Ecobank Transnational Incorporated v Mr Thierry Tanoh
| Jurisdiction | England & Wales |
| Judge | Lord Justice Christopher Clarke,Lord Justice Patten,Sir Terence Etherton |
| Judgment Date | 17 December 2015 |
| Neutral Citation | [2015] EWCA Civ 1309 |
| Docket Number | Case No: A3/2015/2400 and A3/2015/2400A |
| Court | Court of Appeal (Civil Division) |
| Date | 17 December 2015 |
THE CHANCELLOR OF THE HIGH COURT
Lord Justice Patten
and
Lord Justice Christopher Clarke
Case No: A3/2015/2400 and A3/2015/2400A
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
Mr Justice Knowles
Royal Courts of Justice
Strand, London, WC2A 2LL
Matthew Coleman (instructed by Steptoe & Johnson) for the Appellant
Vernon Flynn QC (instructed by Boies, Schiller & Flexner (UK) LLP) for the Respondent
Hearing date: 5 th November 2015
The issue in this appeal is whether Knowles J was wrong to refuse to grant Ecobank Transnational Incorporated ("Ecobank"), an injunction restraining Mr Thierry Tanoh ("Mr Tanoh") from enforcing two judgments which he had obtained in Togo and Côte d'Ivoire.
The history
Ecobank is a major African bank and the holding company in a group carrying on business in 36 African countries. Its headquarters are in Togo. Mr Tanoh was a successful banker who on 15 December 2011 entered into an Executive Employment Agreement ("the EEA") under which he was to be employed in Togo as Chief Executive Officer and Group Managing Director (initially Designate, but later confirmed).
The EEA included the following terms:
" 26 Arbitration
Any and all disputes, controversies or claims arising under or in connection with [the EEA], including without limitation, fraud in inducement of [the EEA], or the general validity or enforceability of [the EEA] shall be submitted to binding arbitration before one arbitrator to be selected by mutual agreement of the parties or failing mutual agreement to be appointed by the President of the International Chambers of Commerce in Paris, France. The arbitration shall be conducted in London, England under the UNCITRAL Rules and the award of the arbitrator is to be final and enforceable in the courts of England. Irrespective of the outcome of the arbitration, it is hereby agreed that the parties shall each bear their own costs.
27 Compliance with Local Law
The Company warrants that the terms of this Agreement do not breach any law, regulation or regulatory requirement in Togo.
28 Governing Law and Jurisdiction
This Agreement shall be governed by the laws of England and subject to clause 26 above, the parties hereby submit to the exclusive jurisdiction of the English Courts".
The Public Investment Corporation ("PIC") is a South African Government corporation. It manages the shareholding in Ecobank of the Government Employee Pension Fund of South Africa. PIC is one of Ecobank's largest shareholders. In 2013 Ecobank was, in the words of Mr Samuel Ayim, Ecobank's Group General Counsel, plunged into a governance crisis. In October 2013 the Chairman was forced to resign and there were calls in some quarters for Mr Tanoh to step down.
On 1 March 2014 Dr Daniel Matjila, a director of PIC and its Chief Executive officer and PIC's representative on the board of Ecobank, wrote a long letter, on a PIC letterhead, to the Acting Chairman and the directors of Ecobank's board. This letter was in excoriating terms and accused Mr Tanoh of incompetence and dishonesty. It was leaked to the Financial Times and Bloomberg.
On 11 March 2014 Mr Tanoh received a letter from Ecobank terminating his employment with effect from 12 March 2014 pursuant to Article 16.3 (b) of the EEA. He was offered 3 months' pay, as required by that Article, and Ecobank was ready to pay the additional lump sum for which the Article called. The reason for the termination was said to be that he had had taken a number of actions which were inconsistent with the governance and practice of Ecobank, which had paralysed its operations and seriously affected its reputation internationally.
The Togo proceedings
On 4 April 2014 Mr Tanoh commenced proceedings before the Labour Court of Lomé in Togo, pursuant to the Togo Labour Code ("the Code"). He claimed that the termination of his employment was in breach of the Code and unfair. Ecobank challenged the jurisdiction of the Court, relying, inter alia, on the arbitration clause in the EEA.
In Togo civil procedure a defendant must raise challenges to the jurisdiction in limine litis — as Ecobank did. The court may require a defendant to plead both to the jurisdiction and to the merits. If the court does so and the defendant pleads only as to jurisdiction the judge can rule that he accepts the merits as pleaded by the claimant. Arguments on the merits that have not been raised at first instance cannot be raised on appeal. The defendant who pleads to the merits is not thereby waiving his right to argue that the dispute in question must be submitted to arbitration pursuant to an arbitration agreement between the parties.
