Apex Global Management Ltd (Petitioner) v Fi Call Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Vos |
| Judgment Date | 20 June 2013 |
| Neutral Citation | [2013] EWHC 1652 (Ch) |
| Docket Number | Case No: 10850/2011 |
| Court | Chancery Division |
| Date | 20 June 2013 |
[2013] EWHC 1652 (Ch)
Mr Justice Vos
Case No: 10850/2011
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building,
Royal Courts of Justice,
London, EC4A 1NL.
Mr John Wardell QC and Ms Rosa Zaffuto (instructed by Irwin Mitchell) for the 3 rd, 4 th and 5 th Respondents
Mr Robert Howe QC, Mr Daniel Lightman, and Mr Paul Adams (instructed by HowardKennedyFsi) for Apex Global Management Limited, the Petitioner
Hearing dates: 21 st, 22 nd and 23 rd May 2013
Introduction
This is now the third in a series of disputes surrounding the jurisdiction of the Court to determine a petition presented under section 994 of the Companies Act 2006 ("section 994") on 12 th December 2011 ("Apex's petition") by Apex Global Management Limited ("Apex" or the "Petitioner"), a company incorporated in the Seychelles, which is owned and controlled by Mr Faisal Abdel Hafiz Almhairat, a Jordanian businessman ("Mr Almhairat").
On this occasion, the dispute concerns the jurisdiction to join Prince Abdulaziz bin Mishal bin Abdulaziz Al Saud, the 3 rd Respondent ("Prince Abdulaziz" or the "3 rd Respondent"), Mr Emad Mahmoud Ahmed Abu Ayshih, the 4 th Respondent ("Mr Ayshih" or the "4 th Respondent"), and Prince Mishal bin Abdulaziz Al Saud, the 5 th Respondent ("Prince Mishal" or the "5 th Respondent"), as Respondents to Apex's petition. Prince Mishal is the father of Prince Abdulaziz, and the founder and owner of a substantial business known as the Al Shoula Group, of which Prince Abdulaziz is the CEO. Prince Mishal and Prince Abdulaziz are referred to together as the "Princes".
Global Torch Limited is a company incorporated in the British Virgin Islands ("Global Torch"). The shares in Global Torch are held as to 50% by Prince Abdulaziz, as to 25% by Mr Ayshih, and as to 25% by Mr Yasin Sabha, a Jordanian lawyer. The directors of Global Torch are Prince Abdulaziz and Mr Ayshih. It is suggested by Apex that, despite these shareholdings, the effective economic owner of Global Torch is Prince Abdulaziz (subject to certain additional submissions in relation to the position of Prince Mishal). Global Torch is the 2 nd Respondent to Apex's petition.
Apex and Global Torch each hold shares in the 1 st Respondent, Fi Call Limited (the "Company", "Fi Call" or the "1 st Respondent") which was incorporated in England under the Companies Act 2006 (the "2006 Act").
In the briefest of outline, the 3 rd to 5 th Respondents contend that the permission to serve the Apex petition out of the jurisdiction on them should be set aside. The applications of the 3 rd to 5 th Respondents dated 15 th May 2012 seek orders that:-
i) the court had no jurisdiction and/or would not exercise jurisdiction over the 3 rd to 5 th Respondents;
ii) the order granting permission to serve the proceedings outside the jurisdiction on the 3 rd to 5 th Respondents be discharged;
iii) Apex's petition is of no effect against the 3 rd to 5 th Respondents; and
iv) service of Apex's petition was of no effect as against the 3 rd to 5 th Respondents.
The grounds of the 3 rd to 5 th Respondents' applications are as follows:-
i) The order to serve out should not have been made, having regard to CPR Part 6.37(1)(a) and (b), because the Court has no jurisdiction and/or should not exercise any jurisdiction over the 3 rd to 5 th Respondents as:-
a) None of the grounds under paragraph 3.1 of CPR PD 6B is made out; and
b) There is no reasonable prospect of success in relation to the pleaded matters against the 3 rd to 5 th Respondents.
ii) There has been material non-disclosure in the application to serve out because:-
a) Mr Almhairat's alleged criminal convictions, previous history of being involved in fraud and forgery in business (particularly in Jordan) and of not acting in good faith were not disclosed; and
b) Changes in position adopted by Apex on the key allegations were not disclosed and explained.
