Linsen International Ltd and Others v Humpuss Transportasi Kimia
| Jurisdiction | England & Wales |
| Judge | LORD NEUBERGER,LORD JUSTICE STANLEY BURNTON |
| Judgment Date | 11 August 2011 |
| Neutral Citation | [2011] EWCA Civ 1042 |
| Docket Number | A3/2011/2048 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 August 2011 |
[2011] EWCA Civ 1042
The Master of the Rolls
(Lord Neuberger of Abbotsbury)
Lord Justice Stanley Burnton
A3/2011/2048
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JUSTICE FLAUX)
Royal Courts of Justice
Strand
London, WC2
MR MICHAEL HOWARD QC and MS SARIA PARUK appeared on behalf of the Applicants
MR JUSTIN FENWICK and MR JAMES WILLAN appeared on behalf of the 3rd, 8th and 13th Respondents
MR ALI MALEK QC and MR CHRISTOPHER HARRIS appeared on behalf of the 11th and 12th Respondents
This is an application made in somewhat unusual circumstances. The claimants entered into contractual arrangements with the first and second defendants, which were subject to arbitration agreements. The claimants then alleged breaches of those contracts, which resulted in arbitrations. Some of those arbitrations have already been determined in favour of the claimants and, being subject to English jurisdiction clauses, the arbitration awards have now been, as it were, converted into orders of the court.
On 17 December 2009 the claimants obtained a worldwide freezing order against the first and second defendants.
The corporate structure involving the first and second defendants and a number of other companies, who are now parties to these proceedings, is complex and is contained in a document which I have as appendix 1 to the skeleton argument of the third to eighth and thirteenth defendants, and I will simply incorporate it as an appendix to this judgment.
The claimants discovered that a transfer of assets has been made between the first defendant and the third defendant. In effect, what happened was that the shares in the fourth, fifth and thirteenth defendants were transferred from the first defendant to the third defendant, and the sixth, seventh and eighth defendants—being one-ship companies—transferred their ships to the third defendant. Thus, in effect the first defendant transferred its directly and indirectly owned assets to the third defendant.
In those circumstances, the claimants applied ex parte for, and obtained from His Honour Judge Mackie QC, sitting as a judge of the Commercial Court, on 10 June 2011, freezing orders against those nine other corporate defendants and against Mr Suharto, the 12th defendant, and against his directly-owned company, the 11th defendant, who for present purposes I am prepared to assume is his alter ego.
The return date for those injunctions was on 5 July 2011, when the matter came on for two days before Flaux J. He would have discharged the injunctions against all but the first and second defendants, "the other defendants", insofar as the underlying claim against the other defendants was based on the proposition that the corporate veil between all the defendants, including Mr Suharto, should be pierced, but in a helpful ruling—because he was not in a position to give a full judgment—dated 13 July 2011 he indicated that he would be prepared to reconsider the possibility of continuing the injunctions against some or all of the other defendants on the basis of the principle, as it is known, in TSB International v Chabra [1992] 1 WLR 231. On that basis, he stood matters over to 19 July. On 19 July, having heard the argument in relation to the Chabra jurisdiction, he decided the issue against the claimants. He again indicated he was not in a position to give a full judgment. It was pointed out to him that he may have left the claimants in limbo, because he was not in a position to give a measured judgment, and there was therefore no final order, and, because the return date in relation to Judge Mackie's order had been arrived at, the injunctions granted by Judge Mackie were effectively discharged.
As I understand it, the Judge pointed out to the claimants, so that they could apply for permission to appeal against his decision not to extend the injunctions granted by Judge Mackie against the other defendants, and in early August, 2 August, the claimants applied in writing for permission to appeal and for renewal of the injunctions in the meantime.
In light of the apparent complexity and the apparent urgency of the matter, I directed on the papers that the matter come before the court this week and in the meantime that the injunctions granted by Judge Mackie should be renewed.
We have now had the benefit of argument as to what should be done in relation to the injunctions granted by Judge Mackie, but effectively discharged by Flaux J.
For my part, I consider that the decision of Flaux J not to renew the injunctions which he refused to renew was correct.
So far as the claimants' case was based on piercing the corporate veil, it seems to me, with due respect to Mr Howard's written and oral arguments, to be plainly unsustainable. The complaint is that one company in the group, the first defendant, has transferred its assets or some of its assets to another company in the same group, the third defendant, partly or wholly for the purpose of avoiding its liability to the claimants. That is the assumption which the judge was prepared to accept as established for...
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