevant customers were and what had become of the cryptocurrencies in question. The information was sought pursuant to the Norwich Pharmacal and/or Bankers Trust v Shapira jurisdictions.

At a first hearing, the Court considered the questions of whether there could be service out of this claim. It concluded that there could be. There was a serious issue to be tried on the merits. There was a good arguable case that a ‘gateway’ was available, namely that under PD 6B §3.1(25). On the current information, England and Wales appeared to be the proper place for the claim to be brought. The Court also made orders for service by alternative means.

At a second hearing, of which notice had been given to the Defendant exchanges, orders were made for the provision of information by them. Consideration was given to the terms of such orders.

The full judgment [2022] EWHC 2954 (Comm) can be found on the National Archives website (external link).

Olympic Council Of Asia v Novans Jets Llp And Novans Investments Ltd And July Gringuz (Butcher J)

Application to commit for contempt – Service out – Alternative Service – Service of the orders said to have been breached – Permission to bring contempt proceedings

The Claimant has brought proceedings seeking to commit the Third Defendant (Mr Gringuz) for alleged contempt in procuring the breach by the First and Second Defendants of orders made by Moulder J in January, April and May 2022.

A number of preliminary issues arose in relation to the proceedings against Mr Gringuz, which were resolved at this hearing. An issue had been adumbrated that permission to serve the contempt application out of the jurisdiction in Ukraine could not be granted.  At the hearing, this was not pursued on the basis, in part, that the new ‘gateway’ in PD 6B, §3.1 (24) was applicable. The Court also decided that there were sufficiently good reasons to authorize alternative service of the contempt application, notwithstanding that Ukraine is a party to the Hague Service Convention. The Court also retrospectively dispensed with formal service of Moulder J’s orders, in particular on the basis that there was no doubt that Mr Gringuz had known the terms of those orders.

A further issue arose as to whether the Claimant needed, and should have, permission pursuant to CPR r. 81.3(5) to bring certain aspects of its contempt application.  The Court determined that in one respect it should not.

The full judgment [2022] EWHC 2910 (Comm) can be found on the National Archives website (external link).

RQP v ZXY   (Butcher J)

Arbitration – s. 67 Arbitration Act – Were decisions awards? – Jurisdiction over a cross-claim – Application under s. 42 Arbitration Act – Application to set aside order for misstatement/non-disclosure

The Claimant (RQP) applied under s. 67 Arbitration Act to set aside certain rulings as to his jurisdiction made by an arbitrator in a dispute between it and ZXY.  The Court concluded that these rulings did not amount to awards, and that s. 67 was not available.  Further, if one of the rulings, whereby the arbitrator had said that he did not have jurisdiction over a counterclaim brought by RQP in the arbitration, was an award, the arbitrator had been correct in concluding that he did not have jurisdiction.

The Defendant (ZXY) applied under s. 42 Arbitration Act for enforcement by the Court of a peremptory order made by the arbitrator whereby RQP had been ordered to provide security for the ZXY’s claim against it in the arbitration. RQP contended that there should be no such order.  One basis for this was that the arbitrator no longer had jurisdiction because, RQP alleged, ZXY had been in repudiatory breach of the arbitration agreement by breaching its duties of confidentiality, and RQP had accepted that breach.  The Court concluded that there should be an order enforcing the arbitrator’s peremptory order.  An appeal on this aspect had been heard at a point when the case settled, but the Court of Appeal determined that the appeal would have been dismissed: [2022] EWCA Civ 1665 (sub nom. S3D Interactive Inc v Oovee Ltd).

RQP also applied to set aside an order made for alternative service on it of the s. 42 application and for directions to permit the hearing of that application with the s. 67 application, on the grounds that there had been non-disclosure or misrepresentation, inter alia, of the length of time the s. 42 application would take to hear.  This application was dismissed. 

The full judgment [2022] EWHC 2949 (Comm) can be found on the National Archives website (external link).

YDU v SAB and BYH  (Butcher J)

Arbitration – Award -What constitutes an award – Specific performance – s. 68 Arbitration Act 1996

The Claimant brought a claim seeking a declaration that parts of a Partial Final Award did not constitute an award for the purposes of the Arbitration Act 1996, alternatively for remission of a paragraph of that award to the tribunal under s. 68 Arbitration Act.

The arbitration concerned the entitlement of the First Defendant to purchase preference shares in the Second Defendant from the Claimant under a Shareholders’ Agreement (the ‘SHA’).  The arbitral tribunal concluded that the First Defendant was entitled to an order for specific performance of the obligation in the SHA whereby the First Defendant could purchase the relevant shares, and that the Claimant held the shares on constructive trust for the First Defendant pending their transfer. As part of the Partial Final Award, the tribunal further ordered that the Claimant was not to transfer any of its shares in the Second Defendant to any party other than the First Defendant or its designee, and made orders as to how the sale transfer and payment of the purchase price should proceed. The Claimant contended that the paragraphs of the Partial Final Award containing these orders were not ‘an award’ for the purposes of the Arbitration Act 1996, because, depending on circumstances, they might, as the tribunal itself envisaged, subsequently be varied or revoked.

It was held that the relevant paragraphs did constitute an award.  There were three analyses which supported that conclusion: (1) that given s.48(5) of the Arbitration Act provides that an arbitral tribunal is, unless otherwise agreed, to have the same power to order specific performance of a contract as the court, the orders of the tribunal in regard to how specific performance should be effected should be regarded as awards and binding as such, notwithstanding that they were subject to variation by the tribunal; (2) that the paragraph of the Partial Final Award prohibiting transfer of the shares to any other party than the First Defendant or designee was an interim measure which, under the terms of the arbitration agreement in the SHA was ‘deemed to be a final award’; and (3) that the relevant paragraphs amounted to a provisional award under s. 39 Arbitration Act 1996.  The Claimant’s alternative application under s. 68 Arbitration Act, made on the basis that the award was uncertain or ambiguous was also dismissed because the Partial Final Award was not uncertain or ambiguous.

The full judgment [2022] EWHC 3304 (Comm) may be found on the National Archives website (external link).

