Jinxin Inc. v Aser Media Pte Ltd
| Jurisdiction | England & Wales |
| Judge | Peter MacDonald Eggers |
| Judgment Date | 30 September 2022 |
| Neutral Citation | [2022] EWHC 2431 (Comm) |
| Docket Number | Case No: CL-2021-000089 |
| Court | King's Bench Division (Commercial Court) |
[2022] EWHC 2431 (Comm)
Peter MacDonald Eggers KC
(sitting as a Deputy Judge of the High Court)
Case No: CL-2021-000089
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Adrian Beltrami KC, Anne Jeavons and Nathaniel Bird (instructed by Herbert Smith Freehills LLP) for the Claimant
Andrew Hunter KC and Shane Sibbel (instructed by Bird & Bird LLP) for the First and Tenth Defendants
Ruth den Besten and Nicholas Goodfellow (instructed by Kingsley Napley LLP) for the Second Defendant
Hugh Norbury KC and Tim Benham-Mirando (instructed by Fladgate LLP) for the Fifth Defendant
Laurence Rabinowitz KC, Simon Colton KC and Sophie Weber (instructed by Allen & Overy LLP) for the Sixth and Ninth Defendants
Hearing date: 20th, 21st and 22nd September 2022
Peter MacDonald Eggers KC:
Introduction
This action concerns claims made by the Claimant (“ Jinxin”) in deceit, and a related claim in conspiracy, brought against the First, Second, Fifth, Sixth, Ninth and Tenth Defendants (“ the Tort Defendants”) arising in respect of alleged misrepresentations fraudulently made which are said to have induced Jinxin to enter into a share purchase agreement dated 8th March 2016 (the “ SPA”).
During a three-day case management conference, two applications were made by the Sixth and Ninth Defendants (supported by some or all of the other Tort Defendants), namely:
(1) An application for a split trial, with each of the three trials envisaged dealing with specified issues (“ the split trial application”).
(2) An application for the striking out of certain parts of Jinxin's Particulars of Claim on the grounds that they plead reliance on the decisions of a Swiss Court and an Italian tribunal which are inadmissible pursuant to the rule in Hollington v Hewthorn [1943] KB 587 (“ the Hollington v Hewthorn application”).
During the case management conference, I dismissed the split trial application and I allowed the Hollington v Hewthorn application. This judgment sets out my reasons for those decisions.
Jinxin's claims
Jinxin is a joint venture owned by two Chinese enterprises, Baofeng and Everbright.
Jinxin entered into the SPA for the acquisition of 65% of the MPS Group from the First to Eighth Defendants for the price of US$661,375,034. The sale was completed on 24th May 2016.
The MPS Group was a media sports rights agency. The MPS Group dealt inter alia in the acquisition and sale and licensing of broadcasting and media rights for various football tournaments, including the premier Italian football league, Serie A, the FIFA World Cup, Coppa Italia, Super Coppa, and Copa America.
Following Jinxin's acquisition of the MPS Group, the financial condition of the MPS Group deteriorated and the MPS Group eventually became insolvent. Jinxin contends that the Tort Defendants were guilty of fraudulent misrepresentations made to Jinxin which induced it to enter into the SPA. The alleged misrepresentations are said to have been made in writing, not orally, and were contained in certain “ Sale Documents” prepared by professional advisors in connection with and prior to the conclusion of the SPA.
The Tort Defendants contend that the MPS Group's financial condition was the result of mismanagement by Jinxin.
The alleged representations have been broadly summarised in the agreed List of Issues as follows:
(1) The Business Practice Representations concerning the honesty, legality and lawfulness of the conduct of the MPS Group business, including as to the absence of bribery, corruption or similar misconduct.
(2) The Serie A Representations that the MPS Group had won the Serie A rights as a result of its long-standing and legitimate relationship with the Italian League and that the Group's Management were confident that the rights would be renewed in 2017 and beyond.
(3) The Investigation Representations as to the limited nature of a criminal investigation then being conducted in respect of the Ninth Defendant (Mr Silva) and its irrelevance to the business of the MPS Group.
(4) The EBITDA Representations concerning the truth, material accuracy and completeness of the financial information, including EBITDA forecasts, provided to Baofeng, Everbright and Jinxin.
