AMB Generall Holding AG v Manches and Others
| Jurisdiction | England & Wales |
| Judge | MRS JUSTICE GLOSTER, DBE,Mrs Justice Gloster, DBE |
| Judgment Date | 20 January 2005 |
| Neutral Citation | [2005] EWHC 35 (Comm) |
| Docket Number | Case No: 2003 Folios 343 and 526 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 20 January 2005 |
[2005] EWHC 35 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mrs Justice Gloster, DBE
Case No: 2003 Folios 343 and 526
Mr N Strauss QC, Mr D Matthews QC and Mr S Hossain (instructed by Slaughter and May) for the Claimant
Mr J Fenwick QC and Mr J Nash (instructed by Barlow Lyde & Gilbert) for the 1 st Defendant
Ms S Carr QC and Mr P Cranfield (instructed by Reynold Porter Chamberlain) for the 2 nd Defendant
Mr N Davidson QC and Mr B Elkington (instructed by DLA) for the 3 rd Defendant and Pt. 20 Claimant
Mr R Miles QC and Mr T Leech (instructed by Herbert Smith) for the 4 th Defendant and the 1 st and 2 nd Pt. 20 Defendants
Mr T Carlisle (instructed by Sykes Anderson) for the 3 rd Pt. 20 Defendant
Hearing dates:: 14 th-17 th June; 21 st-24 th June; 28 th June-1 st July; 5 th July;
th October 2004; and 20th January 2005
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.
Mrs Justice Gloster, DBEIntroduction
This is a trial of 20 preliminary issues relating to liability ("the Preliminary Issues"). The proceedings arise out of arbitration proceedings ("the Arbitration Proceedings") begun in November 1998, which are governed by the Rules of the Stockholm Chamber of Commerce, but are proceeding in England. The arbitration, which is long and complex, arises out of the sale, in April 1993, of the shares in Interlife Assurance Company Limited ("Interlife"), an insurance company, to the claimant in this action, SEB Trygg Liv Holding Aktiebolag ("SEB"), pursuant to the terms of an agreement dated 21 April 1993 ("the Interlife Sale Agreement") and a deed of indemnity of the same date ("the Interlife Deed of Indemnity"). The claimants in the Arbitration ("the Arbitration Claimants") are the, or some of the, vendors of the Interlife shares, and they claim about £2.8 million, being the balance of the purchase price, from SEB, which is the respondent in the Arbitration. SEB has also brought a counterclaim against the Arbitration Claimants for breach of warranty and for an indemnity under the Interlife Deed of Indemnity against liabilities to third parties arising out of the alleged mis-selling of pensions by Interlife. The claim is admitted by SEB and the principal issue in the Arbitration is whether the counterclaim is barred by various contractual limitations. This turns substantially on whether Interlife's agents were guilty of gross negligence.
When the request for arbitration was made to the Stockholm Chamber of Commerce in November 1998, the statement of claim listed the fourth named Arbitration Claimant as Aachener Ruckversicherungs Gesellschaft AG ("Old Aachener Re"). Likewise, when SEB served its counterclaim in the Arbitration Proceedings on 20 April 1999, Old Aachener Re was listed as the fourth-named respondent to counterclaim. It is the status (or non-status) in the Arbitration Proceedings of that company, and its statutory universal successor, AMB Generali Holding AG ("AMB") (the Fourth Defendant in these proceedings), with which, prior to the commencement of the Arbitration Proceedings, Old Aachener Re had merged, that has given rise to the need for the determination of the Preliminary Issues. In short, AMB's contention is that it was not a party to the Arbitration Proceedings when they were begun; and that unless and until it consents to be joined as a party to that Arbitration (or "submits to the jurisdiction" of the Arbitrators), it is not subject to the jurisdiction of the Arbitrators.
Summary of the factual background
The relevant corporate history of Old Aachener Re, which was incorporated under German law, may be summarised as follows:
DATE EVENT
21.4.93 Aachener Rückversicherungs-Gesellschaft Aktiengesellschaft ("Old Aachener Re"), Company registration number HR B137, sold its 12.65% holding in Interlife to SEB under the terms of the Interlife Sale Agreement and the Interlife Deed of Indemnity.
6.7.95 Old Aachener Re resolved to change its name from Aachener Rückversicherungs-Gesellschaft Aktiengesellschaft to AM Konzernrückversicherung Aktiengesellschaft.
