Court Judgment
Subscribe to Court Judgment's Posts

Commercial Court Orders Disclosure in Wake of Fraud Summary Judgment

In the case of Lowry Trading Limited and anor v Musicalize and ors [2024] EWHC 773 (Comm),[1] the Commercial Court demonstrated its willingness to use the various tools at its disposal to compel disclosure and/or the provision of information, particularly where there is a subtext of fraud.

Background

The Claimants operate investment businesses. They claim that Mr and Mrs Anderson (the Second and Third Defendants), acting through various limited companies (the other Defendants), made various false representations as purported concert promoters in order to obtain investment from them. In pursuing recovery of their investments, the Claimants allege claims in: deceit; unlawful means conspiracy; breach of contract; inducement of breach of contract; and breach of trust, as well as claims pursuant to certain guarantees.

On 21 October 2021, the Court granted freezing injunctions against the First, Fourth and Fifth Defendants preventing them from dealing with or disposing of assets outside of the ordinary and proper course of business (the Injunctions). The Injunctions further required the Defendants to notify the Claimants before dealing with or disposing of assets purportedly inside the ordinary and proper course of business, which notice requirements form the basis of the Claim      ants’ present application.

On


Continue Reading



read more

Collateral Waiver: When Voluntary Disclosure Has Unintended Consequences

In Alexander Gorbachev v Andrey Grigoryevich Guriev [2024] EWHC 622,[1] the Commercial Court held that the claimant’s voluntary disclosure of a privileged chronology originally produced by its barrister gave rise to a collateral waiver of: (i) an updated draft of that chronology; as well as (ii) all documents containing, recording or otherwise evidencing the claimant’s instructions in respect of the chronology.

Background

The underlying proceedings concern a long-running £1 billion dispute between Mr Gorbachev (the Claimant) and Mr Guriev (the Defendant) concerning their interests in a Russia-based fertiliser company, PJSC PhosAgro.

Back in October 2012, the Claimant instructed a barrister (Mr Fitzgerald), who prepared a chronology of events (the Original Chronology) based on information given to him by the Claimant at meetings and over the telephone. Later, on 21 January 2013, the Claimant instructed solicitors, around which time Mr Fitzgerald provided the solicitors with the Original Chronology, which he then subsequently revised on 5 February 2013 (the Revised Chronology). It appears not to have been disputed in the present application that both the Original Chronology and the Revised Chronology attracted legal professional privilege.

Some almost 10 years later, the Claimant voluntarily disclosed the Original Chronology to the


Continue Reading



read more

English High Court Unravels National Iranian Oil Company’s Attempt to Shield £100M London Property from Enforcement of Arbitral Award

The English High Court has ordered the National Iranian Oil Company (NIOC) to transfer a high-value London property to Crescent Gas Corporation Limited (CGC) in satisfaction of a US$2.4 billion arbitral award in favour of CGC against NIOC. The Court found that NIOC’s eleventh-hour transfer of the property to its closely linked Iranian pension fund (the Fund) was a ploy to shield it from enforcement action by CGC.

The judgment, which is the most recent development in the ongoing, long-running dispute between CGC and NIOC, is likely to be of interest to practitioners and clients seeking to enforce arbitral awards in England, as well as those establishing or litigating trusts of land in England and Wales

McDermott acted for CGC in the proceedings, as well as the underlying arbitration and award challenge proceedings described below.

Background

In 2009, CGC, a subsidiary of UAE-based Crescent Petroleum, commenced arbitration seated in London against NIOC for breach of a 2001 long-term gas supply agreement. In September 2021, the tribunal rendered a Partial Award on Remedies in favour of CGC in which it ordered NIOC to pay more than US$2.4 billion in damages plus interest.

