In its recent decision in Koza Ltd v Akcil  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”.
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
Wilfried Guemiand Bony v Gilbert Francis Kacou  EWHC 2146 (Ch)).
The recent case of Bony v Kacou provides insight into when the courts will, and will not, find that an arbitration agreement exists under s5 Arbitration Act 1996. The Court also considered the interaction between s5 Arbitration Act and applications for stays of court proceedings under s9 Arbitration Act 1996. This is the sixth and final post in our new term catch-up series.
Premier league footballer, Wilfried Bony, issued proceedings against his former agents accusing them of receiving secret commissions themselves (or through their corporate vehicles) in the course of contract negotiations with Swansea FC. The Defendants were alleged to have breached contractual and fiduciary duties to Mr Bony, and to have made fraudulent and/or negligent misrepresentations. Continue reading
As the new legal year starts in London, we’re running a short series of posts covering developments and cases you might have missed over the summer. This first post in the series looks at the UK and EU position papers on Judicial Cooperation in Civil and Commercial Matters.
Since the Brexit Referendum of June 2016, there has been uncertainty as to how the current conflict of laws regimes concerning civil and commercial matters will change. (Other civil matters are outside the scope of this brief note.)
Until recently, there had been no indication from governmental levels as to the proposals both for the wind-down of the current regime and for the future basis of judicial cooperation (if any) between the UK and EU Member States. This summer saw the publication of position papers by both the EU and the UK. On 12 July 2017, the EU published its Position Paper on Judicial Cooperation in Civil and Commercial Matters. On 22 August 2017, the UK published its paper entitled “Providing a cross-border civil judicial cooperation framework: a future partnership.”
Both papers set out proposals for the “wind-down” period. The EU paper makes no proposals for any new relationship between itself and its former member, the UK. The UK makes some high level proposals in this regard. Continue reading
Marashen Ltd v Kenvett Ltd  EWHC 1706 (Ch) (06 July 2017)
Foxton QC in the Chancery Division overturned an earlier order permitting service of third party costs order on a person resident in Russia by means of alternative service on his lawyers’ offices in London, on the basis that there was no pre-existing order for permission to serve out. A court must have already given permission to serve out of the jurisdiction, before the power to permit alternative service (under CPR 6.15) arises. Pre-existing permission to serve out must exist even for alternative service within the jurisdiction. The power to make alternative service within England and Wales on a defendant resident outside the jurisdiction derives from CPR 6.37(5)(b)(i). In Hague Service Convention cases, there must be “exceptional circumstances” to grant an order for alternative service, outside the terms of the Convention.
Exceptional circumstances is a test going beyond mere good reason. Mere delay or additional expense did not constitute exceptional circumstances. Article 15 of the Hague Service Convention itself offers comfort to a claimant in the case of excessive delay in that, in the event of a delay exceeding 6 months, this article would allow the claimant to continue on with proceedings despite a lack of formal confirmation of service.
The Commercial Court finds that asymmetric jurisdiction clauses are valid exclusive jurisdiction clauses for the purposes of the Brussels Recast. Given their prevalence in financial contracts, a contrary decision could have produced significant instability.
Commerzbank Aktiengesellschaft v Pauline Shipping and Liquimar Tankers  EWHC 161 Continue reading
UNCITRAL continues to make progress towards improving the enforcement of settlement agreements which follow from conciliation or mediation in commercial cases.
In 2014, UNCITRAL agreed that a Working Group should consider the issue of enforcement of settlement agreements resulting from international commercial mediation or conciliation. This was based on a proposal from the US delegation, addressing a perceived need for greater ease of enforcement of settlement agreements that had not been converted into formal judgments or arbitration awards.
Progress has been made by the Working Group in 2016, leading to greater clarity as to any likely final proposal.
The Working Group has developed a concept of a framework for conciliated settlement agreements akin to the New York Convention on the Recognition and Enforcement of Arbitral Awards. Continue reading
In its decision on 20 May 2016, the Commercial Court (Walker J) considered a non-standard jurisdiction clause which fell within the regime of the Brussels I Recast Regulation (Regulation 1215/2012). Perhaps unsurprisingly, he held that a clause, expressed to confer non-exclusive jurisdiction on the English courts, “for the benefit of” the Claimants did not in fact confer exclusive jurisdiction on those courts.
The decision demonstrates that the court will use both a literal and a common sense business reading when construing the jurisdiction clause. Further, the Court was reluctant to allow the parties to import new elements (such as symmetry of obligations) into Articles 25 and 31 of the Recast Regulation. Continue reading
In this case, decided on 5 May 2016, the Commercial Court gave guidance as to the indicia for consideration in determining domicile.
The Claimant was a Swiss businessman, who alleged that he had given the Defendant ( a Russian) $17million, which the Defendant had then wrongly kept rather than investing. The Claimant first brought Russian proceedings for unjust enrichment, on the grounds that the money had passed through Russian bank accounts. The Russian court rejected the claim on the grounds that the dispute was contractual, and that this precluded an unjust enrichment remedy. The Claimant then brought English proceedings, alleging fraudulent misrepresentation and breach of fiduciary duty by the Defendant. The Defendant denied fraud, and denied the jurisdiction of the English courts, stating that Russia or
Belarus was a more appropriate forum. Continue reading
The Commercial Court’s decision in this case (Axa v Weir  EWHC 904 (Comm)) late last week provides a useful restatement of the jurisdictional position concerning insurance written on the London market.
The case, confirms the English Court’s willingness to find that England is the natural forum in such cases even where (as here) there has been no express choice of jurisdiction. It also shows a willingness to allow parties to continue related foreign proceedings and, if appropriate, to stay the English proceedings (see also, e.g. my post on Blue Tropic and Josephine Davies’ post on Jong v HSBC).
It is well known that English law allows recovery for damages for breach of contract in case of a breach of jurisdiction or arbitration clause (see our post on Blair J’s 2015 decision: Barclays Bank v ENPAM, for example). Parties commonly claim costs of addressing the foreign proceedings as such damages. However, what recovery should there be for an innocent party if the foreign court has already declined jurisdiction and awarded the innocent party its costs of the jurisdictional proceedings? Is there any loss still to be recovered in damages in the correct forum?
This issue was considered in the recent London Arbitration 1/16 (2016) 942 LMLN 2 (published on 11 January 2016). The dispute concerned a series of lay-up contracts, whereby the Respondent laid up vessels in the Claimant’s facility in the Far East. All contracts provided for London arbitration. Continue reading