Commercial Disputes Weekly – Issue 22810 December 2024

Privilege – Company
In relation to a claim brought by a beneficial owner of shares for misconduct committed by the company, the Commercial Court held that there was no general rule in English law that a company could not assert privilege against its shareholders. The court rejected arguments that any such principle was based on a shareholder’s proprietary interest in the company’s assets or joint interest privilege.  The company had a fundamental right to privilege. The position differed to that of trustee and beneficiary and shareholders did not generally have a right to the company’s documents outside of the context of litigation. To allow such an extension of joint interest privilege would undermine the public policy basis of legal professional privilege and potentially discourage directors from seeking legal advice because of concerns that such advice might be seen by many third-party shareholders.
Aabar Holdings SARL v Glencore PLC [2024] EWHC 3046 (Comm), 27 November 2024

Injunctions
The Commercial Court has granted an interim mandatory anti-suit injunction to restrain a breach of contractual agreement to London arbitration. The defendant had brought arrest and substantive proceedings in two courts in Yemen. The court was satisfied that it was necessary in the interests of justice. The proceedings in Yemen appeared to be a blatant jurisdictional violation. The defendant had not participated in the English proceedings despite being served and notified of the hearing and had commenced a fresh set of proceedings in Yemen despite interim prohibitory injunctive relief being granted.  The claimants gave an undertaking to protect the defendant against any prejudice it may suffer should it turn out that this interim injunctive relief should not have been granted. The defendant’s behaviour also resulted in it being ordered to pay the claimants’ costs on the indemnity basis.
Manta Penyez Shipping Inc v Zuhoor Alsaeed Foodstuff Co [2024] EWHC 3109 (Comm), 3 December 2024

Jurisdiction
Barclays challenged the jurisdiction of an LCIA-appointed sole arbitrator on the basis that it had invoked a contractual provision, which entitled it, within a certain timeframe, to refer claims brought in arbitration by its counterparty, VEB, to the English courts. Barclays was given permission under section 32 Arbitration Act 1996 to ask the court to determine the jurisdiction of the tribunal. The court decided in favour of Barclays that it had given a valid notice requiring the defendant to withdraw the arbitration proceedings so that the matter could be dealt with by the English court. There was no waiver or estoppel of the right to rely on the asymmetric jurisdiction clause.
Barclays Bank v VEB.RF [2024] EWHC 3088 (Comm), 28 November 2024

Fraud
The claimant obtained a judgment against Mr Ruhan but had difficulties enforcing the judgment because of several other proceedings brought between the various parties to this long running dispute. The court held that a default judgment and strike out proceedings were an abuse of process. It also held that several transactions were at an undervalue and part of a scheme to put Mr Ruhan’s assets beyond the claimant’s reach.
Hotel Portfolio II UK Ltd (in liquidation) v Marlborough Developments Ltd and another [2024] EWHC 3075 (Comm), 29 November 2024

Disclosure
In a dispute arising out of repudiation of a charter by the charterer and an alleged guarantee of the charterer’s obligations, the claimant sought an order that third parties pay the claimant’s costs on the basis that the third parties funded the defence to allow time for an asset stripping scheme to make the defendant “judgment proof”. The claimant applied for disclosure from the third parties in support of its costs application but the court refused on the basis that the disclosure requests were simply a fishing expedition.
SFL Ace 2 Company Inc v DCW Management Limited [2024] EWHC 3074 (Comm), 29 November 2024

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: