Zucker v Tyndall Holdings Plc
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE NEILL,LORD JUSTICE STAUGHTON |
| Judgment Date | 07 May 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J0507-4 |
| Docket Number | 92/0442 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 May 1992 |
[1992] EWCA Civ J0507-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE MORLAND)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Neill
Lord Justice Staughton
92/0442
MR MARTIN MANN, Q.C., instructed by Messrs Jay Benning & Levine, appeared for the Appellants (Plaintiffs).
MR JOHN THOMAS, Q.C., and MR DAVID FOXTON, instructed by MessrsTurner Kenneth Brown, appeared for the Respondents (Defendants).
I will ask Lord Justice Neill to deliver the first judgment.
This is an appeal by the plaintiffs, MrWillard Zucker and three other members of the Zucker family and Mr Grossglauser, from the order of Mr Justice Morland dated 6th April 1992 whereby he discharged a Mareva injunction granted by Mr Justice Potter on an application made to the court ex parte on 30th March 1992. The application to discharge was made ex parte on notice. I understand that pending the hearing of this appeal the respondents have given an undertaking in the terms of the injunction.
By an agreement dated 2nd June 1989 the appellants were allotted 25 per cent of the shares in a Swiss company called Tyndall Trust S.A. The other 75 per cent of the shares in Tyndall Trust were allotted to Tyndall International Holdings Limited save insofar as they already owned shares which they agreed to retain. Tyndall International is a company incorporated in Bermuda and is a wholly owned subsidiary of an English company, Tyndall Holdings Plc, the defendants.
The parties to the agreement of 2nd June 1989 were the appellants, Tyndall Holdings (the defendants and the present respondents) and Tyndall International.
At the time of the agreement the share capital of Tyndall Trust was substantially increased, and the purpose of the agreement (which I shall call "the shareholders' agreement") was to enable Mr Willard Zucker and his companies to join forces with another larger group (the Tyndall Group) and to enable the Tyndall Group, headed by Tyndall Holdings, to obtain access to the Swiss market and to have the benefit of the services of Mr Zucker and of Mr Grossglauser, who is the fifth appellant. At the time of the shareholders' agreement Mr Zucker was the founder and managing director of a company which I can refer to as Serfid. The shares in Serfid were owned as to 100 per cent by Mrs Sylviane Zucker, the second appellant. Mr Grossglauser, for his part, was an executive director of Serfid. At the time both Serfid and its wholly owned subsidiary (a company called CSF Investments Limited of Hamilton, Bermuda) were active ininvestment management and in providing other financial services to both private and corporate clients. For its part the Tyndall Group were also interested on a worldwide scale in the provision of a range of financial services.
It was a term of the shareholders' agreement that if the control of Tyndall Trust should ever pass out of the hands of Tyndall International then the appellants would be entitled to exercise a put option to sell their shares. I should refer shortly to Article 4 of the shareholders' agreement, having first referred to two parts in the definition section in Article 4 which define "the minority shareholders" as meaning the appellants and a "put option" as being the right of the minority shareholders to sell the shares at a defined price. It was provided in section B of Article 4 of the shareholders' agreement as follows:
"a) If, on or before 30th June, 1992:
(i) TIH, without the consent of the minority shareholders, either sells all of TT's shares to any third party or disposes of all of TT's assets, [and then the important words] or sells or otherwise disposes of a controlling interest in TT's shares, [and then certain other events which it is not necessary to refer to]
then the holders of the ZUCKER shares jointly and/or the holders of the GROSSGLAUSER shares will have the right to exercise their respective put option, in respect of all their shares in TT, against TIH, at any time after such event, but no later than 30th September 1992".
It was then provided that in that case the minority shareholders would be entitled to receive from Tyndall International the greater of either what was described as "the formula price per share", which was defined, or what was also defined as "the floor price per share".