The formal orders and the formal grounds relied upon by the 3 rd to 5 th Respondents (which I have just recited) are perhaps rather more complicated than the substance of the applications as argued.
First, despite not abandoning the argument that there was material non — disclosure, Mr John Wardell QC, counsel for the 3 rd to 5 th Respondents, did not argue the point orally. I can say at once that, having read all the original and subsequent evidence, I have no doubt that Mr Wardell was right to adopt this position. There were no proper grounds to allege that service out of the jurisdiction should be set aside on the ground of material non-disclosure.
Secondly, Mr Wardell argued that the facts alleged against the 3 rd to 5 th Respondents were far-fetched, incredible and fanciful, and therefore did not meet the required threshold for service out of the jurisdiction to be permitted.
Thirdly, the 3 rd to 5 th Respondents placed reliance on the contention that, even if the factual threshold (or thresholds) were met, Apex could obtain all the relief it needed or was entitled to against Global Torch, and that it could not therefore ask the court to exercise an exhorbitant jurisdiction by bringing the 3 rd to 5 th Respondents before it.
It is important also to understand at the outset that it was not suggested by the 3 rd to 5 th Respondents that England and Wales was not the most appropriate forum for the determination of Apex's petition. This is hardly surprising since Global Torch itself issued its own petition under section 994 on Apex and Mr Almhairat shortly before Apex's petition was issued (the "Global Torch petition").
Apex relies in its petition on unfairly prejudicial conduct which can be summarised as follows:-
i) Prince Abdulaziz's has retained the post of Chairman of Fi Call whilst refusing to become a de iure director of Fi Call.
ii) Prince Abdulaziz and Mr Ayshih have caused (and Global Torch has knowingly permitted) Fi Call to become involved in unlawful activities relating to money-laundering, for the actual or intended benefit of the Princes.
iii) The 2 nd to 5 th Respondents have pursued a campaign of threats and other unlawful conduct against Apex and Mr Almhairat, including attempting to coerce them into (i) paying over US$6.75 million to which they were not entitled, and (ii) giving up Apex's shares in Fi Call for no consideration, and have destroyed the relationship of trust and confidence between the parties.
iv) From around May 2011 onwards Prince Abdulaziz and Mr Ayshih have been hostile to Mr Almhairat and have refused to cooperate with him in the running of Fi Call.
The final hearings of both Global Torch's petition and Apex's petition have been fixed for hearing in January 2014.
The shape of the hearing and the legal background
It is common ground that three things need to be shown to obtain permission to serve a claim form or a petition out of the jurisdiction:-
i) That in relation to a foreign respondent there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. This is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success.
ii) That there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context, 'good arguable case' connotes that one side has a much better argument than the other.
iii) That in all the circumstances England and Wales is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction.
These tests come from VTB Capital PLC v. Nutritrek International Corp [2013] 2 WLR 398, per Lord Clarke at paragraph 164 and AK Investment CJSC v. Kyrgyz Mobil Tel Ltd [2012] 1 W.L.R. 1804 (Privy Council) per Lord Collins at paragraph 71. It is also common ground that the second requirement that a good arguable case be shown in respect of the service out gateways does not require that it be shown that there is a good arguable case on the underlying merits against either the anchor defendant or the defendant alleged to be a " necessary or proper party" (see paragraphs 81–86 of Lord Collins's speech in AK Investment supra). The 3 rd to 5 th Respondents did, however, suggest that it had to be shown that there was a good arguable case that each defendant sought to be served was indeed a necessary or proper party.
The scale of this hearing has been a matter of some concern to me. In VTB Capital PLC supra, Lord Neuberger said the following about forum applications at paragraphs 82–89. It seems to me that what he said was equally applicable to jurisdiction applications of the kind before me:-
" 82 The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time-consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights.
83 Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds...
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