Havila Kystruten A.S. v Abarca Companhia De Seguros S.A. (Henshaw J)

Shipbuilding contract – provision for committed statement of financing – contractual termination provisions – waiver – recovery of advance payments as reliance loss – whether refund security an ‘on demand’ bond

A provision in a shipbuilding contract requiring the buyer to provide “a written committed statement of its financing” for the vessels was held not to require full loan documentation to have been executed.  The lender’s term sheet and letter confirming that it was approved subject to satisfactory documentation was sufficient.  In reaching that conclusion, the court rejected the Yard’s contention that the ‘factual matrix’ evidence showed the parties understood that only executed loan documentation for the buyer’s financing would meet the requirements of the Yard’s own refund bond providers. It was further held that the preconditions of a right for the Yard to terminate if the parties had concluded, after negotiations, “that there is no other alternative financial arrangement to be provided by the Buyer in order to avoid termination and/or cancellation of the Contract” had not been met.  In addition, the Yard had waived any right to terminate by its subsequent actions.

Among other findings, the court held that the buyer was entitled to terminate on various grounds; that the buyer could recover pre-paid instalments as reliance loss, and was not limited to a restitution claim requiring proof of total failure of consideration (agreeing in that regard with observations of Butcher J in Cardiorentis AG v Iqvia [2022] EWHC 250 (Comm)); and that the refund bonds issued by Abarca were in the nature of ‘on demand’ bonds.

The full judgment [2022] EWHC 3196 (Comm) can be found on the National Archives website (external link).

Qatar Investment & Projects Development Holding Co and His Highness Sheikh Hamad Bin Abdullah Al Thani v John Eskenazi Limited and John Eskenazi (Jacobs J)

Sale of antiquities alleged to be of modern manufacture – claim by purchaser for breach of contract, misrepresentation and negligence.

Sheikh Hamad, a member of the Qatari royal family, was a collector of fine art and antiques, which were acquired by First Claimant QIPCO. QIPCO purchased seven objects from John Eskenazi Ltd (“JEL”), a well-known dealer of ancient objects, for a total price of USD 4,990,000. The claim was brought on the basis that the objects purchased were not ancient but were modern forgeries. In respect of the most expensive object, a statue of a Hari Hara (a Hindu deity), QIPCO alleged that the Defendants were aware that it was not genuine and acted fraudulently. The Defendants maintained that the objects were genuine, and that there were reasonable grounds for believing that this was the case.

In the light of the evidence from art history and materials science experts, the court found that all seven objects were inauthentic. There was, however, no contractual promise by JEL that the objects were authentic. The relevant contractual obligation was an implied term that JEL honestly and reasonably held the opinion that the objects were of ancient origin. Sections 13 (1) and 14 (2) were not breached simply by reason of the objects being authentic. The claim nevertheless succeeded, because there were no reasonable grounds for JEL’s unqualified opinion that each object was of ancient origin. The Defendants did not act fraudulently with respect to the Hari Hara, and the claim in fraud was dismissed.

The full judgment can be found on the National Archives website (external link).

Serious Fraud Office v Litigation Capital Limited (Mr Justice Foxton)

Trust created by litigation funding agreement – nature of trust and powers of trustees – whether powers extended to bringing and compromising proceedings to recover trust assets, with an indemnity from trust funds without the funder’s consent– whether power of appointment under s.36(1) Trustee Act 1925 applied, and, if so, whether it was properly exercised – whether court should appoint replacement trustees and/or receivers over assets in which the trust had an interest – whether open to court not to replace trustees in respect of certain assets on an interim basis.

The parties were in dispute as to the nature of the trust created by a litigation funding agreement, and the powers and duties of the trustees. A Part 8 Claim was issued in which one set of parties sought declarations that the trustees enjoyed the full range of powers arising under the Trustee Act 1925, and were entitled to pursue litigation, at the expense of the trust, with a view to gaining control of assets which would be held on the trust, whether or not the funder consented. The court rejected this argument, holding that the nature of the trust created by the litigation funding agreement was very limited, as were the powers of the trustees. It would be fundamentally incompatible with the terms and commercial purpose of that agreement if the trustees from time-to-time were able to pursue litigation at the trust’s expense, but without the consent of the funder who was the priority beneficiary under the trust.

There were also disputes as to whether two trustees were able to exercise the power under s.36(1) of the Trust Act 1925 to replace a third, whether those trustees should be removed, who should replace them, and whether the court should appoint receivers over certain assets in which the trust held fractional interests. The court held that the power under s.36(1) was fundamentally incompatible with the nature and purpose of the trust created by the funding agreement, and was impliedly excluded. In any event, the power had been exercised for an improper purpose, so that any appointment of a replacement trustee would have been void. The existing trustees were removed because their conduct made it inappropriate for them to hold office as trustees. New trustees with limited powers were appointed over certain assets. In relation to one set of assets in which the trust held fractional interests, the court appointed receivers to realise the assets and pay the proceeds into court. It rejected the argument that it was not open to the court to remove the existing trustees without appointing replacement trustees in respect of those fractional interests.

The full judgment can be found on the National Archives website (external link).

Aiteo Eastern E&P Company Limited v Shell Western Supply and Trading Limited (Mr Justice Foxton)

Challenge under s.67 of the Arbitration Act 1996 – what was required to exercise option to arbitrate a dispute under a permissive and asymmetric arbitration clause – whether implied limitation option must be exercised within a reasonable time.

A loan facility agreement gave the lender a unilateral option to refer a dispute to ICC arbitration. The borrower, which had commenced proceedings in Nigeria, argued that the option could only be exercised either by filing a Request for Arbitration or by undertaking irrevocably and unconditionally to refer the dispute to arbitration. The lender denied that the option could only be exercised in this way, and in any event relied upon the service some 13 months after the commencement of the Nigerian proceedings of a Request for Arbitration. In response, the borrower contended that, by necessary implication, the option to arbitrate could only be exercised within a reasonable time, which had elapsed before the Request for Arbitration was filed. The court rejected the borrower’s construction, holding that the option to arbitrate could be exercised by an unequivocal statement requiring the borrower to arbitrate, without requiring the lender either to commence an arbitration or to undertake to do so. There had been such a statement through the lender’s Notice of Appeal in the Nigerian proceedings. On the construction of the arbitration agreement, there was no implicit time limit for the exercise of the option, albeit doctrines of waiver or estoppel would in certain circumstances prevent the lender exercising the option.

The full judgment can be found on the National Archives website (external link).

Royal & Sun Alliance plc v Tughans ( firm) SA (Mr Justice Foxton)

Consequential issues – need for consequential issues to be determined promptly after circulation of draft judgment and hand-down – submissions on permission to appeal to be proportionate and subject to page limits.

