News

  • The disclosure pilot: an unexpected development. UTB LLC v Sheffield United & Others [2019] EWHC 914 (Ch) - Simon OakesView More

    Wed, 24 April, 2019

    Overview
    1. This is an illuminating decision, as to how the Disclosure Pilot will apply to pre-January 2019 cases.
    2. The case was commenced before the introduction of the Disclosure Pilot into the Business and Property Courts. An order for standard disclosure had been made, before the commencement of the Disclosure Pilot.
    3. Nevertheless, in considering an application for further disclosure in April 2019, Sir Geoffrey Vos, Chancellor of the High Court, considered that the Disclosure Pilot applied, and would do so for “all relevant proceedings subsisting in the Business and Property Courts, whether started before or after 1st January 2019, even in a case where a disclosure order was made before 1st January 2019 under CPR Part 31” (judgment at [17]).

    Background
    1. The case is a hotly-contested shareholder dispute within the ownership structure of Sheffield United Football Club; the matter is due to come on for trial in a few weeks.
    2. In this interlocutory application, one of the parties (Sheffield United Limited) was (inter alia) challenging another party’s (UTB LLC) claims to privilege in respect of certain documents, and seeking disclosure of other defined classes of documents.
    Application for Disclosure: the Disclosure Pilot Considered
    1. The claim had been issued prior to the commencement of the pilot on 1 January 2019. An order for standard disclosure had already been made, when the application challenging privilege and seeking further disclosure came to be heard in April 2019.
    2. Paragraph 1.3 of PD51U states that the “pilot shall not disturb an order for disclosure made before [1 January 2019]. There had, therefore, been some doubt as to whether the pilot applied in such cases, where there was a pre-pilot disclosure order. Indeed, the editors of the 2019 White Book had stated at 51.2.10 that “The Pilot does not apply to any proceedings where a disclosure order had been made before it came into force unless that order is set aside or varied” [emphasis added].
    3. This decision makes clear that the disclosure pilot does indeed apply in all subsisting proceedings within the Business and Property Courts, regardless of when those proceedings began. The Chancellor said, at [15], that the above interpretation in the White Book, of paragraph 1.3 PD51U, was wrong: he stated that although a pre-existing order will not be disturbed by the commencement of the pilot, the pilot will apply to all existing and new proceedings in the Business and Property Courts.
    4. At [24] the Court added that simply because paragraph 18 and other paragraphs of the pilot refer to concepts (like “Extended Disclosure” and “Issues for Disclosure”) which did not exist before 1st January 2019, the pilot will still apply to all cases subsisting in the Business and Property Courts after that date. The Chancellor added that “the Court will interpret the new PD51U in a way that makes it work as effectively” in respect of applications for disclosure in proceedings issued after January 2019, as it will in subsisting cases with pre-existing disclosure orders. Therefore, if an application for further disclosure is made in such proceedings, it will be governed by PD51U, rather that CPR Part 31.
    5. In deciding the privilege and disclosure questions in this case, the Court therefore applied the relevant paragraphs of PD51U:
    1. When considering the challenge to the assertion of privilege Court therefore turned to paragraphs 14 and 16 of PD51U: judgment at [65] and [72] . For example, paragraph 14.3 PD51U states that the Court may inspect a document over which privilege has been asserted if inspection is “necessary” to determine whether the claimed right or duty to withhold disclosure exists, or to determine the scope of that duty or right;
    2. When considering whether to order Extended Disclosure, the Court considered the reasonableness and proportionality of the application (paragraph 2 PD51U), and the continuing obligation for legal representatives to act honestly when giving disclosure, and to conduct a review to satisfy themselves that the claim to privilege is properly made (paragraph 3 PD51U): judgment at [77].
    1. By way of commentary on the pilot generally, the Court at [78] was at pains to emphasise that the requirement under the pilot for parties to co-operate and act with proportionality is “of the greatest importance”. The Chancellor also stated at [75] that “the introduction of the Pilot was intended to effect a culture change. The Pilot is not simply a rewrite of CPR Part 31. It operates along different lines driven by reasonableness and proportionality […]”.
    Commentary
    1. It is therefore clear that, even in a case where an existing order for disclosure has been made, when determining any further applications for (extended) disclosure, the Business and Property Courts will apply the principles laid down in PD51U, with which parties will be expected to have complied.
    2. As to the practicalities of that, the Court at paragraph 23 stated somewhat Delpically that:

    […] parties to cases like this, who want to apply to the court for Extended Disclosure under PD51U, should give detailed thought to the new rules and specifically to the way in which they will affect their application.

    1. Does that extend to completion of the Disclosure Review Document? That was not made expressly clear; the answer seems to be that it will be necessary to the extent required to determine the application. Here, the List of Issues for Disclosure (rather than a full DRD) was required: the Court considered, at [110], that it would only order Extended Disclosure where that is appropriate to fairly resolve one or more of the Issues for Disclosure. And the Chancellor had noted at [22] that whilst parties had given no advanced thought to the production of ‘Issues for Disclosure’, ‘fortunately’ such lists of issues were ultimately produced, which enabled the court to deal with the applications.

    Paul Downes QC and Emily Saunderson of Quadrant Chambers acted for Sheffield United Limited, instructed by Philip Sewell, Shepherd and Wedderburn LLP. 

    A copy of the judgment can be found here. 

    Simon Oakes

    Simon practises in commercial law, with a particular focus on banking & financial services, and complex commercial fraud cases.

    Simon has a wealth of experience in some of the most significant banking and financial services cases of recent years, from major interest rate hedging product litigation to regulatory investigations against individuals. He has a deep knowledge of the allegations of LIBOR misconduct against several major banks, a great deal of experience in misselling cases, and a wealth of experience of developing legal and tactical arguments in major commercial litigation.

    Significant recent instructions include:

    Two ongoing multi-million pound deceit claims against Bank of Scotland and/or Lloyds Banking Group

    Aldersgate & Ors v Bank of Scotland & Anor [2018] EWHC 2601 (Comm): a Commercial Court claim in excess of £100 million, alleging fraudulent and negligent misrepresentation arising out of LIBOR manipulation. The case also involved a ground-breaking interlocutory application by the defendant, attempting to withdraw pleaded admissions of findings by global regulators.

    The LIBOR test case of Graiseley Properties Ltd v Barclays Bank Plc, Deutsche Bank AG v Unitech Global Ltd [2013] EWCA Civ 1372 (CA), in the Court of Appeal and in the High Court. One of The Lawyer’s‘Top 20 cases’ of 2013.

    Hockin v Royal Bank of Scotland in the High Court: a £55 million Financial List banking case concerning interest rate products and the bank’s Global Recovery Group (‘GRG’), and involving issues of misrepresentation, LIBOR manipulation, unlawful means conspiracy and implied duties of good faith.

    Viavi v Shannan & Others [2018] EWCA Civ 681: a significant dispute about the validity of deeds, the principle in Re Duomatic, and estoppel by deed.

    Advising as to the impact of Brexit on the security of motor insurers.

    Having been seconded to both the Financial Services Authority and the Pensions Regulator, Simon has an excellent understanding of how regulators approach cases. He has acted both for and against the targets of regulatory action, including in multi-jurisdictional cases.

    Simon is frequently instructed as sole advocate in the High Court, County Court and Employment Tribunals. He also acts as part of larger counsel teams on long-running commercial litigation.

    > view Simon's full profile

    simon.oakes@quadrantchambers.com

    Paul Downes QC

    Paul specialises in commercial law, and has specific expertise in banking and finance-related matters.

    After taking Silk in 2010, his reputation as a tough, commercially-minded barrister has continued to grow.

