Masri v Consolidated Contractors International (UK) Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CRESSWELL,MRS JUSTICE GLOSTER, DBE,Mrs Justice Gloster, DBE,MR JUSTICE DAVID STEEL,Mr Justice David Steel,THE HON. MR JUSTICE TOMLINSON |
| Judgment Date | 21 October 2010 |
| Neutral Citation | [2008] EWHC 2221 (Comm),[2007] EWHC 468 (Comm),[2010] EWHC 2458 (Comm),[2008] EWHC 2492 (Comm),[2010] EWHC 2640 (Comm),[2008] EWHC 1159 (Comm),[2005] EWHC 944 (Comm) |
| Docket Number | Case Nos: 2004 FOLIO 124 and 2004 FOLIO 831,Case No: 2004 Folios 124 & 831,Case No: 2004-124,CLAIM NO: 2004 FOLI0 124 & 831,Case No: 2004 FOLIO 124 AND 831,Case No: 2004 FOLIO 124,Case No: 2004 Folios 124 and 831 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 21 October 2010 |
[2005] EWHC 944 (Comm)
Mr Justice Cresswell
Case Nos: 2004 FOLIO 124 and 2004 FOLIO 831
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Jonathan Sumption QC and Mr Simon Salzedo (instructed by Simmons and Simmons) for the Claimant
Mr Charles Aldous QC and Mr Simon Birt (instructed by Herbert Smith LLP) for the Defendant
Hearing dates:
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.
Mr. Justice Cresswell:
INTRODUCTION
The facts set out in this Introduction have not been fully investigated and are taken from the written evidence before the court as being those which can be accepted for the purposes of the present applications only.
The claimant ("Mr. Masri") resides in Jordan. In both actions, he seeks damages in respect of the alleged non-performance of a written contract he entered into on 6 November 1992 ("the 1992 Agreement").
The corporate defendants are companies in the Consolidated Contractors Group of Companies ("the Group"):
(1) The holding company is Consolidated Contractors Group SAL Holding Company ("CC Holding"), a company incorporated in Lebanon.
(2) Consolidated Contractors International Company SAL ("CCIC") is a Lebanese company with its principal office in Greece.
(3) Consolidated Contractors International (UK) Ltd ("CCUK") and Consolidated Contractors (Oil and Gas) SAL ("CC Oil & Gas") are group subsidiaries incorporated in England and Lebanon respectively.
Mr. Said Khoury is a co-founder of the Group. He is President of CCIC and of CC Holding. Mr. Khoury is domiciled in Greece.
The 1992 Agreement relates to rights in an oil field in South Yemen, known as the Masila Block or Masila Concession ("the Concession"). The relevant oil interest—a 10% interest in the Concession—was initially held by CCIC. It was agreed to be assigned to CC Oil & Gas by an assignment dated 25 October 1992. The defendants contend that CCIC still held the interest at the time of the 1992 Agreement because the assignment had not then taken effect. Mr. Masri contends that the assignment was effective on 25 October 1992 so that by the time of the November 1992 Agreement, the relevant interest had passed to CC Oil & Gas. The interest is currently held by CC Oil & Gas.
The 1992 Agreement was signed by Mr. Masri and Mr. Khoury. Mr. Masri was himself a party to the 1992 Agreement. The identity of the party on whose behalf Mr. Khoury was acting when he signed the 1992 Agreement is in dispute:
(1) The defendants say that the contracting party was CCIC.
(2) Mr. Masri says that the contracting party was CCUK. In the alternative, Mr. Masri contends that the contracting party was CC Holding, or, in the further alternative, CCIC, CC Oil & Gas or Mr. Khoury.
In the First Action (2004 Folio 124), Mr. Masri claimed against CCUK, alternatively CC Holding. Mr. Masri has discontinued the claim in the First Action against CC Holding.
In the Second Action (2004 Folio 831), Mr. Masri claims in the alternative against Mr. Khoury, CC Holding, CCIC and CC Oil & Gas.
CCUK applies for summary judgment in the First Action and for an order that the claim against CCUK in the First Action be dismissed.
The defendants to the Second Action, who are all out of the jurisdiction, submit that there is no justification for proceedings in England, and each of these parties therefore contests the jurisdiction of this court. Mr. Khoury and CCIC are both domiciled in Greece. Mr Masri served the claim form on them in Greece, without the permission of the court, pursuant to Council Regulation (EC) No 44/2001 ("the Brussels Regulation"). CC Holding and CC Oil & Gas are both incorporated in Lebanon. Mr. Masri obtained (without notice) permission to serve these companies out of the jurisdiction pursuant to CPR 6.20.
In October 1985, Consolidated Contractors International Company Limited ("CCIC Ltd"), a Liberian company which was a member of the Group until its dissolution in March 1987, entered into a Memorandum of Understanding ("the MoU") with Canadian Occidental Petroleum Limited ("CanOxy") (which is now called Nexen), pursuant to which they agreed to associate in an endeavour to obtain a mutually satisfactory agreement with the People's Democratic Republic of Yemen permitting oil and gas operations in the Masila Block. Under the terms of the MoU, the parties agreed that CanOxy would have a 60% interest and that CCIC Ltd would have a 40% interest in any contract area so obtained.