The court stated that, moving forward, the judges of the Commercial Court will be looking to resolve consequential issues following judgment on a speedier and more proportionate basis. Generally, (i) the handing-down of judgments will take place promptly after the provision of the draft judgment to the parties; (ii) consequential matters will be determined much more frequently at short oral hearings, of the order of an hour for hearings other than significant trials, which the Court will look to fix within 7 to 14 days of hand-down; (iii) it should not be assumed that such a hearing will be fixed for the convenience of all counsel involved, where this would be incompatible with a prompt determination of any consequential issues; (iv) if consequential issues are to be dealt with on paper, then for most hearings this will be on the basis of a timetable which will be completed within the same period; and (v) the court will fix strict page limits on the length of skeletons and submissions. In particular, the 15 page limit for ordinary applications of half a day or less should be sufficient in most cases to deal with consequential issues other than those arising after significant trials.

The full judgment can be found on the National Archives website (external link).

Contra Holdings Ltd v Mr M J C Bamford (Jacobs J)

Delays in fixing hearing of “consequentials” following judgment –  Amendment of Statement of Case subsequent to judgment.

In litigation between members of the Bamford family, the defendant successfully applied to strike out the claimant’s claim. Judgment was handed down on 18 July 2022 (see [2022] EWHC 1857 (Comm)). Due to the unavailability of counsel, the hearing of “consequential” matters arising from the judgment was delayed until 28 September 2022. The claimant then applied to amend its Statement of Case to allege fraud. The application was dismissed: the fraud allegation had no real prospect of success, there was no satisfactory reason for the claimant’s failure to make the application prior to or at the strike out hearing, and other discretionary factors favoured dismissal.

The court observed that an increasingly common, but regrettable, feature of Commercial Court litigation is the apparent difficulty in counsel making themselves available for a hearing of “consequential” matters, following the hand-down of a judgment. Delayed consequential hearings create an increased amount of work for the parties and the judge, who has to deal with a case weeks or (as here) over 2 months after judgment has been given, when the case is no longer fresh in his or her mind. They also, as in the present case, allow time for parties to re-think and try to salvage a case which has been lost, here by making a substantial application to amend. In the future, Commercial Court judges will be far less tolerant of “consequential” hearings being delayed because of the unavailability of counsel, and will fix “consequential” hearings to take place within a short time after judgment.

The full judgment can be found on the National Archives website (external link).

VTB Commodities Trading DAC v Petraco Oil Company SA (Mr Justice Foxton)

Proceedings to enforce undertaking in damages – enforcing party seeking security for costs – relevance of Russia (Sanctions) (EU Exit) Regulations 2019 to application for security – application to adjourn trial – meaning and effect of the General Licence Int 2022/2252300.

Petraco, who intervened in the proceedings commenced when VTB obtained injunctions under s.44 of the Arbitration Act 1996, was seeking damages pursuant to the undertaking in damages offered by VTB when obtaining the injunctions (which had since been discharged). The only issues remaining in the proceedings were Petraco’s claim to enforce the undertakings and VTB’s counterclaim. Petraco sought security for the costs of the trial to determine its entitlement pursuant to the undertakings, with VTB’s defence and counterclaim to be struck out if no security was provided.

Held: While it would have been open to Petraco to seek security for the costs of VTB’s counterclaim, with the counterclaim being stayed or struck out of security was not provided, it was not appropriate to order VTB to provide security for Petraco’s costs of enforcing the undertaking, on the basis that its defence would be struck out in default. Having considered the terms of the General Licence, the Court was not satisfied that they provided a realistic basis for VTB to obtain legal representation for the trial, and it was not realistic to expect VTB to conduct that trial in person. In those circumstances, the Court concluded that the adjournment of the trial was unavoidable.

The full judgment can be found on the National Archives website (external link).

Last Bus Ltd v Dawsongroup Bus and Coach Ltd, and another (Mr Justice Andrew Baker)

Hire purchase agreements for premium coaches – whether first defendant’s terms excluded the statutory implied term under the Supply of Goods (Implied Terms) Act 1973 that the coaches would be of satisfactory quality – whether such exclusion satisfied the requirement of reasonableness under UCTA 1977.

[In hire purchase financing contracts for the acquisition by the claimant, in aggregate, of 30 Mercedes Tourismo model coaches costing c.£7.5 million, prior to financing charges, Clause 5(b) of the first defendant’s terms excluded all ”representations, conditions and warranties whether express or implied by law” concerning quality.

Held: The language of Clause 5(b) was clear. It excluded the statutory implied term. There was no serious contrary argument. Hire purchase finance would have been available from other finance houses, but probably only on terms containing an equivalent exclusion; on the other hand, the claimant was not bound to use hire purchase and whether it did or not it had a long-standing relationship with the second defendant importer/distributor such that it could have secured such warranties as to quality as it was prepared to offer. There was a very substantial course of dealing between the parties involving some 45 prior contracts over about 20 years in respect of (in aggregate) about 200 buses and coaches, every one signed by the claimant’s managing director on the first defendant’s terms including Clause 5(b) (or a materially similar predecessor to it). Those being the circumstances of the subject contracts, between substantial and experienced commercial parties, there was no real prospect of the first defendant failing to establish that Clause 5(b) was reasonable. Summary judgment was granted dismissing the claim against the first defendant.

The full judgment can be found on the National Archives website (external link).

Ebury Partners Belgium SA/NV v. Technical Touch BV and another (Jacobs J)

E-commerce –-  incorporation of contractual terms via website – law governing incorporation of English law and jurisdiction clauses – anti-suit injunction.

The Claimants applied for an anti-suit injunction to restrain proceedings in Belgium, and the Defendants applied to set aside service of English proceedings. The Second Defendant, on behalf of the First Defendant, had applied for foreign exchange facilities with the Claimants by making an on-line application. The Second Defendant ticked a box in the on-line form indicating the First Defendant’s assent to the Claimants’ standard terms, which included English law and jurisdiction clauses. However, the Defendants did not read the terms or download them, and they were not sent separately to the Defendants by the Claimants.

The court held that the on-line application form, which required an applicant to indicate its assent to the Claimants’ standard terms by ticking the box, was sufficient to give notice of those terms to the First Defendant. The Claimants’ standard terms were incorporated into the parties’ agreement, notwithstanding that the parties’ concluded agreement may not have been reached at the time when the box was ticked, but only some weeks later. The terms were incorporated applying English law principles, pursuant to Article 10 (1) of the Rome I regulation. It was not unreasonable to apply English law to that issue, and Article 10 (2) of Rome Iwas inapplicable. There were no strong grounds to permit the proceedings to continue in Belgium in breach of the parties’ agreement. An anti-suit injunction was granted.

