Global Torch Ltd (Appellant/Petitioner) v Apex Global Management Ltd and Others and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Maurice Kay,Lord Justice Richards,Lord Justice Briggs |
| Judgment Date | 10 July 2013 |
| Neutral Citation | [2013] EWCA Civ 819 |
| Docket Number | Case No: A3/2013/0520 + 0521 + 0803 Claim No 10850/2011 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 July 2013 |
[2013] EWCA Civ 819
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION, COMPANIES COURT
REF: 10520OF2011
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Maurice Kay, Vice President of the Court of Appeal, Civil Division
Lord Justice Richards
and
Lord Justice Briggs
Case No: A3/2013/0520 + 0521 + 0803
Claim No 10609/2011
Claim No 10850/2011
In the Matter of Fi Call Limited
In the Matter of the Companies Act 2006
In the Matter of the Insolvency Act 1986
and
Mr Mark Warby QC and Mrs R Zaffuto (instructed by Irwin Mitchell LLP) for the Appellants
Mr Robert Howe QC, Mr Daniel Lightman, Ms Shaheed Fatima, Mr Paul Adams (instructed by Howard KennedyFsi LLP) for the Apex parties
Mr Guy Vassall-Adams (instructed by Guardian News and Media Ltd and The Financial Times Limited, the Interested Parties)
Hearing dates : 15, 16 May
Approved Judgment
This appeal is concerned with whether certain proceedings in the Companies Court should be heard in private and with restrictions placed on access by media interests to court documents. The underlying litigation comprises two "unfair prejudice" petitions presented by rival factions in relation to the same company. On 13 February 2013, Morgan J (the Judge) refused an opposed application for a private hearing and associated restrictions. At the conclusion of a hearing in this Court on 15 and 16 May 2013, we announced that we were upholding his Order and would give our reasons at a later date. This judgment contains my reasons.
The background
The judgment below, [2013] EWHC 223 (Ch), contains at paragraphs 2-6, a helpful summary of the underlying litigation. I repeat it here.
Fi Call Ltd ("the Company") was incorporated on 23 rd October 2009 under the Companies Act 2006 ("the 2006 Act"), as a private company limited by shares. The principal shareholders in the Company at the time of its incorporation, and since, have been Global Torch Ltd ("Global Torch") and Apex Global Management Ltd ("Apex"). Global Torch was incorporated in the British Virgin Islands. Apex was incorporated in the Seychelles and is wholly owned by a Jordanian businessman, Mr Almhairat, who at all material times has also been a director of the Company. Throughout, the other de jure director of the Company has been Mr Abu-Ayshih.
On 2 nd December 2011, Global Torch presented a petition to the Companies Court in relation to the Company, pursuant to section 994 of the 2006 Act. The respondents to the petition were Apex, Mr Almhairat and the Company. Apex and Mr Almhairat will be referred to as "the Apex parties". It is Global Torch's case that the affairs of the Company were being conducted in a manner that was unfairly prejudicial to the interests of Global Torch. The principal relief sought was an order that Global Torch's shares be bought by the Apex parties, or one of them. Further and in the alternative, Global Torch sought an order winding up the Company on the just and equitable ground. In very brief summary, Global Torch alleged that Mr Almhairat in particular had misappropriated funds from the Company, had misconducted the Company's business in various ways, had failed to keep proper books and records, had failed to supply books and records to Global Torch and had blocked the holding of board meetings to discuss and to try to resolve matters. In particular, Global Torch pleaded that the relationship between it and Apex had been destroyed by the conduct of the Apex parties. It was pleaded that the destruction of the relationship had been exacerbated by false allegations of criminal conduct which the Apex parties had made about Global Torch and its shareholders; the allegations were said to be that Global Torch and its shareholders had used the Company for criminal purposes. It was also said that the Apex parties had threatened to publish these allegations to third parties.
Global Torch was given permission to serve the petition on the Apex parties out of the jurisdiction. The Apex parties have been duly served and do not dispute jurisdiction.
