Maclaine Watson & Company Ltd v International Tin Council

JurisdictionEngland & Wales
Judgment Date1987
Date1987
CourtChancery Division
[CHANCERY DIVISION] MACLAINE WATSON & CO. LTD. v. INTERNATIONAL TIN COUNCIL [1986 M. No. 7362] 1987 April 28, 29, 30; May 1; 13 Millett J.

Company - Receiver - International organisation - Organisation created by treaty - Headquarters of organisation in United Kingdom - Organisation insolvent - Whether jurisdiction in court to appoint receiver by way of equitable execution over organisation's rights against member states - Supreme Court Act 1981 (c. 54), s. 37(1)

Between 29 August and 23 October 1985, the applicants, who were dealing members of the London Metal Exchange, entered into contracts with the International Tin Council (the “I.T.C.”), an international organisation set up by treaty between Great Britain and a number of foreign sovereign states, which was currently constituted under the Sixth International Tin Agreement (the “Agreement”) for the purchase and sale of tin. The I.T.C. defaulted. In an arbitration to which the I.T.C. submitted, the applicants obtained an award in their favour of £6000000 with taxed costs of £7116. The award was not satisfied. Having obtained leave pursuant to section 26 of the Arbitration Act 1950 to enforce the award, the applicants, on 25 November 1986, entered judgment against the I.T.C. for £6024376, inclusive of interest. That judgment remained unsatisfied. By a notice of motion dated 9 December 1986, the applicants sought the appointment, under section 37F1 of the Supreme Court Act 1981 and R.S.C., Ord. 51, r. 1, of a receiver by way of equitable execution over the relevant assets of the I.T.C., which consisted of the right which it was said to have to be indemnified by or demand contributions from member states for its liabilities incurred to the applicants, for the purpose of satisfying the amounts due to them under the judgment which they had obtained. The notice of motion further sought an order that the receiver appointed be empowered, in the I.T.C.'s name, to make formal demands on the member states and to enforce payment, if necessary, by litigation in the English courts. By a notice of motion, as amended, dated 12 February 1987, the I.T.C. applied for the motion of 9 December 1986 to be struck out on the grounds, inter alia, that the court had no jurisdiction to determine the existence or otherwise of the alleged assets over which receivership was sought, namely rights of action against the I.T.C.'s member states, which would involve the interpretation and construction of a treaty between sovereign states, namely the Agreement.

On the hearing of the motions: —

Held, that while the court in principle possessed jurisdiction, not being debarred by any technical objection, to appoint a receiver by way of equitable execution over the relevant assets of the I.T.C., namely its possible claims to be indemnified by or to receive contributions from its member states, and while any such receiver could be given power to bring proceedings in the I.T.C.'s name, the applicants had failed to show any arguable case for contending that the I.T.C. had any cause of action against its members which was not derived from international treaty; that since it was accepted that a cause of action based on an alleged breach of the treaty would not be justiciable in the English courts, the applicants had failed to show that the I.T.C. had an arguable cause of action against the member states capable of being taken over by the receiver and entertained by the court, and their application for the appointment of a receiver must be dismissed (post, pp. 517G–518D, E–F, 519F–H, 521G–H).

Goldschmidt v. Oberrheinische Metallwerke [1906] 1 K.B. 373 and Bourne v. Colodense Ltd. [1985] I.C.R. 291, C.A. applied.

Holmes v. Millage [1893] 1 Q.B. 551, C.A. considered.

The following cases are referred to in the judgment:

Anglo-Italian Bank v. Davies (1878) 9 Ch.D. 275, C.A.

Bonsor v. Musicians' Union [1956] A.C. 104; [1955] 3 W.L.R. 788; [1955] 3 All E.R. 518, H.L.(E.)

Bourne v. Colodense Ltd. [1985] I.C.R. 291, C.A.

Edwards & Co. v. Picard [1909] 2 K.B. 903, C.A.

Goldschmidt v. Oberrheinische Metallwerke [1906] 1 K.B. 373, C.A.

Harris v. Beauchamp Brothers [1894] 1 Q.B. 801, C.A.

Holmes v. Millage [1893] 1 Q.B. 551, C.A.

International Tin Council, In re [1987] 2 W.L.R. 1229, [1987] 1 All E.R. 890

Johnson v. Diamond (1855) 24 L.J.Ex. 217

Manchester and Liverpool District Banking Co. Ltd. v. Parkinson (1888) 22 Q.B.D. 173, C.A.

Maspons y Hermano v. Mildred Goyeneche & Co. (1882) 9 Q.B.D. 530, C.A.

Morgan v. Hart [1914] 2 K.B. 183, C.A.

Royal Bank of Australia, In re, Robinson's Executor's Case (1856) 6 De G.M. & G. 572

Sea Fire and Life Assurance Co., In re, Greenwood's Case (1854) 3 De G.M. & G. 459

Shephard, In re (1889) 43 Ch.D. 131, C.A.

Westhead v. Riley (1883) 25 Ch.D. 413

The following additional cases were cited in argument:

Adams v. Adams (Attorney-General intervening) [1971] P. 188; [1970] 3 W.L.R. 934; [1970] 3 All E.R. 572

Alcom Ltd. v. Republic of Columbia [1984] A.C. 580; [1983] 2 W.L.R. 750; [1984] 2 All E.R. 6, H.L.(E.)