The full judgment can be found on the National Archives website (external link).

Contra Holdings Ltd v Mr M J C Bamford (Jacobs J)

Delays in fixing hearing of “consequentials” following judgment – Amendment of Statement of Case subsequent to judgment.

In litigation between members of the Bamford family, the defendant successfully applied to strike out the claimant’s claim. Judgment was handed down on 18 July 2022 (see [2022] EWHC 1857 (Comm)). Due to the unavailability of counsel, the hearing of “consequential” matters arising from the judgment was delayed until 28 September 2022. The claimant then applied to amend its Statement of Case to allege fraud. The application was dismissed: the fraud allegation had no real prospect of success, there was no satisfactory reason for the claimant’s failure to make the application prior to or at the strike out hearing, and other discretionary factors favoured dismissal.

The court observed that an increasingly common, but regrettable, feature of Commercial Court litigation is the apparent difficulty in counsel making themselves available for a hearing of “consequential” matters, following the hand-down of a judgment. Delayed consequential hearings create an increased amount of work for the parties and the judge, who has to deal with a case weeks or (as here) over 2 months after judgment has been given, when the case is no longer fresh in his or her mind. They also, as in the present case, allow time for parties to re-think and try to salvage a case which has been lost, here by making a substantial application to amend. In the future, Commercial Court judges will be far less tolerant of “consequential” hearings being delayed because of the unavailability of counsel, and will fix “consequential” hearings to take place within a short time after judgment.

The consequentials judgment can be found on the National Archives website (external link).

Judgment handed down on 18 July 2022 can be found on the National Archives website (external link).

“Victor 1”, Ceto Shipping Corporation v Savory Shipping Inc (Andrew Baker J)

Bareboat charter – meaning of “management fees and any other sums due” to the ship’s technical and crew manager – whether ship could be arrested on a claim for technical and crew management fees – Senior Courts Act, s.20(2)(h)/(p).

The claimant bareboat charterer brought a Part 8 Claim against the defendant shipowner for a declaration that on the proper construction of the charter title to the ship passed to the claimant even if it owed management fees to the ship’s technical and crew manager, so long as the claimant was disputing the debt in good faith. The relevant clause providing for title to pass required that the claimant should have “paid all hire and any other sums due under this Charter and … all management fees and any other sums due under the Management Agreement”. A significant theme in the claimant’s argument was that the manager was protected, if the claimant’s construction of the charter was correct, by the ability to arrest the ship on a claim in rem for its fees after title had passed. The court held that on the proper construction of the charter clause, ‘due meant due’, so that title did not pass if sums were owed to the manager. The manager’s claim for technical and crew management fees was not within the Admiralty jurisdiction of the court allowing the ship to be arrested.

The full judgment can be found on the National Archives website (external link).

Deutsche Bank AG (London Branch) v Central Bank of Venezuela (Cockerill J)

Permission to Appeal – Costs (Issue Based Order) – Interim Payment

The Court considered the authorities on the making of issue based costs orders, and made such an order where an issue was a marginal issue with a very high costs implication which need not have been taken, could have been pursued in a more streamlined fashion and where it was easier to separate the issue than determine an appropriate percentage figure for a reduction. The Court also granted permission to appeal exceptionally under the “some other compelling reason” gateway.

The full judgment can be found on the National Archives website (external link).

Pisante et al v Logothetis et al (No.2) (Andrew Baker J)

Restitution consequent upon rescission of contract – post-trial amendment application – costs and interest

The claimants’ claim that a shipping investment contract had been induced by fraud had succeeded at trial: [2022] EWHC 161 (Comm).  The contract was rescinded.  The consideration for the contract comprised two elements and the court had found that one element would have been invested with the defendants absent the fraud.  The claimants applied to amend to expand their damages claim to allege that the investment with the defendants absent the fraud would have been substantially profitable.

Held:

(i) The finding that the claimants would still have invested some of their money with the defendants was irrelevant to the question of restitution consequent upon rescission.  Rescission was total, not partial; restitution was to the status quo ante and also had to be total, not partial.

(ii) The new damages claim could and should have been put forward so as to be considered at trial, and it would be unjust to introduce it now.

The court also dealt with arguments about costs and interest.

The full judgment can be found on the National Archives website (external link).

Hulley Enterprises and Others v Russian Federation (Butcher J)

Application to lift stay of recognition and enforcement proceedings – ongoing set aside proceedings at the arbitral seat – jurisdictional challenge based on state immunity – balance of factors for and against continuation of stay 

The court partially lifted a stay of proceedings to enforce foreign arbitral awards (the “Awards”) solely for the purpose (and to the extent necessary) for the resolution of Russia’s state immunity challenge.  Russia, resisting enforcement proceedings brought under the Arbitration Act 1996 by the award creditors, had applied to dispute the English court’s jurisdiction on the basis of immunity under s.1(1) of the State Immunity Act 1978.  Russia had also brought set aside proceedings before the Dutch courts, the courts of the arbitral seat.  The court previously refused to lift the stay in April 2021 ([2021] EWHC 894 (Comm)).  However, matters had changed sufficiently since then, as: (1) the Dutch Supreme Court’s decision in November 2021 had resolved for the purposes of the Dutch proceedings those issues that would have overlapped with those raised on Russia’s state immunity challenge here; and (2) the effects of Russia’s invasion of Ukraine gave some further weight to the Claimants’ case that they would be prejudiced if the stay were to continue.  Whilst there remained before the Dutch courts an ongoing challenge to the Awards for procedural fraud in the arbitration, lifting the stay only to the extent necessary to resolve the state immunity challenge would not disrupt those proceedings or create an unjustified risk of inconsistent decisions.

The full judgment can be found on the National Archives website (external link).

National Iranian Oil Company v (1) Crescent Petroleum Company International Limited (2) Crescent Gas Corporation Limited (Butcher J)

Arbitration Award – s.67 Arbitration Act 1996 – s.73 Arbitration Act 1996 – whether a party’s jurisdiction objection raised in the arbitration differed from one it sought to raise in its s. 67 application – summary dismissal of a s. 67 challenge – scope of arbitration agreement governed by foreign law

The court dismissed a s.67 Arbitration Act 1996 application brought by NIOC against an award rendered in favour of the second defendant (“CGC”).  NIOC’s s.67 application alleged that the tribunal lacked substantive jurisdiction to award damages in respect of NIOC having (by its breach of contract) caused CGC to incur liability to its subsidiary, Crescent National Gas Corporation Ltd (“CNGC”), under a separate CGC-CNGC contract.  NIOC argued that this was a claim falling outside the scope of the relevant arbitration agreement (which was governed by Iranian law).  The court made three principal rulings. 

