J&W SANDERSON Ltd (Petitioner) v FENOX (UK) Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Christopher Pymont QC |
| Judgment Date | 18 December 2014 |
| Neutral Citation | [2014] EWHC 4322 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: 7245 OF 2013 |
| Date | 18 December 2014 |
[2014] EWHC 4322 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Royal Courts of Justice
Strand. London. WC2A 2LL
Mr Christopher Pymont QC
sitting as a Deputy Judge of the High Court
Case No: 7245 OF 2013
IN THE MATTER OF FENOX (UK) LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
Mr Mark Hubbard (instructed by Carrington & Associates) for the Second and Third Respondents
Miss Chantelle Staynings (instructed by iLAW) for the Petitioner
Hearing date: 13 November 2014
I have before me an application by the Third Respondent to this petition ("Mr Arbuzov"), supported by the Second Respondent ("Fenox GmbH") to join an additional party as the Sixth Respondent ("Mr Vaganov"), to serve the proceedings on him out of the jurisdiction and to stay the petition. The application for joinder is not pursued as the central application is for a stay and it is accepted that it will make no difference to the outcome of that application whether the additional party is joined or not.
The background to the application is as follows. The petition is brought by a company called J&W Sanderson Ltd ("the Petitioner") for relief in respect of the Company, Fenox (UK) Limited, of which the Petitioner is a 50% shareholder. Fenox GmbH is the only other shareholder. The Company's principal business is to hold some 602,806 shares in a subsidiary, JV Unison CJSC ("Unison"), representing (it is alleged in the petition) about 60.28% of its issued share capital. Unison is a company incorporated under the law of Belarus. The Petitioner alleges that the Company has no directors and that the shareholders cannot agree on the appointment of new directors so that there is deadlock in the Company's management. The Petitioner further alleges that at different times notices have been filed at Companies House indicating that two individuals (Mr Burgess and Mr Khrystsich) had been appointed as directors of the Company, though neither had in fact been validly appointed. Mr Burgess, as purported director, had then executed powers of attorney in favour of two other individuals, Mr Putitski and Mr Arbuzov, to enable a sale to take place of 517,551 of the Company's shares in Unison to a company controlled by Mr Arbuzov. Injunctions are sought against Mr Arbuzov and Mr Putitski (as attorneys under these purported deeds) and Mr Khrystsich (as a purported director) to restrain them from acting on the Company's behalf; they have therefore been joined to the petition as the Third, Fourth and Fifth Respondents respectively. Interim injunctions were granted against them by Registrar Baister on 6 May 2014. Mr Burgess has purportedly now resigned as a director and no relief is sought against him.
Fenox GmbH has served Points of Defence in which it denies the central allegations and raises a number of factual allegations which will need to be resolved at a trial. In summary, the allegations are as follows.
Fenox GmbH traces the ultimate origins of this dispute to a Partnership Agreement made on or about 1 December 2002 between Mr Vaganov and Mr Arbuzov. At that time (so it is alleged) Mr Vaganov owned or controlled about 74% of the issued share capital of Unison, partly through the Petitioner (which owned 602,806 shares in Unison, carrying 60.28% of the voting rights) and partly through a Belarus company called Lada OMS Holdings CJSC ("Lada") (which owned 137,214 shares in Unison, carrying 13.82%). The agreement was to the effect that Mr Vaganov would bring his (indirect) interest into the partnership, with Mr Arbuzov introducing cash or plant and machinery of equivalent value, and thereafter the partners would own that interest equally. Unison ran a car assembly plant in Minsk, originally established as a joint venture between the Belarus government and Ford Motors. The Belarus government remains interested as Unison's main other shareholder.
It is alleged in the Points of Defence that the Company was set up to hold the partnership's interest in Unison, the Company's shareholders (the Petitioner and Fenox GmbH) being the corporate vehicles of the partners, Mr Vaganov and Mr Arbuzov respectively. However, in breach of the Partnership Agreement, Mr Vaganov only procured that the Petitioner's shares in Unison were transferred to the Company and he continued to retain control of Lada's shares in Unison. It is further alleged that it was Mr Vaganov who tried to interfere with the Company's operations by having himself notified to Companies House as director of the Company in May 2009 when no such appointment had been made and even though the Company had hitherto been run, with the consent of the partners, by persons connected with Mr Arbuzov, including Mr Putitski.
It is further alleged that Mr Vaganov had earlier, in November 2007, concluded a memorandum of understanding with Iran Khodro Industrial Group ("Iran Khodro") by which Iran Khodro was to subscribe for shares in Unison giving it a 42.1% interest in the voting rights, with the Belarus government and Lada maintaining their proportionate interests and the Company's being reduced to 23%. In making this arrangement, Mr Vaganov was acting as the Chairman of Unison and (it is alleged) in breach of the Partnership Agreement. Iran Khodro and the Belarus government subscribed for new shares accordingly, although Lada did not. In November 2011, the Company, acting by Mr Putitski with the knowledge and consent of both Mr Vaganov and Mr Arbuzov, applied to the Economic Court of the City of Minsk for the annulment of the issue of shares to Iran Khodro. Lada supported that application initially but later dropped out of the proceedings. The Company's proceedings were successful in that, on 21 June 2012, the Appeal Court in Belarus cancelled the shares issued to Iran Khodro, though not those issued to the Belarus government. The voting rights in Unison's share capital are now therefore controlled by the Belarus government as to 47%, the Company as to 42%, Lada as to 9% and certain officers of Unison as to 2%.
Lada then started proceedings of its own in the...
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