889457 Alberta Inc. v Katanga Mining Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeTHE HON. MR JUSTICE TOMLINSON
Judgment Date05 November 2008
Neutral Citation[2008] EWHC 2679 (Comm)
Date05 November 2008
Docket NumberCase No: 2008 Folio 25

[2008] EWHC 2679 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Hon. Mr Justice Tomlinson

Case No: 2008 Folio 25

Between:
889457 Alberta Inc.
Claimant
and
(1) Katanga Mining Limited
Defendants
(2) Tain Holdings Limited
(3) Wayland Management S.A.

Stephen Auld QC and Simon Colton (instructed by Messrs Dorsey & Whitney) for the Claimant

Richard Slade (instructed by Messrs Norton Rose) for the First Defendant

Sam Wordsworth (instructed by Messrs Salans) for the Second and Third Defendants

Hearing dates: 25 July 2008

(and further written submissions on 8 & 14 August 2008)

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HON. MR JUSTICE TOMLINSON Mr Justice Tomlinson

Mr Justice Tomlinson :

Introduction

1

In this action the First Defendant, nominally a Bermuda corporation, has been properly served with proceedings as of right within the jurisdiction because it carries on its activities in London – CPR 6.2(1)(c) and 6.5(b). The Second and Third Defendants, nominally incorporated in the British Virgin Islands and Panama respectively, have been served with the proceedings out of the jurisdiction on the basis that they are necessary or proper parties to the claim against the First Defendant – CPR 6.20(3)(b). The First Defendant says that this court should decline to exercise its jurisdiction over it because it is clearly shown that the Democratic Republic of Congo, “DRC”, is the natural and appropriate forum for the resolution of the dispute. The Claimant says that at the very least the First Defendant has its central administration in London and so is domiciled in England for the purposes of Article 60 of Council Regulation (EC) No. 44/2001, “the Judgments Regulation”. If that is so, the English court cannot decline to exercise its jurisdiction over the First Defendant on the grounds of forum non-conveniens, even where the state which is said to be more appropriate is outside the European Community – Owusu v. Jackson [2005] QB 801, a decision of the European Court of Justice.

The Second and Third Defendants say that this is an inappropriate case in which to invoke the necessary or proper party jurisdiction because they are in reality the principal defendants to the Claimant's claim. Alternatively they say that it is not shown by the Claimant, on whom lies the burden, that the English court is clearly the natural and appropriate forum for the resolution of the dispute, and that service on them should therefore be set aside.

The Second and Third Defendants also say in their evidence, although tellingly they did not say it in their application, that the Claimant has agreed with them that the Tribunal de Grande Instance of Kolwezi in the province of Katanga in the DRC shall have exclusive jurisdiction in relation to the dispute.

2

The applications before the court therefore raise the familiar question, “where the case may be tried, 'suitably for the interests of all the parties and for the ends of justice'” see Spiliada Maritime Corporation v. Cansulex [1987] AC 460 at page 482 per Lord Goff of Chieveley, citing in turn Lord Kinnear in Sim v. Robinow, [1892] 19 R. 665 at 668. This is, as Professor Adrian Briggs has pointed out, a comparative exercise – see Briggs and Rees, Civil Jurisdiction and Judgments, 4 th Edition at paragraph 4.58. I have unhesitatingly reached the conclusion that England is clearly and distinctly the more appropriate forum for the resolution of this dispute than is the DRC. Indeed with the greatest of respect to the judiciary of the DRC, I do not regard the DRC as an available alternative forum. Authoritative evidence before the court is to the effect that the normal infrastructure of a state does not exist in the DRC. Whilst there is a dispute on the evidence, which I cannot resolve on an application of this sort, as to the extent to which the judicial system is functioning in the DRC, this court cannot in all conscience conclude that the DRC is where the case may be tried suitably for the interests of all the parties, and for the ends of justice. Furthermore the Defendants do not in my judgment genuinely desire that the dispute should be resolved in the DRC. It is the stated position of the Claimant that in the event that this court declines to exercise its jurisdiction it will not seek relief in the courts of the DRC. The Defendants know therefore that there would in fact be no proceedings in the DRC. When in November 2007 the three Defendants made between themselves the call option agreement which has triggered the Claimant's action, tellingly they agreed to London arbitration and to English jurisdiction.

The facts

3

This is a dispute between three men. The Claimant, “Alberta”, is a Canadian company wholly owned by Mr Robert Buchan, who lives in Canada. The Second Defendant, “Tain”, is a BVI company wholly owned by Mr Arthur Ditto. Mr Ditto is based in London. The Third Defendant, “Wayland”, is a Panama corporation wholly owned by Mr George Forrest, a Belgian who has lived all his life in what is now the DRC. His family has lived there for generations. Mr Forrest is on anyone's case a man of great prominence in the DRC. Once business associates, these three gentlemen have fallen out. Mr Buchan accuses Mr Ditto and Mr Forrest of dishonesty, and, in particular, of having attempted to dispossess him of his one-third interest in a Congolese mining company, and of attempting to dispose of their own shareholdings in that company in a manner which will defeat his right of pre-emption. Mr Ditto and Mr Forrest for their part accuse Mr Buchan of dishonesty. Mr Forrest says that Mr Buchan “has brought this claim to try to get something to which he no longer has any right because of his own turpitude”.

