Dell Emerging Markets (Emea) Ltd v Systems Equipment Telecommunications Services S.A.L.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henshaw |
| Judgment Date | 13 March 2020 |
| Neutral Citation | [2020] EWHC 561 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2018-000100 |
| Date | 13 March 2020 |
[2020] EWHC 561 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Henshaw
Case No: CL-2018-000100
Sara Masters QC and Andrew Feld (instructed by Osborne Clarke LLP) for the Claimants
The Defendant and the Respondents did not appear and were not represented
Hearing date: 26 February 2020
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.
| (A) INTRODUCTION | 2 |
| (B) BACKGROUND | 3 |
| (C) TERMS OF THE ANTI-SUIT INJUNCTIONS | 4 |
| (D) NOTIFICATION OF THE ANTI-SUIT INJUNCTIONS TO THE RESPONDENTS | 6 |
| (E) BREACHES OF THE ANTI-SUIT INJUNCTIONS | 7 |
| (F) CONTEMPT: APPLICABLE PRINCIPLES | 8 |
| (G) CONTEMPT: SETS | 10 |
| (H) CONTEMPT: MAHER CHAHLAWI AND MARWAN JUNIOR CHAHLAWI | 11 |
| (I) CONTEMPT: SARAH BIBI | 14 |
| (J) CONTEMPT: PIERRE CHALHOUB | 16 |
| (K) FORMAL SERVICE OF THE ANTI-SUIT INJUNCTIONS | 18 |
| (L) CONCLUSIONS | 24 |
(A) INTRODUCTION
This judgment follows a hearing on 26 February 2020 of an application by the Claimants (“ Dell”), made on notice dated 20 May 2019, for an order that each of the Respondents is guilty of contempt of court, for the committal of second to fifth Respondents to prison for such contempt of court, for permission to issue writs of sequestration against all the Respondents, and for related relief.
Cockerill J on 22 May 2019 gave permission to serve the committal application on the second to fifth Respondents out of the jurisdiction, pursuant to CPR PD 6B para 3.1(3), as necessary or proper parties to the application against the First Defendant (“ SETS”). SETS was already subject to this court's jurisdiction, its solicitors having in March 2018 accepted service of the substantive proceedings (in which Dell sought anti-suit relief) on SETS' behalf in March 2018, and SETS having issued a challenge to the court's jurisdiction on 17 April 2018 but then withdrawn it on 16 May 2018. The committal application was served personally on each of the Respondents on 20 June 2019, and by a letter of 22 January 2020 Dell reminded the Respondents of the importance of attending the hearing. The Respondents initially reserved their position as to the validity of that service, but have issued no application to challenge the court's jurisdiction or service of the application. In these circumstances I am satisfied that the court has jurisdiction over each of the Respondents in relation to this application.
The committal application is supported by the first and second affidavits of Charles Christian Alexander Wedin, a partner in Dell's solicitors Osborne Clarke, and by an expert report on issues of Lebanese law of Mr Mohamed Youssef Alem. In opposition to the application, each of the second to fifth Respondents filed an affidavit, and the Respondents also relied on an expert's report on issues of Lebanese law from Professor Chibli Mallat.
The hearing proceeded, in the Respondents' absence, to address the issue of whether contempts of court have occurred, with any issues of sentence or sanction to be adjourned to a later date. That was the course proposed by Dell following receipt of a letter dated 21 February 2020 from the Respondents' Lebanese lawyer (Mr Naji Lahoud of Jurisfirma), unsupported by any evidence, seeking an adjournment of unspecified duration of the hearing, failing which the Respondents would not attend the hearing. Near the outset of the hearing on 26 February 2020 I gave a detailed oral judgment setting out the background to that request, the steps I took in response to it (including receipt of submissions and evidence from Dell and affording the Respondents a further opportunity to file submissions and/or evidence) and my reasons for proceeding with the hearing in the Respondents' absence.
(B) BACKGROUND
The contempt application relates to the Respondents' breaches of interim and final anti-suit injunctions (together, “ the Anti-Suit Injunctions”) restraining the pursuit of proceedings brought by SETS against Dell in Lebanon. SETS is a Lebanese company. The Second to Fifth Respondents were the members of SETS' board of directors at the relevant times, and have between them owned 100% of company's share capital at all relevant times. In slightly more detail:-
i) The Second Respondent, Mr Maher Chahlawi, is a director and the general manager or chief executive of SETS and owns 40% of its share capital.
ii) The Third Respondent, Mr Marwan Junior Chahlawi, is a director of SETS and the chairman of its board, and owns 50% of its share capital.
iii) The Fourth Respondent, Mr Pierre Albert Chalhoub, has since 4 July 2018 been the third and only other director of SETS. He owns the remaining 10% of SETS' share capital.
iv) The Fifth Respondent, Ms Sara Bibi, was until 4 July 2018 the third director of SETS and owned 10% of its share capital. She was thus Mr Chalhoub's predecessor.