    Before coming to the Bar, Paul worked for Barclays Bank and was an assistant examiner for the Chartered Institute of Bankers. A direct understanding of the commercial and financial worlds means clients benefit from a practical and user-friendly approach. Paul has also acted as an expert witness overseas in relation to banking regulation in the UK, and is lead contributor to Butterworths LexisNexis Encyclopedia on Forms and Precedents.

    Paul also handles general commercial litigation, international trade, media and entertainment, and professional negligence. He acts as an arbitrator in LMAA shipping disputes, commercial disputes and insurance disputes.

    He is recommended as a leading silk for commercial dispute resolution in Chambers & Partners UK Bar 2019 and for Banking & Finance, Commercial Litigation, Financial Services and Fraud: Civil in Legal 500 2019. 

    > view Paul's full profile

    paul.downes@quadrantchambers.com

    Emily Saunderson

    Emily is a general commercial practitioner specialising in commercial fraud, and banking and finance. She has broad experience in obtaining urgent injunctive relief including freezing orders, asset preservation orders and delivery up orders. Emily’s banking and finance practice has a particular emphasis on financial derivatives instruments, and she is familiar with standard form contracts including the ISDA Master Agreement.

    Emily is ranked in the latest edition of Chambers & Partners in commercial dispute resolution and she is recommended as a leading junior in banking and finance and financial services by the Legal 500, where she is described as “technically outstanding, with a very sound grasp of copious quantities of fine detail.”

    She has experience in cases involving contractual interpretation and rectification; dishonest assistance; fraud; bribery; fraudulent trading; rights of set-off; contractual estoppel; rights under contracts of indemnity; and guarantees.

    Before embarking on a career in law, Emily was a financial journalist covering the global derivatives markets. She brings a strong understanding and useful insider’s perspective on financial markets to her legal practice.

    > view Emily's full profile

    emily.saunderson@quadrantchambers.com

  • Time Charter Disputes: Owners cannot claim hire for vessel detained by pirates – The Eleni P – Tom NixonView More

    Thu, 18 April, 2019

    In Eleni Shipping Limited v Transgrain Shipping BV (“The ELENI P”) [2019] EWHC 910 (Comm), Popplewell J held that Owners were not entitled to claim hire from Charterers in the sum of around US$4.5 million in respect of a period of seven months during which the Vessel was detained by Somali pirates in the Arabian Sea. In doing so, Popplewell J provided a concise and transparent example of the application of the fundamental principles of contractual construction in the context of time charter disputes – and showed a firm willingness to challenge the views of an experienced maritime tribunal.

    Owners were represented by Robert Thomas QC, instructed by Evangelos Catsambas, Watson Farley & Williams and Charterers were represented by Thomas Macey-Dare QC, instructed by Eurof Lloyd-Lewis and Emma Skakle, Clyde & Co LLP.

    The Vessel, subject to a time charter on an amended NYPE 1946 form, was ordered to load a cargo of iron ore at a port in Ukraine for discharge at Xiamen in China. The Vessel was routed via the Suez Canal and the Gulf of Aden. She sailed through the Gulf of Aden without incident and into the Arabian Sea, but was there attacked and captured by pirates. She was only released by the pirates some seven months later.

    Owners claimed hire in the sum of around US$ 4.5 million over the time during which the Vessel was captured and detained by pirates.

    The Tribunal rejected Owners’ claim for hire in this period on the basis that it was excluded by each of two additional typewritten clauses in the Charterparty, clauses 49 and 101. Owners appealed in respect of the correct construction of each pursuant to s69 of the Arbitration Act 1996. The appeal succeeded in respect of clause 49, but Popplewell J held that the hire was nonetheless suspended over the relevant period by clause 101.

    Clause 49

    Clause 49 – Capture, Seizure and ArrestShould the vessel be captures [sic] or seized or detained or arrested by any authority or by any legal process during the currency of this Charter Party, the payment of hire shall be suspended for the actual time lost […]

    Owners contended before Popplewell J that Clause 49 only applied when the Vessel was captured, seized, detained or arrested by any authority or any legal process – it therefore did not apply to capture by pirates. Charterers argued that only the word “arrested” was qualified by the phrase “by any authority or by any legal process” – the word “captured” was not so qualified, and as a matter of ordinary language, the Vessel had been captured.

    Popplewell J rejected this argument, holding that Clause 49 only applied to capture where by an authority or legal process, and therefore not to capture by pirates. The phrase “any authority or any legal process” must apply to the whole preceding list of events - if it applied only to arrest it would be superfluous, and the drafting would be “surprisingly inept”. His Lordship also found that the contrary construction was inconsistent with the terms of Clause 15, which only put the Vessel off-hire for detention “by average accidents to ship or cargo” – on Charterers’ construction, Clause 49 would render any detention an off-hire event and “substantially cut across the careful allocation of risk in clause 15, without any apparent commercial rationale for doing so”.

    Popplewell J therefore disagreed with the Tribunal’s assessment that “capture” is not something that an “authority” could be involved in and therefore should be read as a freestanding exclusion. In characteristically pithy terms, his Lordship explained “capture does not necessarily connote the use of force. Unoccupied land or undefended goods may be captured. My wife may capture my heart. I see no difficulty as a matter of the ordinary use of language in the concept of a governmental authority or ruler capturing a vessel.”

    Clause 101

    Clauses 101 – Piracy ClauseCharterers are allowed to transit Gulf of Aden any time, all extra war risk premium and/or kidnap and ransom as quoted by the vessel’s Underwriters, if any, will be reimbursed by Charterers. […] In case vessel should be threatened/kidnapped by reason of piracy, payment of hire shall be suspended. It’s remain understood [sic] that during transit of Gulf of Aden the vessel will follow all procedures as required for such transit including but not limited the instructions as received by the patrolling squad in the area for safe participating to the convoy west or east bound.

    Owners argued that the latter cited sentence only put the Vessel off hire if threatened by piracy occurring during transit of the Gulf of Aden, a finite geographical area capable of definition. Charterers, by contrast, argued that it applied wherever the Vessel was threatened in the Gulf of Aden or as an immediate consequence of her transiting or being about to transit the Gulf.

    The Tribunal had held that (a) there was no generally understood precise definition of the Gulf of Aden as a geographical area in the context of a time charter of this kind and (b) the parties knew that transiting the Gulf of Aden exposed the ships to the risk of piracy not only in any area that could be precisely defined as the Gulf, but also in the Arabian Sea, and that the risk of piracy was expanding.

    Popplewell J noted the silence of the language of the clause on the question posed, but agreed with the Tribunal for three reasons. First, the Tribunal found as a matter of fact that the Gulf of Aden was not capable of being given a geographical definition in this context – such a finding itself not being susceptible to challenge.

    Second, Clause 101 is concerned with voyages through the Gulf of Aden – its purpose is to oblige Owners to accept instructions to trade the Vessel through the Suez canal, in order to make the Vessel more attractive to Charterers, and allocate the risks thereof. The first sentence allocates the burden of an extra war risk premium – and the sentence concerning hire suspension is to allocate the risk of delay from detention as a consequence of the transit which the first sentence requires. It should therefore apply to the immediate consequences of the transit through the Gulf of Aden, and not just be referable to a specific geographic area.

    Third, the war risk and kidnap ransom premium are not defined by reference to a single geographic area – and there is no basis for reading the provision on hire suspension differently.

    At the core of his reasoning was the purpose of Clause 101 – to permit Charterers to engage in trade through the Gulf of Aden – and that the Clause was intended to allocate the risks associated with such trade, not solely within a specifically defined geographical area.

