EURO LIT INSIGHTS

Court of Appeal Interprets Released Claims in a Settlement Agreement

by Jack Thorne and Kimberley Smith | Jul 10, 2024 | Court Judgment, United Kingdom

In the case of Abdullah Nasser Bin Obaid and Ors v Khalid Abdullah Al-Hezaimi and Ors [2024] EWCA Civ 612,[1] the Court of Appeal handed down a judgment highlighting the importance of carefully drafting settlement agreements and, in particular, which claims are released.

Background

2017 Proceedings

In 2017, Mr Bin Obaid, a Saudi Arabian national and businessman, brought proceedings in the English High Court against Dr Al-Hezaimi (the 2017 Proceedings). His case was that he had orally agreed with Dr Al-Hezaimi to invest in the English property market using an offshore corporate vehicle of which Mr Bin Obaid would be the majority shareholder. Under the alleged oral agreement, Mr Bid Obaid would provide the funds and Dr Al-Hezaimi would manage the investments. Mr Bin Obaid listed 24 payments in his Particulars of Claim, which he (or an associated company) made to Dr Al-Hezaimi or a property developer.

On the basis of these allegations, Mr Bin Obaid and his companies started the 2017 Proceedings by bringing a without notice application against Dr Al-Hezaimi and his companies for both a proprietary injunction and a worldwide freezing order, which was duly granted by Barling J (the Barling J Order).

Dr Al-Hezaimi’s

Arbitration Agreements No Longer a Get-Out-of-Jail-Free Card for Insolvent Debtors: A Farewell to Salford Estates

by Campbell Herbert | Jul 2, 2024 | Arbitration, Court Judgment, Banking & Finance, United Kingdom

The Judicial Committee of the Privy Council has decisively redrawn the boundaries between arbitration agreements and insolvency proceedings in the case of Sian Participation Corp (In Liquidation) v Halimeda International Ltd.[1]

At its core, this case represents a clash between the long-established public policy of insolvency law, which aims to efficiently wind-up insolvent companies for the benefit of all creditors, and the now firmly entrenched policy that those who agree to arbitrate their disputes should be held to that bargain. For years, these two heavyweights have fought, neither quite landing a knockout blow. Now, the Privy Council has stepped in to declare a winner.

Prequel: The Rise and Fall of Salford Estates

In 2014’s Salford Estates (No 2) Ltd v Altomart Ltd,[2] the English Court of Appeal determined winding-up petitions generally should not be granted where the underlying debt was subject to an arbitration agreement, even where that debt wasn’t genuinely disputed. This handed debtors a powerful shield against liquidation.

While adopted in many common law jurisdictions, the Salford Estates approach was not followed in the British Virgin Islands, where Sian Participation v Halimeda International arose. Fast-forward to 2024, and the Privy Council has now carefully

Corporate Compliance: A Ruling from the Court of Milan Further Clarifies How to Prevent Corporate Criminal Liability in Case of Directors’ Criminal Violations

by Fabio Cozzi | Jun 3, 2024 | Regulatory/Compliance, Italy

The Italian Supreme Court recently stated that the director’s criminal liability cannot automatically trigger the recognition of corporate criminal liability, as company’s organizational fault must be specifically demonstrated by the Public Prosecutor.[1] Now, the Court of Milan[2] specifically clarifies how an appropriate and effective Organization, Management and Control Model (Model 231) pursuant to Italian Legislative Decree 231/01 (Decree 231) can shield the company from corporate criminal liability.

On January 25, 2024, the Court of Milan convicted the senior managers of an Italian joint-stock company (owned by a foreign-based multinational company) for false corporate communications, pursuant to Article 2621 of the Italian Civil Code (ICC), which provides the criminal liability of directors, general managers, managers in charge of preparing corporate accounting documents, auditors and liquidators when they represent false material facts or they omit material facts whose disclosure is required by law concerning the economic or financial situation of the company or the group.

The Court’s Overview of the Preconditions for Corporate Liability for Criminal Violations

In addition to the analysis of the liability of natural persons, the Court of Milan examined the legal requirements for the company to be deemed liable for crimes committed by

Claim for Damages Against Directors of a Foreign Company: Do Italian Courts Have Jurisdiction?

by Fabio Cozzi and Giulio Marconcin | Jun 3, 2024 | Court Judgment, Italy

Corporate disputes often have a transnational dimension, including in connection with directors liability for wrongdoing. Italian courts are frequently called to decide claims against corporate directors with links with other legal systems, such as the company being incorporated under the laws of a foreign State. This poses relevant procedural issues.

The Court of Milan (decision no 4789/2023) provided valuable insights on the application of the criteria to determine jurisdiction and applicable law in case of a claim brought by a shareholder of a company incorporated outside Italy against the sole director (having his domicile in Italy).

The Dispute

The dispute originates from a complaint brought by the minority shareholder of a limited liability company incorporated under the laws of the United Republic of Tanzania, against the other shareholder and sole director of the company (an Italian resident), allegedly responsible for misappropriation of company’s funds. On these grounds the minority shareholder (assuming that Italian substantive law was applicable to the dispute) brought two actions against the sole director:

a derivative claim under Article 2393-bis of the Italian Civil Code (ICC), according to which the minority shareholder is entitled to act against directors on behalf and in the interest of the

UK General Election: Anti-PACCAR Bill Torpedoed

by Jack Thorne and Harry Denlegh-Maxwell | May 31, 2024 | Legislative Update, United Kingdom

In a previous blog post, we discussed the introduction to Parliament of the Litigation Funding Agreements (Enforceability) Bill (the Bill), which was designed to introduce legislation that would reverse the outcome of the UK Supreme Court’s decision in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others.[1]

As we previously set out, the ruling in PACCAR was set to have significant ramifications for litigation funders, claimants and claimant law firms in the UK that rely on third-party funding, potentially threatening the financial viability of swathes of the litigation funding industry. In PACCAR, the Supreme Court held that litigation funding agreements that entitle funders to be paid a portion of any damages recovered (as opposed to a multiple of the investment made by the litigation funder) are “damages-based agreements”, as defined in the Courts and Legal Services Act, and are therefore unenforceable unless they comply with the relevant regulatory regime.

The Bill proposed amending s58AA of the Courts and Legal Services Act, to insert a provision that “an agreement is not a damages-based agreement if or to the extent that it is a litigation funding agreement”. A litigation funding agreement

Court of Appeal Interprets Released Claims in a Settlement Agreement

Arbitration Agreements No Longer a Get-Out-of-Jail-Free Card for Insolvent Debtors: A Farewell to Salford Estates

Corporate Compliance: A Ruling from the Court of Milan Further Clarifies How to Prevent Corporate Criminal Liability in Case of Directors’ Criminal Violations

Claim for Damages Against Directors of a Foreign Company: Do Italian Courts Have Jurisdiction?

UK General Election: Anti-PACCAR Bill Torpedoed

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