Uoc Corporation v the Insolvency Act 1986
| Jurisdiction | England & Wales |
| Judge | JUDGE WEEKS |
| Judgment Date | 13 March 2003 |
| Neutral Citation | [2003] EWHC 530 (Ch) |
| Court | Chancery Division |
| Docket Number | No. 002180/96 |
| Date | 13 March 2003 |
[2002] EWHC 530 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Royal Courts of Justice
His Honour Judge Weeks, Qc
(Sitting as a Judge of the High Court)
No. 002180/96
MR. JASBIR DHILLON (instructed by Messrs. Wedlake Bell) appeared on behalf of the_Respondents.
MR. JAMES BEHRENS (instructed by Messrs. Dechert) appeared on behalf of the_Claimant.
This is the hearing of a petition to wind up UOC Corp. UOC Corp is a trading company incorporated under the International Business Companies Act of the British Virgin Islands. It is not disputed that the English court has jurisdiction to wind it up as an unregistered company under section 221 of the Insolvency Act 1986.
This petition is unusual in three respects. First, it was presented to the court as long ago as 18th April 1996.
It has taken almost seven years to come to trial. During that time it has been struck out and reinstated twice. Secondly, it is a disputed contributory's petition and the main issue is whether the petitioner is a shareholder of UOC and entitled to present the petition.
Thirdly, there are several documents the authenticity of which is in dispute. This, coupled with the fact that two of the four witnesses who gave oral evidence did so through interpreters and the other two did not have English as their first language, has made it more difficult to get at the truth of what happened in 1994 and 1995.
The petitioner, Mr. Alipour, is an Iranian national and has a friend, Mr. Saffari, who worked in 1993 as a buying clerk for the National Iranian Oil Company. The second respondent, Mrs. Ary, is now a US citizen but she was born in Iran and, through her first husband who was a business man in Tehran, she met Mr. Alipour in 1993. The third respondent,
Mr. Schweininger, is a German citizen and Mrs. Ary's present husband. He and Mrs. Ary were interested in Mr. Alipour's professed contacts in the oil industry. The three discussed doing business together. According to Mr. Alipour, they were to be partners in a joint venture. According to Mrs. Ary and Mr. Schweininger, Mr. Alipour, who had no capital or resources, was to be a commission agent.
There is a document on UOC writing paper headed "Partnership/Co-operation/Confirmation. Mannheim, Germany. April 1994" which Mrs. Ary and Mr. Schweininger say was posted and faxed to Mr. Alipour in that month. Mr. Alipour denies receiving it, but it does set out what the other two say was the relationship between them at the time. It reads: "We confirm, as Directors of the UOC Corp Reg. No. 113398, Tortola, British Virgin Islands, to work together with Mr. Alipour in a friendly and trustful partnership. Due to his promise to have excellent contacts and a high position with decision authority at NIOC (National Iranian Oil Company), we will co-operate with him very closely."The first main activity should be to register UOC at NIOC to get oil directly. Mr. Alipour is able to organise this. We will work on an open, trustful commission basis together. After each successful common business conclusion we will decide about the commission amount. All previous and
future costs in combination with the common business will be calculated and taken into consideration. This partnership is valid until we decide otherwise." UOC was incorporated in the British Virgin Islands on 28th March 1994 on the instructions of Mrs. Ary and Mr. Schweininger. Its authorised share capital is US$ 30 divided into 30 shares of US$ 1 each. The only directors are Mrs. Ary and Mr. Schweininger, both appointed on 28th March 1994. The share register shows 15 shares entered on the register in the name of Mrs. Ary on 28th March 1994 and 15 shares entered in the name of Mr. Schweininger on the same date. There are no further entries on the register.
Certificates for the shares were sent in March or April 1994 from the British Virgin Islands to Germany and signed there by Mrs. Ary as Director and Mr. Schweininger as Director/Secretary. There is no challenge to the authenticity of these certificates. Mrs. Ary's relates to Shares Nos. 1 —15 and is dated April 1994.