On 12 th December 2011, that is 10 days after presentation of the Global Torch petition, Apex presented its own petition in relation to the Company, pursuant to section 994 of the 2006 Act. The respondents to the Apex petition were the Company, Global Torch, HRH Prince Abdulaziz bin Mishal bin Abdulaziz Al Saud ("Prince Abdulaziz"), Mr Abu-Ayshih and HRH Prince Mishal bin Abdulaziz Al Saud ("Prince Mishal"). Global Torch, Prince Abdulaziz, Prince Mishal and Mr Abu-Ayshih will be referred to as "the appellants". Prince Abdulaziz is a director of and a shareholder in Global Torch. The Apex parties say that Global Torch is a corporate vehicle of Prince Abdulaziz. Prince Abdulaziz has also acted as Chairman of the Board of the Company notwithstanding that he is not a de jure director of the Company. The Apex parties say that Prince Abdulaziz has acted as a de facto and/or shadow director of the Company. Mr Abu-Ayshih is a private adviser to Prince Abdulaziz and is a director of and a shareholder in Global Torch, and a de jure director of the Company. Prince Mishal is the father of Prince Abdulaziz (they are members of the Saudi Arabian Royal Family) and the Apex parties make a number of allegations as to his involvement in matters said to be relevant to the Apex petition. The principal relief sought by the Apex petition is an order that one or more of the appellants purchase Apex's shares in the Company.
In its petition, Apex alleges that the appellants have caused the affairs of the Company to be conducted in a way which is unfairly prejudicial to the interests of Apex. It is said that Apex has lost trust and confidence in the willingness of the appellants to manage the Company in a fair and proper manner. The pleaded allegations against the appellants are:
i) Prince Abdulaziz acted irregularly in relation to the Company in that, although he has never been a director of the Company, he has acted as a de facto or a shadow director of the Company and has purported to act as a de jure director of the Company;
ii) Prince Abdulaziz and Mr Abu-Ayshih have been guilty of wrongdoing in relation to a transaction described as "the Beirut transaction";
iii) Prince Abdulaziz and Mr Abu-Ayshih have been guilty of wrongdoing in relation to a transaction described as "the Nairobi transaction";
iv) Prince Abdulaziz and Prince Mishal made various statements to Mr Almhairat which are highly relevant to Apex's case that the affairs of the Company have been conducted in a manner unfairly prejudicial to Apex;
v) In February and March 2010 there were four share sale agreements arranged by Prince Abdulaziz and/or Mr Abu-Ayshih; these agreements resulted in some Apex shares in the Company being sold in circumstances where Apex did not receive any of the proceeds of sale, which were instead taken by Prince Abdulaziz or the Company;
vi) In April 2011, following a sale by Apex of some of its shares, Prince Abdulaziz and Mr Abu-Ayshih demanded that Mr Almhairat pay to them a substantial part of the proceeds of that sale; Mr Almhairat did not comply with this demand following which Prince Abdulaziz and Mr Abu-Ayshih have been hostile to him in a number of ways, including Prince Abdulaziz making a complaint about Mr Almhairat to the Saudi Arabian authorities, leading to the issue of an arrest warrant against Mr Almhairat and the involvement of Interpol. This share sale transaction is the subject of the rival allegation made in the Global Torch petition that the Apex parties have misappropriated funds, namely, the part of the proceeds of sale demanded by Prince Abdulaziz and Mr Abu-Ayshih but not paid to them by Mr Almhairat.
The allegations referred to at (ii), (iii) and (iv) of the last paragraph were expressed in anodyne terms because they were essentially the matters which lay at the heart of the application for a private hearing. Two further serious allegations materialised at a later stage. The Judge put a little more flesh on the bones in a confidential schedule to his judgment but he did not need to go into further detail. Nor do I, because the precise details do not matter for present purposes. It is sufficient to state that in their respective petitions each party is making allegations of egregious conduct on the part of the other and each is denying the counter-allegations. The pleading history is set out in paragraphs 9-11 of the judgment of the Judge. Other interlocutory matters have had to be resolved, yet more remained unresolved at the time of the hearing before us. The substantive hearing of the petitions will not take place until early next year.
The applications
The applications for a hearing in private were made pursuant to CPR39.2, the material parts of which provide:
"(1) The general rule is that a hearing is to be in public.
…
(3) A hearing, or any part of it, may be in private if –
(a) publicity would defeat the object of the hearing;
…
(g) the court considers this to be necessary, in the...
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