On 7 October 2014 the Labour Court ordered Ecobank to plead to the merits as well as making its challenge to the jurisdiction. This is what Mr Tanoh had asked the court to do.
By a letter dated 17 November 2014 Ecobank sought an extension of time in order to file a submission on the merits. The court granted an adjournment, " accompanied by note of its final nature" 1 to 6 January 2015. In the end, however, Ecobank did not enter a plea on the merits, having decided to run the risk of losing if its challenge to the jurisdiction failed.
On 6 January 2015 a hearing took place in Lomé.
On 3 February 2015 the Togo Labour Court held that Articles 5, 230, and 231 of the Labour Code of Togo permitted Mr Tanoh to make a claim in the Labour Court, if he wished to do so, and that the arbitration agreement was no bar to his doing so. It held that, in the light of Mr Tanoh's referring the matter to the Court, " the arbitral procedure instigated by [Ecobank] cannot be enforced on [Mr Tanoh] as this referral nullified Article 26 of [the EEA]". The arbitration agreement was, in those circumstances, unenforceable against him. The Court also found in his favour on the merits, holding that his dismissal was unfair and that Ecobank had " implicitly
admitted the grounds of the action directed against it" and awarded him $ 11,547, 572 or 5,773,786,000 CFA francs. 50% was payable immediately notwithstanding any application to appeal.On 3 February 2015 Ecobank appealed. On 6 February 2015 the Lomé Court of Appeal ordered a provisional stay. On 24 July 2015 that provisional stay was continued.
Côte d'Ivoire proceedings
On 12 May 2014 Mr Tanoh began proceedings before the Abidjan Commercial Court against (i) Dr Matjila; (ii) PIC; and (iii) Ecobank for defamation in respect of the letter of 1 March. The case against Ecobank was based on the tort of inaction arising from its failure to disapprove the defamatory statements made by Dr Matjila.
The rules of Ivorian civil procedure as to pleading to the jurisdiction, joinder of pleas to the jurisdiction and to the merits by judicial order, and the consequences of not pleading to the merits if required to do so, are the same as in Togo.
On 17 July 2014, at the first hearing, the judge tried to get the parties to settle their dispute amicably. Ecobank took part in a conciliation process during the course of which, on 25 September 2014, it offered Mr Tanoh $ 1 million. No settlement was reached and the judge ordered Ecobank to plead both as to the jurisdiction and the merits.
In October 2014 Ecobank objected to the jurisdiction. It submitted a motion in limine litis that the courts of the Côte d'Ivoire lacked jurisdiction for a number of stated reasons relating to Ivorian law. One of the contentions was that certain Articles of an Ivorian Act would not assign jurisdiction to the Abidjan Commercial Court but to the court of Lomé. It relied on Article 26 and, in addition, Article 28 and requested the Court to declare itself " incompetent in favour of the Togolese or English Courts or of the arbitration court designated by the [EEA]". In the alternative it pleaded to the merits. On the evidence before him Knowles J found that under the law of the Côte d'Ivoire a plea to the merits in those circumstances is not a waiver of the right to argue that the dispute must be referred to arbitration.
On 18 December 2014 the judge ordered the defendants to argue their respective case on jurisdiction and merits orally. He rejected a request by Ecobank's counsel to rule on the jurisdiction before proceeding to a hearing in the merits, stating that he would issue only one judgment. The defendants then made submissions on jurisdiction and immediately thereafter made submissions on the merits. In respect of jurisdiction the defendants asserted that the arbitration clause required Mr Tanoh to submit the claims to arbitration and that the Commercial Court did not have jurisdiction.
On 15 January 2015 the Ivorian Court gave judgment in favour of Mr Tanoh against all three defendants for 7.5 billion CFA Francs, being at the time approximately $ 15 million. In respect of Ecobank the court held that it was jointly and severally liable for the conduct of Dr Matjila as he was acting in the capacity of director of Ecobank and in its interests and Ecobank failed to distance itself from the content of the letter but, rather, sought to justify it. Provisional execution was ordered. The court also ordered publication of its decision in all of the media that received or reported on the letter and, in the event of delay in publication, a fine of 200,000,000 CFA francs per day starting from the date of notification of the judgment.
On 11 February 2015 Ecobank filed a...
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