Maroil Trading, Inc. and another v Cally Shipholdings, Inc. and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 07 November 2019 |
| Neutral Citation | [2019] EWHC 2949 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL 2018 000824 |
| Date | 07 November 2019 |
[2019] EWHC 2949 (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
Mr. Justice Teare
Case No: CL 2018 000824
Thomas Grant QC and James Kinman (instructed by Grosvenor Law) for the Claimants
Jonathan Gaisman QC and Keir Howie (instructed by Reed Smith LLP) for the Defendants
Hearing date: 29 October 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
There are before the court (a) an application by the Claimants for summary judgment or strike out of certain allegations made by the Defendants and (b) an application by the Defendants for permission to re-amend their Points of Defence. Although the present action was issued in 2018 the parties have been involved in litigation with each other since 2006.
The procedural history leading up to the applications before the court has been described by the Claimants as “moderately complicated” and by the Defendants as “complicated”. The history involves a number of claims, judgments and settlements. It suffices to state the following, which I take, in the main, from the Defendants' skeleton argument:
i) The Claimants are owned and controlled by Mr. Wilmer Ruperti, a Venezuelan businessman.
ii) In 2006 the Defendants (described in the Claimants' skeleton argument as a collection of shipping companies) brought an action against Mr. Ruperti and others alleging the taking of secret profits. In 2012 they obtained judgment for about US$78 million. In September 2013 a settlement was concluded under which Mr. Ruperti was required to pay US$40 million by instalments.
iii) The Defendants began enforcement proceedings in England, Florida and Switzerland. The last of those involved a criminal prosecution in the course of which the Swiss public prosecutor obtained disclosure of certain documents which he provided to the Defendants. They included a Payment Agreement dated December 2014 between the Claimants and PDVSA, the Venezuelan state-owned oil company, pursuant to which substantial sums were to be paid by PDVSA to the Claimants.
iv) In March 2015 Mr. Ruperti paid US$25.5 million to the Defendants under the September 2013 settlement agreement.
v) A dispute arose as to whether Mr. Ruperti had discharged his debt to the Defendants, which dispute was resolved in favour of Mr. Ruperti by Andrew Smith J. in April 2015.
vi) Permission to appeal was granted by Longmore LJ but in September 2016 the appeal was compromised by another settlement agreement.
vii) The Claimants' claim in these proceedings is brought under the confidentiality provisions in the 2016 settlement agreement (in particular clause 7.3) which provide as follows:
“7. Confidentiality
7.1 Save to the extent required by law, applicable regulation (including any disclosure required in company financial statements) or for the purpose of enforcing this Agreement, the Parties agree to keep confidential the existence and terms of this Agreement, the background and negotiations leading to it and any correspondence or other documents recording such background and negotiations (the “ Confidential Information”). No disclosure of Confidential Information shall be made without the prior written consent of the other Parties, such consent not to be unreasonably withheld.
7.2 The Novoship Companies acknowledge that they, including their advisors, lawyers and investigators, have obtained information during the course of the London Proceedings, the Florida Proceedings and the Swiss Proceedings concerning the Ruperti Parties and the Released Parties, which is private and sensitive, including personal, financial and business information (the “ Sensitive Information”).
7.3 The Novoship Companies undertake that they, their servants, agents, advisers and investigators will keep all the Sensitive Information confidential and will not use or disclose Sensitive Information without the prior written consent of Mr. Ruperti save to the extent required by law.
7.4 Each of the Parties shall assert claims to common interest privilege and/or legal professional privilege and/or confidentiality over any Confidential Information or Sensitive Information to the maximum extent permissible by law and shall notify the disclosing Party of any breach or suspected breach of this clause by any person as soon as it becomes aware of it and shall comply with any reasonable request by the disclosing Party to prevent or restrain a breach or suspected breach of this Agreement or any infringement or suspected infringement, whether by court proceedings or otherwise. Nothing in this Agreement and no action taken pursuant to this Agreement shall be taken as waiving any claim by any Party to privilege over any of the Confidential Information or Sensitive Information. No Party shall have the authority to waive any applicable privilege on behalf of the other Parties, nor shall any waiver of an applicable privilege by the conduct of any one Party be construed to apply to the other Parties.