    Consequently, despite a considerable victory in relation to Clause 49, Owners’ appeal ultimately failed. The judgment of Popplewell J nonetheless provides an excellent example of the willingness of the Commercial Court to engage with both the text of the Charterparty and the underlying allocation of risk arising out of voyages as perilous as those ordered by Charterers in this case.

    > Download a copy of the judgment

    Tom Nixon

    Tom has developed a practice that matches the breadth of Chambers’ practice areas, including international commercial disputes, shipping, conflicts of laws, commodities, aviation, commercial chancery and company work. He has acted, both as sole counsel and as a junior, on claims varying in value from hundreds of pounds to multiple billions. He enjoys difficult cases, and prides himself on being responsive and easy to work with.

    > view Tom's full profile

     

    Robert Thomas QC

    Robert's practice has moved from strength to strength since taking silk in 2011. He retains a strong presence in the traditional areas of his practice and has recently complemented this with substantial experience in commercial fraud and related relief. He is ranked as a Leading Silk in the latest editions of both directories, and has been praised in previous editions for having a "fantastically effective and intellectual style", for "consistently deliver[ing] a first-class service" and for his ability to handle "difficult cases on a tight timetable". He is a registered practitioner in the DIFC and is also receiving an increasing number of appointments as an arbitrator.

    Robert is frequently ranked as a leading barrister in the Chambers & Partners as well as the Legal 500 directories for Shipping & Commodities.

    "A strong advocate who can focus on the key legal issues in cases with many strands." (Legal 500 Asia Pacific, 2019)

    "He gives excellent advice and his advocacy is authoritative, reasoned and persuasive." ..."Very user-friendly." (Chambers UK 2019)

    "...Very quick, friendly and an excellent communicator."... "Very smart and someone who gets fully involved in the case..." (Chambers UK, 2019)

    > view Rob's full profile

    Thomas Macey-Dare QC

    Tom is a leading commercial barrister specialising in shipping, shipbuilding, energy, international trade, insurance and international arbitration.  He is recognised as a leading practitioner by the Legal 500 UK / Asia Pacific in International Arbitration and Shipping, and by Chambers UK / Global in Shipping & Commodities. 

    In the directories, Tom has been described as "fantastic", "spectacular", "extremely hard-working and clever", "quick on his feet", "brave", "intuitive", "incredibly practical" and "completely unflappable"; and he has won praise for his "spot-on" understanding of the law, his "exceptionally good" command of technical issues, and his "highly persuasive and very effective" advocacy.

    Tom represents shipowners, commodity traders, shipyards, underwriters, salvors, oil companies, banks and other commercial clients, in the Business & Property Courts (Commercial Court, Admiralty Court & Chancery Division), the Court of Appeal, and international commercial arbitrations. He is particularly skilled at handling cases involving complex commercial transactions and technical expert issues. He also specialises in emergency applications including freezing and antisuit injunctions.  

    > view Tom's full profile

  • Deck cargo exclusion clauses: Aprile SPA v Elin Maritime Ltd (“The Elin”) - Max DavidsonView More

    Thu, 18 April, 2019

    In The Elin, the court held that a clause in a bill of lading providing that certain cargo was “loaded on deck at shipper’s and/or consignee’s and/or receiver’s risk; the carrier and/or Owners and/or Vessel being not responsible for loss or damage howsoever arising” was effective to exclude a carrier’s liability for any loss of or damage to the deck cargo, including any loss or damage caused by the unseaworthiness of the vessel or the carrier’s negligence.

    The cargo interests had argued that, by applying the guidance to the interpretation of exclusion clauses set out in R v Canada Steamship Line [1952] AC 192, the clause should be read as not excluding the carrier’s liability for loss or damage caused by the carrier’s negligence or the unseaworthiness of the vessel. That outcome had found favour in the Singapore Court of Appeal in Sunlight v Ever Lucky Shipping Company Ltd [2004] 2 Lloyd’s Rep. 174 and in the Canadian Court of Appeal in Belships v Canadian Forest Products Ltd (1999) A.M.C. 2606, in which similarly worded exclusion clauses were held not to exclude a carrier’s liability for unseaworthiness and negligence respectively.

    The carrier argued that the words should be given their plain and natural meaning, and invited the court to follow the obiter decision of Langley J in The Imvros [1999] 1 Lloyd’s Rep 848, in which it had been held that a similarly worded deck cargo exclusion clause was effective to exclude losses caused by unseaworthiness.

    Stephen Hofmeyr QC, sitting as a Judge of the High Court, dismissed numerous academic and judicial criticisms of Langley J’s decision in The Imvros, and held that as a matter of plain language and good commercial sense the carrier’s construction should be preferred. He declined to apply the approach espoused by the Privy Council in Canada Steamship Line mechanistically, which might have led to the exclusion clause being interpreted in the manner contended for by the cargo interests.

    This decision resolves a conflict which had existed in the authorities as to the interpretation of deck cargo exclusion clauses. The English court declined to follow the approach adopted in the Singapore and Canadian Courts of Appeal, and instead confirmed that, as a matter of English law, a clause providing that a carrier will not be liable for loss or damage to deck cargo “howsoever arising” will be effective to exclude liability for the carrier’s negligence or its failure to exercise due diligence to make the vessel seaworthy. In order for the exclusion clause to operate, the cargo must be stated to be carried on deck and in fact carried on deck.

    Max Davidson acted for the cargo interests, instructed by Philip Roose and Aneta Pillay of Roose & Partners.

    > download a copy of the judgment

    Max Davidson

    Max undertakes work in a broad range of commercial disputes, including shipping, sale of goods, international arbitration, conflicts of law, aviation, energy and insurance. He regularly appears in the Commercial Court and in international arbitration. 

    Max is recommended as a leading barrister in Legal 500:

    A strategic thinker and someone who can be a huge help in honing litigation strategy and seizing the initiative on a case.’ (Legal 500 2019)

    > view Max's full profile

    max.davidson@quadrantchambers.com

  • Quadrant Chambers welcomes Banking and Commercial Litigator Simon OakesView More

    Fri, 12 April, 2019

    Quadrant Chambers is delighted to welcome Simon Oakes to Quadrant Chambers. Simon is a commercial litigator with a particular focus on banking & financial services matters. He has been involved in major banking cases in recent years, including the LIBOR manipulation cases of Graiseley Properties Ltd v Barclays Bank Plc in the Court of Appeal, and Aldersgate v Bank of Scotland in the High Court.

    I am very excited to be joining Quadrant Chambers. Quadrant’s reputation for commercial litigation goes without saying; the set also has a very strong – and growing - banking & finance team and I am very much looking forward to being part of its continued development. I think the set will provide an excellent platform for me to further develop the banking and commercial litigation practice which I built up at Outer Temple Chambers. I leave behind many good friends at OTC, and wish them all the best for the future.“ Simon Oakes

    It is a real pleasure to welcome Simon to Quadrant Chambers. He will be a fantastic addition to Quadrant and in particular our banking and commercial litigation offering ,which goes from strength to strength following the arrival of banking and commercial specialists Paul Downes QC, Emily Saunderson, Stewart Chirnside and Joseph Sullivan early last year.” Simon Croall QC, Head of Quadrant Chambers

    Quadrant Chambers is ranked as a leading banking and finance and commercial dispute resolution set.

    … a strong stable of commercially minded banking litigators with a strong track record in major civil disputes. (Legal 500 UK Bar 2019)

     

    Simon Oakes

    Simon practises in commercial law, with a particular focus on banking & financial services, and complex commercial fraud cases.

    Simon has a wealth of experience in some of the most significant banking and financial services cases of recent years, from major interest rate hedging product litigation to regulatory investigations against individuals. He has a deep knowledge of the allegations of LIBOR misconduct against several major banks, a great deal of experience in misselling cases, and a wealth of experience of developing legal and tactical arguments in major commercial litigation.

