Internet FZCO v Ansol Ltd
| Jurisdiction | England & Wales |
| Judge | MRS JUSTICE GLOSTER, DBE,Mrs Justice Gloster, DBE |
| Judgment Date | 09 February 2007 |
| Neutral Citation | [2007] EWHC 226 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2006 Folio 508 |
| Date | 09 February 2007 |
[2007] EWHC 226 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
COMMERCIAL COURT
Mrs Justice Gloster, DBE
Case No: 2006 Folio 508
Miss Catharine Otton-Goulder QC (instructed by Steptoe & Johnson) for the Claimants
Brian Doctor Esq, QC & Patrick Goodall Esq (instructed by Clyde & Co) for the Defendants
Hearing dates: 11 th December 2006; 12 th December 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
These are the reasons for the ruling which I gave on 15 December 2006, whereby I refused the application of the first defendant, Ansol Limited (“Ansol”), for an interim injunction to restrain the first claimant, Intermet FZCO (“Intermet”), and the third claimant, Vneshexpertservice Consulting Company Limited (“Ves”) from proceeding with or taking any further steps in the arbitration commenced by the first and third claimants before the Zurich Chamber of Commerce by way of a Notice of Arbitration dated 18 January 2006 (“the Arbitration”), pending the hearing and final determination of these proceedings in the Commercial Court. The substantive hearing of the Arbitration was due to take place in the period between 29 January 2007 and 2 February 2007.
The basis of Ansol's application was that it alleged that Intermet and Ves have, in effect, commenced two sets of concurrent proceedings against Ansol, one by way of arbitration, and the other by way of these court proceedings. Ansol contends that the very same contractual claims are advanced against Ansol in the Arbitration as are also being pursued in the court proceedings, that there is a significant degree of duplication and overlap between the court proceedings and the Arbitration and that, accordingly, if the Arbitration is allowed to proceed, it is inevitable that the very same factual matters and issues will have to be considered and determined in both sets of proceedings, including serious allegations of fraud and forgery. It is not disputed by the claimants that the two sets of proceedings do indeed arise out of the same factual matrix, and share the same factual background, and that there will, at least to a certain extent, be an overlap in witnesses and evidence between the two sets of proceedings. Ansol complains that the first and third claimants have conducted both sets of proceedings in this fashion so that they will get two bites at the cherry; accordingly Ansol contends that if the Arbitration is not successful, the first and third claimants will in reality seek to litigate the matter again in the Commercial Court proceedings. Apart from Ansol, neither the second claimant, Intermet LLC, nor any of the other defendants to the court proceedings, is a party to the Arbitration.
In the circumstances, Ansol contends that this is a case where the court should exercise its jurisdiction pursuant to CPR 25.1(1)(a), section 37(1) of the Supreme Court Act 1981, or alternatively the inherent jurisdiction to grant an injunction to restrain Intermet and Ves from proceeding with the Arbitration: see The “Oranie” and The “Tunisie” [1966] 1 Lloyd's Rep 477, 487 CA, Northern Regional Health Authority v Derek Crouch Construction Co Ltd [1984] 1 QB 644, 659B CA, University of Reading v Miller Construction Ltd (1995) 4 ADR LJ 56. Ansol, by Mr Brian Doctor QC and Mr Patrick Goodall of counsel, contended that it would be severely unjust and prejudicial to Ansol if the arbitration proceedings were allowed to continue against it; whereas on the other hand, no injustice, or at least no irreparable prejudice would be caused to Intermet and Ves by a stay of the Arbitration being imposed.
The first and third claimants oppose Ansol's application. Miss Catharine Otton-Goulder QC, on their behalf, contends the application is founded upon a mis-characterisation of the respective claimants' claims in the Arbitration and in the action and proceeds on the misconceived assumption that parties should not pursue alternative causes of action.
