KMG International NV v Melanie Anne Chen Chipper Management Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Moulder |
| Judgment Date | 09 May 2018 |
| Neutral Citation | [2018] EWHC 1078 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2017-000753 |
| Date | 09 May 2018 |
Neutral Citation Number: [2018] EWHC 1078 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Moulder
Case No: CL-2017-000753
Alain Choo Choy QC, Anna DilnotandSophie Weber (instructed by PCB Litigation LLP) for the Claimant
Elspeth Talbot Rice QC and Graeme Halkerston (instructed by Penningtons Manches LLP) for the Defendants
Hearing dates: 18 and 19 April 2018
Judgment Approved
Introduction
This is the first defendant's application, dated 27 February 2018, to stay the proceedings on the basis that England is not the most appropriate forum for the determination of the claimant's claim. The second defendant, Chipper Management Limited (“Chipper”) applies to set aside the permission granted by Andrew Baker J to serve it out of the jurisdiction.
The claimant's application to continue the worldwide freezing injunction will be determined following this decision on the defendants' applications.
Claim
In these proceedings the claimant, KMG, a Dutch company, seeks compensation from the defendants in respect of the alleged unlawful dissipation (the “Dissipation”) of assets, shares in a German company, Novero GmbH (“Novero”) owned by a Dutch company, Novero Investments BV (“NIBV”). Novero was owned indirectly, through intermediate companies, by DP Holding SA (“DPH”), a Swiss company (together with its subsidiaries, the “DP group”).
KMG asserts that the Dissipation was orchestrated and/or facilitated by the first defendant (“Ms Chen”) and/or Chipper (amongst others) in order to enrich themselves and/or to remove the Novero asset from the DP group with the aim of preventing KMG from being able to collect under an arbitral award (the “Arbitral Award”) of $200m against DPH.
Background
The Dissipation according to KMG involved the transfer of shares in Novero through a number of entities and ultimately to Laird plc (“Laird”), an English quoted company.
The first transfer out of the DP group is disputed. For present purposes however it is sufficient to note that the shares in Novero were transferred (on the defendants' case) to a Bahamian trust, the Oscul Settlement, in September 2014 and then it appears on the claimant's evidence, transferred to a Bahamian company, Oscul Investment Limited in June 2015 and then to a St Lucian company, Donares Limited, in November 2015 and then to a Barbadian company, Geranium International Limited (“Geranium”), in December 2015 and then to a Luxembourg subsidiary of Geranium, Novero Luxembourg sarl. Laird purchased Geranium and thus indirectly acquired the shares in Novero, the acquisition being completed on 20 January 2016 (I note the submission of counsel for the defendants that only the first transfer out of the DP group is relevant in these proceedings and deal with this below).
Until August 2014 DPH was owned by Mr Patriciu and after his death by his estate (the “Estate”), of which the beneficiaries include his daughters, Ana Patriciu (“AP”) and Maria Patriciu.
In the period 2007–09 KMG acquired from DPH the shares in a Dutch company, The Rompetrol Group NV (“TRG”), and the Arbitral Award which gave rise to these proceedings arose from a dispute between KMG and DPH and the Estate arising out of that acquisition.
The defendants' case is that the following background is also relevant to the applications before the Court: DPH through its Dutch subsidiary, Arch Industries NV (at that time owned by Mr Patriciu) and RIAMO Holdings GmbH (a German company beneficially owned by Mr Olosu) entered into a joint venture (through a company called Rotendo Invest BV) through which Mr Olosu and Mr Patriciu each had a 50% indirect interest in the Novero Group. A dispute arose between the parties (with numerous sets of proceedings being brought by Mr Olosu), and ultimately Mr Patriciu bought the Novero Group on 31 October 2013 (through NIBV) under a supervised Court process in the Netherlands and subject to an independent valuation by an expert valuer, Mr Scheepers.
Ms Chen, joined DPH in 2009 having acted as a consultant on the acquisition of TRG. It is KMG's case that Ms Chen was a key decision maker in DPH and with AP, continues to control DPH.
Chipper is a BVI incorporated company. It is KMG's case that Ms Chen is a director of and controls Chipper. Chipper was a director of Novero but was not appointed until after the transfer in June 2015, being appointed on 25 June 2015.
Personal service of the claim form was effected on Ms Chen on 14 December 2017. Leave to serve proceedings on Chipper out of the jurisdiction was granted by Andrew Baker J on 15 December 2017.
Ms Chen does not dispute the validity of service on her and I proceed on that basis to consider the issue of forum.
