Qatar Investment and Projects Development Holding Company v Phoenix Ancient Art S.A.
| Jurisdiction | England & Wales |
| Judge | Andrew Burns |
| Judgment Date | 20 July 2023 |
| Neutral Citation | [2023] EWHC 1916 (KB) |
| Year | 2023 |
| Court | King's Bench Division |
| Docket Number | Case No: QB-2020-003721 |
[2023] EWHC 1916 (KB)
Andrew Burns KC
(Sitting as a Deputy Judge of the High Court)
Case No: QB-2020-003721
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Roger Stewart KC and Marie-Claire O'Kane (instructed by Pinsent Masons LLP) for the Claimants
Gilead Cooper KC and Francesca Mitchell (instructed by Herrington Carmichael LLP) for the First, Second and Third Defendants
Hearing date: 18 th July 2023
Andrew Burns KC (Sitting as a Deputy Judge of the High Court):
Introduction
This is the Claimants' partly adjourned application to make substantial amendments to their particulars of claim to add claims for deceit, fraudulent misrepresentation and unlawful means conspiracy against the Defendants.
The Claimants are Qatar Investment and Project Holding Co (“QIPCO”) and its Chief Executive Officer, Sheikh Hamad. In 2013 QIPCO purchased through its English agents Pinsent Masons, a chalcedony statuette of the figure Nike (the “Nike”). It was purchased from the First Defendant (“Phoenix”). The Nike was sold for US$2.2m under the terms of a Sale and Purchase Agreement dated 13 May 2013 (“the SPA”). The SPA was subject to English law and jurisdiction. It provided for completion of the purchase once QIPCO's expert had inspected the Nike in New York, with Pinsent Masons transferring the purchase money from England to its agent in New York and ownership passing to QIPCO when Pinsent Masons authorised the release of the funds and the Nike was collected by QIPCO's agent in New York.
The Claimants sought to add three new defendants and by these amendments bring against them the new claims of deceit, fraud and conspiracy. The new defendants joined and served by order of Master McCloud dated 30 March 2023 are:
a. The Second Defendant, Mr Ali Aboutaam, the co-founder and President of Phoenix, who was based in Geneva, Switzerland;
b. His brother the Third Defendant, Mr Hicham Aboutaam, who was the other co-founder of Phoenix, and sole owner of Electrum, Phoenix's agent in New York; and
c. The Fourth Defendant, Mr Roland Ansermet, a Swiss dealer of antiquities who supports the provenance of the Nike by giving evidence that he bought it in 1982 and sold it to Phoenix's agent, Tanis Antiquities Ltd.
Background to the Claim
The Schedule 1 of the SPA described the Nike as a “Byzantine Chalcedony Statuette of a Nike – Victory, Period: circa 400 – 500 AD” and in the attached report it was described as “Presumed origin and period Early Byzantine, 5 th Century AD”. The Schedule gave the following provenance for the Work: “Phoenix Gallery Ancient Art S.A., Geneva, Switzerland, Ex Collection Ansermet — Acquired in 1982”.
In or around early 2018, the Claimants raised concerns with Phoenix as to the authenticity of the Nike. They had received a report stating that microscopic inspection had detected modern machine tool markings and machine polishing. Attempts to resolve the dispute were unsuccessful despite a standstill agreement dated 7 May 2019 which was terminated on 8 October 2020.
The Claimants issued the claim on 22 October 2020 and served Phoenix with the Claim Form and Particulars of Claim. Phoenix served its Defence on 2 February 2021 and the Claimants served their Reply on 31 March 2021. Phoenix served a Re-Amended Defence dated 24 September 2021; and the Claimants served a Re-Amended Reply dated 13 October 2021. Further steps were taken with a trial listed for 2023 including a stay for ADR in 2022.
On 8 March 2023 Master McCloud held a Pre-Trial Review at which the Claimants applied for permission to amend the Claim Form and Particulars of Claim to add the Second, Third and Fourth Defendants. She gave permission to join the Second, Third and Fourth Defendants respectively and serve the Amended Claim Form and Particulars of Claim, without prejudice to their rights to challenge jurisdiction and the proposed amendments.
