Executive Authority for Air Cargo and Special Flights v Prime Education Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Saini |
| Judgment Date | 05 February 2021 |
| Neutral Citation | [2021] EWHC 206 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QA-2020-000166 |
| Date | 05 February 2021 |
[2021] EWHC 206 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM SENIOR MASTER FONTAINE
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HONOURABLE Mr Justice Saini
Case No: QA-2020-000166
Philip Coppel QC (instructed by MS-Legal Solicitors) for the Appellant
Farhaz Khan (instructed via Direct Access) for the First, Second, Third and Fifth Respondents
Hearing date: 29 January 2021
Approved Judgment
This judgment is in 8 parts as follows:
| I. Overview — | paras. [1–12] |
| II. The Facts — | paras. [13–63] |
| III. The Senior Master's Judgment — | paras. [64–71] |
| IV. Ground of Appeal — | paras. [72–75] |
| V. The Repudiation Ground — | paras. [76–98] |
| VI. Additional Grounds — | paras. [99–106] |
| VII. Consideration — | paras. [107–119] |
| VIII. Conclusion — | paras. [120–121]. |
I. Overview
This is an appeal against part of an Order of Senior Master Fontaine (“the Senior Master”) made on 30 July 2020. By that Order, the Senior Master dismissed the Appellant's application dated 7 October 2019 seeking summary judgment against the First, Second, Third and Fifth Defendants (the Fourth Defendant is yet to be served out of the jurisdiction in Turkey).
The Senior Master's reasons for dismissing the application were provided in a detailed reserved judgment handed down on 22 July 2020: [2020] EWHC 1985 (QB) (“the Judgment”). The Senior Master also gave a short further judgment in relation to consequential matters on 22 July 2020 (“the Additional Judgment”) in which she declined to make certain declarations in favour of the Appellant.
The appeal before me is limited to an appeal against the dismissal of the summary judgment application made against the First Defendant. No issue is taken in relation to the refusal of summary judgment as regards the other Defendants, whose cases will go to trial. This is a point of some significance in this appeal.
Permission to appeal on a number of grounds was granted by Ellenbogen J on 19 November 2020, with directions for an expedited hearing of the appeal. Ellenbogen J refused to vacate the trial window, which remains 4 May 2021 to 30 July 2021. In terms of the procedural history, Morris J on 19 December 2018 made a Freezing Order against the Defendants without notice, and this was continued by Order of Yip J dated 11 January 2019, following an application to discharge it: [2019] EWHC 522 (QB). I will refer to this judgment further below.
This appeal first came on before me for hearing on 18 January 2021. On that day the Third Defendant, Mrs Sekerci, was acting in person and sought leave to represent the other Defendants. Mrs Sekerci applied for an adjournment of the appeal so that she could instruct Counsel, using funds frozen under the Freezing Order.
The adjournment application was opposed by the Appellant, the Executive Authority for Air Cargo and Special Flights (“EACS”) and there had been a dispute about the quantum and terms on which the frozen funds could be used for that purpose. After oral argument from Mrs Sekerci and Leading Counsel for EACS, I acceded to Mrs Sekerci's application. The nature of the issues in this case would have made it a challenging appeal for a lay person to conduct. I adjourned the hearing of the appeal for a short period and directed a release of funds for the instruction of Counsel. Counsel (who did not appear below) was duly instructed and he has ably represented the Defendants in the appeal. His concise submissions, and those of Leading Counsel for the First Defendant, (who also appeared below), have been of substantial assistance to me. The hearing was conducted remotely by MS Teams.
Turning to the appeal, the headline complaint made by EACS is that, on the basis of what it argues were the uncontroversial facts before the Senior Master, the First Defendant had no answer to the claim for a judgment in the two sums of €13,439,788.74 and £1,871,560, plus interest. That claim is advanced on both a contractual and proprietary basis.
The First Defendant seeks to uphold the Senior Master's decision but also seeks permission to cross-appeal on a distinct issue concerning the Senior Master's interim conclusion on the invalidity (by reason of lack of consideration) of a purported amendment to an original contract, which was the main basis for EACS's claims.