    Significant recent instructions include:

    • Two ongoing multi-million pound deceit claims against Bank of Scotland and/or Lloyds Banking Group
    • Aldersgate & Ors v Bank of Scotland & Anor [2018] EWHC 2601 (Comm): a Commercial Court claim in excess of £100 million, alleging fraudulent and negligent misrepresentation arising out of LIBOR manipulation. The case also involved a ground-breaking interlocutory application by the defendant, attempting to withdraw pleaded admissions of findings by global regulators.
    • The LIBOR test case of Graiseley Properties Ltd v Barclays Bank Plc, Deutsche Bank AG v Unitech Global Ltd [2013] EWCA Civ 1372 (CA), in the Court of Appeal and in the High Court. One of The Lawyer’s ‘Top 20 cases’ of 2013.
    • Hockin v Royal Bank of Scotland in the High Court: a £55 million Financial List banking case concerning interest rate products and the bank’s Global Recovery Group (‘GRG’), and involving issues of misrepresentation, LIBOR manipulation, unlawful means conspiracy and implied duties of good faith.
    • Viavi v Shannan & Others [2018] EWCA Civ 681: a significant dispute about the validity of deeds, the principle in Re Duomatic, and estoppel by deed.
    • Advising as to the impact of Brexit on the security of motor insurers.

    Having been seconded to both the Financial Services Authority and the Pensions Regulator, Simon has an excellent understanding of how regulators approach cases. He has acted both for and against the targets of regulatory action, including in multi-jurisdictional cases.

    Simon is frequently instructed as sole advocate in the High Court, County Court and Employment Tribunals. He also acts as part of larger counsel teams on long-running commercial litigation.

    > view Simon's full profile

    simon.oakes@quadrantchambers.com

     

    Related news:

    Jan 2018 - Specialist Banking and Commercial Team Joins Quadrant Chambers

    https://www.quadrantchambers.com/news/specialist-banking-commercial-team-joins-quadrant-chambers

    Jan 2019 – Quadrant Chambers Features Twice in The Lawyer Top 20 Cases of 2019

    https://www.quadrantchambers.com/news/quadrant-chambers-features-twice-in-the-lawyer-top-20-cases-of-2019

  • Email Fraud and Persons Unknown - Joseph EnglandView More

    Wed, 10 April, 2019

    There are an increasing number of email fraud cases where parties are deceived into paying outstanding invoices to existing suppliers to accounts not held by that supplier. The fraud often involves the fraudsters cloning real emails of company employees, interposing within legitimate emails and, at the time when invoices are due, asking for funds to be paid to banks purportedly (but not in fact) held by the supplier.

    This case is such an example and an example of how the Court is prepared (initially) to grant injunctive relief to freeze the accounts of “Persons Unknown” as well as (as was the case until relatively recently) simply grant a Bankers Trust type disclosure order to reveal the details of the bank accounts to where funds were sent. 

    Facts

    1. FrieslandCampina Nederland B.V. (“FC”) was a long-standing supplier of butter to World Protenis Kft (“WP”). It sent two legitimate invoices: one for EUR 2,152,804.50 (“Invoice 1”) and a second for EUR 2,212, 155.00 (“Invoice 2”).
    2. Legitimate emails passed over the outstanding payment of Invoice 1 between Agnes Bata (“AB”) of WP and Leopold Messan (“LM”) of FC between 18 February 2019 and 25 February 2019.
    3. EUR 1,652,804.50 was paid by WP towards Invoice 1 to FC’s genuine bank account in The Netherlands, leaving EUR 500,000 outstanding for Invoice 1
    4. Then on 26 February 2019 at 12:24, AB of WP received an email purportedly from LM of FC. The email (later known to be false) included the chain of legitimate emails between AB and LM referred to above over Invoice 1. It requested payment of the remaining amount and attached new bank details at Barclays for FC (“the Barclays Account”) (later known to be false).
    5. WP then paid the remaining EUR 500,000 for Invoice 1 to the Barclays Account on 27 February 2019 from its bank in Hungary. 
    6. There was then an email purportedly from AB dated 28 February 2019 stating that the outstanding EUR 500,000 transfer would be delayed due to “an upgrade ongoing” with WP’s bank. The real AN would have known that EUR 500,000 had been paid on 27 February 2019 and there was no upgrade to WP’s bank account. 
    7. Legitimate correspondence then followed whereby the real LM chased the real AB for outstanding monies due on invoices in general terms. The real AB, who of course thought WP had now paid the c.EUR 1.5 million and EUR 500,000 for Invoice I (the latter payment being made to the Barclays Account), emailed the real LM on 11 March 2019 saying WP had just paid EUR 1,512,155 towards the EUR 2,212,150 due under Invoice 2. In this sense, the fraudsters were initially lucky as they had not in fact additionally requested payment for Invoice 2 to the Barclays Account.
    8. On 11 March 2019, the real LM telephoned the real AB chasing the EUR 500,000 for Invoice 1 and the full amount for Invoice 2.  It then became clear to the parties that EUR 500,000 was paid by WP to clear Invoice 1 and c.EUR 1.5 million towards Invoice 2, both to the Barclays Account. The sums had not been received by FC who were not the holder of the Barclays Account.
    9. Fortunately, WP called its bank on 11 March 2019 and was able to recall the EUR 1,512,155 transfer towards Invoice 2 made on 11 March 2019 but were not able to recall or recoup the earlier EUR 500,000 payment.

    Decision

    1. An interim order was obtained from Swift J for disclosure against Barclays and for an injunction against “Persons Unknown” and for service on “Persons Unknown”, as the legal and/or beneficial holders of the Barclays Account, initially via Barclays.  There was also a “gagging order” preventing Barclays from informing the holders of the account until after the initial disclosure. Swift J had relied on the decisions in CMOC v Persons Unknown [2017] EWHC 3599 (Comm) and CMOC Sales and Marketing Ltd v Persons Unknown [2018] EWHC 2230 (Comm) to be satisfied there were similarly arguable causes of action and that an order could be made against “Persons Unknown.”, and was otherwise satisfied that the test for injunctive relief was met on the facts.
    2. Following the order of Swift J, disclosure from Barclays showed that, fortunately, c.EUR 350,000 of the EUR 500,000 remained in the Barclays Account. However, the remaining c.EUR 150,000 of the EUR 500,000 left the Barclays Account soon after its receipt by way of three transfers ultimately to bank accounts held by entities in Dubai. It also identified the address and holder of the Barclays Account (and revealed other accounts held by him at the bank).
    3. Anthony Metzer QC (sitting as Deputy Judge of the High Court) continued the injunction at the return date and granted related applications following “Persons Unknown” being revealed. After a thorough review of the evidence and the law (including the decisions of HHJ Waksman QC, as he then was, in the CMOC cases), he concluded that WP had at least a good arguable cases in respect of several fraud-based and resitutionary causes of action and there was a real risk of dissipation that had been heightened by the timing and nature of the transfers out of the Barclays Account; and there had been a total lack of response from the Respondent.
    4. In respect of CMOC [2017 decision], the Judge relied on HHJ Waksman’s reasoning that [6]:

    “Conversely, there is a strong reason for extending the principle which is that the freezing injunction can often be a springboard for the grant of ancillary relief in respect of third parties, which arguably could not get off the ground unless there has been a primary freezing injunction. That is very much the case in fraud litigation and is very much the case here where the first object is of course to notify the banks of the freezing injunction so that they can freeze the relevant bank accounts - irrespective of if and when it comes to the attention of the underlying defendants, And then, secondly, on the basis of that, to obtain vital information from the various banks which may assist in positively identifying some or all of the defendants. And I note that the latest edition of takes the same view. See in particular para.17-019 at p.601 at the top of the page. So it seems to me there is at least a good arguable case that the court has jurisdiction to allow the claimants to bring a claim of this kind.”

