Sberbank of Russia v Ante Ramljak
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 21 February 2018 |
| Neutral Citation | [2018] EWHC 348 (Ch) |
| Date | 21 February 2018 |
| Court | Chancery Division |
| Docket Number | CR-2017-005571 |
[2018] EWHC 348 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMPANIES COURT (ChD)
Royal Courts of Justice
Rolls Building, Fetter Lane
London, EC4A 1NL
HHJ Paul Matthews
(sitting as a Judge of the High Court)
CR-2017-005571
In the Matter of Agrokor D.D.
And in the Matter of the Cross-Border Insolvency Regulations 2006
David Allison QC and Adam Al-Attar (Instructed by Linklaters LLP) appeared on behalf of the Applicant
Tom Smith QC and William Willson (Instructed by Kirkland & Ellis International LLP) appeared on behalf of the Respondent
Wednesday, 21 February 2018
(2.04 pm)
JUDGEIn the course of this application for a variation of the stay automatically granted by virtue of the order which I have already made, recognising certain proceedings in Croatia as a main proceeding for the purposes of the Cross Border Insolvency Regulations, I have been treated to an interesting argument about the meaning of an undertaking which was given at an early stage in the litigation. The parties came before Mr Justice Barling on 3 August 2017, shortly after the original application had been issued on, I think, 28 July 2017. They effectively agreed an order which was put to the judge for his approval, and he duly approved it. The terms of the order are important, and in particular the recitals to it.
The order is headed “Consent order”, and it begins as follows:
“Upon the application of Ante Ramljak as the Extraordinary Commissioner of Agrokor DD for the recognition under the Cross Border Insolvency Regulations 2006 of the Extraordinary Administration Proceedings commenced in Croatia in respect of Agrokor DD.”
Then it says this:
“And upon the applicant and the respondent Sberbank agreeing and undertaking that:
(1) Pending final determination of the Recognition Application, Sberbank shall take no further steps in LCIA arbitration no. 173684 as against Agrokor DD and its subsidiaries which are the respondents to the arbitration (together the Relevant Companies) and the applicant will cause or procure that the Relevant Companies shall take no further steps in the LCIA arbitration no. 173684 as against Sberbank, save as required to comply with this undertaking;
(2) They shall take all necessary steps to procure a stay of LCIA arbitration no. 173684 as against the Relevant Companies pending final determination of the Recognition Application.
(3) Pending final determination of the Recognition Application, no further arbitration or claim in relation to any debts arising prior to the commencement of the Extraordinary Administration roceeding shall be commenced by Sberbank against the Relevant Companies in the courts of England and Wales or before an arbitral tribunal seated in England and Wales.
IT IS ORDERED BY CONSENT that …”
Then the rest of the order gives directions for the evidence and other preparations for the application itself, which I heard in October last year. I handed down my judgment on 9 November last year, in which I decided that it was right to recognise the main proceeding in Croatia.
So, in this order, the parties are agreeing, and an undertaking is given by Sberbank, that it will not prosecute the arbitration already commenced or carry on any further arbitration in England and Wales or make any other application to the court, “pending final determination of the Recognition Application”.
The difference between the parties today is, broadly speaking, is this. Sberbank says that the application has now been determined by the court, and therefore the undertakings have come to an end. The Extraordinary Administrator, Mr Ramljak, says that the final determination of the Recognition Application has not yet occurred, because there is still an outstanding application for permission to appeal. Until that is dealt with — and of course any succeeding substantive appeal, and I suppose even up to and including the Supreme Court — it cannot be said that there has been a final determination. Hence the undertakings continue.
Two important points to notice are these. First, this is actually an order by consent and the parties are agreeing, which means that this is a contract as well as an order of the court. The second point is that the undertakings in fact go wider than the automatic stay that would be imposed by the recognition order itself, because the recognition order only applies as against Agrokor DD and does not apply to any of its affiliates or subsidiaries, whereas the undertakings plainly are expressed to apply in relation to the affiliates and subsidiaries known as the “Relevant Companies”.
