Gulf Azov Shipping Company Ltd and Another v Chief Humphrey Irikefe Idisi and Others
| Jurisdiction | England & Wales |
| Judge | LORD PHILLIPS,LORD JUSTICE SIMON BROWN,LORD JUSTICE LONGMORE,LORD JUSTICE BROOKE |
| Judgment Date | 14 February 2001 |
| Neutral Citation | [2001] EWCA Civ 247,[2001] EWCA Civ 21 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A3/2001/6025 A3/2000/6256 A3/2000/5047 A3/2001/0013,A3/2000/3636/A 3636/B |
| Date | 14 February 2001 |
[2001] EWCA Civ 21
The Master of the Rolls
(lord Phillips)
Lord Justice Simon Brown
(vice President of the Court of Appeal, Civil Division)
Lord Justice Longmore
A3/2000/3636/A 3636/B
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(COMMERCIAL COURT)
(MR JUSTICE MOORE-BICK)
Royal Courts of Justice
Strand
London WC2A 2LL
MR J BENEDICT and MR B BHALLA (Instructed by Messrs Speechly Bircham, London, EC4A 3LX) appeared on behalf of the Appellant
MR DAVID MILDON QC and MR RICKY DIWAN (Instructed by Messrs Stephenson Harwood, London, EC4M 8SH) appeared on behalf of the Respondent
LORD PHILLIPS, MR: On 22 November 2000 Moore-Bick J held the first Defendant, Chief Idisi ("the Chief"), to be in contempt of Court for breach of a number of Court orders in relation to the securing of the Defendants' assets. He directed that the Chief should be committed to prison for three months but suspended that committal to 31 January 2001 on terms that, if the Chief satisfied a number of stipulated conditions, thereby purging his contempt, the order would be discharged. The Chief has not satisfied all those conditions, but appeals, as he is entitled to do as of right, against the order that he be imprisoned.
We have had put before us some very recent additional evidence on affidavit which is relevant in two respects. Some of that evidence gives additional factual information in relation to the findings of fact made by the Judge. We have acceded to the application that we should allow that evidence to be put before us, having particular regard to the fact that this is a case that involves the liberty of the Appellant. The other objective of that additional evidence is to demonstrate the extent to which the Chief has taken steps to purge his contempt and to satisfy the conditions subject to which his sentence has been suspended. With that latter matter we are not concerned. That is a matter for consideration by the trial Judge at, or I hope shortly after, the end of this month, which ends the period given to the Chief to satisfy those conditions.
The Chief resides in Nigeria. That is where he is now believed to be. He is unlikely to come to England if on arrival he will be committed to prison. But the order made by Moore-Bick J has potentially wider implications. To explain these, it is necessary to outline the background to this appeal. In so doing I propose to set out the facts largely in the form found by the Judge with a few minor corrections. In essence these facts are not contentious.
"The Chief is a Nigerian businessman whose activities include providing services to companies engaged in oil exploration and production in Nigeria. The second defendant is a company incorporated in Nigeria through which the Chief conducts that business. The third defendant is a company incorporated in England which was used for collecting payments in London due to the first and second defendants. The Chief is the chairman and major shareholder of the second defendant, Lonestar Drilling Nigeria Limited."
The judge stated that before him it was not seriously disputed that in practical terms the Chief controlled the activities of the both the Defendant companies. In any event, he found that this was clearly borne out by the evidence and that it was unnecessary for most purposes to distinguish between the Chief and Lonestar, although it was right to bear in mind that the application was made against the Chief alone.
