Commercial disputes

The Commercial Court has rejected an application by the Claimants in the Magomedov litigation – a $14 billion claim concerning alleged unlawful means conspiracies and bribery – for a Norwich Pharmacal order against three financial services companies, following the hearing of jurisdiction challenges and of the Claimants’ substantive application for Norwich Pharmacal relief, at a two-day hearing before Jacobs J.

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Mr Justice Calver acceded to the Claimants’ application for a Norwich Pharmacal order where the defendant law firm had obtained from an unnamed business consultancy a report which was subsequently deployed in s.68 proceedings against the Claimants with a view to setting aside an arbitration award. The report was subsequently revealed to be a forgery. The judgment contains a very interesting analysis of the circumstances in which a law firm might become amenable to a Norwich Pharmacal order and the extent to which privilege might bar such relief.

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The Claimants had sought c. £12m in damages for deceit, alleging that a deliberate oral misrepresentation at a meeting in 2016 led to Wirecard Bank extending credit to Monarch Airlines (which subsequently became insolvent). Mrs Justice Cockerill DBE dismissed the case in its entirety. The Judge agreed with the Defendants that German law applied to the claim and considered and applied the German law of causation, concluding that even if the misrepresentations had been made, they had not been relied upon. Of particular interest is the Judge’s consideration of “Gestmin” and the matters raised by Popplewell LJ in his 2023 COMBAR lecture “Judging Truth from Memory”.

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The Defendant was sentenced to 18 months immediate imprisonment following the trial of a contempt application on 4 June 2024. The Court found that the Defendant had breached the asset disclosure provisions of a worldwide freezing order by giving inaccurate asset disclosure and that he had given false evidence seeking to verify that disclosure.

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Re Valorem Holdings Ltd represents a groundbreaking developing in the nature of injunctive relief that the court is prepared to grant to protect the rights of minority shareholders in s.994 petitions. In this case, the court was prepared to change the constitution of the board by way of interim relief to remove the respondent to the petition (the CEO) from the board and install the petitioner’s management team as directors on a without notice application. That decision was upheld on the return date.

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The Claimant advanced fraud claims in deceit, the tort of causing loss by unlawful means and unlawful means conspiracy arising out of the failure of a share purchase agreement. The judgment addresses the Second Defendant’s challenge to jurisdiction on the basis that the claims did not satisfy the merits threshold that the Claimant had to show a real prospect of success on the claim. Having considered the contemporaneous documentation, the judge found that the Claimant had no real prospect of establishing the factual allegations that underlay her claims. Permission to serve out of the jurisdiction was therefore refused. The case shows that, in appropriate circumstances, a court will find that a claim has no real prospect of success even where allegations of fraud are made.

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The claimants brought an application seeking to commit the defendant for breach of an undertaking he had given to the court. At a trial in March 2023 HHJ Pelling KC, sitting in the Commercial Court, dismissed the application. The Court of Appeal dismissed the claimants’ appeal, emphasising the need to focus on the breach as actually alleged in the application notice and the importance of procedural fairness when a defendant is facing a committal application.

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An important Court of Appeal case. The first instance judge had set aside and refused to continue a without notice non-compete and confidentiality injunction on grounds of alleged breaches of the duty of full and frank disclosure and the supposed adequacy of damages. The Court of Appeal allowed the appeal, and made some important comments concerning (1) the need for “a sense of proportion in complex cases” when considering lack of fair presentation complaints and (2), more generally, about the appropriateness of interim injunctions in non-compete cases.

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Judgment handed down by the BVI Commercial Court in what is the latest episode in the global Ablyazov litigation; in this claim against 54 defendants, Kazakhstan’s BTA Bank alleges it has been the victim of a fraudulent scheme involving the issue of high letters of credit resulting in losses of approximately US$230 million.

The judgment provides a comprehensive survey of the law applicable to service out of the jurisdiction in the BVI, including the duty of full and frank disclosure, and provides a salutary warning to litigants seeking to use BVI incorporated ‘Anchor Defendants’ as a hook through which to bring their real targets within the jurisdiction of the BVI courts.

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This case involved a 7-day trial of an unfair prejudice petition, followed by a one-day quantum hearing. The petition was brought by minority shareholders in respect of two substantial property developments; at trial the Deputy Judge found numerous incidents of unfair prejudice, including a failure on behalf of the board to exercise valuable contractual rights held by the Company. Whilst the Company was heavily balance-sheet insolvent, the Deputy Judge granted a buy-out order in the Petitioners’ favour, on the basis that the Company be valued as if the unfairly prejudicial acts had not occurred, and, in addition, that part of the Company’s debt be ignored for the purposes of the buy-out order.

