Qatar National Bank (QPSC) v The Owners of the Yacht Force India
Jurisdiction | England & Wales |
Judge | Mr Justice Teare,Mr. Justice Teare |
Judgment Date | 25 March 2020 |
Neutral Citation | [2020] EWHC 719 (Admlty) |
Date | 25 March 2020 |
Docket Number | Case No: AD 2018 000096 |
Court | Queen's Bench Division (Admiralty) |
[2020] EWHC 719 (Admlty)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION ADMIRALTY COURT
ADMIRALRY ACTION IN REM AGAINST
THE YACHT FORCE INDIA
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Teare
Case No: AD 2018 000096
Stephen Du (instructed by Ince Gordon Dadds LLP) for the Claimant
Brian Taylor of Gateley PLC for the Defendant Oliver Caplin (instructed by Cleary Gottlieb Steen & Hamilton LLP) for Cannes Islands SAS
Neil Henderson (instructed by TLT LLP) for the State Bank of India and others
The Admiralty Marshal represented himself
Hearing date: 20 March 2020
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.
On 29 January 2020 the Admiralty Court made an order at the request of the Claimant in this action, Qatar National Bank, that the “Super Yacht” FORCE INDIA be sold. The Admiralty Marshal instructed his broker to sell FORCE INDIA and bids were to be received by 10 March 2020. On that very day the Claimants applied to the Court for an order setting aside the order for sale. The Court declined to do so but suspended the sale to enable a proper hearing to take place on notice to the interested parties. In so doing the court followed the course adopted by Hewson J. in The Acrux [1961] 1 Lloyd's Reports 471. In order to protect the position of the Marshal, his brokers, another claimant with a statutory right of action in rem and the claimants in another action who had obtained a Worldwide Freezing Order which affected FORCE INDIA, the order for sale was only suspended on terms that certain undertakings were given. On 20 March 2020 the Court considered the adjourned application with the benefit of submissions from the interested parties and further evidence. That hearing took place by telephone as a result of the coronavirus crisis. The Court decided to set aside the order for sale. In view of the unusual nature of the application the Court indicated that its reasons would be a given at a later date. These are the Court's reasons.
The Court is particularly grateful to Charles Berthillon, a director of Cannes Islands, for his second witness statement dated 20 March 2020 which was prepared urgently in order to provide the Court with important evidence regarding the genesis of the application to set aside the order for sale.
The background
The Claimant had a mortgage on FORCE INDIA and on 29 January 2020 had obtained judgment against the yacht in respect of the sums secured by that mortgage. Unusually, the mortgage had not been granted as security for a loan to the owner of the yacht to enable him to purchase the yacht. A related company known as Gizmo had borrowed some €27 million in 2008 to finance the acquisition of a company which owned a property in Sainte Marguerite off the coast of France. The mortgage on the yacht was later granted as additional security for that loan. The circumstances in which the mortgage was granted were described in the Court's judgment given on 29 January 2020 at paragraph 3; see [2020] EWHC 103 (Admlty).
On 27 December 2019, prior to the Claimant obtaining judgment in rem against the yacht, Gizmo and Cannes Islands SAS, a subsidiary of a Swiss company in the luxury real estate business, had entered into a memorandum of understanding by which Cannes Islands would purchase the shares in Le Grand Jardin, a wholly owned subsidiary of Gizmo which owned the property in Sainte Marguerite. Cannes Islands has no links with the Owners of FORCE INDIA or with Dr. Mallya, who is said (which allegation is denied) to be the beneficial owner of FORCE INDIA.
Le Grand Jardin had been placed under judicial receivership by the Commercial Court in Cannes on 5 February 2019 and the memorandum of understanding required Cannes Islands and Gizmo to obtain that court's approval to the “continuation plan” for Le Grand Jardin.
The need for an order setting aside the order for sale
On 4 February 2020, that is after the Admiralty Court had ordered the sale of FORCE INDIA, the Commercial Court in Cannes considered the continuation plan. The court expressed reservations that the plan did not sufficiently guarantee the repayment of Le Grand Jardin's liabilities, in particular those owed to the Claimant. As a result of the court's reservations a transaction, the Assignment Agreement, was entered into between Cannes Islands and the Claimant on 6 March 2020. A sum of Euros 17.5 million was to be paid to the Claimant in return for an assignment of contracts and receivables, including an assignment of the charge on the French property and of the mortgage on the yacht. This arrangement was to assure the Cannes Commercial Court that Le Grand...
To continue reading
Request your trial