Athena Capital Fund Sicav-Fis S.C.A. v Secretariat of State for the Holy See
| Jurisdiction | England & Wales |
| Judge | Mr Simon Salzedo |
| Judgment Date | 26 November 2021 |
| Neutral Citation | [2021] EWHC 3166 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2020-000367 |
[2021] EWHC 3166 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Rolls Building, Fetter Lane, London, EC4A 1NL
Mr Simon Salzedo QC (sitting as a Judge of the High Court)
Case No: CL-2020-000367
Michael McParland QC, Samar Abbas Kazmi and James Bradford (instructed by Hill Dickinson LLP) for the Defendant/Applicant
Charles Samek QC and Tetyana Nesterchuk (instructed by Withers LLP) for the Claimants/Respondents
Hearing dates: 25 – 26 October 2021
Mr Simon Salzedo QC (sitting as a Judge of the High Court):
This is my judgment on the Defendant's application to set aside service of the Claim Form or to stay these proceedings on the basis that the Court has no jurisdiction over them, or should not exercise such jurisdiction as it may have, or should stay the proceedings pending certain events. The claim is mainly for declarations and the Defendant's contention is that its purpose and/or effect would be to prejudice a criminal investigation overseas.
Parties
The Defendant is the Secretariat of State of the Holy See. The Defendant describes itself (in the dramatis personae that its counsel provided to the Court, which was supported by references to the evidence) as follows:
“A governmental unit of The Holy See, which is the jurisdiction of His Holiness, the Pope, the Supreme Pontiff of the Roman Catholic Church. The Holy See exercises sovereign jurisdiction over the Vatican City State, and is recognized as foreign sovereign in international law, possessing full international legal personality and enjoying the same rights and obligations as States. The Secretariat of State is a core governmental unit of the Holy See and has three Sections: the Section for General Affairs, the Section for Relations with States and the Section for Diplomatic Staff of the Holy See. The Secretariat of State provides ‘close assistance to the Supreme Pontiff in the exercise of his supreme office’ and its functions include various administrative roles as well as responsibility for diplomatic relations with other States. The Secretariat of State is thus a department of the government of a foreign state, and therefore a ‘State’ within the meaning of s.14 of State Immunity Act 1978.”
As appears from that description, the Defendant is not itself the Holy See. However, many of the documents refer to the Defendant by explicit definition as the “Holy See”, which is apt to confuse in the present context. In this judgment I will generally refer to “the Defendant” for clarity. Where I use the term the “Holy See”, it is intended in its accepted broader sense, consistent with the above description.
The Fourth Claimant, Mr Mincione, is an individual holding Swiss and British nationality who is a person of interest in an investigation by the Vatican State's Office of the Promoter of Justice (the “ OPJ”) into various alleged wrongdoing. Mr Mincione is a member of the Board of Managers of the Third Claimant (“ WRM”). At relevant times, he was one of two such members, the other being Mr Robert Henric Hessing. The Articles of WRM provided that in general it could be bound by the signature of any two members of the Board of Managers or by any person to whom powers were specially delegated. For some relevant purposes, powers were delegated to Mr Hessing, but not (on expert evidence of Luxembourg law that was adduced from Mr Thibaut Partsch) to Mr Mincione.
WRM was (according to the Particulars of Claim) the general partner, director and alternative investment fund manager of the First Claimant (“ Athena Capital”). Athena Capital describes itself as a corporate partnership and an investment company with variable capital, organised under the laws of, and registered in, the Grand Duchy of Luxembourg. The Second Claimant (“ RSS1”), the parties agree, is not a separate legal person at all, but is a sub-fund of Athena Capital, in which capacity it was the sole legal and beneficial owner of all the issued shares in 60 SA-2 Limited, which was the sole legal and beneficial owner of all the shares in 60 SA-1 Limited, which was the sole legal and beneficial owner of all the shares in 60 SA Limited. 60 SA Limited was the legal and beneficial owner of a freehold property at 60 Sloane Avenue, London, SW3 3XB (the “ Property”).