First, NIOC’s s.67 application was not precluded by a failure to object which qualified for the purposes of s.73 of the Arbitration Act 1996.  Although in the arbitration, NIOC had not expressly articulated the scope objection (and had focused instead on how the disposition of the claim required an incidental finding that CGC was liable to CNGC under a different contract with its own arbitration agreement), NIOC had implicitly made the objection as a matter of substance. 

Second, NIOC was precluded from relying on Iranian law expert evidence insofar as it was inconsistent with the tribunal’s substantive findings (which had res judicata effect); but that this was not fatal to NIOC’s application on the facts. 

Third, assessed on its merits, NIOC had no realistic prospect of establishing that an arbitration agreement worded to cover any claim “arising out of or relating to the Contract” was to be construed, in accordance with such principles of construction of Iranian law as had been arguably shown to exist on this application, as not extending to a damages claim brought by CGC against NIOC for its having caused CGC to incur liability to CNGC by its breach of contract. The court granted summary judgment in favour of the defendants. 

The full judgment can be found on the National Archives website (external link).

Various Eateries Trading Limited v Allianz Insurance PLC (Butcher J)

Business interruption insurance – Covid-19 – insured peril – indemnity period – proximate cause of loss in insurance – construction of limits of liability provisions – identification of ‘single occurrence’ for the purposes of aggregation clauses

The court interpreted provisions in a business interruption insurance policy, which were materially similar to those in Stonegate v MS Amlin ([2022] EWHC 2548 (Comm)) and Greggs v Zurich ([2022] EWHC 2545 (Comm)). A Covered Event (an occurrence of an insured peril) for the purposes of the ‘disease’ peril clause arose whenever a person contracted Covid-19 within the ‘Vicinity’ or entered the ‘Vicinity’ with Covid-19. Applying Stonegate, the number of Covered Events for the ‘enforced closure’ peril clause must be counted on a per Venue closed basis. For the ‘prevention of access’ peril clause, there occurred a Covered Event each time a materially different restriction which prevented access to insured Venues was imposed or advised, but no separate Covered Event arose for each affected Venue. The number of Covered Events must be identified by reference to the substance of the relevant actions or advice, not their form. The ‘Indemnity Period’ started with the commencement of business interruption caused by a Covered Event, rather than with a Covered Event. For the ‘disease’ peril clause, the court found that Covid-19 cases occurring before the insurance period ended had not been shown to be proximate causes of most governmental measures or decreases in custom after that period. The ‘prevention of access’ and ‘enforced closure’ peril clauses covered Covered Events starting within the insurance period and continuing beyond it. The ‘Limit of Liability’  per Single Business Interruption Loss applied to all claimed business interruption losses, irrespective of whether there was aggregation. On aggregation, the court, applying Stonegate, accepted Allianz’s position that certain government measures, such as restaurant closures and the second lockdown, were “single occurrence[s]” with which the claimed losses could have a sufficient nexus.

The full judgment can be found on the National Archives website (external link).

Stonegate Pub Company Limited v (1) Ms Amlin Corporate Member Limited (2) Liberty Mutual Insurance Europe SE (3) Zurich Insurance Plc (Butcher J)

Business interruption insurance – Covid-19 – insured peril – meaning of ‘occurrence’ in an aggregation clause – proximate cause of loss in insurance – guidance in the FCA Test Case – additional increase in cost of working cover – accounting for payments by third party reducing costs and diminishing insured loss

The court considered the correct interpretation of various insuring clauses in a business interruption insurance policy; specifically, the interpretation as to when each instance of an insured peril occurred under each of the ‘disease’, ‘enforced closure,’ and ‘prevention of access’ clauses.  For the purposes of the aggregation clause, the “single occurrences” with which the claimed losses might have a sufficient nexus which had been established were  (i) the Government’s decision on 16 March 2020 to advise people to avoid social venues and (ii) the Government’s instructions on 20 March 2020 for restaurants, pubs, and bars to close.  Regarding proximate cause, Covid-19 cases (which were insured perils) occurring within the insurance policy period were proximate causes of the lockdown continuing until July 2020 (thereby causing business loss), but not of governmental action or (with certain exceptions) changes in consumer behaviour after that date.  As for the interpretation of the Additional Increased Cost of Working (“AICW”) provisions, the AICW sub-limit provided for in the insurance policy applied per each Single Business Interruption Loss, and not in the aggregate. AICW and Increased Cost of Working (“ICW”) under the policy terms were mutually exclusive.  The AICW sub-limit was not available for increased costs and expenses having the effect of diminishing or avoiding losses in turnover, as those would be ICW.  Payments under the Coronavirus Job Retention Scheme and business rates relief received by the insured had to be accounted for under the savings clause (and the general law) as far as they diminished the insured loss.

The full judgment can be found on the National Archives website (external ink).

Greggs PLC v Zurich Insurance PLC (Butcher J)

Business interruption insurance – Covid-19 – insured peril – identification of ‘single occurrence’ for the purposes of aggregation clauses – interpretation of limit of liability clauses – accounting for third party payments diminishing insured loss.

The court considered the approach to be taken when determining the number of Covered Events (occurrence of insured perils) for the ‘prevention of access’ and ‘enforced closure’ perils in a business interruption insurance policy, applying the reasoning in Stonegate ([2022] EWHC 2548 (Comm)).  It could not be said that all of the Covid-19 cases (‘disease’ Covered Events), were to be regarded as causing a single business interruption loss to which a single Limit of £2.5 million applied.  For the purposes of the ‘aggregation’ clause, the court accepted that the Government’s COBR decision on 16 March 2020 was a ‘single occurrence’.  It was possible that losses arising from subsequent measures between 16-23 March 2020 (which were a progression of the 16 March decision), and losses arising from the insured’s decision to close its shops from 24 March 2020, were losses “in connection with” the COBR decision, and therefore aggregable.  The measures taken in each of the four nations after May 2020 were not a ‘single occurrence’ even if they were broadly to the same effect.  There were separate ‘occurrences’ in each nation when new restrictions were introduced, unless they merely continued existing restrictions (or made trivial changes).  Restrictions imposed on limited geographical areas also counted as separate ‘occurrences’.  The sub-limit on Public Relations Crisis Management costs applied per each Single Business Interruption Loss, in addition to the Limit of Liability.  Applying Stonegate, Coronavirus Job Retention Scheme payments and business rates relief were to be accounted for in assessing Greggs’ loss before applying the Single Business Interruption Loss limit. 