    Commentary

    1. The decision is a useful illustration of an increasingly common occurrence of email fraud but the less common occurrence of how that translates into a Court application up to and including the return date.
    2. It is also an endorsement of the precedent set in the decisions of HHJ Waksman QC (as he then was) in CMOC to grant injunctions against “Persons Unknown” to inter alia avoid the delay in freezing accounts whilst their identify is discovered through disclosure.
    3. It is also an example of where the majority of the monies were in fact still in the account (and here the larger EUR1.5 million sum was recalled before it was received into that account), suggesting it may be more worthwhile to seek such relief than at first may be thought. Other parties may not be so fortunate.

    Joseph England appeared for World Proteins (instructed by Hubert Ashton of Peachey & Co LLP)

    A copy of the judgment can be found here.

    Joseph England 

    Joe practises in a wide range of commercial disputes.

    Joe began his legal career qualifying as a solicitor at Allen & Overy LLP before transferring to the Bar. Joe spent the first year of his practice as the Judicial Assistant to Lord Sumption and Lord Wilson at the Supreme Court. He soon returned as counsel to the Supreme Court in Bank of Cyprus UK Limited v Menelaou [2015] UKSC 66.

    Since starting practice in August 2013, Joe has been engaged, on a near full-time basis, in a major ICC oil and gas arbitration in London and Geneva, and subsequent related litigations, working and appearing with legal teams in Poland, The Netherlands, Ireland, Curaçao, Nigeria, Mauritius, Scotland, the US, London and Switzerland.

    To view Joseph's full profile, please click here. 

    joseph.england@quadrantchambers.com

  • First collision liability appeal to go to the Supreme Court - Simon Rainey QC and Nigel Jacobs QCView More

    Fri, 05 April, 2019

    On 4th April 2019 the Supreme Court granted permission to appeal against the decision of the Court of Appeal in Evergreen Marine UK Ltd v Nautical Challenge Ltd [2018] EWCA Civ 2173 in relation to the collision between the large container vessel “EVER SMART” and the VLCC “ALEXANDRA 1” just outside the dredged entrance/exit channel to the port of Jebel Ali in the United Arab Emirates in 2015.

    Simon Rainey QC was brought in, following the decision of the Court of Appeal, to seek permission to appeal and will represent Evergreen on the appeal, leading Nigel Jacobs QC and instructed by Ince Gordon Dadds - Faz Peermohamed, Sophie Henniker-Major, Lida Logotheti, James Drummond and Patrick Ryan. 

    This will be the first collision liability case to go to Supreme Court, and the first such case to reach the final appellate court since 1976.

    The Supreme Court will consider the important issue of the relationship between the narrow channel rule (Rule 9) and the crossing rules (Rules 15 -17) of the International Regulations for Preventing Collisions at Sea 1972.

    The interaction of these rules occurs on numerous occasions on a daily basis throughout the world. The crossing rules not only apply to a situation which occurs continuously in navigation but to one where the need for clear and strict guidance as to what each vessel is to do when a crossing situation arises is of particular importance. In one of the leading cases on the crossing rules, the Court stressed that the crossing rules should not lightly be held to be inapplicable but “ought to be applied and strictly enforced because they tend to secure safe navigation” (per Lord Wright in The Alcoa Rambler [1949] AC 236 (PC) at 250).

    The Court will determine the correctness of the approach of the Court of Appeal (and of the Admiralty Judge) in (a) treating Rules 9 and 15 as effectively mutually exclusive of each other in the common situation of one vessel navigating in a narrow channel and another vessel approaching the same channel and intending to enter it so that the crossing rule was inapplicable in such a situation and also (b) in treating Rule 15 and the crossing rule as a general principle as only ever capable of applying where the putative give-way vessel is on a “steady course”.

    Simon Rainey QC

    Simon Rainey QC is one of the best-known and most highly regarded practitioners at the Commercial Bar noted for his intellect and advocacy. He has extensive experience of international arbitration, regularly appearing as advocate under all of the main international arbitral rules (LCIA; SIAC, UNCITRAL; ICC, Swiss Rules etc) and also sitting as arbitrator.

    Current examples of his work as counsel are in arbitration before the Permanent Court of Arbitration in a US 13billion gas supply dispute; under Nigerian Law and seat in relation to an offshore oilfield redetermination dispute between oil majors, under UNCITRAL Rules in a mining supply take or pay dispute involving one of the world’s leading mine conglomerates; an ICC arbitration concerning a new mine development in Russia and an ICC Dubai seat arbitration involving specialist offshore vessels and in associated s67 and s68 LCIA challenges in the A v B [2017] EWHC 3417 (Comm) litigation in the4 Commercial Court. Recent arbitral appointments include an ICC Paris seat arbitration concerning a power station failure, a French law and seat arbitration relating to an oil rig drilling contract, an offshore construction contract claim under SIAC Rules and a long-term ore supply contract claim under Swiss Rules.

    He is highly ranked by Chambers and Partners and Legal 500 as a first division international arbitration specialist (“Highly regarded for his expertise in handling high-profile international arbitrations in connection with complex oil and gas, banking and finance and trade issues. He is well known for his prowess in advising and representing clients in disputes in countries as far flung as Turkey, Russia, the USA, China and India” 2018; “Incredibly good, with a particular skill in reducing the complicated to the elegantly simple, which when you're trying to present a case to a tribunal or court is one of the more valuable things you need to have” 2018; “Clearly now one of the top commercial silks and a delight to work with.” 2018; “A mixture of brilliance and brevity, his written submissions are like poetry” 2018), He was nominated for “International Arbitration Silk of the Year 2017” by Legal 500 and has also been awarded “Shipping & Commodities Silk of the Year” 2017 by both Chambers & Partners and Legal 500.

    He sits as a deputy High Court Judge in the Commercial Court and is Honorary Professor of Law, Business and Economics, University of Swansea.

    To view Simon's full website profile, please click here.

    simon.rainey@quadrantchambers.com

    Nigel Jacobs QC

    Nigel Jacobs QC is a specialist in shipping, insurance, commodity and commercial disputes.  His work covers the full range of such disputes from casualty work (collisions, salvage, unsafe port and limitation) through to marine insurance, joint venture, guarantee, and letter of credit, as well as "traditional" charterparty and contractual claims.   His appears both in the High Court and in arbitration.  He is regularly instructed in (worldwide) freezing injunction, anti-suit injunctions and jurisdictional disputes.  His recent arbitrations include the termination of a substantial Middle Eastern joint venture and a successful challenge to the conclusion of a long-term charterparty.   He is currently involved in an unsafe port case (South America) and a number of other casualties. He is also increasingly appointed as an arbitrator. 

    Over the past two years Nigel has been heavily committed in the substantial "ATLANTIK CONFIDENCE" litigation. In a 29 day trial he led the team (on behalf of cargo interests) which successfully challenged the shipowner's right to limit under the Limitation Convention 1996 on the grounds that the vessel was the subject-matter of a deliberate casualty.   This was the first occasion in which the right to limit had been successfully challenged in this jurisdiction.  

    Consistently ranked as a 'Leading Silk' in Chambers UK, Chambers Global and The Legal 500 directories where he has been praised as ..."Very impressive. He has a really good grasp on technical details and he is very thorough." (Chambers UK 2019)

    To view Nigel's full website profile, please click here. 

    nigel.jacobs@quadrantchambers.com

  • London International Disputes Week 2019View More

    Tue, 02 April, 2019

    The inaugural London International Disputes Week (LIDW) is taking place from  7-10 May 2019 . The event will explore the future of international dispute resolution and celebrate the heritage of London as a leading centre for handling international disputes, through a programme of interactive sessions and networking events.

