ED&F Man Capital Markets Ltd v Come Harvest Holdings Ltd
| Jurisdiction | England & Wales |
| Judge | Daniel Toledano |
| Judgment Date | 04 July 2019 |
| Neutral Citation | [2019] EWHC 1661 (Comm) |
| Date | 04 July 2019 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | CL-2017-000782 |
[2019] EWHC 1661 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Daniel Toledano Q.C.
(SITTING AS A DEPUTY JUDGE OF THE HIGH COURT)
CL-2017-000782
Huw Davies Q.C. and John Robb (instructed by Clyde & Co LLP) for the Claimant
David Lewis Q.C. and Andrew Dinsmore (instructed by Reed Smith LLP) for the Tenth Defendant
Hearing date: Thursday 20 June 2019
Daniel Toledano Q.C.:
Introduction
This is the application of the Tenth Defendant (“Straits”) made under CPR Part 11 challenging the jurisdiction of the Court and seeking to set aside the Order that I made ex parte on 23 November 2018 granting permission to the Claimant (“MCM”), a company registered in England, to serve the proceedings on Straits in Singapore.
At the heart of Straits' case on this application is a complaint about MCM having procured the Order dated 23 November 2018 using material which it had obtained in pre-action disclosure proceedings in Singapore. By doing so, the Claimant breached an implied undertaking to the Singapore Court about the use of that material. Indeed, by Order dated 31 May 2019, Aedit Abdullah J in the High Court of Singapore granted an injunction restraining MCM from using in this action in England any part of the material obtained in Singapore covered by the implied undertaking. As a result, MCM has produced redacted versions of the evidence that it relied on when seeking permission to serve out of the jurisdiction, as well as a redacted version of the Amended Particulars of Claim, which had previously also included reference to the material obtained in Singapore.
Straits claims that two consequences flow from this. First, Straits claims that the Order of 23 November 2018 cannot stand and must be set aside in its entirety. Secondly, Straits claims that MCM, by issuing and then pursuing pre-action disclosure proceedings in Singapore, exercised a choice in favour of any substantive proceedings against Straits in Singapore such that it cannot now change course and pursue Straits in England as England would not be the proper place for the claim. Before considering these two issues and the other matters that arise, I will set out the factual and procedural background to this application.
Background to MCM claims
In 2016, MCM entered into a Commodities Sale and Purchase Agreement with each of the First Defendant (“Come Harvest”) and the Second Defendant (“Mega Wealth”) (dated 29 April 2016 in the case of Come Harvest and 13 June 2016 in the case of Mega Wealth) (the “Master Agreements”). The Master Agreements were governed by English law and provided for disputes to be resolved by the Courts of England and Wales. Come Harvest and Mega Wealth are companies incorporated in Hong Kong.
The Master Agreements contemplated that the parties would thereafter enter into contracts for the sale and purchase of metal whereby Come Harvest or Mega Wealth would sell the metal to MCM but with the option to repurchase it at a later date. The mechanics involved MCM making payment to Come Harvest or Mega Wealth upon receipt of warehouse receipts relating to the metal. The recipient of an original endorsed warehouse receipt can obtain possession of the nickel by presenting the warehouse receipt to the warehouse operator. The warehouse operator was Access World Logistics (Singapore) Pte Ltd (“Access World”).
Pursuant to the Master Agreements, MCM entered into a number of purchase contracts with each of Come Harvest and Mega Wealth relating to the sale and purchase of nickel. The nickel the subject of these contracts was stored in various warehouses in Malaysia, South Korea and Singapore.
In each case:
(1) MCM made payment to Come Harvest or Mega Wealth from its bank accounts held in England. According to the pleaded claim, USD117,326,050.86 was paid to Come Harvest and USD167,210,088.37 was paid to Mega Wealth.
(2) MCM made payment upon receipt by MCM at its offices in London of purported warehouse receipts (the “Receipts”) issued by Access World. All but one of these Receipts purported to have been originally issued by Access World to the order of Straits and then endorsed either to Come Harvest or Mega Wealth and then, in turn, blank endorsed and delivered to MCM. The remaining Receipt was issued by Access World to the order of the Fourth Defendant.