I have already mentioned the OPJ. The OPJ, like the Defendant, is an emanation of the Vatican City State, but the two entities operate independently of each other. The evidence is that the OPJ investigates alleged crimes on behalf of the state, but it does so under conditions of secrecy which prohibit it from disclosing the information it generates during an investigation, including to the Defendant.
Facts
This being primarily a jurisdiction application, I have heard submissions on the basis of written evidence only. My description of the facts is based on that evidence and it is not intended to make binding findings save insofar as required for the determination of the application before me. The essential background to the claims and the application is certain investigations and allegations of wrongdoing in relation to the business of the Holy See. The allegations that are most material for present purposes relate to a transaction (the “ Transaction”), whose description I take largely from the Particulars of Claim. I will then set out the outlines of the investigation which have been detailed mainly in the Defendant's evidence.
The Transaction
Prior to the Transaction, the Defendant owned shares in a sub-fund of Athena Capital, called the Global Opportunities Fund, which held 45% of the units in RSS1. The Defendant was therefore the holder of a substantial indirect interest in the Property. The Claimants say that the Defendant wanted to become the 100% owner of the Property and that to that end it was agreed that the Defendant would purchase all the shares of 60 SA-2 Limited from RSS1 for consideration of £40 million plus the Defendant's shares in the Global Opportunities Fund. The Claimants further say that it was agreed that the Defendant would act in the Transaction through its agent, Gutt SA, a company incorporated in Luxembourg.
The Transaction was implemented through several documents, the most important of which I now describe.
A “ Framework Agreement” dated 22 November 2018 was made between (1) Gutt SA as “Purchaser”, (2) Athena Capital as “Seller”, stated to be acting on behalf of RSS1 and to be represented by its General Partner WRM, itself represented by Mr Hessing, and (3) the Defendant, represented by the Head of the Administrative Office, Mgr. Alberto Perlasca. In the Framework Agreement, “The Holy See” was a defined term meaning the Defendant. Recital A to the Framework Agreement stated:
“(A) The Purchaser is instructed and funded by Holy See in connection with the acquisition of the Shares as described in this Framework Agreement and has full authority to negotiate this Framework Agreement and any other documentation required to effect the Transaction (as defined below).”
Other recitals described the Property, the interests in it and defined the Transaction. Then from recital J onwards, the following was stated:
“(J) It is intended that the Seller and the Purchaser will enter into a binding sale and purchase agreement (‘ SPA’) in respect of the Shares for a consideration consisting of (a) a fixed cash consideration and (b) the transfer to the Seller of the GOF Shares, so that the Purchaser becomes the owner of 100% of the share capital of the Company (as well as, in turn, indirectly, the owner of 100% of the share capital of 60SA1 and 60SA).
(K) The Holy See currently intends, given the positive progress and developments having occurred in respect of the management of GOF by the General Partner including, for example, the value creation arising from the Planning Permission, to consummate the Transaction, which will enable the Holy See to take control of the Property through the ownership of the Sale Group. The Property has become a strategic asset for The Holy See and retains significant upside potential. As a result, The Holy See wishes to exercise greater oversight of the Property through the Purchaser as its agent whom it is anticipated will carry out future strategic decisions relating to the development of the Property. The Holy See has determined that the Purchaser is suitably experienced and qualified for this purpose.
…
(N) The Seller, the Purchaser and the Holy See acknowledge and confirm the statements in the recitals above and it is the common understanding between them that such statements are the basis on which this Framework Agreement is being entered into and will be the basis on which the SPA will be entered into and completed.
(O) The Seller, the Purchaser and the Holy See wish to record in this Framework Agreement their common understanding of the material terms of the SPA (all of which are, for the avoidance of doubt, acknowledged and understood by The Holy See).”
Clause 1 of the Framework Agreement defined the “Transaction” as follows:
“1. MAIN TERMS OF THE TRANSACTION
It is intended that the SPA will reflect the terms in this Clause 1.
1.1. Sale and Purchase of the Shares
1.l.1 The Seller will undertake to sell to the Purchaser, and the Purchaser will undertake to purchase from the Seller, the Shares in consideration for the Purchase Price on the...
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