    Spanning four days, LIDW comprises a must-attend 1-day conference at the National Gallery and 18 sessions on different types of disputes and forms of dispute resolution. Information on the programme and registration process can be found here.

    The technical sessions will bring together lawyers, judges, arbitrators, academics and others involved in using or administrating dispute resolution from around the world and many sectors The event will also draw on the international experience of clients and colleagues and facilitate discussions on the future of dispute resolution in both in London and globally.

    There will be many opportunities to enjoy networking with colleagues, including a welcome drinks reception at Banking Hall and a gala dinner at historic Mansion House.

  • Islandsbanki HF & Others v Kevin Gerald Stanford [2019] EHWC 595 (Ch.)  - Joseph EnglandView More

    Tue, 02 April, 2019

    • Judgment was handed down in long-running bankruptcy proceedings against Kevin Stanford, a well-known businessman who founded fashion brands such as All Saints and Karen Millen (with his former wife of that name).
    • The focus below is on the petition of Islandsbanki HF (“IB”).

    Background

    The Debtor
    1. As explained in the judgment [1], Mr Stanford’s exceptional success from the 1980s until about 2008 has been “transformed into insolvency”. From about 2012, he has been embroiled in large litigation in Luxembourg with Kaupthing ehf upon which he relies for his change in fortunes. Kaupthing ehf claims a debt of over £460 million against Mr Stanford. Mr Stanford alleges fraud and contends that this caused his demise, asserting that a successful outcome in that litigation will secure him at least £50 million.
    The Three Petitions
    1. Three separate petitions were presented by creditors, and were opposed by Mr Stanford, as follows:

      a. IB - Mr Stanford argued that execution of IB’s Icelandic judgment debt was invalid due to errors in the writ and its execution, such that there had not been unsatisfied execution for the purposes s. 268(1)(b) of the Insolvency Act 1986 (“the Act”); and that execution had been commenced prior to the expiry of the period under the Lugano Convention/CPR 74 for appealing the order registering the Icelandic judgment in England
      b. HMRC - Mr Stanford argued that HMRC’s petition was an abuse of process by reason of inter alia extortion on the part of revenue officers at HMRC. He also argued that the petition should be dismissed because bankruptcy would jeopardise the outcome of the extant proceedings in Luxembourg
      c. Shineclear Holdings Limited – The Debtor opposed the petition for a debt of c.£6 million on complex grounds of abuse or process and estoppel arising out  of dealings between Mr Stanford and Kaupthing efh (a related party of Shineclear Holdings Limited).

    Procedural History

    1. The procedural history was protracted given the three separate petitions and featured numerous interim appeals and reviews of decisions under s.375 of the Act before the final hearings.
    2. The petitions had proceeded separately with IB’s to be heard first (having been adjourned a number of times). An order was then made (in IB’s absence) to jointly case manage the three petitions. This was set aside by the order of Chief ICC Judge Briggs dated 1 August 2018. The Debtor then applied to review that decision, which was dismissed by Deputy (and former Chief) ICC Judge Baister, with IB’s petition then listed to be heard first.
    3. IB’s petition was finally heard on 20 December 2018 before ICC Judges Jones for half a day. At the end of the hearing, the Judge decided to adjourn the hearing of the petition and list it for hearing with HMRC’s later petition. That decision was successfully appealed by IB– see Islandsbanki HF v Kevin Stanford [2019] EWHC 307 (Ch.) (Carr J.) - see here
    4. There were also various procedural issues, and reviews and appeals, in the other petitions.

    IB’s petition

    1. IB’s petition was first presented in April 2017. It was founded on proving unsatisfied execution. It was based on an unpaid Icelandic judgment for c.£1.3 million arising from the Debtor’s failure to repay a loan. The petition was disputed on procedural grounds. The main ones are explained below.

    The Lugano Convention and Execution Prior to the Expiry of the Appeal Period

    1. That first issue was whether there was “unsatisfied execution” when IB’s execution occurred (by a writ of control) within the time limit prohibiting execution prescribed by the revised Lugano Convention 2007 (“the Lugano Convention”) reflected in CPR 74 and the registration order made in this case, which tied to the period for appealing the registration.  
    2. IB submitted that the premature execution was a procedural defect which could be waived or otherwise cured under inter alia CPR Part 3 to do justice to the reality of the situation noting how matters had moved on over several years. It emphasised the lack of prejudice caused to Mr Stanford, who subsequently became aware of the registration order and writ, and did not apply to set either aside. It also relied on an agreement with Mr Stanford where he acknowledged that the Icelandic judgment was enforceable in England. Above all, it submitted that Mr Stanford has never said what his grounds of appeal would be to the registration order.
    3. The Judge held that the origins of the prohibition in the registration order and CPR 74 determined the issue. Article 47(3) of the Lugano Convention provides that:

    “During the time specified for an appeal pursuant to Article 43(5) against the declaration of enforceability and until any such appeal has been determined, no measures of enforcement may be taken other than protective measures against the property of the party against whom enforcement is sought

    1. Article 43(5) further provides: “An appeal against the declaration of enforceability is to be lodged within one month of service thereof …”.
    2. The Civil Jurisdiction and Judgments Regulations 2009 inserted the Article 47(3) prohibition within section 4A of the Civil Jurisdiction and Judgments Act 1982 as follows:  

    4A Enforcement of judgments, other than maintenance orders, under the Lugano Convention (1) …  (2) A judgment … registered under the Lugano Convention shall, for the purposes of its enforcement, be of the same force and effect, the registering court shall have in relation to its enforcement the same powers, and proceedings for or with respect to its enforcement may be taken, as if the judgment had been originally given by the registering court and had (where relevant) been entered.  (3) Subsection (2) is subject to Article 47(3) of the Lugano Convention (restriction on enforcement where appeal pending or time for appeal unexpired), to section 7 (interest on registered judgments) and to any provision made by rules of court as to the manner in which and conditions subject to which a judgment registered under the Lugano Convention may be enforced.”  (emphasised added).

    1. IB submitted that this confirmed jurisdiction in the CPR, including under CPR 3, to permit the Court to waive this defect given the lack of prejudice. It relied on case law where CPR 3.10 had been used to waive a defect in a writ. The Debtor emphasised that the breach was not of the kind that was appropriate to cure noting it was a breach of the Lugano Convention.  

    Decision

    1. ICC Judge Jones held [25] that the reference to section 4A(2) being subject also to “Article 47(3) … section 7 … and … rules of court as to the manner in which and conditions subject to which a judgment registered under the Lugano Convention may be enforced” was not to be construed as enabling Rules of Court to override or otherwise alter the agreement between signatories to the treaty. The power to make rules was to give effect to the Lugano Convention as “This was both its ordinary meaning and a purposive construction.” [25]
    2. He held [26] there was a binding prohibition against enforcement until the time for appeal has expired. He held that there was no jurisdiction to enforce during the prohibited appeal period unless the protective measure exception applies (which it did not on the facts). Breach of the prohibition could not be described as a procedural defect under the Rules. He further held that, even if he was wrong, the Court should not exercise its power under CPR 3 to invalidate the execution to circumvent the Lugano Convention nor exercise any inherent power to abridge time or to waive or ignore the breach.
    3. He held that [27]:

    The Convention has enabled the European Union and the other signatories to reach agreement for (amongst other matters) judgment recognition and enforcement within each other’s jurisdiction but subject to its precise terms. One of the terms agreed is that “no measures of enforcement” shall take place during the appeal period for a declaration of enforceability for a foreign judgment (subject to the “protective measure” exception which does not apply here) and there is no provision within the revised Lugano Convention to abridge time.”

