Dr Martin John Coward v Ms Elena Ambrosiadou

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMr Andrew Henshaw
Judgment Date31 July 2019
Neutral Citation[2019] EWHC 2105 (Comm)
Date31 July 2019
Docket NumberCase No: CL-2017-000707

[2019] EWHC 2105 (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

Before:

Andrew Henshaw QC (sitting as a Judge of the High Court)

Case No: CL-2017-000707

Between:
Dr Martin John Coward
Claimant
and
Ms Elena Ambrosiadou
Defendant

Derrick Dale QC, Christopher Knowles and Ian Bergson (instructed by BDB Pitmans LLP) for the Claimant/Respondent

Elspeth Talbot Rice QC and Bajul Shah (instructed by Harcus Sinclair LLP until 30 April 2019, and thereafter by Harcus Parker Ltd) for the Defendant/Applicant

Hearing dates: 18–19 March and 10 May 2019

Approved Judgment

Mr Andrew Henshaw QC:

(A) INTRODUCTION

3

(B) FACTUAL CONTEXT

4

(1) 1981 – 1989: the parties' marriage and discussions in Bahrain

4

(2) 1991 – mid 1992: IKOS (UK) Limited and Paloma Partners' approach

5

(3) Mid to late 1992: Dr Coward and Ms Ambrosiadou move to England; the 50/50 agreement

5

(4) Late 1992 – 1994: forming IKOS Partners and managing funds for Paloma

5

(5) Late 1994 – mid 1996: the IKOS Fund, IKOS CIF, IKOS AM and the Felix Trust

6

(6) Late 1996 – 2003: growth of the IKOS Fund

6

(7) 2005 – early 2006: the move to Cyprus and the 40/40/20 agreement

7

(8) Mid-2006 – early 2007: restructuring IKOS and settling the Eclectic and Hestia Trusts

7

(9) Mid-2007 – 2009: operation of the trust structures

9

(10) Mid-late 2009: Greek divorce proceedings and Dr Coward's resignation from IKOS

10

(C) THE ISSUES

10

(D) JURISDICTION: THE GATEWAY ISSUE

11

(1) The Claimant's essential case

11

(2) Applicable test

12

(3) 50/50 agreement: evidential basis

17

(4) 50/50 agreement: where the agreement was made

34

(5) 50/50 agreement: governing law and/or jurisdiction clause

35

(6) 50/50 agreement: enforceability

37

(7) 50/50 agreement: issue estoppel

38

(a) The test

39

(b) The issues before Asplin J

40

(c) Asplin J's findings

40

(d) Relevance to the present case

42

(e) Privity

42

(f) Conclusion on issue estoppel

46

(8) 40/40/20 agreement: evidential basis

46

(9) 40/40/20 agreement: variation or replacement of 50/50 agreement

49

(10) 40/40/20 agreement: governing law and jurisdiction

52

(a) If the 40/40/20 agreement replaced the 50/50 agreement

52

(b) If the 40/40/20 agreement varied the 50/50 agreement

55

(E) FORUM

58

(F) STAY

60

(G) SERIOUS ISSUE TO BE TRIED

61

(1) Whether any duty could have arisen

61

(2) Termination

62

(3) Limitation

63

(4) Abuse of process

63

(H) OVERALL CONCLUSION

70

(A) INTRODUCTION

1

The Defendant (“ Ms Ambrosiadou”) applies pursuant to CPR Part 11 for the stay or dismissal of claims brought against her by the Claimant (“ Dr Coward”) for breach of contract, breach of fiduciary duty and associated relief.

2

Dr Coward and Ms Ambrosiadou, who were married from 1983 to 2010, started a quantitative trading business in the early 1990s, which prospered. Dr Coward says it was his development of the trading software and model that made the business so successful. It is his case that at the outset, in 1992, he and Ms Ambrosiadou orally agreed to structure the business in a tax-efficient way, following advice, but also agreed to divide equally between them the profits they received from the business (“ the 50/50 agreement”). Later, he alleges, they orally agreed in 2006 to vary the 50/50 agreement by reducing their own shares to 40% each with the remaining 20% going to their son (“ the 40/40/20 agreement”). For ease of exposition, I use the terms “ 50/50 agreement” and “ 40/40/20 agreement” in this judgment without the word “alleged”, although their existence is strongly contested.

3

Subsequently, Dr Coward's and Ms Ambrosiadou's personal relationship became strained, and in April 2009 Ms Ambrosiadou filed for divorce. Dr Coward left the business in December 2009, and the parties have since then been embroiled in numerous pieces of litigation in England, Cyprus, Greece, Monaco and the BVI.