Relevant law
It was common ground before me that the following principles apply to an application for a stay on the grounds of forum non conveniens (as set out in the judgment of Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] A.C. 460 at 476):
“In my opinion, having regard to the authorities (including in particular the Scottish authorities), the law can at present be summarised as follows.”
(a) The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.
(b) As Lord Kinnear's formulation of the principle indicates, in general the burden of proof rests on the defendant to persuade the court to exercise its discretion to grant a stay (see, e.g., the Société du Gaz case, 1926 S.C.(H.L.) 13, 21, per Lord Sumner; and Anton, Private International Law (1967) p. 150). It is however of importance to remember that each party will seek to establish the existence of certain matters which will assist him in persuading the court to exercise its discretion in his favour, and that in respect of any such matter the evidential burden will rest on the party who asserts its existence. Furthermore, if the court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial of the action, the burden will then shift to the plaintiff to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in this country (see (f), below).
In my opinion, the burden resting on the defendant is not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum….
d) Since the question is whether there exists some other forum which is clearly more appropriate for the trial of the action, the court will look first to see what factors there are which point in the direction of another forum. These are the factors which Lord Diplock described, in MacShannon's case [1978] A.C. 795, 812, as indicating that justice can be done in the other forum at “substantially less inconvenience or expense.” Having regard to the anxiety expressed in your Lordships' House in the Société du Gaz case, 1926 S.C. (H.L.) 13 concerning the use of the word “convenience” in this context, I respectfully consider that it may be more desirable, now that the English and Scottish principles are regarded as being the same, to adopt the expression used by my noble and learned friend, Lord Keith of Kinkel, in The Abidin Daver [1984] A.C. 398, 415, when he referred to the “natural forum” as being “that with which the action had the most real and substantial connection.” So it is for connecting factors in this sense that the court must first look; and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction (as to which seeCrédit Chimique v. James Scott Engineering Group Ltd., 1982 S.L.T. 131), and the places where the parties respectively reside or carry on business.” [Emphasis added]
The claim
I have before me the particulars of claim and a draft amended particulars of claim. Since the defendants are disputing jurisdiction no consent has been sought by KMG for the proposed amendments, however in determining this application I shall proceed on the basis that the claim is as set out in the draft amended particulars of claim as I did not understand counsel for the defendants to object to this course.
The claim is advanced on 2 bases: firstly a claim in tort under the Dutch Civil Code and secondly a claim under English law asserting an unlawful means conspiracy. The claim under Dutch law is on the basis that under the Rome II Regulation the damage occurred in the Netherlands. The claim under English law would arise if it is clear from all the circumstances of the case that the tort is manifestly more closely connected with England (Article 4(3) of the Rome II Regulation).
The case advanced by KMG is that the shares in Novero were transferred out of NIBV into the name of the various offshore entities which were owned and/or controlled and/or associated with Ms Chen and/or AP. KMG asserts that Ms Chen and AP have “done all they can to conceal their wrongdoing” by dissolving Oscul and Donares (among other things). KMG further asserts that DPH's conduct to resist enforcement is “part and parcel of the strategy devised” by Ms Chen to ensure no substantial funds or assets are left within the DP group against...
To continue reading
Request your trial
-
Dynasty Company for Oil and Gas Trading Ltd v The Kurdistan Regional Government of Iraq
...(QB); [2020] 1 FLR 182Iran, Claim against Empire of (1963) 45 ILR 57Jaffe v Miller (1993) 103 DLR 4th 315KMG International NV v Chen [2018] EWHC 1078 (Comm)Kuwait Airways Corpn v Iraqi Airways Co [1995] 1 Lloyd’s Rep 25, CALG v Rina SpA (Case C-641/18) EU:C:2020:349; [2021] 1 All ER (Comm) ......
-
Shallan Overseas Investments Ltd v Primefuels Investments Ltd
...and others v Rolls Royce Industrial Power (India) Ltd and others [2002] 1 WLR 1269 applied; KMG International NV v Chen and another [2018] EWHC 1078 (Comm) considered; Reeves v Sprecher and others [2007] EWHC 117 (Ch) considered. 3. The risk of inconsistent judgments is a matter of real ......
-
KMG International NV (a company incorporated under the laws of the Netherlands) v Melanie Anne Chen
...and oral submissions. Background 4 The outline facts in this claim are set out in the judgment of this court dated 9 May 2018 [2018] EWHC 1078 (Comm) (the “Forum judgment”) in relation to the defendants' application to stay the proceedings on the basis that England was not the most appropr......