Mad Atelier International B.v v. Mr Axel Manes
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 28 April 2020 |
| Neutral Citation | [2020] EWHC 1014 (Comm) |
| Date | 28 April 2020 |
| Docket Number | Claim No. CL-2019-000250 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 1014 (Comm)
THE HONOURABLE Mr Justice Bryan
Claim No. CL-2019-000250
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF
ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Rolls Building, Fetter Lane
London, EC4A 1NL
Jasbir Dhillon QC and Stewart Chirnside (instructed by Mishcon de Reya LLP) for the Claimant
Graham Chapman QC (instructed by Herbert Smith Freehills LLP) for the Defendant
Hearing dates: 10 and 11 March 2020
Approved Judgment
A Introduction .
A.1 The Applications
The parties appear before the Court on the hearing of the application of the Defendant (“Mr Manès”). He applies to strike out, and/or for summary judgment in respect of, all of or part of the claims of the Claimant (“MAD International”) against him; alternatively, he applies for a case management stay (collectively the “Applications”).
The underlying dispute relates to the breakdown of a joint venture to develop a new brand and restaurant. In the English proceedings, MAD International alleges that Mr Manès breached a 2015 Joint Venture Agreement (the “JVA”). MAD International previously issued proceedings before the Paris Commercial Court to overturn a Share Transfer Contract in connection with this venture against two companies: the first company was owned wholly by Mr Manès, and the second company owned wholly by the first company.
In July 2018, the Paris Commercial Court gave judgment (the “Paris Judgment”) dismissing MAD International's claim, which MAD International has appealed. The appeal is currently pending and a decision is expected in October 2020 (the “French Civil Proceedings”). In April 2019, MAD International issued English proceedings against Mr Manès for breach of the JVA, pursuant to an English jurisdiction clause (the “English Proceedings”).
Mr Manès seeks the following orders:
(1) An order striking out MAD International's Claim Form and Particulars of Claim (dated 11 April 2019 and 10 April 2019 respectively) in whole or in part pursuant to CPR 3.4(2)(a) and/or (b), on the ground that they are an abuse of process because the facts and matters on which MAD International relies have already been heard before, and determined by, the Paris Commercial Court. Mr Manès contends that the abuse of process arises from the fact that the Paris Judgment gives rise to issue estoppels which preclude the pursuit of these proceedings (essentially, a res judicata issue); alternatively, if there is no issue estoppel, the English Proceedings are an abuse of process in the wider sense. This is referred to as the “Abuse Application”.
(2) An order summarily dismissing the claims or some of the claims against Mr Manès pursuant to CPR 3.4(2)(a) and/or CPR 24.2 (the “Strike Out / Summary Judgment Application”):
(a) on the basis that MAD International has no real prospect of succeeding on those claims and there is no other compelling reason why the case should be disposed of at trial. This is on the basis that the Paris Commercial Court has already determined the facts and matters on which MAD International relies.
(b) Alternatively, if any of the claims are found not to be abusive, to strike out and/or summarily dismiss those claims.
(3) In the event that the claims are not struck out in their entirety and/or summary judgment is not given on the claims in their entirety:
(a) For a stay of these proceedings pending the final determination of the French Civil Proceedings (the “Case Management Stay Application”).
(b) Alternatively, an extension of the deadline for filing the Defence until 28 days following the hearing and determination of the Applications. I understand that this is not controversial between the parties.
I deal first with the background facts (A.2) and the law (B.1-B.6) before turning to address the Applications themselves.
A.2 The Background Facts
Mr Manès was, in 2015, the executive chef at the “L'Atelier de Joël Robuchon” restaurant in Paris (the “Paris Restaurant”), which had previously been owned and controlled by the French chef, Joël Robuchon. In 2015, the Paris Restaurant was owned by MAD Atelier S.A.S. (“MAD Atelier”), which in turn was owned by MA Développement S.A.S. (“MA Développement”). At all material times, Mr Manès was the owner and chairman of MA Développement.
Dream International Cooperatief U.A. (“Dream”) is ultimately owned and controlled by Dogus Holding A.S., which is the ultimate parent of a multinational group of companies with interests in the hotel and restaurant industries (the “Dogus Group”).
(1) The Joint Venture
In 2015, Mr Manès and the Dogus Group entered into a joint venture to develop an international franchise of restaurants under the “L'Atelier de Joël Robuchon” brand (the “Joint Venture”).
The Joint Venture was implemented in two stages. The first stage was as follows.
