A.G. Der Manufacturen I.A. Woronin Leutschig & Cheshire v Frederick Hutts & Company

JurisdictionEngland & Wales
Judgment Date02 May 1928
Docket NumberCase No. 91
Date02 May 1928
CourtKing's Bench Division
English High Court of Justice (King's Bench Division).

(Mr. Justice Wright.)

Case No. 91
The Manufacturing Company I. A. Wormin Luetchg and Cheshire Limited and Cheshire (plaintiffs)
and
Frederick Huth & Company (defendants).

Jurisdiction — Territorial — (1) Effect of Decrees of Foreign Governments Nationalising Assets of Corporations In corporated under Laws of that State — Effect Limited to Assets within Territory of that State — (2) Effect of Decrees of Foreign Government Cancelling Shares and Monopolising Business — Effect upon Bearer Shares Held by Persons outside Territory of that State.

The Facts.—The plaintiff company was incorporated in Russia before the Great War and owned a cotton mill in Petrograd. It had no branch or agency in England. The defendants were the plaintiff company's bankers and correspondents in England. The shares in the plaintiff company, with the exception of the directors' qualification shares, were bearer shares, and the statutes of the company provided that the holders of receipts for the deposit of share warrants at banks were entitled to vote at meetings. At some date in the year 1917 the defendants held nearly £82,000 of the moneys of the plaintiff company.

In November, 1917, the Soviet Government established itself in Russia by means of a revolution, and on 28 June, 1918, it issued a Decree purporting to nationalise all the property of joint stock companies engaged in the cotton industry and having a capital exceeding one million roubles. The capital of the plaintiff company was six million roubles divided into 6000 shares. A Decree of October, 1918, required the owners of shares in textile companies to produce their shares for registration, and Decrees of November, 1918, and March, 1919, established a National Textile Board, provided for the financing of State enterprises, and purported to cancel the shares of all companies whose enterprises had been confiscated or nationalised.

In March, 1917, the directors of the plaintiff company were or included the plaintiff Cheshire and three other persons, W. and B. and S. In August, 1918, at a meeting held or purporting to be held in Petrograd, V. W. and B. C. and L. M. were elected directors. During 1918 and 1919 W. and B. and S. died, the plaintiff Cheshire and V. W. and B. C. came to England, and the remaining director L. M. went to Paris. The four surviving directors held or purported to hold meetings in England in the years 1920 to 1924 and passed resolutions...

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