A summary of the disputes between the parties is fully set out in the respective skeleton arguments. For present purposes I summarise them as follows:
From 30 December 2003 to 23 December 2004, Intermet and/or Intermet LLC loaned Ansol a total of US$ 113,649,358.90. Ansol made some repayments, but then defaulted, owing (as is allegedly admitted) over US$ 50 million. In order to postpone repayment, Ansol offered to give the claimants security for the debt by transferring to the claimants, or their nominee, the sole share in a company called Gradex Limited, which allegedly owned a valuable property in Moscow. Ansol eventually transferred ownership of a UK company called Gradex Limited to the claimants' nominee, Ves, but the interest in the Moscow property was held not by the UK Gradex Limited, but by a Gibraltar company of the same name, the fourth defendant. Ansol has failed to repay the debt, and the security is said to be worthless.
A Mr Nazarov, the ninth defendant, was the director of Ansol and the claimants contend that he beneficially owned the share capital of Ansol, Ashton Investments Limited (the second defendant), Enothera Limited (the third defendant), Gradex Gibraltar, Prixford Limited (the fifth defendant), Gradex UK, and (through Gradex Gibraltar) the interest in the Moscow property. The claimants contend that he perpetrated a fraudulent scheme through those companies and with the assistance of the individual defendants. The substance of Ansol's defence, on the other hand, is that the situation is an unfortunate misunderstanding, in which all but the tenth defendant (a Mr Rastegaev) were misled, and that Mr Rastegaev is the true villain.
The claimants have a signed judgment in default against three of the defendants: the fourth (Gradex Gibraltar), the fifth (Prixford) and the tenth (Mr Rastegaev). Messrs Clyde & Co represent all the remaining defendants. The claimants contend that three of those defendants, namely the sixth, seventh and twelfth, evaded service compelling the claimants to incur the delay and expense of obtaining an order for service on them by alternative means.
No sooner, however, than they had been served, than Clyde & Co came on the record for those defendants. As a result, the sixth, seventh and twelfth defendants only served their Defence to the claimants' claim on 4 December 2006, by way of an Amended Defence. That Amended Defence reflects that already served on 20 October 2006 by the remaining defendants, the essence of which is as described above.
The contractual agreements between the parties are complicated, and to a certain extent in dispute. There are (at least) the following written agreements between the following parties:
i) A Tolling Agreement dated 4 December 2003 between Intermet (but not Intermet LLC or Ves) and Ansol. This was expressly governed by Swiss law and contained, by clause 15, an agreement to arbitrate disputes in the following terms:
“All disputes arising out of or in connection with this Agreement, including its validity, interpretation, application, scope, enforceability, performance, breach, and termination shall be settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said rules. The Arbitration shall take place in Zurich.”
ii) A Tolling Agreement dated 22 January 2004 between Intermet LLC, (but not Intermet or Ves) and Ansol, also expressly governed by Swiss law, which, likewise by clause 15 contained an agreement to arbitrate in the same terms as the previous Tolling Agreement.
iii) An Agency Agreement dated 22 January 2004 between Intermet, Intermet LLC (but not Ves) and Ansol, also expressly governed by Swiss law, which, by clause 5, contained an agreement to arbitrate disputes in the following terms:
“All the disputes arising out of or in connection with this Agreement shall be settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules. The Arbitration shall take place in Zurich.”
iv) The General Agreement, dated 1 January 2005 (although not signed until 21 January 2005) between Intermet (but not Intermet LLC), Ves and Ansol. This was also expressly governed by Swiss law and, by clause 12, contained an agreement to arbitrate disputes which differed from the previous three arbitration agreements:
“All disputes arising from the present Agreement or in connection with the present Agreement or the actions covered by the Agreement shall be completely regulated by arbitration court pursuant to Swiss Chamber of Commerce Regulations of International Arbitration, as in force for the date of submission of the Arbitration Notice under these Regulations.”; and
v) The Supplementary Agreement dated 12 May 2005, between Intermet (but not Intermet LLC), Ves and Ansol, which varied the General Agreement. Ansol alleges that this agreement is a forgery.
The two Tolling Agreements and the Agency Agreement concerned the provision to Ansol of bauxite and alumina and the payment of fees for converting bauxite and alumina into aluminium. The dispute between the claimants and the defendants does not concern those transactions, but concerns the loans which the claimants made to Ansol, and the means...
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