AMB Generali Holding AG v SEB Trygg LIV Holding AB
| Jurisdiction | England & Wales |
| Judge | Buxton,Tuckey,Maurice Kay L JJ |
| Judgment Date | 10 November 2005 |
| Date | 10 November 2005 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal (Civil Division).
Buxton Tuckey and Maurice Kay L JJ
I Gatt QC and T Leech (instructed by Herbert Smith) for the first appellant.
J Nash (instructed by Barlow Lyde & Gilbert and Reynolds Porter Chamberlain) for the second and third appellants.
N Davidson QC (instructed by DLA) for the fourth appellant.
N Strauss QC, D Matthews QC and S Hossain (instructed by Slaughter & May) for the respondent.
N Davidson QC for the Part 20 appellant.
I Gatt QC and T Leech for the first Part 20 respondent.
T Carlisle (instructed by Sykes Anderson) for the second Part 20 respondent.
The following cases were referred to in the judgment of the court:
AEI Rediffusion Music Ltd v Phonographic Performance LtdWLR [1999] 1 WLR 1507.Biogen Inc v Medeva plcUNK[1997] RPC 1.Collen v WrightENR(1857) 8 E & B 647; 120 ER 241. Harrisons & Crossfield Ltd v London and North-Western Railway Co[1917] 2 KB
755.
Lay v AckermanUNK [2004] EWCA Civ 184.Morgan Est (Scotland) Ltd v Hanson Concrete Products LtdWLR[2005] 1 WLR 2557.Nelson v NelsonWLR[1997] 1 WLR 233.Powell v SmithELR(1872) LR 14 Eq 85.Roache v News Group Newspapers Ltd[1998] EMLR 161.Rockland Industries Inc v Amerada Minerals Corp of Canada Ltd[1980] 2 SCR
2.
Sardinia Sulcis, TheUNK [1991] 1 Ll Rep 201. Scarf v JardineELR(1882) LR 7 App Cas 345.Willis Faber & Co Ltd v Joyce(1911) 104 LT 576.Yonge v ToynbeeELR[1910] 1 KB 215.
Arbitration — Nullity — Universal succession — Authority — Ratification — Misnomer — Solicitors — Warranty of authority — Arbitration arising from sale of participations in insurance company — Vendors claimed against purchaser for balance of purchase price and purchaser counterclaimed — Named claimants included vendor company which had transferred rights under sale agreement to subsidiary and then merged with parent — Parent which had succeeded to claim instructed solicitors to change name of claimant in arbitration then asserted that proceedings never properly authorised — Director of vendor company had had actual or ostensible authority for purposes of proceedings — Parent had ratified actions in making vendor and thus successor party to arbitration — Parent had submitted to jurisdiction of arbitral tribunal — Proceedings not a nullity because party wrongly named — Solicitors not in breach of warranty of authority and did not warrant correct name of client.
This was an appeal from a decision of Gloster J [2005] EWHC 35 (Comm) that arbitration proceedings brought in the name of a non-existent company were not a nullity since the mistake was one of misnomer and the proceedings had been authorised or ratified by the company's successor.
In 1993 the Total Shareholding In An Insurance Company, Interlife, was Sold By Its Owners To The Claimants In The Action, Seb. The corporate Owners Were Four Companies, Including A Company (Old Aachener Re) which Had A Participation Of 12.5% in Interlife. In order To Administer A Dispute That Arose As A Result Of The Sale The Four Corporate Owners Jointly Employed An Insurance Industry Professional, M. M's contact At Old Aachener Re was A Director Of That Company, H. The dispute Arose, First, From The Refusal Of Seb To Pay The Balance Of The Purchase Price. That Led To Arbitration Proceedings Commenced In The Stockholm in November 1998 in Which The Vendors Claimed Against Seb, And Seb Counterclaimed On Grounds Alleging The Mis-selling of Pensions By Interlife under Its Previous Ownership. The proceedings Were Throughout Entitled As Having Been Brought By, Amongst Others, An Aachener Re company, And Not In The Name Of Amb, Which Had By Then Succeeded To The Claim. The vendors Were Jointly Represented From 1995 by Solicitors, Manches, instructed By M, until Sprecher Grier Halberstam (SGH) Took Over In August 1999. In March 2000 the Partner At Sgh With The Conduct Of The Case Moved To Another Firm (P & J) And Took The Case With Him. M continued As The Solicitors' Point Of Contact With The Vendors. The Arbitration Proceedings (which Were Solely Concerned With the issues under the counterclaim, as the non-payment by SEB was admitted) occupied a substantial amount of time in the hearing of evidence in 2001, with further proceedings envisaged in 2002.
