Standard Chartered Bank (Hong Kong) Ltd (a Company Incorporated in Hong Kong) and Another v Independent Power Tanzania Ltd (a Company Incorporated in Tanzania) and Others
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Flaux,The Hon Mr Justice Flaux |
| Judgment Date | 16 November 2016 |
| Neutral Citation | [2016] EWHC 2908 (Comm) |
| Docket Number | Case No: CL-2013-000411 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 16 November 2016 |
[2016] EWHC 2908 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building
7 Rolls Building
Fetter Lane
London EC4A 1NL
The Honourable Mr Justice Flaux
Case No: CL-2013-000411
(Formerly 2013 Folio 1697)
Mr Jonathan Davies-Jones QC and Mr William Edwards (instructed by DLA Piper UK LLP) for the Claimants
The Defendants did not appear and were not represented
Hearing dates: 6 September 2016
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.
Introduction
This is the claimants' application pursuant to an Application Notice dated 10 June 2016 for summary judgment under CPR 24 against all the defendants. The first claimant (to which I will refer as "SCBHK") and the second claimant (to which I will refer as "SCBMB") which are both wholly owned subsidiaries of Standard Chartered Bank claim against the first defendant (to which I will refer as "IPTL") sums due under a Facility Agreement dated 28 June 1997 which was novated to SCBHK by Danaharta Managers (which had itself taken over the loan by a process of novation from the original lending banks under that Agreement). SCBMB had become the Facility Agent under that Agreement. SCBHK as Security Agent also claims against IPTL under an independent covenant to pay in the Security Deed entered on the same day and forming part of the same suite of finance documents as the Facility Agreement.
SCBHK also claims declaratory relief against IPTL and against the second and third defendants (to which I will refer as "VIP" and "PAP" respectively). VIP was a 30% shareholder of IPTL and had entered a Shareholder Support Deed and a Charge of Shares also dated 28 June 1997 and forming part of the same suite of Financing Agreements, under which VIP and its fellow 70% shareholder Mechmar Corporation (Malaysia) Berhad ("Mechmar") undertook, inter alia, to use their best endeavours to procure that IPTL complied with its obligations under the Financing Agreements and independently covenanted not to dispose of their shares. SCBHK's case is that IPTL is in breach of its obligations under the Financing Agreements, putting VIP in breach of the Shareholder Support Deed and that, in breach of the covenant in the Charge of Shares, VIP has purported to transfer its shareholding to PAP.
All three defendants made challenges to the jurisdiction of the English Courts, on the basis that Tanzania not England was the most appropriate forum for the determination of the dispute between the parties, alternatively, in the case of VIP, on the basis that the English proceedings were an abuse of process. IPTL and VIP had been served with the proceedings as of right pursuant to service of process provisions in the relevant contracts and PAP was served outside the jurisdiction in Tanzania pursuant to permission granted by Popplewell J under CPR 6.37 and PD6B paragraph 3.1(3), on the basis that PAP is a necessary or proper party to the claim against IPTL. At the hearing of the jurisdiction challenges, it was accepted by PAP that, if the claim against IPTL proceeded in England and was not stayed, then that service out was valid and the claim against PAP should also proceed in England.
Following a four day hearing in April 2015, the jurisdiction challenges were all dismissed by this court: [2015] EWHC 1640 (Comm); [2016] 1 All E.R. (Comm.) 233. The defendants' appeal against my judgment was dismissed by the Court of Appeal on 28 June 2016: [2016] EWCA Civ 411. The Supreme Court refused permission to appeal on 19 July 2016. At a case management hearing on 13 June 2016, I set a timetable for the determination of the present summary judgment application, with the hearing to take place in the week of 5 September 2016. Each of the defendants was duly served with this application and the claimants' evidence in support. However, since the jurisdiction challenge was finally dismissed, none of the defendants has taken an active part in the proceedings, notwithstanding that VIP unconditionally acknowledged service in May 2016, after the Court of Appeal judgment.