Between 1984 and 1986, CCIC acquired the assets of and liabilities of CCIC Ltd, as part of a general group restructuring. CCIC Ltd was subsequently dissolved on 6 March 1987.
On 15 September 1986, CanOxy and CCIC entered into an Agreement for Petroleum Exploration and Production in the Masila Block with the Ministry of Energy and Minerals of the People's Democratic Republic of Yemen ("the PSA"), pursuant to which CanOxy and CCIC were granted the exclusive right to conduct petroleum operations in the Masila Block during the term of the PSA. The PSA became effective on 15 March 1987, when the South Yemeni parliament ratified it.
It is Mr. Masri's case (which is disputed by the defendants) that he assisted the Group to obtain this interest in the Concession, and that in late 1985 and in compensation for his services Mr. Sabbagh (one of the other founders of the Group) orally granted him an interest amounting to 25% of the Group's 40% interest in the Concession.
On 6 April 1988, CanOxy and CCIC entered into a Joint Operating Agreement in respect of their interest in the Concession ("the JOA"), the term of which was expressed to be coincident with the PSA. Under this agreement, the parties again agreed that ownership of the Concession would be split 60% to CanOxy and 40% to CCIC.
Mr. Masri alleges he had a further meeting with Mr. Sabbagh at CCUK's offices in London, prior to which he was given a report on the status of the project prepared by Mr. Brawley and at which he and Mr. Sabbagh initialled a document dated 3 July 1991 recording that Mr. Masri's share of the Concession would be 1.5%.
Thereafter, CCIC farmed out 30% of its 40% interest in the Concession to Pecten Yemen Company and Oxy Yemen respectively.
Mr Nakhleh sent Mr. Masri a statement of cash calls paid by CCIC in respect of the Concession, requesting Mr. Masri to transfer US$ 2,210,263.75 to CCIC's account with the Arab Bank in London. This sum represented 10% of the total cash calls paid by CCIC from 30 April 1992 to 31 October 1992, plus interest. The letter was dated 24 October 1992, though Mr. Masri contends that he did not receive it prior to signing the 1992 Agreement on 6 November. The letter was on CCIC's headed paper, and was signed by Mr. Nakhleh as "Group Financial Controller Finance and Administration".
On 25 October 1992, Mr. Khoury (acting on behalf of CC Oil & Gas) signed an Assignment Agreement and Deed of Assignment between CCIC and CC Oil & Gas pursuant to which CCIC agreed to assign to CC Oil & Gas its remaining 10% interest in the Concession. The defendants contend that this assignment did not take effect until February 1993 at the earliest. Mr. Masri contends that it took effect immediately in accordance with its terms.
On 6 November 1992 Mr. Masri met with Mr. Khoury at CCUK's offices in London. At this meeting it was agreed that a memorandum should be written recording the parties' agreement that he should receive a 1% participation in the Concession. The 1992 Agreement was subsequently prepared for Mr. Khoury by Mr. Brawley of CCUK, typed onto CCUK headed notepaper, and later on the same day was signed by both Mr. Khoury and Mr. Masri, at a meeting that took place at Mr. Khoury's house in London.
At the time he signed the 1992 Agreement, Mr. Khoury was a director and authorized signatory of both CCIC and CC Oil & Gas. He was not however (and has never been) a director or direct shareholder of CCUK. The defendants contend that Mr. Khoury had no authority to contract on behalf of CCUK. Mr. Masri contends that he did not know that Mr. Khoury had not been appointed a director or signatory of CCUK. Mr. Masri also contends that Mr. Khoury was clothed with such authority by CCUK despite any lack of formal appointment.
THE 1992 AGREEMENT
The 1992 Agreement was in the following terms: —
"[Logo—CCC] CONSOLIDATED CONTRACTORS INTERNATIONAL (UK) LTD
SILVER CITY HOUSE, 62 BROMPTON ROAD, LONDON, SW3 1BW
MEMORANDUM
TO: MR MUNIB MASRI
FROM: MR SAID KHOURY
DATE: 6 NOVEMBER 1992
This is to define the principles of participation of Munib Masri (MASRI) in CCC's interest in the Masila Block in Yemen.
Basic principle is for Masri to receive 10% of CCC's 10% interest or a 1% overall interest in the Block for Masri subject to the following conditions, payments and adjustments:
1. Masri is to pay 10% of Masila Block Development costs which are paid by CCC.
2. Masri is to pay 10% of Masila Operating costs assessed to CCC.
3 …
4. Masri shall pay 10% of CCC's share of Bonus and Training payments required under the Production Sharing Agreement (PSA). …
In consideration for the payments and participation of Masri as described above, Masri shall be entitled to the following when and if received by CCC. (Based on actual net receipts by CCC, i.e. after payment of marketing and other costs).
A. 10% of CCC's share of...
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