Apex Global Management Ltd and Another v Global Torch Ltd (Respondent / Claimant)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Gloster,Lady Justice Black,Sir Christopher Clarke |
| Judgment Date | 28 April 2017 |
| Neutral Citation | [2017] EWCA Civ 315 |
| Docket Number | Case No: A2/2015/4329 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 April 2017 |
[2017] EWCA Civ 315
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
IN THE MATTER OF FI CALL LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
MR JUSTICE HILDYARD
10850 of 2011
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Gloster
Vice President of the Court of Appeal, Civil Division
Lady Justice Black
and
Sir Christopher Clarke
Case No: A2/2015/4329
Al Mustakim Esq and Daniel Searle Esq (instructed by Capital Solicitors LLP) for Apex Global Managment Limited and Faisal Abdul Hafiz Almhairat
Justin Fenwick Esq QC, Daniel Saoul Esq and Michael Ryan Esq (instructed by Mishcon de Reya LLP) for Global Torch Limited
Hearing dates: 30 November 2016
Approved Judgment
Introduction
This is an appeal by Apex Global Management Limited ("the second appellant") and Mr Faisal Abdul Hafiz Almhairat ("the second appellant") (collectively "the appellants") against a judgment of Hildyard J ("the judge") dated 30 November 2015 ("the stay judgment"). By that judgment, the judge refused to grant a stay of execution in relation to a previous judgment against the appellants in favour of Global Torch Limited ("the respondent") handed down by the judge on 11 November 2015 and reported at [2015] EWHC 3269 (Ch) ("the main judgment").
At the hearing of the appeal we dismissed the appeal with our written reasons to follow thereafter. These are my reasons for dismissing the appeal.
Background and procedural chronology
The background to this matter is set out by the judge in the main judgment.
The events relevant to the present appeal are as follows:
i) In March 2011 a Mr Abdulrahman Al Shehri had purchased shares in Fi Call Limited ("Fi Call") for $16.7 million, under a share purchase agreement which I shall refer to as the "the SPA". The entirety of the $16.7 million consideration was paid to the first appellant.
ii) In December 2011 the first appellant and the respondent each presented a petition under section 994 of the Companies Act 2006. Each sought an order that the other party purchase their respective shares in Fi Call.
iii) In June 2013 the appellants resisted a jurisdictional challenge by the respondent (and certain other parties), successfully arguing that all matters should be adjudicated by the English courts: see the judgment of Vos J (as he then was) in Apex v FiCall [2014] BCC 286.
iv) In July 2013 the two section 994 petitions were consolidated by Vos J into a single set of proceedings.
v) On 27 October 2014 the trial of the petitions was listed to start with an estimated length of 6 weeks (disclosure having occurred, witness evidence and expert reports having been exchanged). However, the trial was adjourned following the second of two eleventh-hour applications (the first of which was dismissed) by the appellants who asserted that they could no longer fund their participation in the trial and that the second appellant, Mr Almhairat, had fled the jurisdiction and was seeking asylum in a secret location. The adjournment was subject to strict conditions which included the provision by the appellants of important information relating to their assets and other material needed to verify the assertions made;
vi) On 18 December 2014, following repeated non-compliance with the adjournment conditions and subsequent orders for disclosure and the provision of information arising from the respondent's allegation that the court had been misled by the appellants in their application to adjourn the trial, an unless order was made against the appellants requiring compliance.
vii) On 9 January 2015 the appellants failed to comply with the unless order, their statement of case was struck out and they were debarred from the proceedings.
viii) On 26 – 28 January 2015 the trial of the respondent's counterclaim against the appellants took place; the appellants did not participate.
ix) On 11 November 2015 the judge handed down judgment. In short the judge found in the respondent's favour in relation to its petition and ordered the appellants to pay $6.7 million, plus interest, to the respondent in connection with the SPA. The judgment contained a number of damning findings in relation to the appellants' misconduct in the affairs of the joint venture company Fi Call.
x) On 25 November 2015 the appellants applied for a stay of execution in relation to the 11 November judgment ("the application").
xi) On 30 November 2015 the judge refused the application.