The background to the present proceedings was set out by me at [7] to [81] of my jurisdiction judgment. So far as presently material, none of that recitation of the facts was challenged by the defendants in the Court of Appeal. I do not propose to repeat it all here, but simply summarise in the next section of the judgment the factual background insofar as it is relevant to this application.
On 21 July 2016, the same day as the parties were notified that the Supreme Court had dismissed VIP's application for permission to appeal, the court received a lengthy letter direct from VIP (notwithstanding that solicitors were still on the record for VIP at that time) signed by the company secretary Mr Didace saying that they had instructed their English lawyers to cease acting and inviting the court to "delay" the summary judgment hearing for an unspecified period of time. He asserted that: " there are cogent reasons, discernible from the trial evidence in the Tanzanian Action of which your Lordship may take judicial notice, why summary judgment cannot be regarded."
In essence, the basis for the assertion that VIP could not deal with the summary judgment application at a hearing at the beginning of September was threefold: (i) that Mr Rugemalira, a director of IPTL who was said to be critical to their defence had given evidence in the Tanzanian proceedings in February 2016, but his evidence was part heard and VIP could not discuss his evidence with him and so could not produce a witness statement from him in opposition to the present application; (ii) VIP would need time to put its expert evidence before the court and (iii) VIP had lost confidence in the impartiality of the English courts.
The claimants' solicitors DLA Piper UK LLP provided a response to that letter dated 26 July 2016. By that stage Charles Russell Speechlys LLP had come off the record for VIP. The claimants opposed VIP's application for an adjournment pointing out: (i) that, as had been discussed at the hearing on 13 June 2016, the obvious solution to any impediment in speaking to Mr Rugemalira was for VIP to make an application to the Tanzanian court (which the claimants had indicated they would support) for him to be released; (ii) that, at that hearing on 13 June 2016, the experts' reports which VIP had chosen to deploy in Tanzania were exhibited to a witness statement of Mr Novak of Charles Russell Speechlys LLP and there was no suggestion that the expert evidence served in England would be substantially different, so that VIP had ample time to serve any expert evidence for the purposes of the present hearing; and (iii) that the court should reject the suggestion that it had not acted impartially or that there had been any impropriety on the part of the claimants.
I was and remain satisfied that there was nothing in any of these impediments. I have little doubt that, if VIP had made an unopposed application to the Tanzanian court to have Mr Rugemalira released, the court would have acceded to that application. VIP simply chose not to make such an application. Furthermore, the period of nearly three months from the directions hearing on 13 June 2016 to the hearing of the summary judgment application on 8 September 2016 was ample time within which VIP could have recast its experts' reports, so as to be compliant with CPR Part 35 (an issue to which I return below). Again, it has simply chosen not to do so. There is no question of this court not being impartial or of the claimants having acted with impropriety.
In the circumstances, the application for an adjournment was refused and the hearing proceeded. The reality is that, as Mr Davies-Jones QC submitted on behalf of the claimants, the VIP letter is a piece of window dressing for what was a voluntary decision by VIP not to participate in the present proceedings further, putting it in the same position as the other two defendants who had taken that voluntary decision in May 2016 following the dismissal of their appeal by the Court of Appeal.
In the circumstances, in relation to claims which are English law claims, the defendants have chosen not to put in Defences to those claims. In accordance with well-established principles, at the hearing of the summary judgment application, Mr Davies-Jones QC drew my attention to the points, both factual and legal, which the defendants might have made had they continued to participate and filed Defences: see Habib Bank Ltd v Central Bank of Sudan [2006] EWHC 1767 (Comm), [2007] 1 WLR 470, at [9] and Concept Oil Services Ltd v EIN-GIN Group LLP [2013] EWHC 1897 (Comm), at [9]. He did this primarily by reference to the Plaints filed by the defendants before the Tanzanian courts and, in the case of VIP, the expert evidence it has served in the Tanzanian proceedings, even though (for reasons elaborated below) that expert evidence is inadmissible in the present proceedings.
So far as the relief sought on this application is concerned, the claimants are not seeking all the declaratory relief sought in their Particulars of Claim (in particular the negative declaratory relief sought at [94], that the claimants are not...
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