Mr. Schweininger's relates to Shares Nos. 16 —30 and is also dated April 1994. The Share Certificates have an intricate blue border and are sealed with the company seal. There is, however, a third certificate in existence, numbered 3. It purports to show that Mr. Golam Reza Alipour, Passport No. 5122278, is the registered holder of 10 shares in UOC numbered 1 —10. It, also, is dated April 1994 and it
appears to bear the signatures of Mrs. Ary (in her maiden name) and Mr. Schweininger, and to bear the company seal. It has, however, significant differences from the other two certificates: (1) Mr. Alipour's certificate is a photocopied document in black ink whereas the other two certificates are printed documents with the blue border. (2) There are no printed details on the reverse of Mr. Alipour's certificate, whereas the other two certificates have a share transfer form printed on the back. (3) Three different typewriting styles are found on Mr. Alipour's certificate whereas there is only one on the other two. (4) Mr. Alipour's certificate is 88 per cent of the size of each of the other two and is printed on watermarked paper, unlike the other two.
These differences, and other features, lead two handwriting experts to conclude that Mr. Alipour's certificate has originated from an early copy of Mr. Schweininger's which has subsequently been modified. Mrs. Ary and Mr. Schweininger deny that they ever signed Mr. Alipour's certificate and the main issue I will have to decide is whether it is a genuine document or a forgery.
In 1994 Mr. Alipour introduced Mrs. Ary to a Mr. Osama, said by Mr. Alipour to be a deputy of Saddam Hussein in relation to the purchase of oil and petrochemical products from Iraq. Perhaps fortunately, no contract resulted from that introduction, and UOC did little, if any business in 1994. However, as a result of adverse comment in the German press on the connection with Iraq, Mrs. Ary moved from Germany in August 1994 to her flat in Tehran where she stayed until March 1995. In the meantime, Mrs. Ary wanted to buy a house in Dorset because her son was at school in Sherborne. On 25th August 1994, Mr. Schweininger and Mrs. Ary agreed, subject to contract, to buy Chaffeymoor Grange near Gillingham for £550,000. Their solicitors advised them that there were advantages in having an off-shore company as the registered owner and they chose UOC. Contracts were exchanged with UOC as the purchaser on 20th December 1994 and the sale was completed on 20th January 1995. It is not necessary for me to make any finding as to the source of the purchase monies, most of which was borrowed money.
On 20th February 1995, Mrs. Ary let her flat in Tehran to Mr. Alipour who had previously been living with his sister. The agreement was for one year at a monthly rent of 600,000 rials. At about this time UOC was negotiating for its one really successful transaction. As finally agreed on 10th March 1995, the deal was for HHSTE Investment Fund, a government agency in Iran, to sell 20,000 metric tonnes of urea to UOC for US$ 1.86m f.o.b., stowed and trimmed at the port of Bandar Imam Khomeini for shipment to China. Simultaneously, UOC entered into a back-to-back 5 contract with Cargill BV in Amsterdam to sell them the same cargo for US$ 3.3m, also f.o.b., at the same port.
Letters of credit were issued simultaneously by Credit Suisse. The price to UOC was later increased to US$ 1.92m but the gross profit was still US$ 1.38m. The vessel left port on 24th April with the cargo, and the letters of credit were honoured at the end of May.
In June 1995, Mr. Alipour asked Mrs. Ary and Mr. Schweininger to send US$ 200,000 to his friend Mr. Saffari for expenses incurred by the latter in connection with the loading of the urea. Mr. Schweininger agreed with a separate proposal to pay a Mr. Abidi and a firm called Shahid Bhagari, who had both had a hand in setting up the deal, $100,000 each, but he refused to pay Mr. Saffari more than US$ 5,000 because he thought Mr. Saffari had done nothing for UOC.
In a letter dated 26th June 1995 and also signed by Mrs. Ary, Mr. Schweininger said: "We cannot agree with your proposal to pay Mr. Saffari US$ 200,000. That was not agreed and this is an amount which is bigger than the profit of the partners."The letter then sets out various figures and concludes: "We trust you, Reza, 100 per cent and we gave you two years of our time. The reason was your promise that we will conclude several big oil deals to grow up UOC very fast to 6 get more and more powerful. However, until today, we get out only the starting costs. As you know, for each activity you need funds and our proposal is that each of us partners get $100,000. With Mr. Abidi and Shahid Bhagari, that is an amount of $500,000. If you can agree with this, please give us an account number to transfer the $100,000 to you. If you wish, we can handle also your amount of the trust money in our accounts."There are frequent references in this letter, which is written in English, to "partners" and "partnership". Mr. Schweininger explains this by saying that he thought the English word "partner" had the same connotations as the German word "Partner" or "Geschäfts partner" which, he says, covers any sort of business associate except for customer or shareholder.Mr. Alipour says that he sent two faxes in July in response to this letter asking for further information.
Mrs. Ary and Mr. Schweininger deny receiving those faxes, but...
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