In December 2001 SEB's Solicitors Wrote To P & J raising Concerns About Whether Old Aachener Re, against Whom They Thought Themselves To Be Counterclaiming, In Fact Existed, And Asking For Confirmation Of The Entity For Whom P & J acted. That was An Issue Because Old Aachener Re had Changed Its Name In 1995 and Then Entered Into An “incorporation agreement” With Its Subsidiary, New Aachener Re, by Which It Transferred its rights Under The Interlife sale Agreement, But Not Its Obligations Thereunder. New Aachener Re then Changed Its Name To The Pre-1995 name Of Old Aachener Re. Old Aachener Re then Sold New Aachener Re to A Third Party And Merged With Its Parent Company, Amb, Which Succeeded To Its Assets And Liabilities. Old Aachener Re was Dissolved And Ceased To Exist As A Separate Entity In 1997.
In 1995 H had resigned as a director of Old Aachener Re and become a director of New Aachener Re. However he continued to be the person to whom M, as the point of contact with Manches and the subsequent two firms of solicitors, reported in relation to the dispute and the arbitration. M continued to think that H, who had not informed him about the merger, was acting on behalf of Old Aachener Re. In naming Old Aachener Re as the fourth claimant in the arbitration, Manches had no knowledge of the merger between Old Aachener Re and AMB, nor of Old Aachener Re's dissolution as a corporate entity in October 1997, more than a year before the arbitration proceedings were issued. H had resigned as a director of New Aachener Re in 1998 and died in 2002.
In 2002 AMB informed M that the name of the relevant claimant in the arbitration proceedings should be changed from Old Aachener Re to AMB. In 2003 AMB performed a volte face and took the point that neither Old Aachener Re nor AMB had ever authorised the arbitration proceedings and that H had had no authority to act since 1995. AMB, in effect, also denied that the previous solicitors who had acted for the arbitration claimants, namely Manches and SGH, had ever been authorised to act on behalf of Old Aachener Re or AMB.
SEB issued proceedings against the solicitors for damages for breach of warranty of authority and issued an arbitration claim against AMB to determine the substantive jurisdiction of the tribunal over AMB in the arbitration proceedings.
The judge held that the arbitral proceedings were not a nullity by reason of their having been commenced in the name of a company that no longer existed; AMB was a party to the arbitration, because H had had actual authority from Old Aachener Re in 1997 and thereafter to instruct M, and through him the solicitors, to bring and continue the proceedings on behalf of Old Aachener Re; AMB was further a party because even if H had not had actual authority to act for Old Aachener Re he had had ostensible authority in that regard; whatever the position on authority, AMB by its decisions and conduct in 2002 had ratified the presence in the arbitration of Old Aachener Re and thus of its successor AMB; that conduct also estopped AMB from denying that it was a party to the arbitration proceedings.
Because on the judge's findings the solicitors were authorised to act by Old Aachener Re, alternatively by AMB, they were not in breach of their warranty of authority, but they were in breach of a more limited warranty, that the client for whom they acted bore the name in which they pursued the proceedings.
AMB challenged the judge's holding that they were parties to the arbitral proceedings, and the solicitors appealed against the judge's finding of the limited warranty.
Held, dismissing the appeal:
1. On her factual decision that H had had actual authority the judge had omitted nothing from her analysis, and although it would have been open to her or to another judge to view much, perhaps most, of the material in a different light from that which she adopted, she did not come anywhere near to making the sort of error that would undermine her conclusion. Therefore the appeal on the issue of actual authority was dismissed. The evidence was that the persons involved in 1995 accepted that H was indeed authorised to deal with the Interlife matter.
2. H's authority sprang not from his position as a director but from representations by Old Aachener Re, albeit conveyed, with the authority of Old Aachener Re, by H, that H had been entrusted with the business. It was that representation that conferred ostensible authority on H to act on behalf of Old Aachener Re. That representation could not be avoided by AMB without M being told by Old Aachener Re or on its authority that H's authority had been withdrawn. Therefore H had ostensible authority after June 1995 to act in relation to Interlife for Old Aachener Re and thus, after the merger, for AMB.
3. Even absent both actual and ostensible authority for H to act for Old Aachener Re, AMB's actions in 2002 ratified the actions of H and M in making Old Aachener Re, and thus its successor AMB, a party to the arbitration.
4. By its conduct in 2002 AMB submitted to the jurisdiction of the arbitral tribunal, and was estopped from contending otherwise. AMB instructed P & J to take steps to make AMB a party to the arbitration, and P & J conveyed those instructions to SEB. AMB was in the circumstances a party to the arbitration in its own right, even if it did not succeed to the position in the arbitration of Old Aachener Re.
5. The issue in respect of misnomer was who would reasonably have been understood by the party against whom the claim was asserted to be the entity bringing the claim. In this case the pleadings unequivocally said that they were...
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