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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Global Torch Ltd v Apex Global Management Ltd  EWHC 223 (Ch) (13 February 2013)
Cite as:  EWHC 223 (Ch)
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IN THE MATTER OF FI CALL LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
London, EC4A 1NL
B e f o r e :
B E T W E E N:
GLOBAL TORCH LIMITED
- and -
APEX GLOBAL MANAGEMENT LIMITED
FAISAL ABDEL AZIZ HAFIZ ALMHAIRAT
FI CALL LIMITED
MR JUSTICE MORGAN
B E T W E E N:
APEX GLOBAL MANAGEMENT LIMITED
- and -
FI CALL LIMITED
GLOBAL TORCH LIMITED
HRH PRINCE ABDULAZIZ BIN MISHAL BIN ABDULAZIZ AL SAUD
EMAD MAHMOUD AHMED ABU-AYSHIH
HRH PRINCE MISHAL BIN ABDUL AZIZ AL SAUD
Mr Timothy Otty QC, Ms Neill and Ms Zaffuto (instructed by Clifford Chance LLP ) for Prince Abdulaziz and Prince Mishal
Mr Christopher Harrison and Mr Alexander Cook (instructed by Clifford Chance LLP) for Mr Abu-Ayshih
Mr Robert Howe QC, Mr Daniel Lightman, Ms Shaheed Fatima and Mr Paul Adams (instructed by Howard Kennedy) for Apex Global Management Ltd and Mr Almhairat
Mr Guy Vassall-Adams (instructed by In-house Lawyers) for Guardian News and Media Ltd and The Financial Times Ltd
Hearing dates: 19th, 20th and 21st December 2012
Crown Copyright ©
Mr Justice Morgan:
(1) Prince Abdulaziz acted irregularly in relation to the Company in that, although he has never been a director of the Company, he has acted as a de facto or a shadow director of the Company and has purported to act as a de jure director of the Company and has purported to be Chairman of the Company;
(2) Prince Abdulaziz and Mr Abu-Ayshih have been guilty of wrongdoing in relation to a transaction described as "the Beirut transaction";
(3) Prince Abdulaziz and Mr Abu-Ayshih have been guilty of wrongdoing in relation to a transaction described as "the Nairobi transaction";
(4) Prince Abdulaziz and Prince Mishal made various statements to Mr Almhairat which are highly relevant to Apex's case that the affairs of the Company have been conducted in a manner unfairly prejudicial to Apex;
(5) In February and March 2010 there were four share sale agreements arranged by Prince Abdulaziz and/or Mr Abu-Ayshih; these agreements resulted in some Apex shares in the Company being sold in circumstances where Apex did not receive any of the proceeds of sale, which were instead taken by Prince Abdulaziz or the Company;
(6) In April 2011, following a sale by Apex of some of its shares, Prince Abdulaziz and Mr Abu-Ayshih demanded that Mr Almhairat pay to them a substantial part of the proceeds of that sale; Mr Almhairat did not comply with this demand following which Prince Abdulaziz and Mr Abu-Ayshih have been hostile to him in a number of ways including Prince Abdulaziz making a complaint about Mr Almhairat to the Saudi Arabian authorities leading to the issue of an arrest warrant against Mr Almhairat and the involvement of Interpol in Saudi Arabia and Jordan. This share sale transaction is the subject of the rival allegation made in the Global Torch petition that the Apex parties have misappropriated funds, namely, the part of the proceeds of sale demanded by Prince Abdulaziz and Mr Abu-Ayshih but not paid to them by Mr Almhairat.
The applications under CPR rule 39.2
The applications under CPR rule 5.4C(4)
The applications under CPR rule 5.4C(2)
(1) the Petition;
(2) all other statements of case filed on behalf of the Petitioner or the Respondents, including Points of Defence and Points of Reply;
(3) all orders made in the proceedings;
(4) the skeleton arguments of the parties for hearings which took place on 28th March 2012 and 17th July 2012 and any other hearing which has taken place.