The representations alleged by Jinxin are both express representations made in the Sale Documents and implied representations, the implied representations emerging from the Sale Documents. It is not alleged that any oral representations were made.
As Mr Adrian Beltrami KC, who appeared on behalf of Jinxin with Ms Anne Jeavons and Mr Nathaniel Bird, made clear, the full nature of the alleged representations, and the issues arising from the alleged representations, are identified in the parties' statements of case.
Jinxin alleges that these representations were false in that these broadcasting and media rights were obtained by, and the MPS Group relied for their continuation and retention upon, bribes and other secret financial accommodations given to relevant decision-makers combined with a series of unlawful and anti-competitive arrangements designed to avoid proper competition in the allocation process. Jinxin further alleges that the Tort Defendants were aware that the representations were false, and intended the recipients of the Sale Documents, including Baofeng and Everbright, and Jinxin to rely on them and Jinxin did rely on those representations in that it would not have concluded the SPA but for the alleged representations. Jinxin seeks the rescission of the SPA or damages.
Jinxin also brings a claim against the Tort Defendants on the basis that the Tort Defendants conspired to injure Jinxin by unlawful means through the making of the alleged representations.
The Tort Defendants defend the claims in full.
The split trial application
The application
The Sixth and Ninth Defendants applied for an order that the trial of the deceit claim brought by Jinxin be split into three stages. This application is supported by each of the other Tort Defendants and is resisted by Jinxin.
The three stages of trial proposed by the Tort Defendants are:
(1) The “ first trial” would deal with the identification of the representations made, their meaning, Jinxin's awareness of the representations, and Jinxin's reliance on the representations. In particular, the following issues were proposed to be determined at the first trial:
(a) What representations were made in the Sale Documents and/or by the provision of the Sale Documents and what were the terms of those representations? (Paragraph 17 of the agreed List of Issues).
(b) Are the alleged representations inconsistent with the terms of the warranties contained in the SPA? (Paragraph 18 of the agreed List of Issues).
(c) If any of the representations were made, (i) were they made to Jinxin or to a class of persons to which Jinxin belonged, (ii) were the representations continuing representations which were repeated and continued until completion of the transaction, and (iii) could Jinxin rely and was it reasonable for Jinxin to rely on the alleged representations allegedly made in or by the provision of the Sale Documents, (iv) what is the effect of certain letters (including duty of care and non-reliance letters), and (v) did the Sale Documents contain disclaimers and other terms preventing reliance on the representations and, if so, were such terms unenforceable pursuant to section 3 of the Misrepresentation Act 1967? (Paragraph 19 of the agreed List of Issues).
(d) Did Jinxin waive any claim it might have in relation to the falsity of the EBITDA representations and/or is Jinxin contractually estopped from asserting that the alleged EBITDA representations were false by reason of the SPA and the Deed of Variation? (Paragraph 30.5 of the agreed List of Issues).
(e) If any of the alleged representations were made, did Jinxin rely on those representations and did the alleged representations induce Jinxin to enter into the SPA and/or proceed to completion? In particular, (i) which individuals (if any) were aware of the alleged representations and how did the said individuals understand the alleged representations, (ii) which individuals relied on the representations and did such reliance constitute reliance by Jinxin, (iii) can Jinxin rely on the presumption of inducement, (iv) is Jinxin contractually estopped from contending that it relied on the alleged representations by clause 19.2(a) of the SPA, (v) would Jinxin have proceeded with the acquisition in the absence of or regardless of the truth or falsity of the alleged representations because it was instead motivated by Chinese investment policy and/or a desire to complete the transaction expeditiously, and (vi) was Jinxin aware or did Jinxin suspect prior to signing the SPA and/or completion that some or all of the alleged representations were false and/or did Jinxin accept the risk that the alleged representations may be false? (Paragraph 32 of the agreed List of Issues).
(2) The “ second trial” would deal with, amongst other issues, the questions of the falsity of the alleged representations, the knowledge and intention of the Tort Defendants, and the Tort Defendants' responsibility for the representations. (Paragraphs 15, 16, 21, 22, 23, 25, 26, 27, 28, 29, 30.1–30.4, 31, 34.1, 34.2 and 34.3 of the agreed List of Issues).
(3) The “ third trial” would deal with remedies and quantum (paragraph 33, 34, 34.4, 35, 36, 37 and 38 of the agreed List of Issues).
Mr Laurence...
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