The underlying dispute arises from the termination of an international distribution agreement executed on 22 June 2004 between the First Claimant and SETS, under which the First Claimant appointed SETS as a non-exclusive distributor of Dell products in Lebanon. The agreement contained an exclusive jurisdiction clause in favour of the English courts.
Dell says that as result of SETS's breaches of the 2004 agreement, Dell terminated it. SETS responded by commencing proceedings in Commercial Court of Lebanon on 5 December 2017 for wrongful termination of the agreement. Dell reacted by commencing proceedings in this court in February 2018 claiming a final and permanent anti-suit injunction restraining pursuit of the Lebanese proceedings. The First Claimant also brought contractual claims for declarations and damages under the 2004 agreement.
Dell obtained interim and final anti-suit injunctions on 19 April 2018 and 15 June 2018 respectively. SETS nonetheless continued to pursue the Lebanese proceedings, and indeed commenced a second set of proceedings (“ the Invalidation Proceedings”) on 28 May 2018. In this judgment I refer to the two sets of proceedings in Lebanon together as “ the Lebanese Proceedings”. Various steps and hearings occurred in the Lebanese Proceedings, as indicated in more detail below. Most recently, the Lebanese court on 21 January 2020 held that it lacked jurisdiction due to the exclusive English jurisdiction clause (rejecting SETS' argument that that clause was void under Lebanese law because the agreement was an exclusive distribution agreement). However, SETS has now filed an appeal from that decision.
(C) TERMS OF THE ANTI-SUIT INJUNCTIONS
On 19 April 2018, Moulder J granted Dell an interim anti-suit injunction pending trial of its claim (“ the Interim Anti-Suit Injunction”) after a contested, on-notice hearing on 23 March 2018 at which SETS was represented by solicitors and counsel. The Interim Anti-Suit Injunction was endorsed with a penal notice directed at both SETS and third parties including directors:
“IF YOU SYSTEMS EQUIPMENT
TELECOMMUNICATIONS SERVICES S.A.L. DISOBEY THIS ORDER YOU MAY BE HELD TO BE IN CONTEMPT OF COURT AND YOU MAY BE FINED AND HAVE YOUR ASSETS SEIZED AND ANY OF YOUR DIRECTORS MAY BE IMPRISONED, FINED OR HAVE THEIR ASSETS SEIZED.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS THE RESPONDENT TO BREACH THE TERMS OF THIS ORDER MAY ALSO BE HELD TO BE IN CONTEMPT OF COURT AND MAY BE IMPRISONED, FINED OR HAVE THEIR ASSETS SEIZED.”
The operative provisions of the Interim Anti-Suit Injunction provided in material part:
“2. Until trial or further order, save as consented to in writing by the solicitors for the Claimants, Osborne Clarke LLP:
a. [SETS] shall not whether by itself or by its directors, officers, employees, or agents, pursue, continue or take any further steps in the Lebanese Proceedings, and/or commence any further proceedings in Lebanon in relation to the 2004 IDA, or the Defendant's appointment as a distributor of Dell products, against the Claimants or any additional Dell entities.
…
c. [SETS] shall take no steps in Lebanon or before the Lebanese Courts to interfere with these English Proceedings.”
The Interim Anti-Suit Injunction also ordered SETS to pay Dell's costs in the sum of £90,000. Those costs have not been paid.
On 15 June 2018, Robin Knowles J made a permanent and final anti-suit injunction against SETS (“ the Final Anti-Suit Injunction”), in addition to granting summary judgment on certain other of Dell's claims. The application for the Final Anti-Suit Injunction and summary judgment was made on notice, although by that time SETS' English solicitors DWF had come off the record. Robin Knowles J ordered that the steps taken to serve SETS with the application were good service.
The Final Anti-Suit Injunction is endorsed with a penal notice directed at both SETS and its directors and officers:
“IF YOU SYSTEMS EQUIPMENT
TELECOMMUNICATIONS SERVICES S.A.L. DISOBEY THIS ORDER YOU MAY BE HELD TO BE IN CONTEMPT OF COURT AND YOU MAY BE FINED AND HAVE YOUR ASSETS SEIZED AND ANY OF YOUR DIRECTORS MAY BE IMPRISONED, FINED OR HAVE THEIR ASSETS SEIZED.
ANY OFFICER, EMPLOYEE, REPRESENTATIVE, AGENT OR SERVANT OF THE DEFENDANT WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS THE DEFENDANT TO BREACH THE TERMS OF THIS ORDER MAY ALSO BE HELD TO BE IN...
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