Interpretation of Article 24(2) Brussels Recast

In its recent decision in Koza Ltd v Akcil [2017] EWCA Civ 1609, the Court of Appeal interpreted the scope of Article 24 (2) Brussels I Recast, which governs exclusive jurisdiction “in proceedings which have as their object the validity of the constitution, the nullity or dissolution of companies or other legal persons or associations of natural or legal persons, or the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat”.

Factual Background

The dispute concerned the control and management of the First Claimant, Koza Ltd, a company with its seat in England and Wales. The Second Claimant was a director of Koza Ltd. Koza Ltd was a wholly owned subsidiary of Koza Altin Isletmeleri AS. Both were members of the Koza Group. The Koza Group was accused by the Turkish authorities of financing of terrorism, and became embroiled in Turkish criminal proceedings. Koza Altin served notice requisitioning a general meeting of Koza Ltd with a view to passing resolution replacing its directors, including the Second Claimant, with the First, Second and Third Defendants. Koza Ltd would not voluntarily call the general meeting. Statutory procedure was sought to call the general meeting.

Koza Ltd sought relief on two grounds:
(i) the “English law company claim”, which alleged that the resolutions to which the notices related could not be passed without the consent of Mr Ipek, and he did not consent, and
(ii) “the authority claim”, which alleged on a variety of grounds that the Defendants had no authority to serve the notices served. Continue reading

No anti-suit although HK claims breach jurisdiction clause

Team Y&R Holdings v Ghossoub [2017] EWHC 2401 (Comm) is an interesting treatment of parallel proceedings. The exclusive jurisdiction clause was read to fulfil its purpose: the substance not the form of allegedly wrongful Hong Kong proceedings was important and third parties were not bound.  However, despite Mr Ghossoub being in breach of the jurisdiction clause, no anti-suit injunction was granted against him.  The decision should give parties pause for thought when drafting jurisdiction clauses and starting or resisting parallel proceedings. Chaos or at least inconvenience might be unavoidable without a clearly drafted jurisdiction clause. It also offers guidance on how to write a jurisdiction clause which bites on non-contracting parties.

The origin of the dispute

The case arose from a sale and purchase agreement (“SPA”) for the shares of Team Y&R Holdings (“TYRH”) and a service agreement (“SA”) between Mr Ghossoub and TYRH.  The SPA contained an exclusive jurisdiction clause as follows (the SA clause was less detailed).

“The English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with this agreement and the parties submit to the exclusive jurisdiction of the English Courts.” Continue reading