The Applicants' case for privacy
The submissions for the Applicants
The submissions for the Apex parties
The submissions for the Guardian and the FT
CPR rule 39.2
"General rule—hearing to be in public
39.2—(1) The general rule is that a hearing is to be in public.
(2) The requirement for a hearing to be in public does not require the court to make special arrangements for accommodating members of the public.
(3) A hearing, or any part of it, may be in private if—
(a) publicity would defeat the object of the hearing;
(b) it involves matters relating to national security;
(c) it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality;
(d) a private hearing is necessary to protect the interests of any child or patient;
(e) it is a hearing of an application made without notice and it would be unjust to any respondent for there to be a public hearing;
(f) it involves uncontentious matters arising in the administration of trusts or in the administration of a deceased person's estate; or
(g) the court considers this to be necessary, in the interests of justice.
(4) The court may order that the identity of any party or witness must not be disclosed if it considers non-disclosure necessary in order to protect the interests of that party or witness."
The open justice principle at common law
"Right to a fair trial
1 In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.
2 Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3 Everyone charged with a criminal offence has the following minimum rights:
(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court."
"Right to respect for private and family life
1 Everyone has the right to respect for his private and family life, his home and his correspondence.
2 There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
"Article 8 and reputation
37 On behalf of the press, [counsel] did not dispute that article 8 rights fall within the scope of "the rights of others" in article 10(2). But, under reference to the judgment of the European Court of Human Rights in Karakó v Hungary (Application No 39311/05) (unreported), given 28 April 2009 , he submitted that article 8 does not confer a right to have your reputation protected from being affected by what other people say. So the only article in play in relation to M's reputation was article 10 .
38 In the Karakó case the applicant was a politician. During an election campaign an opponent had said in a flyer that the applicant was in the habit of putting the interests of his electors second. The applicant accused his opponent of criminal libel, but the prosecutor's office terminated the investigation on the ground that the flyer concerned the applicant as a candidate rather than as a public official and so its publication was not a matter for a public prosecution. Then, acting as a private prosecutor, the applicant submitted an indictment for libel. The district court dismissed the indictment on the ground that the opponent's statement was a value judgment within the limits of acceptable criticism of a politician. The applicant complained of a violation of his article 8 rights. The European court held that there had been no such violation.
39 As the European court's judgment in the Karakó case itself shows, in Petrina v Romania (Application No 78060/01) (unreported), given 14 October 2008 , the court had confirmed, at para 19, that the right to protection of reputation is a right which, as an element of private life, falls within the scope of article 8 ("le droit ŕ la protection de la réputation est un droit qui relčve, en tant qu'élément de la vie privée, de l' article 8 de la Convention"). The court had gone on, at para 29, to survey its previous case law, ending up with the statement in Pfeifer v Austria (2007) 48 EHRR 175, 183, para 35, that "a person's reputation, even if that person is criticised in the context of a public debate, forms part of his or her personal identity and psychological integrity …"
40 In the Karakó case the European court did not depart from that earlier jurisprudence. Rather, it accepted, at para 23, that some attacks on a person's reputation could be of such a seriously offensive nature as to have an inevitable direct effect on the victim's private life. But the court took the view that, on the facts, the applicant had not shown that the publication in question had constituted such a serious interference with his private life as to undermine his personal integrity. That being so, the applicant's reputation alone was at stake in the context of the expression which was said to have damaged it.
41 Contrary to what [counsel] suggested, however, this conclusion did not mean that the court was proceeding on the basis that the applicant's claim in respect of his reputation did not fall within the scope of article 8 . That would have been inconsistent with the court's previous case law and would also have made nonsense of the reasoning in paras 24–29 of the judgment. In particular, in paras 24 and 25 the court is concerned with the inter-relationship of articles 8 and 10 in the circumstances. The outcome of that discussion (para 26) is that, even though the applicant is founding on article 8 , the court must consider whether the Hungarian authorities properly applied the principles inherent in article 10 . The court concludes that they did: para 27. Putting the two strands together, the court goes on to find, in para 28, that the applicant's claim that his reputation as a politician has been harmed is not sustainable under article 8 and that a limitation of his opponent's right to freedom of expression under article 10 would have been disproportionate. That leads, finally, to the conclusion that there has been no violation of article 8 .