(1) Mr Manès caused MAD International to be incorporated on 26 June 2015 to be the vehicle for the Joint Venture. On incorporation, MAD International was wholly owned by Ragnar Investments Limited (“Ragnar”), a Maltese company wholly owned by Mr Manès at the time.
(2) Marc Padberg (“Mr Padberg”), a senior employee within the Dogus Group, was appointed as statutory director.
(3) On 1 July 2015, MA Développement transferred its shares in MAD Atelier to MAD International for approximately €7.5m.
The second stage was as follows:
(1) On 6 July 2015, Dream acquired 60% of the shares in MAD International from Ragnar for approximately €14.3m based on an enterprise value of approximately €27m.
(2) On the same day, MAD International entered into the JVA with Mr Manès, Dream and Ragnar which set out the terms for, amongst other matters, the ownership and operation of the Paris Restaurant. The JVA is governed by English law, and provides for the courts of England to have exclusive jurisdiction in relation to disputes arising out of or in connection with it.
The overall effect of the Joint Venture was to move MAD Atelier from the control of Mr Manès (through MA Développement), to the full ownership of MAD International, in which Dream held 60% of the shares.
There is a factual dispute as to what happened next:
(1) MAD International's case is that, during the first year, the Paris Restaurant performed well and there were no issues between the parties. The first time that any issues were raised was in an email dated 30 September 2016 from Mr Manès to Mr Akdag (a senior employee of the Dogus Group and a member of the Supervisory Committee appointed by Dream under the JVA).
(2) Mr Manès claims that the Joint Venture ran into difficulties and relations between Mr Manès and the Dogus Group deteriorated.
On 15 June 2016, Mr Manès wrote to MAD International, in his capacity as Chairman of MAD Atelier, giving notice of an annual general meeting of MAD Atelier (the “AGM”) and enclosing various documents including MAD Atelier's annual accounts for the year ending 31 December 2015 (“2015 Annual Accounts”). In early July 2016, Mr Padberg received copies of a document purporting to be the minutes of this AGM signed by Mr Manès. Mr Padberg signed and returned them as requested on 7 July 2016.
(2) The 3 August 2016 Meeting
On 3 August 2016, there was a meeting in Paris (the “3 August Meeting”) attended by Mr Padberg and Mr Manès.
Mr Padberg signed various documents (the “Share Transfer Documents”) which had the effect of transferring MAD International's shares in MAD Atelier (the “Shares”) to MA Développement for €3,096,698. It is not disputed that the following documents were signed:
(1) A share transfer agreement between MAD International and MA Développement dated 3 August 2016, for the transfer of the Shares from MAD International to MA Développement for a consideration of €3,086,698;
(2) A share transfer order dated 3 August 2016 transferring the Shares to MA Développement, and the corresponding CERFA form;
(3) The minutes of the extraordinary general meeting on 3 August 2016 approving the transfer of the Shares to MA Développement; and
(4) A valuation report valuing the Shares at €3,086,698 as at 30 June 2016.
There is a factual dispute as to how this meeting came about:
(1) MAD International claims that, in a telephone call in mid-July 2016 between Mr Manès, Mr Padberg, Mr Beylik (Head of Audit at the Dogus Group) and Mr Akdag, Mr Manès informed Mr Padberg that, notwithstanding that he had already signed the AGM minutes, it was necessary under French law for him to be physically present in Paris to approve the 2015 Annual Accounts in the presence of MAD Atelier's statutory auditor.
(2) Mr Manès claims that, as a result of the breakdown of the joint venture relationship, the parties had agreed that MA Développement would purchase the Shares and the 3 August Meeting was convened for the purpose of executing the necessary documents to give effect to this transfer. Mr Watts, in his second witness statement on behalf of Mr Manès, states that negotiations took place by telephone between Mr Manès and Mr Padberg in June 2015. The existence of such negotiations, and such alleged agreement, is very much in issue between the parties.
MAD International says that, at the end of the 3 August Meeting, Mr Padberg asked for copies of the documents he had signed but Mr Manès refused saying copies would be sent to him later. In fact, the documents were sent to him 4 months later (which is not contested by Mr Manès).
MAD International's case is that the share transfer represented a sale at a significant undervalue, on the basis that:
(1) MAD International had purchased the Shares from MA Développement for €7.5m only just over a year earlier on 1 July 2015.
(2) On 6 July 2015 Dream had paid €14.3m for a 60% shareholding in MAD International when MAD...
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