Having successfully defended two challenges to the award, brought


Continue Reading



read more

English Courts Assert Jurisdiction to Grant Anti-Suit Relief in Landmark Case

In a ground-breaking ruling, the Court of Appeal has confirmed that English courts have the authority to issue final anti-suit injunctions in support of arbitration agreements governed by English law, even when the seat of the arbitration is outside of England. The landmark judgment in Unicredit Bank GmbH v Ruschemalliance LLC [2024] EWCA Civ 64, which follows three earlier lower court decisions arising on substantially the same fact[1], reinforces the robust protection of arbitration rights under English law and solidifies the position of English courts as a bastion for arbitration.

Background

The dispute revolved around Italian bank UniCredit, which, along with Deutsche Bank and Commerzbank, issued performance bonds in favour of RusChemAlliance (RCA), a Russian operator of an LNG facility in the Leningrad Oblast, in relation to construction contracts between RCA and German engineering contractors. These bonds were governed by English law and provided for arbitration in Paris under the ICC rules.

Following Russia’s invasion of Ukraine in February 2022 and the subsequent imposition of wide-ranging EU sanctions, the German companies halted work under the construction contracts after receiving confirmation from German authorities that they deemed such work to be prohibited under Regulation (EU) 833/2014. RCA terminated the


Continue Reading



read more

Clearview AI Inc Overturns Regulatory Intervention at First Instance

Clearview AI Inc.’s facial recognition technology has been subject to regulatory scrutiny from the privacy sector worldwide, including the UK Information Commissioner who issued the US company with monetary penalty and enforcement notices (the Notices) for alleged violations of GDPR/UK GDPR (the Regulations).

In a judgment dated October 17, 2023 (the Judgment), the UK’s First-tier Tribunal (FTT) (being the first level of regulatory appeals) upheld, on jurisdictional grounds, Clearview’s appeal of the Notices. The Commissioner sought permission to appeal on November 17, 2023. This blog piece is a reduced version of our wider commentary on the case, which is available here.

Background

Clearview is a US company providing facial recognition services to criminal law enforcement and national security agencies (and/or their contractors) outside of the United Kingdom and the European Union. In short, Clearview collects publicly available images of faces from the internet, which are compiled into a database (the Database). Clearview’s software then creates a mathematical ‘vector’ of those faces, such that they can be indexed and searched against. Clearview’s clients are able to upload their own images onto their private Clearview platform and compare those images against the Database. Clearview’s algorithmic software will return images of sufficient


Continue Reading



read more

Provision to Curb “Torpedo Actions” also Applies to Asymmetrical Jurisdiction Agreements

In summer 2021, the German Federal Court of Justice ruled on a dispute between the insolvency administrator of the airline Air Berlin and its main shareholder Etihad Airways over millions in damages that had been going on for several years.

From a procedural point of view, the Federal Court’s findings on so-called “torpedo actions” are of particular importance, further limiting the scope of application of this litigation tactic.

A torpedo action is essentially an action that pre-empts an expected action by the other party in order to block it. A torpedo action is usually filed in a jurisdiction that promises either favorable case law or a particularly long duration of proceedings. This can considerably delay a legal dispute.

This is made possible by the principle of priority that applies to cross-border disputes and the jurisdiction of different courts. According to this principle, an action brought first before a competent court blocks all subsequent actions with identical subject matter before another court. If this torpedo action is brought in a less efficient jurisdiction with notoriously slow-working courts, the opponent’s action can be delayed by several years in some cases.

In order to put a stop to this abuse of rights, the


Continue Reading



read more

Representative Proceedings | A Low Bar to the “Same Interest” Requirement?

In Commission Recovery Ltd v Marks & Clerk LLP & Anor [2024] EWCA Civ 9, the Court of Appeal handed down one of its first decisions concerning representative proceedings following the landmark Supreme Court decision in Lloyd v Google. The Court of Appeal upheld the High Court’s decision at first instance and allowed a representative proceeding under CPR 19.8(2) to proceed, but also identified several issues that it noted will require careful case management in the future.