"In 1997 two drilling rigs belonging to Lonestar were carried on board the first claimant's vessel Dubai Valour from India to Sapele, Nigeria under a bill of lading which contained a London arbitration clause. On arrival part of the cargo which had been loaded on deck was missing. The shipowners said that it had been lost overboard during a storm, but that explanation did not satisfy Lonestar which commenced proceedings in Nigeria claiming damages in the sum of US$17 million. The second claimant, the vessel's P & I Club, was willing to provide a letter of guarantee in what it considered to be a reasonable amount in order to secure the claim, but was not willing to secure the full amount of the claim which it considered to be massively inflated. In the view of the Club the missing equipment could not be valued at more than US$1 million. As a result, in order to obtain security in the full amount of their claim, the defendants ensured that the vessel was prevented from leaving Sapele indefinitely. Eventually, after various attempts to remove her had been thwarted and when her [remaining] crew had reached the limits of their endurance, the claimants agreed to pay the sum of US$3 million into an escrow account in London for the benefit of Lonestar in return for its agreement to release the vessel. Shortly after the money had been deposited the vessel was allowed to leave Nigeria, having been detained for a total period of nearly 21 months.
Having obtained the release of the vessel her owners and the Club took immediate steps to prevent the money standing in the escrow account from being released to the defendants. On 23rd April 1999 Timothy Walker J made a worldwide freezing order against the defendants in the sum of US$12.3 million in which the sum standing in the escrow account and other sums standing to the credit of the defendants' bank accounts in London were specifically identified. As is usual the order also required the defendants to give full disclosure of their assets in support of the injunction. The judge also made an order restraining the defendants from continuing or procuring the continuation of the proceedings which they had begun in Nigeria and from commencing or prosecuting any other legal proceedings in respect of their claim except in arbitration or by way of counterclaim in the present action.
The claimants began the present proceedings to recover damages for duress and for the wrongful detention of the vessel. The defendants were served with the proceedings in Nigeria, but [narrowly] failed to serve a defence within the time allowed and accordingly the claimants entered judgment in default on their claim to recover the US$3 million paid into the escrow account. The matter came back before Timothy Walker J on 14th July 1999 as a result of complaints by the claimants that the defendants had failed to make full disclosure of their assets. On that occasion the judge ordered the Chief and Lonestar's finance manager, Mr Franklin Ahonkhai, to attend for cross-examination and to bring with them for that purpose a number of documents identified in the schedules to his order The cross-examination of both the Chief and Mr Ahonkhai was later adjourned on terms that copies of those documents be provided to the claimants in the meantime.
The matter next came before the court in August 1999 after the claimants discovered that the defendants had disposed of a sum of US$350,000 in breach of the terms of the freezing order by transferring the bulk of it out of the jurisdiction and paying the balance to a firm of lawyers acting for them in this country. On the application of the claimants the matter came before David Steel J."
David Steel J ordered that the Defendants return the sum of US$350,000 to the jurisdiction and directed that if it was not returned by 8 September 1999 writs of sequestration in respect of the Defendants' property in this country should be executed. The money was not returned by that date and accordingly the writs were executed.
"One of the assets owned by the Chief took the form of fees due under a contract described as a 'Services Procurement Agreement' under which he undertook in the capacity of 'facilitator' to procure the provision by Ecodrill Nigeria Limited, a company of which he is on his own admission chairman and alter ego, of personnel and administrative services to a company called Expro Gulf Ltd. Under that agreement the Chief was entitled to be paid a commission of 5% of net foreign currency received by Expro Gulf. Prior to the imposition of the freezing order commission had been remitted to an account with the National Westminster Bank in London. On 2nd November 1999 the freezing order was varied by Cresswell J to restrain the defendants from giving directions to Expro Gulf Ltd to pay sums due under that agreement to pay any account other than that with the National Westminster Bank.
On 8th November 1999 the matter came back before the court on the hearing of both the defendants' application to set aside the default judgment and the owners' application for summary judgment on their claim for damages for the detention of the vessel."
The hearing continued, with breaks, up to 17 November 1999. On 16 November US$350,000 was bought back into the jurisdiction. Because of this in particular, Langley J held that, despite the fact that the Defendants had been guilty of serious contempts, they should not be precluded from being heard on the application. Nonetheless, their being heard did them no good because the Judge dismissed the application to set aside the default judgment and gave judgment for the owners for damages to be assessed. He ordered the Defendants to make an interim payment of US$2 million on account of damages. Orders for costs were also made against the Defendants. The sequestrators appointed pursuant to the order made by David Steel J had by then seized assets of the Defendants to the value...
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