7.5 Each Party hereby irrevocably consents to the other Parties disclosing the terms of this Agreement to their shareholders, legal representatives, auditors, accountants, insurance brokers or other relevant professional advisers and to their insurers, provided in each case that the recipient of the disclosure undertakes to keep those terms confidential subject to the qualifications set out in Clause 7.1.
7.6 Where there has been publication of the Confidential or Sensitive Information in the press or other media, the Parties shall be released from the obligations set out in this clause to the extent necessary to comment on the Confidential or Sensitive Information so published in order to protect the reputation of the Party making the comment or to correct or clarify any misinformation that has been published or in order to cause the publication of a rebuttal. For the avoidance of doubt, where the initial publication of the Confidential or Sensitive Information was made with the consent or co-operation of any Party, that Party shall not be released from the obligations set out in this clause nor from any liability to any other Parties for any breach of such obligations.
7.7 To the extent permitted by law none of the Parties to this Agreement will make any public or private statement that is critical or disparaging of any other Parties.
7.8 Provided Completion has occurred, the Parties' rights and obligations under this clause shall continue in full force and effect notwithstanding the termination of this Agreement for any reason whatsoever.”
viii) In October 2016 a Mr. Hall provided to a Mr. Sargeant copies of documents obtained in the Swiss enforcement proceedings, including the Payment Agreement. Mr. Hall had been engaged by the Defendants in February 2014 to investigate Mr. Ruperti's assets and had obtained copies of the documents in that capacity. However, when he provided copies to Mr. Sargeant he was acting for another client, Mr. Mohammed Al-Saleh, and was no longer acting for the Defendants. (This is not common ground but for the purposes of the present applications it must be assumed to be the case.) There is evidence that in return for the copies Mr. Sargeant provided Mr. Hall with a video of Mr. Sargeant's brother engaged in sexual acts. Mr. Sargeant's brother was in dispute with Mr. Al-Saleh.
ix) The documents provided to Mr. Sargeant led to further proceedings against the Claimants brought by Mr. Sargeant's company, Latin American Investments Limited and another company. In those proceedings it was alleged that by receiving payments from PDVSA the Claimants, who were in a joint venture with Latin American, had made secret profits. A Worldwide Freezing Order (for sums collectively totalling about US$83 million) was obtained and in November 2017 the claims were settled by the Claimants who agreed to pay a substantial sum in three tranches. It is said that only the first tranche was paid, and that a further settlement was concluded thereafter, under which additional payments have been made.
x) The present proceedings have been brought by the Claimants against the Defendants. They allege that when Mr. Hall provided the documents to Mr. Sargeant there was a breach by the Defendants of the 2016 settlement agreement, in particular of clause 7.3, entitling the Claimants to damages in the amount of their liability to Latin American as settled, the costs of those proceedings and the losses caused to the Claimants by the Worldwide Freezing Order. The Defendants deny any breach or liability to the Claimants.
It is against that background that the Claimants have issued an application for summary judgment or strike-out and the Defendants have sought permission to re-amend their defence.
There are three issues for the court to determine. In essence they are:
i) Is there a real issue to be tried that, as contended by the Defendants, the disclosure of the Payment Agreement was not a breach of the 2016 settlement agreement because it had ceased to be a private document in April 2015 when it was referred to in evidence before Andrew Smith J. and in his judgment;
ii) Is there a real issue to be tried that there can be no breach of the 2016 settlement agreement for disclosure made by Mr. Hall when he was not acting as the Defendants' agent or investigator;
iii) Is there a real issue to be tried that, if the Claimants were in truth liable to Latin American, there was a public interest in the Swiss Proceedings Documents being disclosed such that there has been no breach of the 2016 settlement agreement, or at any rate no enforceable...
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