Pankim Kumar Patel v Minerva Services Delaware, Inc.
| Jurisdiction | England & Wales |
| Judge | Lance Ashworth |
| Judgment Date | 28 April 2022 |
| Neutral Citation | [2022] EWHC 970 (Ch) |
| Docket Number | Claim No. BL-2021-001958 |
| Year | 2022 |
| Court | Chancery Division |
[2022] EWHC 970 (Ch)
DEPUTY HIGH COURT JUDGE Lance Ashworth QC
Claim No. BL-2021-001958
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Patrick Harty (instructed by Bark&co Solicitors) for the Claimant
David Halpern QC (instructed by Wordley Partnership) for the First Defendant
William Skjøtt (instructed by Morrisons Solicitors LLP) for the Second and Third Defendants
Hearing dates: 5 th & 6 th April, 2022
APPROVED JUDGMENT
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Lance Ashworth QC
Introduction
I have before me an application made by Minerva Services Delaware Inc (“ MSD”) seeking a proprietary and personal freezing order against the Claimant, Pankim Patel. The application was issued on 4 April 2022 and was argued on 5 and 6 April 2022. I announced my decision at the conclusion of the hearing. These are my reasons for that decision.
Mr David Halpern QC appeared on behalf of MSD and Mr Patrick Harty on behalf of Mr Patel. Mr William Skjøtt was present on behalf of Messrs. Baxendale-Walker and Slater, the Second and Third Defendants, but took no part in this application. I am very grateful to Mr Halpern and Mr Harty for their written and oral submissions, which had to be worked up at some speed in light of the limited notice of the application.
This matter was last before me on 1 and 2 March 2022 when a number of matters were dealt with. 2 of them were applications by MSD for relief from sanctions, moved by Mr Challenger who then appeared for MSD. I set out the background to this matter in my written reasons for granting limited relief but refusing the rest. To better understand this judgment, I repeat that background here.
On 28 October 2021, the Claimant, Mr Patel, issued a Part 8 claim form, seeking “an anti-suit and anti-arbitration injunction” restraining MSD from taking any further steps in an arbitration it had commenced in Delaware (“ the Delaware Arbitration”). A similarly described injunction was sought against the Second and Third Defendants, Messrs. Baxendale-Walker and Slater, restraining them from causing or procuring MSD to take any further steps in the Delaware Arbitration and also restraining Messrs. Baxendale-Walker and Slater from commencing or pursuing any other substantive proceedings arising out of or in connection with the same subject matter. In addition a mandatory injunction was sought for the discontinuation of the arbitration.
The basis for the claim was that the Delaware Arbitration was “vexatious and oppressive and an abuse of the Court's process, England being the proper forum”. The application was supported by a 35-page witness statement from Mr Majid, a solicitor at Bark&co Solicitors on behalf of Mr Patel, with an exhibit running to over 1,400 pages. There were no then current proceedings in England and Wales between MSD and Mr Patel.
The witness statement set out a lot of information in respect of Mr Baxendale-Walker and a number of legal cases he has been involved in previously. It was said that the Delaware Arbitration was brought effectively at his behest, following on from a failed application in this jurisdiction for an injunction by a different company, Bay Mining Consultants Ltd (“ Bay”), which was heard before Tipples J on 30 April 2021. In those proceedings, which had been discontinued in May 2021, Bay had sued as assignee of the benefits of a Deed of Fiduciary Declaration from 2008 (the “ 2008 Deed”) and a Deed of Fiduciary Declaration from 2021 (the “ 2021 Deed”), under which it was claimed that Mr Patel held in excess of £11 million on trust for the principal under the Deeds.
Tipples J had refused an application for an interim freezing order on a number of grounds (to which I will return in due course) including that there was no serious issue to be tried that the assignment of the rights under either of the Deeds of Fiduciary Declarations on which Bay was suing was valid. She held that there had been no compliance with section 53(1)(c) of the Law of Property Act 1925 in respect of the assignment. Tipples J certified the application was totally without merit and ordered that Bay pay Mr Patel's costs of £14,508.
