Judgment summaries

2023

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)) may 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)) may 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)) may 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)) may 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)) may 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)) may be found on the National Archive 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)) may 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:

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.
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.
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.
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
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:

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.
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.
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.
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 Archive 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.

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

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 can be found on the National Archives website (external link).

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 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 can be found on the National Archives website (external link).