So, the question that I have to decide is simply a question of construction. Rather to my surprise, I have not been shown any authority which covers this precise situation arising in the context of either an agreement or an undertaking to the court. I have however been shown a number of authorities which bear on what might be regarded as analogous situations using language which is more or less similar to the language of the undertaking.
Sberbank, by Mr Allison QC, has referred me to several of these authorities. The first is Kirby v Telegraph plc [1999] EMLR 303, a decision of the Court of Appeal. That was a question, not really of construction of any phrase which appears in a statute, or even a contract, so much as a question whether, the court at first instance having rendered its decision, it retained any jurisdiction to take further steps in the litigation. It was a case of defamation, where at a very late stage indeed, the claimant received notice that he was going to suffer a greater loss, it was said, as a direct result of the defamation that had taken place, than he had otherwise thought. Unfortunately, because it was so unexpected, he had not pleaded any special damage in this respect. The question was whether, the court having made its order after the conclusion of the trial, it was too late to do anything about it.
The Court of Appeal decided that this set of circumstances attracted the operation of the principle that a court, once having reached a final conclusion on a matter at trial, no longer had jurisdiction to adjudicate on any matters related to that, except of course for those special cases provided for in the rules, for example, costs, permission to appeal and so on. The only way forward for the unfortunate claimant was the possibility of an appeal out of time.
So that is, as I say, an interesting decision on the question of what powers the court has to continue with aspects of the litigation after a court of first instance has reached a conclusion at the trial, But it really does not help me to decide what is meant by “final determination” in the context of this order. Similarly with another case which was referred to in the skeleton argument, Tardios v Linton [2015] EWHC 1429 (QB), where Kirby v Telegraph plc was discussed, exactly the same point having arisen.
Another authority relied on by Sberbank was Tanfern v Cameron-MacDonald [2000] EWCA Civ 3023. That was a case in a different, effectively a statutory, context. The facts of the case do not matter for present purposes, but the Court of Appeal, comprised of the Master of the Rolls, Lord Justice Peter Gibson and Lord Justice Brooke, gave some guidance as to the rules which were about to, or had just, come into force in relation to the destination of appeals from lower courts to higher ones. These were contained in what was then the Practice Direction to CPR Part 52. I just mention now that the rules are of course now rather different, but this was the position being described at the time. For those purposes, it was necessary to distinguish between a “final” decision and an “interim” decision. If it was a final decision from a lower court, it would go to one appeal court, and if it was an interim decision, it might go to a different appeal court. So, again, I do not derive any particular assistance from that decision, interesting as it is in its own context. I was also shown the destination tables for appeals in CPR Practice Direction 52 from the 2016 White Book, but those references to my mind do not add anything to what has already been said. I also add that I was referred to a much earlier decision which drew a similar distinction for the purposes of appeals, Salaman v Warner [1891] 1 QB 734, where again the question was whether an order was final or interlocutory for the purpose of the appeal process.
There is then a further case to which I must come back at a later stage, Re Riddell (1888) 20 QB 512. This was concerned with the meaning of the phrase “final judgment” for the purposes of the Bankruptcy Act 1883, section 4(1)(g). The reason it mattered in this case was that the court had struck out a claim for want of prosecution and made an order that the unsuccessful party should pay costs to the successful, and the question was whether the order for costs to be paid was such as could be the foundation of a bankruptcy petition under the then current Bankruptcy Act of 1883. For that purpose a ‘final judgment’ was needed. Because the order for costs had been made in an order striking out the claim for want of prosecution, the Court of Appeal was clear that this was not a “final judgment” for that purpose, and therefore could not be the foundation of the bankruptcy petition.
I was also referred to a passage in the White Book at page 1765, paragraph 52.0.6, which referred to “determination” in, as it were, the same phrase as “judgment” and “order”, suggesting that the three words were used in an interchangeable sense. But there was no authority supporting the note. However, in the second volume of the White Book, at page 2492, I was shown another note, referring to an interesting decision...
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