4

The First Defendant, “Katanga”, is a Bermudian company with its principal office in London in which both Mr Ditto and Mr Forrest have a substantial interest. They are both major shareholders and Directors. Mr Buchan/Alberta once also had a substantial interest in Katanga. It is common ground that disposal by Mr Buchan/Alberta of those shares in Katanga in 2007 led to acrimonious relations between the three men. By the time this action was brought Katanga was seeking listing on the London stock exchange. On 6 November 2007 it announced its intention to merge with Nikanor plc.

5

Katanga has a subsidiary, KFL, which is in a joint venture with La Générale des Carrières et des Mines (“Gécamines”), a state-owned and operated mining enterprise of the DRC. The joint venture owns Kamoto Copper Company SARL (“KCC”), with 75% held by KFL and 25% held by Gécamines. The major and extremely valuable asset of KCC is the Kamoto copper and cobalt mine, which is anticipated to produce in each year from 2010 150,000 tonnes of copper and 8,000 tonnes of cobalt.

6

The company which actually operates the Kamoto mine is Kamoto Operating Limited, hereinafter “KOL”. This is a DRC company. It was established in October 2005 with three hundred issued shares to be held equally between Alberta, Tain and Mr Forrest. KOL receives a fee of 3% of KCC's budgeted expenditure for operating and capital costs. This is already a substantial amount, which can be expected to rise even further as production increases. The shareholdings in KOL are thus extremely valuable and their value can be expected to increase.

7

KOL was set up by a Deed of Incorporation which it is common ground takes effect as a contract between the three subscribers. No copy is available of the original document, which was apparently in the French language. The original subscribers were Alberta, Tain and Mr Forrest. Tain and Wayland appear to have purported to amend the Deed in early November 200In the Revised Deed Wayland is named as the third subscriber rather than Mr Forrest. Since Wayland is simply the creature of Mr Forrest, I can disregard this for present purposes. The Deed and the Revised Deed are in most respects identical. There is however one significant difference.

8

Articles 5, 6 and 12 of what is said to be an English translation of the original Deed provide:

Article Five: Capital

The capital is set at the sum of 3,000,000 Congolese francs.

It is represented by 300 company shares with voting rights, without face value, with each share representing 1/300 of the company assets. These shares are fully subscribed and fully paid-up.

Article Six: Subscription

The parties state that their share capital subscription is as follows:

1. 889457 Alberta Inc. 100 company shares

2. Tain Holdings Limited 100 company shares

3. Mr George Forrest 100 company shares

Total: 300 company shares

The aforementioned Shareholders note and declare that the number of shareholders is three, that the capital has been fully subscribed and paid up. The company thus has 3,000,000 (three million) Congolese francs available.

Article Twelve: Ownership —Transferability

The ownership of the shares shall be established by an entry in a register kept at the registered office. The register may only be consulted by the shareholders at the place where it is kept.

The register shall contain the following information: the precise name of the owners, the number of shares held by each of them, the dates of the transfers or conversions.

The shares may only be transferred by virtue of a special authorization from the Board of Directors, in favour of an approved transferee, insofar as all the operations specified hereinafter have been fully respected beforehand.

1

The shares that a Shareholder proposes selling shall first be offered to the other Shareholders.

2

The Shareholder who wants to transfer all or some of his shares shall notify the Board of Directors of his...

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    ...views of the speaker. As for the English decisions in which reference was made to material from Transparency International, in Alberta Inc v Katanga Mining Ltd, [2008] EWHC 2697 (Comm) Tomlinson J referred at para 27 to Transparency International in a list of entities on whose reports an ex......
  • PJSC National Bank Trust v Boris Mints
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    • Queen's Bench Division (Commercial Court)
    • 23 March 2021
    ...and duplication of costs. That is a powerful factor in favour of having the applicants as parties to this litigation: see 889457 Alberta Inc v Katanga Mining Ltd [2008] EWHC 2679 (Comm), para 25; Citi-March Ltd v Neptune Orient Lines Ltd [1996] 1 WLR 1367, 1375–6. 18. I do not ignore the ......
  • Flatela Vava and Others v Anglo American South Africa Ltd
    • United Kingdom
    • Queen's Bench Division
    • 16 July 2012
    ...by conducting an examination of the reality of where the work and management of the companies were carried out. 28 In 889457 Alberta Inc v Katanga Mining Limited [2008] EWHC 2679 (Comm), Tomlinson J (as he then was) held that the place of central administration of a company was in London wh......
  • Vava and Others v Anglo American South Africa Ltd
    • United Kingdom
    • Queen's Bench Division
    • 24 July 2013
    ...be found and, if so, was that or one of them in England." 19 The third of these cases is the decision of Tomlinson J in 889457 Alberta Inc v Katanga Mining Ltd, [2008] EWHC 2679 (Comm). The claimant invoked the jurisdiction of the English court on the basis that the first defendant, a......
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1 books & journal articles
  • FOREIGN LAW IN DOMESTIC COURTS
    • Singapore
    • Singapore Academy of Law Journal Nbr. 2017, December 2017
    • 1 December 2017
    ...SGHC 285 at [43]; The Hooghly Mills Co Ltd v Seltron Pte Ltd[1994] 3 SLR(R) 757 at [16]. 113889457 Alberta Inc v Katanga Mining Ltd[2008] EWHC 2679 (Comm). 114 As in Cherney v Deripaska[2012] EWCA Civ 1235. 115 Teo Guan Siew & Wong Huiwen Denise, “Referring Questions of Foreign law to t......

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