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The Royal Court of Guernsey dismisses a substantial unfair prejudice application, which represents a key aspect of multi-faceted ongoing litigation connected with the bankruptcy in the US of once high-flying billion-dollar investment firm Highland Capital Management LP. 

The judgment contains interesting discussion of (i) whether breach of a duty to act in good faith necessarily amounts to bad faith, and (ii) the circumstances in which equitable considerations may have a place in governing the proper conduct of the affairs of a company.

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Judgment has been handed down in the Court of First Instance of the DIFC by Justice Sir Jeremy Cooke.

Kirtanlal International DMCC, a steel trading company, brought a claim for damages of USD 18.51m in relation to what it said was the unlawful termination of its facility agreement with the Defendant bank. Kirtanlal claimed that the Bank acted in breach of a duty of good faith and/or a Braganza duty, alleging malice on the part of the Bank. Kirtanlal also alleged that there were breaches of tortious, fiduciary and regulatory duties by the Bank.

The Court rejected the $18.5 million damages claim.

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A Privy Council judgment delivered simultaneously with the Supreme Court decision in Republic of Mozambique v Credit Suisse International. Lord Hodge delivered two important judgments on how to define and identify the “matters” which give rise to stay of legal proceedings in favour of arbitration (in England under Section 9 Arbitration Act 1996) and certain other related issues. In doing so, these Courts have dropped the overly “granular” approach adopted by English Courts recently and opted for a more nuanced and analytical approach favoured by the Australian courts. The legal analysis in the two decisions is more or less identical.

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In a judgment handed down on 20 September 2023 following the trial of preliminary issues, the Deputy Judge of the Commercial Court held that it is not a rule of private international law that a final and binding foreign judgment on the merits must be enforceable in the foreign jurisdiction before it could be the subject of an application to ‘enforce’ the foreign judgment in this jurisdiction by a claim at common law, and dismissed the sixth defendant’s application to set aside a default judgment the claimant had obtained against the first defendant, as (i) there was accordingly no arguable defence, and (ii) the sixth defendant had not satisfied the Denton criteria.

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A US$1 Billion damages claim, which arose out of the collapse of NMC PLC, a former FTSE 100 company, and its operating subsidiaries in the UAE, all of which are now in administration in England and Wales and the UAE. The claimant is an Abu Dhabi-based bank, and the first to third defendants are the former private shareholders in NMC PLC. The Bank alleged that the defendants are responsible, with others, for a serious fraud that appears to have taken place within the NMC Group of companies. The defendants all deny involvement in the fraud.

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A multi-million euro, multi-faceted fraud claim in the Cayman Islands that made new law on the Cayman Fraudulent Dispositions Law.

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South Africa’s largest ever private sector accounting fraud scandal. Alleged payments totalling approximately €95 million are said to have been made fraudulently. The case raises issues of German, Austrian, Swiss and BVI law.

The latest chapter in the long running and high-profile litigation instigated by the LIA seeking to recoup funds invested during the Gaddafi dictatorship in Libya. Successfully defended fraud and corruption claims to the value of £200m.

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One of the largest frauds ever perpetrated involving some 118 banks which together lent a total of $126 billion over two decades.

A case involving the first statutory free-standing worldwide freezing order in Cayman. The first common law case in which a freezing injunction was granted over claims for American treble damages under RICO. Fraud resulted in losses of $5bn, with the lead claim being for $60m.

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Court of Appeal case concerning the question of the Court’s power to order rectification of the register to reverse the administrative restoration of an LLP where the restoration had been obtained through the provision of fraudulent material.

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A complex multi-jurisdictional case involving one of Greece’s largest shipping families and their ownership of shares in two Liberian Corporations, which raises multiple conflicts of law issues and matters relating to fraudulent misappropriation of shares.

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Resisting an application in the Commercial Court for immediate enforcement of an arbitral award of almost $3 billion granted in an SCC arbitration.

One of The Lawyer’s “Top 20 Cases of 2018”. Claims against the former Managing Director and Finance Director of the Claimant company for breach of duty and conspiracy, in connection with benefits provided to the directors from the Claimant company’s pension scheme.

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Supreme Court case; acting on behalf of Cavendish in relation to the continued existence of the doctrine of penalties in both commercial and consumer contracts.

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