4

Dr Coward claims that, pursuant to the 50/50 and 40/40/20 agreements, Ms Ambrosiadou had duties to act honestly and in good faith; to disclose to Dr Coward any sums representing profits of the business which she or their son received or had paid in accordance with their instructions; and, if requested by Dr Coward, to ensure that to the extent Dr Coward had not already received or had paid to his order 40% of such sums, then he would do so. Dr Coward alleges that Ms Ambrosiadou breached those duties, and that since he left the business in 2009 Ms Ambrosiadou has accessed or benefited from sums representing profits of the business without disclosing them or procuring that Dr Coward receive his share.

5

Ms Ambrosiadou denies that the 50/50 and 40/40/20 agreements were made. She contends that the parties' actual relationship was governed by express written terms, including a written partnership agreement made in 1992, and a series of companies and trusts set up over time. Ms Ambrosiadou also denies that any payments have been made upon which the alleged agreements could bite, and contends that Dr Coward is issue estopped from advancing his present claim, alternatively that it is an abuse of process.

6

Dr Coward issued this claim on 17 November 2017. He obtained permission to serve out of the jurisdiction from Phillips J on 3 May 2018, on the papers, on the basis that his claim was based on the 50/50 agreement (as varied by the 40/40/20 agreement), which Dr Coward said was made in England and/or governed by English law under Article 4 of the Rome Convention and/or contained an implied jurisdiction clause in favour of England.

7

Dr Coward submits that the present case – based on alleged oral agreements – is a classic example of the type of case that the court should resolve at trial, especially as there are documents said to be consistent with the performance of the agreements, and that Ms Ambrosiadou's counter-arguments rest upon mischaracterisation of Dr Coward's case.

8

Ms Ambrosiadou contends that the court has no jurisdiction, or should decline to exercise any jurisdiction it does have, because Dr Coward:

i) cannot satisfy the “ good arguable case” test in relation to any of the gateways in CPR 11 PD 6B;

ii) cannot show that England is clearly the appropriate forum for the trial of the action; and

iii) cannot show that his claim meets the relevant threshold merits test of a serious issue to be tried.

9

Alternatively, Ms Ambrosiadou submits that the court should stay these proceedings pending the outcome of proceedings in Cyprus (“ the Cyprus Family Claim”) which are said to raise similar issues to the present claim.

10

Following an application made on behalf of Ms Ambrosiadou for directions to preserve the privacy of certain matters, which is the subject of a separate judgment given on 18 March 2019, short portions of the hearing were held in private. In the event it has not been necessary to refer to any of those matters in the present judgment.

(B) FACTUAL CONTEXT

11

I set out below the essential background to this application, based on the facts as summarised in the parties' submissions (largely those made on behalf of the Claimant). Save where I indicate otherwise later in this judgment, this section of my judgment should not be taken as involving factual findings on matters in dispute. It is intended to serve as an adequate overview for present purposes of the context in which, at least on the Claimant's case, the dispute arises.

(1) 1981 – 1989: the parties' marriage and discussions in Bahrain

12

Dr Coward and Ms Ambrosiadou met in England in 1981, when Dr Coward was studying for a PhD in Control Theory Engineering and Ms Ambrosiadou for a DPhil. They married two years later. Dr Coward began working for a company called Principia Mathematica, and then Goldman Sachs. He used mathematical techniques to value options and develop trading models, and wrote software. Ms Ambrosiadou undertook an MBA at Cranfield.

13

In 1989 Dr Coward began working for Investcorp in Bahrain. He says he developed the data collection techniques, software, models and relationships required to trade Japanese warrants. Later, Ms Ambrosiadou joined Dr Coward in Bahrain. They decided to start a business: a fund, fund manager, or investment advisor to a fund, drawing on their respective skills and experience.

(2) 1991 – mid 1992: IKOS (UK) Limited and Paloma Partners' approach

14

In July 1991 Ms Ambrosiadou set up an English company, IKOS (UK) Limited (“ IKOS UK”), which was owned by Ms Ambrosiadou and a Mr Brown until 1994, and thereafter solely by Ms Ambrosiadou. Ms Ambrosiadou was also one of IKOS UK's directors. Dr Coward says he and Ms Ambrosiadou intended this company to bear the expenses of activities leading to setting up the anticipated fund, fund manager, or adviser.

15

In early 1992 Paloma General Partners LP (“ Paloma”) contacted Dr Coward about providing investment management services to them. They wanted someone to use mathematical models to trade Japanese warrants for them. In June 1992 Dr Coward and a Mr. Edwin Robertson, whom Dr Coward wished to work with him and Ms Ambrosiadou in the new business, met Paloma about this proposal.

(3) Mid to late 1992: Dr Coward and Ms Ambrosiadou move to England; the 50/50 agreement

16

In August or September 1992, Dr Coward left Investcorp. He transferred sums he had accumulated working offshore to an account held by Ms Ambrosiadou (who was not domiciled in the UK) in Jersey, which he says later helped to fund the development of the business. Dr Coward and Ms Ambrosiadou moved back to England, and planned to take up Paloma's proposal. Dr Coward says he began writing the...

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