Tipples J was concerned as to the involvement of Mr Baxendale-Walker and Mr Slater in those proceedings and directed that there be a hearing to determine whether a civil restraint order should be made in respect of either of them. Nonetheless, at the further hearing on 14 May 2021, she did not make a civil restraint order in respect of either of them, although she observed that there was or may be a prima facie case that Mr Baxendale-Walker was the real party behind the proceedings, before holding that she did not need to make any finding on that occasion.
Against that background, on 6 August 2021 MSD filed a request for arbitration with the American Arbitration Association effectively seeking to sue on the same Deeds of Fiduciary Declaration for the same sums or at least the majority of the same sums (albeit the claim was put as one for breach of trust and fiduciary duties and it was advanced as a proprietary claim), which had by then purportedly been assigned to MSD under an assignment of June 2021. It is not necessary to go into the detail of that claim for this purpose, save to say that it is not contested that it was in respect of the same sums claimed to have been advanced to Mr Patel and which had been the subject of the English proceedings before Tipples J. It is to be noted that the request for arbitration was supported by a number of declarations by people other than Mr Baxendale-Walker, some of whom he appears to have had some connection with, including Mr Slater.
The reason that the matter had been referred to arbitration was that the 2008 Deed had what was said to be a valid arbitration clause, which allowed the principal to bring arbitration proceedings wherever it chose to do so. As the rights of the principal had purportedly been assigned to MSD, a Delaware corporation, MSD sought to institute arbitration proceedings in Delaware.
Mr Patel challenged the jurisdiction of the arbitrator in Delaware on the basis that there was no enforceable arbitration agreement and made representations on this to the appointed arbitrator. Before the arbitrator had made any ruling on that, Mr Patel issued the Part 8 claim in England seeking the anti-suit injunction described above. The relief sought is extremely wide given its worldwide nature. There was no carve out for proceedings to be brought in England and Wales.
Permission was sought to serve MSD out of the jurisdiction. This was granted by Master Clark on 25 November 2021, who said that any documents in the proceedings, including the Claim Form, could be served on MSD at an address in Delaware by post pursuant to Article 10(a) of the Hague Service Convention. The order went on to provide that MSD had 22 days after service to file an acknowledgment in respect of the Claim Form. The order refers to the Master having read Mr Majid's first witness statement. I have not seen any other materials that were put before the Master, such as a skeleton argument in support, and I do not know whether she had any further materials. What she does not seem to have been told was that there were no other proceedings in England and Wales between MSD and Mr Patel.
For reasons that were debated with counsel at the hearing before me in March, in my judgment in order to be able to seek an anti-suit injunction in a case which does not involve a contract with an exclusive jurisdiction clause in favour of England and Wales, English law requires that the legitimate interest which an anti-suit injunction seeks to protect must be the existence of proceedings in this country which need to be protected by the grant of a restraining order ( Turner v. Grovit [2002] 1 WLR 107 at paragraph [27]). Had this been drawn to the attention of Master Clark, which it was not, she may have declined to grant permission for service out of the jurisdiction.
Before service had been effected against MSD, both the Second and Third Defendants had been served. Their position then and at all times since has been that the decision to bring the Delaware Arbitration was nothing to do with them. They therefore said that they would take the pragmatic approach that the injunctive relief sought against them would not affect them and therefore were content to consent to injunctions against them. Injunctions were made against them by Marcus Smith J on 17 December 2021 in even wider terms, to which they had consented, than those which had been sought in the Part 8 Claim.
It was suggested to me that the hearing before Marcus Smith J was in the interim applications list, which may or may not have been appropriate. As MSD had not been served by then, Marcus Smith J was persuaded to grant permission to serve the Claim Form and all subsequent documents including the order of Master Clark by emailing them to MSD's US attorneys. He ordered that the Claim Form was deemed served on MSD on the date it was emailed and that MSD had 22 days thereafter to file an acknowledgment of service. Again Marcus Smith J was not told that there were no proceedings in existence in this country.
Marcus Smith J went on to direct that a first hearing of the...
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Pankim Kumar Patel v Minerva Services Delaware, Inc.
...proceedings is set out in a judgment of Mr Lance Ashworth KC, sitting as a deputy High Court judge, dated 9 May 2022: reported at [2022] EWHC 970 (Ch). Those interested may refer to both judgments, which set out the background to this matter in fuller 4 In summary, Mr Patel began these pro......