An important aspect of the cross-petition dispute between the parties was the SPA. The appellants and the respondent each respectively relied upon a version of the SPA which the other said was forged. Under the appellants' version, all of the shares sold to Mr Al Shehri belonged to the first appellant. Under the respondent's version, around 40% of the shares sold were the respondent's. The respondent argued that the appellants had failed to account to it in respect of the purchase monies received for its shares ("the Al Shehri claim").
By the main judgment the judge found, inter alia, that the respondent had shown that the respondent's version was the true version of the SPA. Consequently the Al Shehri claim succeeded: the appellants were under a liability to account to the respondent for 40% of the $16.7 million purchase price, i.e. $6.7 million.
The basis on which the appellants sought a stay of execution of this judgment was that the respondent's version of the SPA contained an exclusive jurisdiction agreement in favour of the courts of Saudi Arabia ("the jurisdiction clause"). The essence of the appellants' case – both in the application and on appeal – was that if the respondent's version was the true SPA, the jurisdiction clause should be given effect; in effect, once the judge reached this conclusion, he should have declined jurisdiction to deal with any other issues.
As I have said, the decision under appeal is the judge's refusal to grant a stay.
Submissions
The arguments developed by the appellants in their written submissions and by Mr Al Mustakim in oral submissions may be summarised as follows:
i) The judge was wrong to find that the application was too late. The appropriate time for the appellants to raise the issue of the jurisdiction clause was after the judge had determined that the respondent's version was the true SPA, i.e. it was not necessary to do so beforehand.
ii) The judge erred in his approach to the question whether the jurisdiction clause should result in a stay. The judge was wrong to ask himself whether the jurisdiction clause posed an "insuperable bar" to the adjudication of the Al Shehri claim in the English courts. The correct approach was to recognise that the claim should be adjudicated in Saudi Arabia unless there were strong countervailing reasons. No such strong reasons were advanced and the judge did not identify any.
iii) The judge was wrong to find that the jurisdiction clause did not apply to the Al Shehri claim as a matter of construction.
On behalf of the respondent, Mr Justin Fenwick QC advanced the following arguments in response to these three challenges to the judgment:
i) On timing: it was too late to challenge jurisdiction. If the appellants had wished to rely on the jurisdiction clause, they should (at the very least) have reserved their position at the outset of the litigation.
ii) The judge's approach to the jurisdiction clause was the correct one, and the decision to refuse to grant a stay of execution was a faultless exercise of discretion.
iii) As to construction, on a proper reading the jurisdiction clause did not apply to the Al Shehri claim.
Mr Fenwick advanced six further arguments as to why the application should have failed, which would be relevant if this court decided to consider the exercise of discretion afresh:
i) The appellants had no standing to bring the application as they had been struck out and debarred from defending these proceedings.
ii) Independently of any objections regarding delay per se, the appellants had submitted to the jurisdiction of the English court in respect of the Al Shehri claim and had waived reliance upon the jurisdiction clause.
iii) The unconscionable and dishonest conduct of the second appellant weighed against a stay, which would require the respondent to engage in further litigation.
iv) A stay in favour of the courts of Saudi Arabia would be perverse, given the second appellant's position that he could not obtain justice there and in the total absence of any indication that the appellants would submit to the jurisdiction of the Saudi courts.
v) A stay would be pointless, given that there was no indication that the appellants have any defence to the Al Shehri claim.
vi) It would be entirely impractical and procedurally inappropriate to hive off the Al Shehri claim when there were related, overlapping issues which fell to be determined (and, indeed, have now been determined) by the English courts.
Finally, Mr Fenwick relied upon a general consideration of the other circumstances of the case.
Discussion and determination
(i) Timing
It was common ground that CPR Part 11 was in principle applicable to an application to stay proceedings on the basis of the jurisdiction clause. Prima facie, this requires any such application to be brought "within 14 days after filing an acknowledgement of service" (CPR r. 11.1(4)(a)). A party who fails to do so is deemed to have accepted that the English courts have jurisdiction.
However, it was also common ground that it is possible to make a late application for a stay in certain circumstances. The issue of what circumstances would permit a late...
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