The underlying proceedings concern current and former clients of the two defendant firms, Marks & Clerk LLP (M&C), and its associated firm, Long Acre Renewals (LAC), alleging that those firms received secret commissions for referring clients of M&C to a third party. They allege that M&C and LAC are liable to account for the amount of those commissions. A special purpose vehicle, Commission Recovery Ltd (CRL), was incorporated for the purposes of bringing the proceedings and took an assignment of a claim from one of M&C’s clients, Bambach Europe. CRL is the representative claimant in the action.

Representative Actions under English Law

Under CPR 19.8, a Claimant can bring a claim on behalf of other persons where they have the “same interest” in


Continue Reading



read more

D&O Insurances and Acting Board Members have the Same Burden of Proof in Direct Proceedings with the Injured Company

In a recent decision, the Higher Regional Court of Cologne dealt with the extremely topical issue of the distribution of the burden of proof in a direct lawsuit brought by a company against its D&O insurer.

The Decision of the Higher Regional Court of Cologne

In the case decided by the Higher Regional Court of Cologne, a limited liability company (GmbH) insured its managing director with a D&O insurance policy. After an event occurred which was presumed by the GmbH to be covered by insurance (involving inadequate fire insurance taken out by the managing director), the company did not take action against its managing director itself but had the claim of the insured managing director against the D&O insurance assigned to it and instead made a claim against the insurance on the basis of the assigned right.

The Higher Regional Court of Cologne now had to deal with the question of whether the same burden of presentation and burden of proof applies to the suing GmbH and the defending D&O insurance, compared to the imagined case that the injured GmbH would have initially made in a claim against its managing director.

In the latter case, the burden of proof would


Continue Reading



read more

Executive Board and Managing Directors Not Personally Liable for Anti-Trust Fines Imposed on Company

In summer 2023, the Higher Regional Court of Düsseldorf ruled that board members and managing directors are not personally liable for fines imposed on a company.

The Decision of the OLG Düsseldorf

The case in question concerned recourse claims by two stainless steel companies against their former board member due to his involvement in a stainless steel cartel.

After official investigations revealed that a board member of both companies had been involved in the exchange of competitively sensitive information for several years, the German Federal Cartel Office imposed a fine of EUR 4.1 million on one of the companies. In addition, a further fine was imposed personally on the board member himself.

Besides the reimbursement of the fine, the suing companies also demanded compensation for the legal defense costs incurred in connection with the fine proceedings.

The Higher Regional Court of Düsseldorf rejected the recourse claims of the companies against their managing director in its entirety and, with regard to the fine imposed on one of the companies, determined that recourse against the acting body was not eligible.

The Higher Regional Court of Düsseldorf justified its decision by stating that in the alternative the assessment under antitrust law would be


Continue Reading



read more

Deutsche Bank Anti-Suit Injunction

The recent decision of the Court of Appeal (the Court) in Deutsche Bank v Ruschemalliance LLC [2023] EWCA Civ 1144 (Deutsche Bank) confirms the strong interest in favour of granting anti-suit relief to hold parties to their arbitration agreements, even where the seat of arbitration is in a jurisdiction that does not itself provide for anti-suit injunctions (ASIs).  In this case, anti-suit relief against proceedings issued in Russia was granted in circumstances where the relevant contract contained an agreement to arbitrate disputes in Paris. The Court considered that England was the proper forum for the anti-suit application, and that an anti-suit injunction was appropriate, because French courts do not grant ASIs.

The case is timely as it comes against the backdrop of a number of disputes about forum and choice of law in the wake of the Russian invasion of Ukraine.  Agreements have increasingly broken down following implementation of US and European sanctions.  There have been a number of consequential disputes over where to litigate – in Russia (as the Russian entity may prefer) or according to the contract’s specified forum.  Paris is one of the most popular ‘neutral’ forums for dispute resolution, including in contracts with Russian counterparties.  However, if


Continue Reading



read more

STAY CONNECTED

TOPICS

ARCHIVES

2024 The Legal 500 EMEA - Leading firm