Section C of Article 4 of the shareholders' agreement contained provisions for the issue in satisfaction of either the floor price or the formula price due to the appellants as minority shareholders of a number of new fully paid ordinary shares in Tyndall Holdings which were to be calculated in a manner there set out. It was further provided in this section (in order that the minority shareholders would get marketable securities if they exercised the put option) that Tyndall Holdings undertook to apply for listing on the London Stock Exchange of the Tyndall shares which were to be issued and that in the meantime they would retain sufficient outstanding capital to make the necessary allotments to fulfil their obligations if required.
It was further provided in Article 4 that the put option could be exercised by any or all of the minority shareholders by sending a letter to Tyndall International by telefax or by registered mail, and that on receipt of such a notice Tyndall International, when they got the notification letter and the certificates representing the Tyndall Trust shares from the minority shareholders, would then proceed to determine the exact and final amount of Tyndall shares to be issued and that within three months they would issue and deliver the relevant Tyndall shares to the minority shareholders.
Finally, I think the only other part of the agreement to which it is necessary to refer is Article 14, which provided that the agreement should be governed by Swiss law and that any disputes (save one which it is not necessary to trouble with) which arose in connection with the agreement should be submitted"to the non-exclusive competence of the Courts of the Canton of Geneva,…subject to an appeal to the Federal Tribunal, in Lausanne".
On 26th or 27th September 1991 Tyndall Holdings was taken over by another company, Jupiter Tarbutt Merlin Holdings Plc. It is apparent that that takeover caused some concern to the appellants. It came to their attention that the services of a number of senior executives had been dispensed with and that certain subsidiaries of the Tyndall Group had been disposed of. It was a development that had not been anticipated by the appellants, and one of the effects of the takeover was that the shares in Tyndall Holdings Plc were no longer going to be listed on the London Stock Exchange. So the appellants took the opinion of a Swiss lawyer, and in an opinion dated 18th February 1992 Professor Doctor Frank Vischer expressed the opinion that as a result of the takeover of Tyndall Holdings by Jupiter the appellants had become entitled to exercise the put option contained in the shareholders' agreement. He expressed his final conclusion in these words by way of summary (page 122 of the bundle):
"By the take-over of Tyndall Holdings PLC by Jupiter Tarbutt Merlin Holdings PLC on August 31, 1991, Tyndall Holdings PLC has directly disposed of its controlling interest in Tyndall International Holdings Limited and therefore has indirectly disposed of its controlling interest in Tyndall Trust SA. Consequently, the right to exercise the put option by the minority shareholders according to art. 4 lit. B lit. a of the shareholders agreement of June 2, 1989 has to be admitted. The formula price per share as stated in the shareholders agreement today cannot be applied stricto sensu in the case of the said take-over. It seems justified to calculate the formula price on the basis of the date of the take-over".
Doctor Vischer at that time was treating the date of the takeover as being 31st August, but it was in fact 26th or 27th September 1991. For present purposes nothing turns on that point.
On 23rd March 1992, following the obtaining of that opinion in February, the appellants exercised the put option and sent their share certificates to Tyndall International, and I understand that it is accepted that if there was a valid exercise of the option the three months period for the issue of the Tyndall shares will expire on 24th June next, (24th June 1992).
On 25th March 1992 proceedings were commenced by the appellants in the court of first instance in Geneva. In these proceedings the appellants claimed first a declaration that they had validly exercised their right to "put" the shares as foreseen in Article 4 of the shareholders' agreement, and secondly an order that Tyndall Holdings and Tyndall International should jointly and severally pay to them the amount of six million Swiss francs with interest at 8 per cent from 24th June 1992. Certain other relief was claimed to which it is unnecessary to refer.
It seems that the sum claimed was calculated on the basis that it was no longer possible for the appellants to obtain marketable securities by way of shares by the issue to them of shares in Tyndall Holdings and that the sum claimed represented the aggregate value of the shares in Tyndall Trust.
On 30th March the writ of summons was issued in the present proceedings and it was on that day that the appellants obtained an order ex parte from Mr Justice Potter. In the writ the appellants claim various...
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