The full judgment can be found on the National Archives website (external link).

EGF v HVF et al (Andrew Baker J)

Arbitration – allegation of apparent bias by seeming to pre-judge an aspect of the merits (Arbitration Act 1996, s.24) – arbitrators’ power to require a payment on account as an interim remedy in respect of a money claim (UNCITRAL Rules, Articles 26 & 34, Arbitration Act 1996, ss.39 & 58)

In an arbitration seated in London and governed by the UNCITRAL Rules, HVF claimed c.US$400 million as a debt it said was owed by HVF under three related long-term supply contracts.  The arbitrators permitted HVF to rely on two extra witness statements served on the final day of a four-day merits hearing, in response to an allegation of dishonesty raised by EGF the previous day, without allowing for cross-examination on those statements (which would have necessitated an adjournment).  The court dismissed a claim that the arbitrators had thereby made it appeared that they might be pre-judging an issue going to the merits so as to create a justifiable doubt as to their impartiality.  The arbitrators issued a partial award requiring EGF to pay HVF US$250 million on account of HVF’s claim, by way of interim relief, subject to later adjustment or reconsideration.  The court dismissed challenges to that award under s.67 and s.68 of the 1996 Act.  EGF contended that the arbitrators had no power to order payment on account by way of interim relief, alternatively no power to issue an award for interim relief.  That challenge did not go the arbitrators’ substantive jurisdiction, so the s.67 claim failed.  The pleaded claim of substantial injustice was not made out, so the s.68 claim also failed.  Obiter, if substantial injustice had been shown, the s.68 claim would have succeeded:  Article 26 of the UNCITRAL Rules did confer power to order payment on account by way of interim relief; but Article 34 of the UNCITRAL Rules requires in unqualified terms that any relief granted by an award must be final, so the arbitrators exceeded their powers by granting interim relief in the form of a partial award.

The full judgment can be found on the National Archives website (external link).

Pisante et al v Logothetis et al (No.2) (Andrew Baker J)

Restitution consequent upon rescission of contract – post-trial amendment application – costs and interest

The claimants’ claim that a shipping investment contract had been induced by fraud had succeeded at trial: [2022] EWHC 161 (Comm).  The contract was rescinded.  The consideration for the contract comprised two elements and the court had found that one element would have been invested with the defendants absent the fraud.  The claimants applied to amend to expand their damages claim to allege that the investment with the defendants absent the fraud would have been substantially profitable.

Held:

(i)            The finding that the claimants would still have invested some of their money with the defendants was irrelevant to the question of restitution consequent upon rescission.  Rescission was total, not partial; restitution was to the status quo ante and also had to be total, not partial.

(ii)           The new damages claim could and should have been put forward so as to be considered at trial, and it would be unjust to introduce it now.

The full judgment can be found on the National Archives website (external link).

Banca Intesa Saopaolo SpA and Dexia Crediop SA v Comune di Venezia (Foxton J)

ISDA Master Agreement – whether void or entered into without authority – recoverability of amounts paid – whether claimants’ payments under hedging swaps gave rise to defence of change of position

On the basis of the decision of the Italian Supreme Court in the Cattolica case, Venice lacked the substantive power to enter into speculative derivatives or those which involved the payment of an “upfront”. That want of substantive power amounted to a lack of capacity for the purposes of English conflict of law rules, such that the Transactions were not binding on Venice. Venice’s alternative claim that the relevant officials lacked authority to enter into the Transactions, or that the Transactions were unenforceable for breaches of Italian mandatory laws, failed, as did its alternative claims for breach of duty. The Banks’ claims that Venice was estopped from denying that it lacked capacity to enter into the Transactions failed, as did their alternative claims in breach of contract and misrepresentation. Venice was entitled to recover the amounts paid under the Transactions in unjust enrichment. However, the unjust enrichment claims were governed by English law and it was open to the Banks to advance a defence of change of position. The payments made by the Banks under “back to back” hedging transactions amounted to a change of position (Westdeutsche Landesbank Girozentrale v Islington LBC [1994] 4 All ER 890 and South Tyneside MBC v Svenska International plc [1995]1 All ER 545 not followed).

The full judgment can be found on the National Archives website (external link).

NDK v HUO and KXF (No 2) (Foxton J)

Arbitration Award – s.67 Arbitration Act 1996 –whether a dispute as to the shareholder status of a party claiming to have acquired shares and who had signed a Deed of Accession to a Shareholders Agreement fell within the scope of the Arbitration Agreement in the Shareholders Agreement

A person claiming to have acquired shares in private company had executed a Deed of Accession in the required form agreeing to be bound by the terms of the Shareholders Agreement. There was a dispute as to whether there had been a valid transfer of shares to that party and as to whether it had become a registered shareholder of the company. The issue arose as to whether an arbitral tribunal appointed pursuant to the Arbitration Agreement in the Shareholders Agreement had jurisdiction to determine whether or not a valid transfer of shares had taken place.  Held: it was clear from the terms of the Deed of Accession read together with the Shareholders Agreement that it was intended to put persons proposing to acquire shares in the company and who had executed a Deed of Accession in the require form in contractual privity with the other shareholders for certain purposes, even if no valid transfer of the shares had in fact taken place.  The Arbitration Agreement formed part of the contract between the party who had executed the Deed of Accession and the other shareholders. Having regard to the terms of the Arbitration Agreement and the decision in Fiona Trust v Privalov [2007] UKHL40, the Arbitration Agreement so incorporated extended to a dispute as to whether or not there had been a valid transfer of shares to the party executing the Deed of Adherence.

The full judgment can be found on the National Archives website (external link).