MCM sold the nickel on to a sub-buyer called ANZ Commodity Trading Pty Ltd (“ANZCT”).
In January 2017 MCM claims to have received information that led it to investigate the transactions. Representatives of MCM met with representatives of Access World in Singapore to seek confirmation that the nickel was in existence. Shortly thereafter ANZCT sought to present one of the Receipts to Access World for authentication. Access World concluded that this Receipt was not genuine. It would seem that Access World thereafter concluded that all but one of the Receipts were not genuine and cancelled them. Straits admits that the Receipts are not genuine although the other Defendants put MCM to proof on this issue. Straits has claimed that, at all material times, it or its bankers have retained possession of the authentic original warehouse receipts.
In light of the above, MCM concluded that it had been the victim of a substantial fraud using the forged Receipts.
Procedural history in Singapore and in England
On 25 May 2017 MCM commenced pre-action disclosure proceedings called OS 533 against Straits in Singapore seeking 11 categories of documents and seeking to administer 10 interrogatories on Straits. I consider the nature of these pre-action disclosure proceedings in more detail later in this Judgment. MCM accepts that its provisional intention at this time was also to commence substantive proceedings against Straits in Singapore if such proceedings were justified by the evidence. In response to the OS 533 application, Straits filed Affidavit evidence of Ms He in support of its position that MCM was not entitled to the information and documents requested. This is the material that MCM used when first seeking relief against Straits in the English Court.
On 21 December 2017 MCM issued the English proceedings against Come Harvest and Mega Wealth only. The claim form asserted causes of action in deceit and unjust enrichment.
MCM did not reveal the existence of the English proceedings against Come Harvest and Mega Wealth to Straits or to the Singapore Court until 7 March 2018 even though Straits had sought in Singapore discovery from MCM of the proceedings that MCM was taking worldwide. On 14 June 2018 MCM told the Singapore Court that the English proceedings were “ strictly irrelevant” so far as Straits was concerned.
Come Harvest and Mega Wealth served their Defence in the English action on 28 June 2018.
On 13 August 2018 Assistant Registrar Zeslene Mao dismissed OS 533. MCM appealed against this decision on 24 August 2018 although MCM accepted as part of its applications issued in England in September 2018 that it would discontinue the appeal if required by the English Court. In the event, MCM discontinued its appeal on 11 February 2019.
MCM says that by September 2018 a number of reasons had combined to lead to the decision to apply to join Straits to the existing action in England against Come Harvest and Mega Wealth, rather than to bring a substantive claim against Straits in Singapore. In particular, MCM had by summer 2018 received the Defence from Come Harvest and Mega Wealth and other documentation that it had not been in possession of at the outset. MCM says that the Defence was important because it appeared to implicate Straits in the alleged fraud perpetrated against MCM.
Accordingly, on 7 September 2018 MCM filed an application to amend its Particulars of Claim in the English proceedings, to join the Third to Tenth Defendants and to serve the proceedings out of the jurisdiction on them. Come Harvest and Mega Wealth consented to the amendment application. The application came before me ex parte on 23 November 2018 and I gave permission to join and to serve out of the jurisdiction. However, on 24 January 2019 Straits issued the present jurisdiction challenge.
So far as Singapore is concerned, on 1 March 2019 Straits issued a summons for an anti-suit injunction seeking to restrain the English proceedings as against it and also sought an injunction to restrain the use outside of Singapore of the materials obtained from the OS 533 action. On 31 May 2019 the Singapore High Court refused the anti-suit injunction but granted the injunction restraining use of the OS 533 materials. In dismissing the anti-suit injunction application, the Judge said:
“ 5. As for the Anti-suit injunction, I was not persuaded that Singapore was the clearly more appropriate forum. There were factors, relied on by [Straits], which pointed to Singapore; but just as much there were factors pointing instead to England. It suffices to note that given this close balance, the Defendant did not make out the first requirement for the issuing of an ASI.
6. Additionally, I would note that none of the factors relied on by the Defendant were to my mind sufficient in any event to establish vexation and oppression of the degree that would justify the issuing of an anti-suit injunction. The mischief or conduct raised could be better and specifically targeted by the injunction against use of...
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