Court Judgment Archives - 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

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

Supreme Court Clears the Air on ‘Force Majeure’ Clauses

by Jack Thorne and Sadaat Cheema | May 28, 2024 | Court Judgment, Transportation & Logistics, United Kingdom

The UK’s Supreme Court has issued an important judgment clarifying the extent to which parties are required to use reasonable endeavours to avoid force majeure. Force majeure, or in layman’s terms ‘act of god’, is a specified, and generally unforeseen and disruptive, event which may mean that one or both parties to a contract are relieved from having to fulfil their obligations under it. In the present case, the underlying contract contained a force majeure clause, which included a provision requiring the party which was affected by the force majeure event to exercise reasonable endeavours to overcome it.

The relevant force majeure event took the form of US sanctions which effectively prevented payment by the charterer under an affreightment contract being made to a shipowner using US dollars. The charterer instead offered to make payments in euros and to cover any losses arising to the shipowner through the conversion of those payments into US dollars. However, in what seems a somewhat counterintuitive decision, the Supreme Court unanimously found against the charterer, on the basis that the requirement on the shipowner to exercise reasonable endeavours to overcome the force majeure event did not mean that it had to accept performance that

The Elusive ‘Anti-Anti-Arbitration Injunction’

by Sadaat Cheema | May 28, 2024 | Arbitration, Court Judgment, Oil & Gas, Transportation & Logistics, United Kingdom

The recent decision of the High Court in Euronav Shipping NV v Black Swan Petroleum DMCC [2024] EWHC 896 (Comm) illustrates when a party may be unable to enforce an arbitration agreement which is otherwise valid and enforceable. In the present case, Euronav succeeded in satisfying all of the elements of the test for an injunction which sought to restrain Black Swan Petroleum (BSP) from pursuing an anti-arbitration application before the Malaysian Courts. Nevertheless, in the exercising its discretion, the Court declined to award an injunction having regard to international comity and because it deemed that it would be vexatious and/or oppressive given the applicant’s earlier submission to Malaysian court jurisdiction. The case is a cautionary reminder of the need to pursue a carefully considered dispute resolution strategy.

Facts

The applicant, Euronav, a firm involved in ocean transportation and storage of oil, entered into a contract with a Malaysian registered company, Silk Straits SDN BHD (Silk Straits), by which it made available certain tanks on the Motor Tanker Oceania (the Vessell) for storage of oil. A first addendum to the agreement provided for English governing law and exclusive jurisdiction of the English High Court, and recorded Euronav’s consent to prospective assignment

Commercial Court Orders Disclosure in Wake of Fraud Summary Judgment

by Jack Thorne and Jonathan Robb | May 22, 2024 | Court Judgment, United Kingdom

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

Collateral Waiver: When Voluntary Disclosure Has Unintended Consequences

by Jack Thorne and Jonathan Robb | May 22, 2024 | Court Judgment, United Kingdom

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

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

by Michael Darowski, Campbell Herbert and Jannika Glendon | Apr 23, 2024 | Arbitration, Court Judgment, Oil & Gas, United Kingdom

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

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

by Campbell Herbert | Mar 5, 2024 | Court Judgment, Banking & Finance, Oil & Gas, United Kingdom

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

Clearview AI Inc Overturns Regulatory Intervention at First Instance

by Jack Thorne, Pilar Arzuaga and Jonathan Robb | Feb 14, 2024 | Court Judgment, Regulatory/Compliance, Technology, United Kingdom

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

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