Royal & Sun Alliance Insurance Limited and ors v Tughans (a firm) (Foxton J)

Professional indemnity insurance – transaction success fee – whether arbitrator had jurisdiction to award arbitral claimant a declaration relating to its liability to repay success fee or damages in the amount of the fee or whether granting the declaration involved a serious irregularity under s.68 of the Arbitration Act 1996 – whether as a matter of law the insurance policy responded to any liability the claimant might be found to have to return or pay damages in the amount of the success fee

The court should not adopted an overly strict interpretation of the scope of a particular submission to arbitration for the purposes of s.30(1)9c) of the Arbitration Act 1996, where the dispute fell within the scope of the parties’ arbitration agreement. In this case, while the arbitration claimant had informed the arbitration respondent that it would not be seeking a particular form of relief in the arbitration, the effect of that statement was not to deprive the arbitrator of jurisdiction to grant such relief, albeit the arbitration claimant required the arbitrator’s permission to depart from that concession, in circumstances in which considerations of justice and fairness to the other party might make it appropriate to refuse such consent. Accordingly the challenge under s.67 of the Arbitration Act 1996 failed. However, the granting a declaration which included the relief which the arbitration claimant had disclaimed its intention of seeking, without considering whether or not the arbitration claimant should be given permission to depart from the position it had adopted, involved a serious irregularity which has occasioned substantial prejudice to the arbitration respondent. For that reason, the challenge under s.68 of the Arbitration Act 1996 succeeded. So far the appeal under s.69 of the Arbitration Act 1996 is concerned, the arbitration claimant had accrued a contractual right to the Success Fee. In those circumstances, the arbitration claimant would suffer a loss for the purposes of the professional indemnity policy if ordered to pay damages in the amount of the Success Fee to a third party. If no contractual right to the Success Fee had ever accrued, then the obligation to return the fee would not have involved an indemnifiable loss for the purposes of the policy.

The full judgment can be found on the National Archives website (external link).

Deutsche Bank AG (London Branch) v Central Bank of Venezuela (Cockerill J)

Recognition of judgments – Act of state – One voice doctrine – Claims in rem – Natural Justice – Foreign governments and independence

On remission from the Supreme Court the Court found that certain judgments of the Venezuelan Courts purporting to nullify the executive acts of the individual recognised by the UK government as President of Venezuela were capable of being “quashing decisions”, but found that (i) they were not entitled to recognition as not meeting the criteria for recognition of in personam judgments and as not being the equivalent of judgments in rem which could be recognised and enforced by English courts (ii) if they had been capable of recognition there would have been defences to recognition as recognition would have been contrary to the “one voice” doctrine and the failings in natural justice in each case were serious clear breaches of natural and substantial justice and a denial of a fair trial under Article 6 of the ECHR and would render it inappropriate to recognise them.

The full judgment can be found on the National Archives website (external link).

NDK v HUO and KXF (Foxton J)

Arbitration Award – s.67 Arbitration Act 1996 -Whether arbitrators’ decision that court proceedings had been brought in breach of arbitration clause in a Shareholders Agreement (SHA) raised an issue as to the substantive jurisdiction of the tribunal for the purposes of s30(1) of the Arbitration Act 1996.

Where there was no dispute as to the existence of an arbitration agreement between the parties under which the tribunal had been appointed, but a dispute as to whether the arbitration agreement extended or was capable of applying to particular claims brought by one of the parties in court proceedings, the arbitrators’ decision as to the scope and applicability of the arbitration agreement when granting anti-suit relief raised an issue as to the tribunal’s substantive jurisdiction for the purposes of s.30(1) of the Arbitration Act 1996. Where the shareholders in a private company were required to be parties to the shareholders’ agreement, claims brought in court by one shareholder against another claiming relief by reference to the Articles of Association in respect of matters which also gave rise to breaches of the shareholders’ agreement fell within the arbitration agreement in the shareholders’ agreement (BTY v BUA [2018] SGHC 2013 and Dickson Holding Enterprise Company Limited v Moravia CV [2019] HKCFI 1424 not followed). The fact that the dispute involved an issue with implications for the accuracy or contents of a public register (in this case the register of members of a company) did not raise a sufficient public policy to override the strong public policy under English law of allowing commercial parties to refer their disputes to arbitration and holding them to their agreement to do so (dicta in BTY not followed).

The full judgment can be found on the National Archives website (external link).

The Ecu Group Plc v (1) HSBC Bank Plc (2) HSBC UK Bank Plc (3) HSBC Bank USA, N.A. and Therium Litigation Finance Atlas AFP IC (“Therium”) (Moulder J)

Defendants’ application for a non-party costs order against Therium, litigation funder. Whether Therium jointly and severally liable with the Claimant in respect of the Defendants’ costs, whether liability should be limited to costs incurred from the date of the litigation funding agreement, whether liability of Therium should be limited to its proportion of overall funding, whether Therium should receive credit for ATE insurance (and similar), whether Therium was liable for the outstanding amount of the interim payment.

The full judgment can be found on the National Archives website (external link).

Deutsche Bank AG v (1)  Sebastian Holdings, Inc and (2) Mr Alexander Vik (Moulder J)

Application of the Claimant for committal of the Second Defendant, Mr Alexander Vik. The Court found Mr Alexander Vik in contempt of court in that Mr Vik firstly deliberately gave false evidence in response to certain questions at a Part 71 means hearing on 11 December 2015 and secondly failed to produce documents as required by an order of the Court.

The full judgment can be found on the National Archives website (external link).

Bank of America Europe DAC v Citta Metropolitana di Milano (Foxton J)

CPR 15.11 – application to lift automatic stay – whether test for relief against sanctions to be applied – whether test satisfied – whether defendant should be given extension of time for lodging an acknowledgment of service to allow it to bring an out of time jurisdictional challenge

An application to lift the automatic stay imposed under CPR 15.11 was an application for relief against sanctions. It was appropriate to grant relief in this case – the claimants had deliberately allowed the actions to be stayed but had been seeking to address legitimate concerns arising from the equivocal nature of the defendant’s position, albeit by inappropriate procedural means. However, in circumstances in which it had suited both parties to avoid active participation in English proceedings for a long period pending developments in Italy, it was appropriate to grant the defendant an application for an extension of time within which to acknowledge service of the proceedings.

The full judgment can be found on the National Archives website (external link).

ARI v WXJ (Foxton J)

s.16(1) Arbitration Act 1996 – clause 30 of BARECON charterparty form requiring appointment of arbitrator to commence arbitration and requiring other party to appoint its own arbitrator within 14 days failing which the first appointed arbitrator could be designated sole arbitrator – whether defendant had validly appointed its arbitrator within 14 day period – test to be applied

Where an arbitration agreement governed by English law required a party to appoint its arbitrator to commence the arbitration, or provided that a party’s right to appoint an arbitrator would be lost if not exercised within a particular period, the test of whether there had been a valid appointment was to be approached pragmatically. All that was required was an unconditional confirmation of acceptance of the appointment by the arbitrator which was communicated to the other party, or an unconditional confirmation of the arbitrator’s willingness to accept appointment which the appointing party acted on by communicating the appointment to the arbitrator and the other party.