    1. The Judge concluded that there no enforcement for the purposes of s.268(1)(b) of the Act as the writ was invalid. IB was therefore unable to establish that Mr Stanford was unable to pay his debts in accordance with the requirements of that provision.
    2. The Judge, however, found in favour of IB in relation to defects alleged in the writ itself and the manner of its execution raised by Mr Stanford. [33-35] The Judge held that he was bound by the ratio of in the decision cited to him of Jacobs J. in Skarzynski v Chalford Property Company Ltd [2001] BPIR 673 that “returned” in s.268(1)(b) of the Act did not have a technical meaning and required only proof that the execution or other process failed to satisfy the debt, and that it should not be undermined by technical procedural irregularities. [19-20] The Debtor had argued that the Court of Appeal’s decision in Re A Debtor (No 340 of 1992) [1996] 2 All ER 211 of Millet LJ applied on the facts of the execution here and showed that the defects in question should not be waived.
    3. As noted above, the Judge then gave a judgment in HMRC’s petition and made Mr Stanford bankrupt on that petition. [39-93]. The Judge later varied his decision on 13 March 2019 such that HMRC was not substituted but rather its petition was granted separately following IB’s petition being dismissed, such that the “look-back” date would start from the date of HMRC’s petition, rather than the earlier date of the petition of IB.

    Commentary

    1. The case was highly unusual as it featured three separate petitions for bankruptcy (rather than one lead petitioner with supporting creditors). It involved novel procedural questions arising from this and others, such as whether substitution could be granted by abridging time limits.
    2. The petitions also raised complex points of law. In terms of IB’s petition, the judgment considered the much less well-trodden basis for establishing bankruptcy under s.268(1)(b) of the Act of unsatisfied execution (as opposed to relying on a statutory demand) on what was said to be conflicting authority on the manner of execution. 
    3. Further, it raised an important point of wider relevance (on which there was little to no legal guidance) concerning the interpretation of the Lugano Convention and its interaction with the CPR generally and in terms of the prohibition on execution of an order registering a foreign judgment until the appeal period had expired. This may also influence comparable registration/recognition of foreign judgment provisions.

    Joseph England appeared for Islandsbanki HF.

    Paul Joseph appeared from HMRC; Raquel Agnello QC for Shineclear Holdings Limited and Andrew Clutterbuck QC and Gregory Denton-Cox for Kaupthing ehf

    Daniel Burkitt appeared for the Debtor.

    A copy of the judgment can be found here.

    Joseph England 

    Joe practises in a wide range of commercial disputes.

    Joe began his legal career qualifying as a solicitor at Allen & Overy LLP before transferring to the Bar. Joe spent the first year of his practice as the Judicial Assistant to Lord Sumption and Lord Wilson at the Supreme Court. He soon returned as counsel to the Supreme Court in Bank of Cyprus UK Limited v Menelaou [2015] UKSC 66.

    Since starting practice in August 2013, Joe has been engaged, on a near full-time basis, in a major ICC oil and gas arbitration in London and Geneva, and subsequent related litigations, working and appearing with legal teams in Poland, The Netherlands, Ireland, Curaçao, Nigeria, Mauritius, Scotland, the US, London and Switzerland.

    To view Joseph's full profile, please click here

    joseph.england@quadrantchambers.com

  • Preserving the right to arbitrate: where are the boundaries to an arbitration agreement? - Nigel Cooper QCView More

    Mon, 01 April, 2019

    Whether it is in the context of a jurisdiction challenge or by way of response to an application to restrain proceedings said to be in breach of an arbitration agreement, the wording of the arbitration clause is the usual starting point for determining the arbitrability of a dispute. The courts will be generous in their construction of an arbitration clause guided by the now well-known principles found in Fiona Trust as applied in recent case law, namely that:

    • One should assume that rational businessmen are likely to have intended any dispute arising out of the relationship which they have entered or purported to enter to be decided by the same tribunal.
    • An arbitration agreement is a distinct and separable agreement so that an attack on the validity of the main agreement does not necessarily entail the invalidity of the arbitration agreement.

    Nevertheless, there remain certain types of dispute which are not arbitrable. In particular, a dispute will not be capable of settlement by arbitration if it involves an issue of public policy, public rights, or the interests of third parties. The difficulty is to determine where the boundaries lie. When does the principle of kompetenz-kompetenz give way to public policy or public rights?

    The courts have confirmed that civil law claims which involve allegations of criminality are arbitrable: London Steamship Owners’ Mutual Insurance Association Ltd v the Kingdom of Spain. They have likewise held that disputes among shareholders giving rise to a claim of unfair prejudice are capable of being resolved by arbitration; see Fulham Football Club (1987) Ltd v Richards.

    In two recent cases, the issue of arbitrability has come up in the context of claims involving the insolvency law of a foreign state and claims involving the constitutional law of another state. In Nori Holding Ltd v PJSC Bank Otkritie Financial Corporation, Males J (as he then was) had to consider, among other things, whether a final anti-suit injunctioncould be brought to restrain proceedings brought in accordance with the insolvency law of a foreign state (Russia) to set aside transactions at an undervalue.

    The defendant argued that rights created by statutory avoidance provisions exist for the benefit of the general body of creditors in any insolvency or insolvency-related context and that a company’s pre-insolvency management would not ordinarily contemplate including avoidance claims within the scope of an arbitration agreement. Accordingly, the defendant submitted that an arbitration clause in wide general language should not be construed as extending to a claim in insolvency proceedings; alternatively, that the claims were non-arbitrable as a matter of both the governing law and as a matter of Russian law. In support of its arguments, the defendant relied not only on the Fulham FCcase but also a decision of the Singapore Court of Appeal, Larsen Oil & Gas Pte Ltd v Petroprod Ltd.

    The court rejected the defendant’s arguments, holding that in the absence of any express exclusion of disputes of any kind, wide and general language in an arbitration clause such as “any dispute or disagreement arising under, or in connection with this Agreement” means what it says. Further there is no basis for any implied limitation on the scope of such language whether or not the claim is otherwise arbitrable. Accordingly, the court held that, contrary to the position under Singaporean law, English law does not start from a presumption that avoidance claims made in the context of a party’s insolvency will fall outside the scope of the arbitration clause.

    Turning to the question of whether the Russian proceedings went to matters which were non-arbitrable, the court said that what mattered was the substance, not the form, of the claims. In this case, the dispute was a straightforward factual dispute as to whether the transactions constituted a fraud on the bank to replace valuable secured loans with worthless bonds. If so, the bank would have a claim to avoid the transactions and require the claimants to reinstate the position existing before the transactions were carried out.

    Whatever label was applied to the proceedings, the essential dispute was the same. The arbitrators could decide whether the claimants had defrauded the bank and, if so, grant any remedy to which the bank might be entitled. Importantly, there was no remedy claimed, such as a winding-up order, which could have affected the status of the bank or the position of third parties in such a manner as to take the case beyond the consensually derived jurisdiction of the arbitrators. The court, therefore, concluded that the claims made in the Russian proceedings were arbitrable and could be restrained by an anti-suit injunction.

    Again, the court took a different approach to that of the Singaporean courts. In particular, the court rejected any submission that arbitration in itself represents a deprivation of inalienable rights. Rather, arbitration is merely an alternative method of resolving disputes.

    In Nori, the court also rejected the possibility that the dispute was one which had to be decided in two stages, with the arbitrator deciding the factual issues and leaving it to the Russian court to decide the remedy to which the bank was entitled. The possibility of such a two-stage process was one to which the court (Knowles J) returned in Aqaba Container Terminal (PVT) Co v Soletanche Bachy France SAS.

