B.B. Energy (Gulf) DMCC v Mohammed Hussein Al Amoudi

JUDGMENT APPROVED

The defendants apply for a stay of these proceedings by application notice dated 21 February 2018.

The claimant has sued each of the four defendants here as of right by, in each case, serving the proceedings at an address for service within this jurisdiction maintained by the defendant in question as a result of his directorship of one or more English companies. It is accepted that that amounted to valid service, irrespective of whether the subject matter of the claims is connected to the companies the directorship of which generated the need to maintain that address for service.

The defendants were directors of Société Anonyme, Marocaine de l'Industrie de Raffinage (‘SAMIR’). As its name suggests, SAMIR is a Moroccan oil-refining company. It was placed into judicial liquidation by the Commercial Court of Casablanca by order dated 21 March 2016.

The claimant is a company incorporated in Dubai. It carries on business in the trading of crude oil, refined oil products and natural gas. The claimant has been admitted in the liquidation of SAMIR as a creditor, owed c.US$126m, and it has obtained a default judgment against SAMIR in this court for c.£88m by reference, as I understand it, to that debt. The claimant claims in these proceedings that the defendants are liable to it in damages in respect of loss occasioned to it through entering into the contract with SAMIR under which SAMIR defaulted.

Three causes of action or groups of cause of action are pleaded:

a. Firstly, the claimant makes a claim for losses it says were caused to it by the wrongful conduct or mismanagement of the defendants in the course of conducting the business of SAMIR as directors. That has been referred to as the ‘mismanagement claim’.

b. Secondly, the claimant asserts claims in deceit, alleging that it was induced by false representations by the defendants, as to which the defendants knew of the falsity or were reckless as to the falsity of the representations, to enter into the defaulted contracts.

c. Thirdly, the claimant puts forward a claim or claims for damages for what it says was an unlawful means conspiracy.

All three causes of action or groups of cause of action as pleaded depend critically upon allegations of fact particularised in some detail under paragraph 60 of the particulars of claim, but claiming essentially that the defendants caused SAMIR to continue to trade with the claimant in and after Q4 2014, well knowing that SAMIR would be unable to meet its resultant financial obligations or reckless in that regard. Contrary to the defendants' submissions or contrary at least to a certain emphasis in their submissions, those critical factual allegations are not peculiar to or creatures of Moroccan law, nor do they have an exclusively or predominantly Moroccan centre of gravity as matters of fact, although of course the connection to Morocco is not insignificant since the allegations relate to SAMIR.

In the mismanagement claim, those critical allegations of fact are said to give rise to liability under Moroccan law, specifically under Article 352 of Moroccan law 17–95, relating to public limited companies, and/or Article 77 or Article 78 of the Moroccan ‘ code des obligations et des contrats’ (‘the obligations code’). The claimant also pleads reference to Article 903 of the obligations code, concerning the duties of agents towards their principals, but it is agreed that would at most inform the content of the defendants' duties as directors as may be relevant to the bases of liability asserted, as opposed to giving the claimant a separate or additional cause of action. Acting contrary to the defendants' duties under Article 352 of law 17–95 and/or Article 77 or 78 of the obligations code is then said to be one of the unlawful means deployed in the alleged conspiracy.

The deceit claim is founded upon alleged implied representations said to have been made by the defendants personally to the claimant as to SAMIR's ability to perform its contractual commitments and/or as to whether they would in fact be fulfilled. Those alleged representations are said to have been deceitful because of the critical factual allegations. The use of deceit in continuing to trade with the claimant is then said to be the other unlawful means deployed in the alleged conspiracy.

A focus on the nature and detail of the claims that has been generated by this application has revealed, it seems to me, three difficulties or infelicities in the way they have been pleaded.

Firstly, as part of the pleading of the mismanagement claim, at paragraph 61 of the particulars of claim the claimant has pleaded that, pursuant to Moroccan law, it “as a creditor of SAMIR” can claim against the defendants for loss resulting from the breaches of duties the claimant alleges. It is, however, plain on the evidence that has been generated as to Moroccan law for the purposes of this application — and that is on both sides of the fence — that the claimant's status as a creditor of SAMIR is not in fact necessary to or indeed of any direct relevance to whether it does or does not have the tortious causes of action under Moroccan law which it alleges.

Secondly, there is at least a question as to whether a ‘personal and distinct loss’, differentiating a claimant in some way from a body of creditors of a company which has become insolvent, is required before the claimant in question has a valid claim for compensation under Article 352 as a matter of Moroccan law. I articulate that carefully because, as throughout, I wish to be clear that at this stage and in this judgment I am not in a position to and do not purport to reach determinations on any of the issues that will or may ultimately go to the merits of the claimant's claim. It is thus not entirely clear to me at this stage whether the claimant for its part does accept the need for this personal and distinct loss, but on any view it is apparent, although only perhaps from a solicitor's letter relatively recently sent, intended to stand as further particulars, that if there is such a requirement, the claimant will say that it can satisfy it.

Thirdly, the way in which the claimant has articulated its plea as to its loss and damage is at all events capable of creating, as it seems to me, some confusion as to the way in which it seeks to measure its damages. It was apparent from discussion of that aspect of the pleading during argument that it is well recognised on the claimant's side that all the claims made are claims in tort and that, on reflection, it may not be as clear as it ought to be on the pleading that the contract prices not paid by SAMIR are, if they be relevant at all, relevant to the measuring of any damages claimed only as (it may be) evidence of the value of cargoes the claimant will say it was wrongfully induced or caused to supply to SAMIR.

Those concerns about the pleading do not, however, have any material bearing on the present application. How the claimant will put its claims is in my view clear enough for the purposes of considering the exercise of any discretion to stay that may be available to the court. That said, if these proceedings are not to be stayed, in my judgment those concerns about the pleading ought to be resolved, which I apprehend may mean striking through the erroneous or unnecessary words in paragraph 61, requiring a proper pleading as to personal and distinct loss for the Article 352 claim, and requiring the loss and damage plea to be corrected or clarified.

Turning then to this application, the defendants' application notice sought a stay on four bases:

a. on the basis that this court is not an appropriate forum for the resolution of the claimant's claims ( forum non conveniens);

b. on the basis that the claimant's claim should be stayed in favour of the Moroccan liquidation proceedings as a lis alibi pendens;

c. under Article 34 of the Brussels Regulation recast, on the basis that the Moroccan liquidation proceedings are related proceedings; or

d. as a temporary case management measure pending a decision in the Moroccan proceedings as to whether the liquidation of SAMIR is to be extended to the defendants under Article 706 of the Moroccan Commercial Code, something that has been recommended but not yet determined in the Moroccan liquidation proceedings, as I shall explain.

It is, however, common ground that Article 34 of the Brussels Regulation (recast) does not apply because the Moroccan proceedings are in the nature of insolvency proceedings excluded from the scope of the regulation. Furthermore, it was authoritatively established by Owusu v Jackson (Case C-281/02) [2005] QB 801that proceedings within the scope of the Brussels Regulation brought here against a defendant domiciled here cannot be stayed on the basis that England is a forum non conveniens. Owusu v Jackson was decided under the Brussels Convention, but subject always to the debate that continues as to the precise extent of the decision, it remains good law for the Brussels Regulation (recast).

It is common ground that the fourth defendant is domiciled within the jurisdiction. On the evidence before me for the application I am satisfied that the third defendant is also...