Birmingham and District Land Co. v. London and North Western Railway Co. (1888) 40 Ch.D. 268, C.A.

Blackman v. Fysh [1892] 3 Ch. 209, C.A.

Bull (Henry) & Co. v. Murphy (1900) 21 N.S.W.(Eq.) 1

Buttes Gas and Oil Co. v. Hammer (No. 3) [1982] A.C. 888; [1981] 3 W.L.R. 787; [1981] 3 All E.R. 616, H.L.(E.)

Cadogan v. Lyric Theatre Ltd. [1894] 3 Ch. 338, C.A.

Central Bank v. Ellis (1896) 27 O.R. 583

Congreso del Partido, I [1983] 1 A.C. 244; [1981] 3 W.L.R. 328; [1981] 2 All E.R. 1064, H.L.(E.)

Douglas, Heron & Co. v. Hair (1778) 33 Mor. Dict. 14605

Dreyfus v. Inland Revenue Commissioners (1929) 14 T.C. 560, C.A.

Forsyth (William) v. Hare (John) & Co., 1834 S.C. 42

Godman v. Winterton (1940) Vol. II Annual Digest and Reports of Public International Law Cases, 205

Hart v. Emelkirk Ltd. [1983] 1 W.L.R. 1289; [1983] 3 All E.R. 15

Imperial Bank of Canada v. Motton (1897) 29 N.S.R. 368

Joachimson v. Swiss Bank Corporation [1921] 3 K.B. 110, C.A.

Levermore v. Levermore [1979] 1 W.L.R. 1277; [1980] 1 All E.R. 1

National Bank of Greece and Athens S.A. v. Metliss [1958] A.C. 509; [1957] 3 W.L.R. 1056; [1957] 3 All E.R. 608, H.L.(E.)

Nissan v. Attorney-General [1970] A.C. 179; [1969] 2 W.L.R. 926; [1969] 1 All E.R. 629, H.L.(E.)

Pooley v. Driver (1876) 5 Ch.D. 458

Potts, In re, Ex parte Taylor [1893] 1 Q.B. 648, C.A.

Salomon v. Salomon & Co. Ltd. [1897] A.C. 22, H.L.(E.)

Sheffield Corporation v. Barclay [1905] A.C. 392, H.L.(E.)

Telfair Shipping Corporation v. Inersea Carriers S.A. [1985] 1 W.L.R. 553; [1985] 1 All E.R. 243

Trendtex Trading Corporation v. Central Bank of Nigeria [1977] Q.B. 529; [1977] 2 W.L.R. 356; [1977] 2 All E.R. 881, C.A.

Von Hellfeld v. E. Rechnitzer and Mayer Freres & Co. [1914] 1 Ch 748, C.A.

Walker v. Baird [1892] A.C. 491, P.C.

Willows v. Ball (1806) 2 Bos. & Pul. (N.S.) 376

MOTIONS

By a notice of motion dated 9 December 1986, the applicants, Maclaine Watson & Co. Ltd., sought against the respondents, the International Tin Council (the “I.T.C.”) the following relief, viz. (1) An order that Michael Anthony Jordan of Shelley House, 3 Noble Street, London E.C.2 or some other fit and proper person might be appointed receiver by way of equitable execution over those assets of the I.T.C. comprising the right of the I.T.C. to be indemnified by contributions from member governments for its liabilities incurred to the applicants, for the purpose of satisfying the amounts due to them under the judgment entered in the Queen's Bench Division (Commercial Court), (1986 M. No. 5388) on 13 November 1986; (2) an order that the receiver be empowered to make formal demand on the member states of the I.TC to demand contributions from and/or to indemnify it for the liabilities incurred to the applicants; (3) an order that the receiver be granted liberty to apply for such further or other directions and orders as he might be advised; (4) all necessary or consequential directions and orders, including directions as to the hearing of the applications by the I.T.C. for orders that the applicants' motion be struck out and costs.

By a notice of motion dated 12 February 1987 (as amended), the I.T.C. moved that the application of 9 December by the applicants, be struck out or dismissed on the following grounds: (1) that it required determination of issues that were not justiciable in that the court, which had no jurisdiction to determine the existence or otherwise of the alleged assets over which receivership was sought, namely an alleged right or rights of action against member states of the I.T.C., which determination would involve the interpretation and construction of a treaty made between sovereign states. (2) The I.T.C. was immune from suit and legal process and, on the true construction of article 6(1) of the International Tin Council (Immunities and Privileges) Order 1972, not subject to the receivership jurisdiction of the court. (3) The appointment of a receiver of any such assets as alleged in the applicants' notice of motion would involve interference with the rights, privileges and functions of the I.T.C. whose status was that of an international organisation established by sovereign states and recognised under international law. (4) The appointment of a receiver would involve interference with and/or the interpretation of and/or adjudication upon international treaty-based transactions between, and the rights and obligations of, independent sovereign states. (4A) The court had no jurisdiction in any event to appoint a receiver either for the purpose of creating an asset (as by making a demand for contribution or indemnity) or in respect of an alleged right to exercise a power to make such a demand. (4B) Further, in any event the court had no jurisdiction to appoint a receiver by way of equitable relief except where the interest of the judgment debtor in the alleged asset was an equitable interest only which, if it had been a legal interest, could have been...

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