    In Aqaba, the claimant sought a permanent anti-suit injunction to restrain Jordanian proceedings in connection with disputes under a construction contract. In those proceedings, the defendant alleged that certain provisions of Jordanian law were unconstitutional and that the construction contract, which had been entered into pursuant to those provisions, was null and void. The claimant sought to restrain the Jordanian proceedings on the basis that the relief sought in relation to the construction contract was a breach of the arbitration agreement. It was common ground between the parties that, as a matter of Jordanian law, the defendant had to claim to invalidate the construction contract in order to have any locus or standing to pursue a constitutional claim.

    The court rejected the defendant’s argument that the claim to invalidate the construction contract was not arbitrable. That claim, the court held, was plainly within the language of the arbitration agreement and was governed by the law of the contract, namely English law. What was not arbitrable was the constitutional claim to invalidate the provisions of Jordanian law. The court did not accept the defendant’s argument that the claim to invalidate the construction contract fell within the constitutional claim.

    What both Nori and Aqaba highlight is that the English courts continue to embrace the principles laid out in Fiona Trust and carefully scrutinise any claim that a dispute raises issues which are not arbitrable. Simply because a dispute arises in the context of one party’s insolvency will not mean that the dispute falls outside the scope of an arbitration agreement in the absence of a suitably worded express exclusion. Similarly, where elements of a dispute raise issues which are not arbitrable, that does not mean that the dispute as a whole will not be subject to the parties’ arbitration agreement. Where a party is in substance seeking to enforce contractual rights against another party or is seeking to set aside or invalidate the contract, the court will continue to enforce the arbitration agreement. It will do so even if there are related public law issues which are properly the subject of separate proceedings, possibly in another jurisdiction.

    This article was first published by the practical law arbitration blog, here.

    Nigel Cooper QC

    Nigel has a commercial practice predominantly covering the fields of shipping, energy and insurance/reinsurance law. He appears before the business and appellate courts in England & Wales,and has a strong arbitration practice advising on and acting in disputes before all the main international and domestic arbitral bodies. Nigel accepts appointments as an arbitrator and has acted as a mediator and as a party’s representative in mediations. He has experience of public inquiries having appeared for the government in three major formal investigations.

    Nigel’s commercial practice covers most aspects of international trade and the carriage of goods, commodities,  brokerage and commercial management disputes, fraud & illegality, and professional negligence. ; His shipping practice includes all forms of bill of lading and charterparty disputes; shipbuilding (including superyachts and military vessels) and off-shore construction; ship sale and purchase; limitation and collision actions, pollution and, occasionally, Merchant Shipping Act offences. In addition to his commercial shipping practice, Nigel has a specialist interest in disputes in the yachting and marine leisure market. In the energy sector, Nigel’s work covers both upstream and downstream aspects of the industry. He has advised on and acted in disputes relating to drilling and exploration, to production and to the sale and purchase of energy products as well as on related issues such as the enforcement of related guarantees and the insurance of drilling units. Nigel’s insurance & reinsurance practice extends to policy disputes in both the non-marine and marine sectors. In all areas of his practice, Nigel is experienced in dealing with related jurisdictional and enforcement issues, including early measures to ensure the preservation of assets.  

    To view Nigel's full profile, click here.

    nigel.cooper@quadrantchambers.com

  • Simon Rainey QC and Luke Parsons QC feature in the Legal 500 International Arbitration PowerlistView More

    Tue, 26 March, 2019

    Simon Rainey QC and Luke Parsons QC feature in the first Legal 500 International Arbitration Powerlist launched 26 March 2019.

    Congratulations to Ania Farren of Arbitrators at 10 Fleet Street who also makes the list.

    The full powerlist can be found at: https://indd.adobe.com/view/564a051b-fdb0-401c-b45a-7c9b4cf95cf7 

    Simon Rainey QC

    Simon Rainey QC is one of the best-known and most highly regarded practitioners at the Commercial Bar noted for his intellect and advocacy. He has extensive experience of international arbitration, regularly appearing as advocate under all of the main international arbitral rules (LCIA; SIAC, UNCITRAL; ICC, Swiss Rules etc) and also sitting as arbitrator.

    Current examples of his work as counsel are in arbitration before the Permanent Court of Arbitration in a US 13billion gas supply dispute; under Nigerian Law and seat in relation to an offshore oilfield redetermination dispute between oil majors, under UNCITRAL Rules in a mining supply take or pay dispute involving one of the world’s leading mine conglomerates; an ICC arbitration concerning a new mine development in Russia and an ICC Dubai seat arbitration involving specialist offshore vessels and in associated s67 and s68 LCIA challenges in the A v B [2017] EWHC 3417 (Comm) litigation in the4 Commercial Court. Recent arbitral appointments include an ICC Paris seat arbitration concerning a power station failure, a French law and seat arbitration relating to an oil rig drilling contract, an offshore construction contract claim under SIAC Rules and a long-term ore supply contract claim under Swiss Rules.

    He is highly ranked by Chambers and Partners and Legal 500 as a first division international arbitration specialist (“Highly regarded for his expertise in handling high-profile international arbitrations in connection with complex oil and gas, banking and finance and trade issues. He is well known for his prowess in advising and representing clients in disputes in countries as far flung as Turkey, Russia, the USA, China and India” 2018; “Incredibly good, with a particular skill in reducing the complicated to the elegantly simple, which when you're trying to present a case to a tribunal or court is one of the more valuable things you need to have” 2018; “Clearly now one of the top commercial silks and a delight to work with.” 2018; “A mixture of brilliance and brevity, his written submissions are like poetry” 2018), He was nominated for “International Arbitration Silk of the Year 2017” by Legal 500 and has also been awarded “Shipping & Commodities Silk of the Year” 2017 by both Chambers & Partners and Legal 500.

    He sits as a deputy High Court Judge in the Commercial Court and is Honorary Professor of Law, Business and Economics, University of Swansea.

    To view full website profile, please click here.

    Luke Parsons QC

    Luke is a Commercial silk whose practice encompasses insurance and reinsurance, international trade, energy, sale of goods, banking, commercial contracts, and shipping. Luke is ranked by Chambers UK. Legal 500 UK, Chambers Global and the Legal 500 Asia Pacific legal directories. He has been described by the directories as: “"...Luke Parsons is exceptional. He is very commercially minded and will go the extra mile."  Chambers UK 2018 and “"...he's charming but at the same time incisive. He really drills down to the bottom of points...”; "...exceptionally bright and very good on his feet. He is a master of getting the tone and the content of his delivery just right no matter the audience..." Chambers UK 2017.

    Luke is often called in to handle the highest value, most complex claims, involving coordinating large teams of experts and has acted on many precedent-setting cases in the High Court, and Court of Appeal. Current examples of his work as counsel include leading the Quadrant team challenging a multibillion dollar settlement of an international arbitration on the grounds it was procured by fraud; an ICC arbitration seated in Paris concerning a road construciton case and a massive and complex LCIA Arbitration in the energy sector, worth over $500 million.

    Given the frequently international dimension of his practice, Luke has extensive experience in dealing with foreign law and multi-jurisdictional disputes.  In particular he frequently acts in arbitrations with a cross-border element and is experienced in making applications to the High Court in support of English arbitrations and also in support of foreign arbitrations in the English courts and advises on the enforcement of awards under the New York Convention.

    Before coming to the Bar, Luke worked with a firm of international Lloyd’s brokers and then with a multi-national underwriting company. This experience in the London and International Markets assists with his practical and commercial approach to disputes whilst maintaining the intellectual rigour for which he is well-known.

    To view his full website profile, please click here