I should record that the hearing before the Senior Master was conducted by telephone over a full day and involved a substantial number of documents. It was clearly a heavy application. I was told there were technical difficulties and interruptions on several occasions. This was a time when judges and counsel had just started remote hearings and we were all facing real challenges.
To compound these difficulties, it seems to me (based on the documents before me) that the Senior Master was not assisted in managing the hearing by the number and range of arguments being advanced, some of which were pursued and dropped, and some of which had not been foreshadowed by the parties (and involved matters of law which required consideration of authorities which were not put before her).
The Senior Master produced an admirable judgment in these challenging circumstances. As I indicated to Leading Counsel for EACS at the hearing, I did not consider many of the criticisms made of the Judgment (or the suggested failure of the Senior Master to deal with certain issues) to be well-founded.
On the limited points where the appeal has been revealed to have some substance, it is on the basis of arguments which (while open to EACS on the material and documents below and within the scope of permission) have been put to me in a rather different (and more developed) form to that in which they were advanced before the Senior Master.
II. The Facts
My summary of the facts is based on the witness statements and main documents in the bundles before me. There are a large number of statements, and I have sought to provide what may be regarded as a highly simplified summary. The Senior Master's Judgment contains a fuller exposition.
Many of the factual assertions made by the witnesses (particularly those made by the Defendants) are substantially disputed. Nothing I record in my summary is intended to reflect any conclusions on my part in respect of matters which will need to be resolved at trial. As appears below, however, certain matters are common ground and I have focussed upon those.
EACS is an executive agency of the government of Libya. Its original purpose was to provide flights for senior government ministers and officials. On the evidence before me, EACS enjoys separate legal personality under Libyan law, and it is accepted that it is an entity with the ability to sue and be sued under the law of England and Wales.
The First Defendant (“Prime Education”) is a company registered in England, incorporated on 20 June 2008. The Second and Third Defendants, who are husband and wife, (I will refer to them below as “Mr Sekerci” and “Mrs Sekerci”, respectively) are the sole directors of Prime Education. Mr Sekerci is also the company secretary.
The Fourth Defendant (“PE Turkey”) is a Turkish company (incorporated in 2012) of which Mr Sekerci is a director and 50% shareholder, the other 50% shareholder being his business partner, Burhan Conoglu. The Fifth Defendant (“York Property”) is a company registered in England and Wales, of which Mr and Mrs Sekerci are the sole directors.
In or around 2012, the remit of EACS was extended and it took on the responsibility for Libyan pilot and aviation engineer training. This required EACS to create a pool of pilots and engineers beyond that which had been required for EACS in fulfilling its original mandate. Libya's two state-owned airlines, Libyan Airlines and Afriqya, were also intended to benefit from the expanded pool of pilots and engineers.
EACS decided to train between 180 and 250 individuals (the precise figure is in issue). These people would need to attend aviation schools outside Libya, there not being any such facilities within Libya. They would also need to have necessary language skills in English before undertaking such courses.
Prime Education's business was to run international education and training programmes from the UK. PE Turkey was established to run education and training projects from Turkey. On the evidence before me, both Prime Education and PE Turkey provided such services for a variety of organisations in Libya and across the Middle East. It appears that Prime Education was first put in touch with EACS through the commercial attaché of the British Embassy in Libya in about 2014.
On 17 December 2015, EACS and Prime Education entered into a written contract (“the 2015 Agreement”). The 2015 Agreement was signed on behalf of EACS by a Mr Jamil Shubana (“Mr Shubana”), the general manager and CEO of EACS, and by Mr Sekerci on behalf of Prime Education. I note that the company stamp of EACS, with the words “EACS General Director”, appears under Mr Shubana's signature, description and date. The 2015 Agreement was made in both Arabic and English language versions.
I will set out the main provisions of the 2015 Agreement below but will first provide a broad summary of its effect. The 2015 Agreement provided that Prime Education would supply civil aviation educational and training consultancy and management services...
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