Master McCloud postponed the trial to 11 days in early 2024 and listed a hearing on 23 June for the amendments to be challenged and made directions for exchange of evidence for that hearing. She adjourned that hearing to give more time for the Fourth Defendant to be served and the application comes before me today. Despite attempts to chase, the Claimants have not received confirmation that the Fourth Defendant has been served out of the jurisdiction, but the other parties invited me to proceed with the application. I agree that it is appropriate to proceed today having regard to the trial listed to commence in January 2024.
In the unamended case there were essentially, two key issues: first whether the Nike was authentic and if not, whether Phoenix was in breach of express or implied terms of the SPA and/or guilty of negligence. The Claimants contended that the Nike was manufactured in modern times and claim damages for breach of duty under contract and/or tort and/or under s. 2 of the Misrepresentation Act 1967. In its Re-Amended Defence Phoenix maintains that the Nike is a genuine Byzantine treasure but, in any event, Phoenix denies that it is in breach of any term of the contract or negligent. It is also denied that the Claimants relied on, or were entitled to rely on, any statement by Phoenix as a basis for believing that the Nike was authentic. Phoenix plead a term of the SPA excluding liability for negligent misrepresentation and asserts that the Claimants relied on the expertise of their own expert in buying the Nike.
The Proposed Amendments
The proposed Amended Particulars of Claim introduces reformulated claims for breach of contract and negligence and pleads deceit by fraudulent misrepresentation and/or unlawful means conspiracy against the Defendants.
As the Fourth Defendant has not yet been served and so does not appear, the conclusions I reach and the orders that I make are without prejudice to the Fourth Defendant's right to object. The First to Third Defendants are represented by Mr Cooper KC and Ms Mitchell who have helpfully provided a document indicating the proposed amendments to which their clients take objection and the ones to which they do not object. The amendments which are not challenged are largely clarifications or particularisation of the existing case of breach of contract, negligence and negligent misrepresentation. They are appropriate amendments and I grant permission for those amendments on that basis. I also permit the Claimants to amend paragraph 31 of the Amended Particulars of Claim by inserting a missing ‘not’ as that typographical error was identified during the course of the hearing.
The rest of the amendments are contested. Apart from one amendment, all the contested amendments are to add claims of deceit by fraudulent misrepresentation and/or unlawful means conspiracy against the Defendants. The outlier amendment I can deal with first.
Paragraph 28 of the Amended Particulars of Claim
The Claimants apply to amend paragraph 28 to add the underlined words as follows:
“QIPCO is entitled to and claims damages for Phoenix's breach of duty (in contract and/or tort), amounting to the difference between the value of the Work had it conformed to the contract of sale and had a genuine provenance (US$2.2m) and its actual value (zero). For the avoidance of doubt, the Claimants' case (for the purpose of all claims against all Defendants – as to which see also paragraphs 29A to 29F below) is that the Work is valueless because it is inauthentic and/or because it has a false provenance. The sterling equivalent of US$2.2m at 13 May 2013 was 1,433,740. The source for the exchange rate used is the daily spot rate of the Bank of England on this date.”
Discretionary factors
It is agreed that this amendment raises a straightforward question of discretion. Under CPR r.17.1(2) “If his statement of case has been served, a party may amend it only – (a) with the written consent of all the other parties; or (b) with the permission of the court.” I adopt and apply the principles helpfully summarised in Quah Ling v Goldman Sachs [2015] EWHC 759 (Comm) at [38]. In particular I note the importance of the overriding objective and the balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted. As trial is not until the end of January 2024 these are classed as late but not ‘very late’ amendments. I bear in mind that lateness is a relative concept and that costs may not always be an adequate compensation. Lateness may require the parties to revisit significant steps in the litigation. I have to look to the Claimants for a good explanation for any delay and any non-compliance with the Civil Procedure Rules or directions of the Court as the wider public interest requires the Court must ensure that other litigants can obtain justice efficiently and proportionately. A good explanation is one of the factors to be considered in the balance.
The overriding objective is to enable the Court to deal with cases justly and at proportionate cost. Amendments may be refused if they result in a disproportionate and unjustified addition of costs or Court time or if allowing them would be disproportionate to the amount of money at stake or the importance of the issues in the case. I have been asked to consider the financial position of each party. I accept that the Claimants are very wealthy, but I have no evidence before me about the financial situation of the Defendants or whether there would be financial prejudice to them by permitting the amendments.
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