7.7.95 Old Aachener Re entered into an Incorporation Agreement ("the Incorporation Agreement") with its subsidiary, Laurensberg Beteiligungs-Aktiengesellschaft ("New Aachener Re"), company registration number HR B6217, by which certain assets and liabilities were agreed to be transferred from Old Aachener Re to New Aachener Re, including its rights under the Interlife Sale Agreement and the Interlife Deed of Indemnity. The Incorporation Agreement took effect as from 1.1.95. (It is common ground that the rights transferred included the rights under the Interlife Sale Agreement and the Interlife Deed of Indemnity, but not Old Aachener Re's obligations thereunder, since those could only be assigned with the consent of all other parties to the Interlife Sale Agreement and the Interlife Deed of Indemnity and no such consent was ever asked for or obtained.)
14.7.95 New Aachener Re changed its name from Laurensberg Beteiligungs-Aktiengesellschaft to Aachener Rückversicherungs-Gesellschaft Aktiengesellschaft (ie the pre-6.7.95 name of Old Aachener Re).
14.7.95 Old Aachener Re registered its name change from Aachener Rückversicherungs-Gesellschaft Aktiengesellschaft to AM Konzernrückversicherung Aktiengesellschaft.
27.7.95 Employers Reinsurance Corporation ("ERC"), (a company in a wholly separate group from Old Aachener Re and AMB) acquired all the shares in New Aachener Re from Old Aachener Re.
11.9.96 New Aachener Re changed its name to ERC Aachener Rückversicherungs-Gesellschaft Aktiengesellschaft (also referred to as "ERC Aachener").
17.6.97 Old Aachener Re, under the name AM Konzernrückversicherung Aktiengesellschaft, merged with its parent company AMB Aachener und Münchener Beteiligungs-Aktiengesellschaft. ("AMB"), company registration number HR B 93 under the German Transformation Statute 1994. All of Old Aachener Re's assets and liabilities were transferred to AMB with effect from 1 January 1997 under the German law of universal statutory succession.
13.10.97 Old Aachener Re was dissolved and ceased to exist as a separate entity.
29.6.01 AMB registered a change of its name from Aachener und Münchener Beteiligungs-Aktiengesellschaft to AMB Generali Holding AG.
It is common ground between the parties and their German law experts, that the merger between Old Aachener Re and AMB was a transfer, under the German Transformation Statute 1994, by universal succession, of all assets and liabilities of the transferor entity (Old Aachener Re) to the transferee entity (AMB); that such universal succession transferred all assets and obligations in one legal act, by operation of law, with the result that the transferee entity, AMB, became party to all the agreements concluded by Old Aachener Re, the transferor entity, without requiring any participation by the transferor entity's creditors or counter-parties and became responsible for all of Old Aachener Re's liabilities; that all creditors of Old Aachener Re automatically became creditors of AMB as the transferee entity; that upon the merger, Old Aachener Re ceased to exist as a separate corporate entity, without liquidation, with its shareholders ceasing to have any rights in Old Aachener Re and having, in return, corresponding rights in AMB. It was also common ground that that English law regarded all matters relating to the status of Old Aachener Re and AMB as being governed by the law of those companies' domicile and that English law would recognize the effect of universal succession: see National Bank of Greece and Athens S.A. v Metliss [1958] AC 509; Adams v National Bank of Greece SA [1961] AC 255; Eurosteel Ltd v Stinnes AG [2000] 1 All ER 964.
Manches, the first defendant in these proceeding (which, by Ian Yonge, a partner, had conduct of the Arbitration Proceedings on behalf of the Arbitration Claimants until August 1999), were first instructed on behalf of the vendors of Interlife in February 1995. Manches' instructions came from a Mr Sackville and a Mr Paine, who were directors of, and minority shareholders in, Interlife, and from a Mr Alec Merrifield (the third Part 20 Defendant in these proceedings and who had been involved in the initial sale), an insurance industry professional, on behalf of the corporate shareholders, including Old Aachener Re. Mr Merrifield's contact at Old Aachener Re was a Professor Harry Hauptmann ("Professor Hauptmann"), who was a director of Old Aachener Re at that date and who had overseen the sale of Interlife on behalf of the former in 1993.
Manches first wrote to SEB on behalf of all the vendors on 12 July 1995. Correspondence between Manches and SEB continued for several years, culminating in the commencement of the Arbitration Proceedings by Manches, on behalf, or purportedly on behalf, of the Arbitration Claimants, in November 1998. Before any arbitration claim was commenced by anyone, the 5-year limitation milestone for principal claims by SEB (21 April 1998) passed. As I have said, Old Aachener Re was listed as the fourth named claimant, as Manches had no knowledge of the merger between it and AMB, nor of the former's dissolution as a corporate entity.
On 14 July 1995, Professor Hauptmann resigned as a director of Old Aachener Re and became on the same date a director of New Aachener Re. However he...
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