The full judgment can be found on the National Archives website (external link).

National Investment Bank Ltd v Eland International (Thailand) Co Ltd (Foxton J)

Arbitration Act 1996 – interrelationship between ss.18 and 72 – whether effect of order under s.18 to preclude application for declaration under s.72 – whether right to refer dispute to arbitration waived – effect of finding of non-arbitrability by foreign court and whether it gave rise to an issue estoppel

Where the applicant had not participated in the s.18 hearing, the court’s s.18 order did not have the effect of depriving the applicant of its entitlement to apply for relief under s.72. Here the applicant was entitled to a declaration under s.72 that the arbitration tribunal did not have jurisdiction on the basis that the respondents had waived the right to refer the dispute to arbitration by commencing proceedings in Ghana and/or their conduct in those proceedings. The decision of the Ghana court that the claims were not arbitral as a matter of Ghana law did not give rise to an issue estoppel, the issue of public policy being one for the courts of each country.

The full judgment can be found on the National Archives website (external link).

PJSC NBT v Mints and others (Foxton J)

Arbitration award – whether award gave rise to issue estoppel against non-arbitrating parties – test for privity when determining preclusive effect of prior arbitral award and generally – scope and application of “special circumstances” exception to doctrine of issue estoppel when prior determination in arbitration – application of doctrine of abuse of process against background of prior determination in an arbitration award – applications for permission to amend and summary judgment.

The arbitral award did not give rise to an issue estoppel against non-party defendants in subsequent Commercial Court proceedings. Nor was it an abuse of process for those defendants to advance arguments in the Commercial Court proceedings which were inconsistent with the findings of the arbitral tribunal. For that reason, application for permission to amend to plead a case of issue estoppel or abuse of process, and for summary judgment on the amended case, refused.

The full judgment can be found on the National Archives website (external link).

Aquavita International SA v Indagro SA (Foxton J)

Anti-suit injunction – Arbitration Agreement – whether proceedings commenced in foreign court to obtain interim order which required mandatory performance of disputed contractual obligation a breach of the Arbitration Agreement – whether interim nature of foreign court’s order constituted “strong reason” for not granting an anti-suit injunction – relevance of availability of relief from English court under s.44 Arbitration Act 1996.

The court held that proceedings commenced in Brazil for an interim order which had the effect of requiring the final performance of a disputed contractual obligation constituted a breach of the arbitration agreement between the parties. Nor did the interim nature of the relief sought provide a “strong reason” for not granting anti-suit relief given the practical effect of the order. For that reason, the court renewed the anti-suit injunction granted by Fraser J on the “without notice” application.

The full judgment can be found on the National Archives website (external link).

Invest Bank P.S.C. v Ahmad Mohammad El-Husseini Et Al. (Andrew Baker J)

Enforcement claims that assets are owned beneficially by the first defendant or have been the subject of transactions at an undervalue entered into by him (s.423 Insolvency Act 1986) – whether claims arguable – whether the court should set aside permission to serve out of the jurisdiction and/or refuse permission to amend and/or grant summary judgment against the claimant – whether steps taken by a company, acting by a controlling individual, constitute a transaction entered into by the individual.

Where an individual does no more than act as the instrument by which his company acts, the individual does not enter into a transaction with the company, or with the party with whom the company, thus acting by the individual, deals. On the claimant bank’s proposed pleading: no arguable s.423 claim was raised for most of the assets in respect of which that point had been taken, but there was an arguable s.423 claim in respect of a certain US$15 million cash balance; an arguable claim of beneficial ownership in the first defendant was raised, but limited to an allegation of express trust, in respect of two London properties, but not in respect of certain English company shares.

The full judgment can be found on the National Archives website (external link).

Gulfvin Investment Ltd v Tahrir Petrochemicals Corporation S.A.E. et al. (Andrew Baker J)

Permission to serve proceedings out of the jurisdiction – whether England and Wales the most appropriate forum.

The claimant contracted to buy shares in Carbon Holdings Ltd (‘CHL’), the parent of the first defendant (‘TPC’), for US$5 million. It paid the price to a London bank account in TPC’s name as required by the contract but did not receive the promised shares. The claimant claimed damages for deceit against the second and third defendants (Mr El-Baz and Mr Garfinkel) and restitution on the ground of unjust enrichment against TPC. The defendants challenged jurisdiction (CPR Part 11). The restitution claim, if brought on its own, might most appropriately have been brought in this jurisdiction. The deceit claim, if brought on its own, should most appropriately be brought in Texas. The claimant’s position was that it was not appropriate to separate the claims. It had not been shown that this jurisdiction was clearly or distinctly the most appropriate forum for the trial of the action.

The full judgment Ulfvin Investment Ltd v Tahrir Petrochemicals Corporation S.A.E. et al can be found on the National Archives website.

Unicredit Bank AG v Euronav NV (Moulder J)

Delivery of Cargo without production of bill of lading – Whether Owners liable to financing Bank for breach of contract- Status of bill of lading after the novation of the charterparty by the original shipper such that the Bill of Lading was no longer in the hands of the charterer but remained in the hands of the original shipper- Causation.

The court held that the Bill of Lading did not contain the contract of carriage between the Owners and the lawful holder of the Bill, BP, on or after the date of the novation and prior to the alleged misdelivery. Alternatively, any breach by the owners in discharging the Financed Cargo without production of the Bill of Lading did not cause the loss or in the alternative the Bank would have suffered the same loss in any event.

The full judgment Unicredit Bank AG v Euronav NV can be found on the National Archives website (external link).

Federal Republic of Nigeria v JP Morgan Chase (Cockerill J)

Banking – Quincecare duty – whether agreements were reached in fraud of the FRN – whether D was grossly negligent in making payments pursuant to those agreements – whether court precluded from considering the issue by the foreign act of state doctrine – title to sue – loss – causation – contributory negligence.

The court held that certain 2011 Resolution Agreements relating to a oil concession granted in controversial circumstances in 1998 were not concluded as part of a fraud on the FRN and consequently the Quincecare duty was not engaged. Had there been such a fraud the bank was not on notice of the fraud in 2011 and though on notice in 2013 was not grossly negligent. There would therefore have been no breach of the Quincecare duty (as modified by the contract) had there been a fraud. The court also concluded that it was not precluded from considering these issues by the foreign act of state doctrine, and that as a matter of Nigerian Law that the correct claimant had sued.

The full judgment Federal Republic of Nigeria v JP Morgan Chase can be found on the National Archives website.

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