42 In short, in the Karakó case the European court was concerned with the application of articles 8 and 10 in a situation where, in the court's view, the applicant had not shown that the attack on his reputation had so seriously interfered with his private life as to undermine his personal integrity. In fact, the court does not mention any specific effects on the applicant's private life. In the present case, however, as already set out at para 21 above, M does explain how he anticipates that his private life would be affected if his identity were revealed. Admittedly, he appears at one point to single out the alleged damage to his reputation. Nevertheless, the court is really being invited to consider the impact of publication of his name on his reputation as a member of the community in which he lives and the effect that this would have on his relationship with other members of that community. In that situation the alleged effect on his reputation should be regarded as one of the reasons why, he contends, a report that identified him would seriously affect his private life. On that basis the report would engage article 8(1) . "
"Freedom of expression
1 Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.
2 The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary."
"The interplay between articles 8 and 10 has been illuminated by the opinions in the House of Lords in Campbell v MGN Ltd  2 AC 457. For present purposes the decision of the House on the facts of Campbell and the differences between the majority and the minority are not material. What does, however, emerge clearly from the opinions are four propositions. First, neither article has as such precedence over the other. Secondly, where the values under the two articles are in conflict, an intense focus on the comparative importance of the specific rights being claimed in the individual case is necessary. Thirdly, the justifications for interfering with or restricting each right must be taken into account. Finally, the proportionality test must be applied to each. For convenience I will call this the ultimate balancing test. This is how I will approach the present case."
"12 Freedom of expression.
(1) This section applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression.
(2) If the person against whom the application for relief is made ("the respondent") is neither present nor represented, no such relief is to be granted unless the court is satisfied—
(a) that the applicant has taken all practicable steps to notify the respondent; or
(b) that there are compelling reasons why the respondent should not be notified.
(3) No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed.
(4) The court must have particular regard to the importance of the Convention right to freedom of expression and, where the proceedings relate to material which the respondent claims, or which appears to the court, to be journalistic, literary or artistic material (or to conduct connected with such material), to—
(a) the extent to which—
(i) the material has, or is about to, become available to the public; or
(ii) it is, or would be, in the public interest for the material to be published;
(b) any relevant privacy code.
(5) In this section—
"court" includes a tribunal; and
"relief" includes any remedy or order (other than in criminal proceedings)."
The Practice Guidance
9 Open justice is a fundamental principle. The general rule is that hearings are carried out in, and judgments and orders are, public: see article 6.1 of the Convention, CPR r 39.2 and Scott v Scott  AC 417. This applies to applications for interim non-disclosure orders: Micallef v Malta (2009) 50 EHRR 920 , para 75ff; Donald v Ntuli (Guardian News & Media intervening)  1 WLR 294 , para 50.
10 Derogations from the general principle can only be justified in exceptional circumstances, when they are strictly necessary as measures to secure the proper administration of justice. They are wholly exceptional: R v Chief Registrar of Friendly Societies, Ex p New Cross Building Society  QB 227, 235; Donald v Ntuli  1 WLR 294, paras 52–53. Derogations should, where justified, be no more than strictly necessary to achieve their purpose.
11 The grant of derogations is not a question of discretion. It is a matter of obligation and the court is under a duty to either grant the derogation or refuse it when it has applied the relevant test: M v W  EWHC 2457 (QB) at .
12 There is no general exception to open justice where privacy or confidentiality is in issue. Applications will only be heard in private if and to the extent that the court is satisfied that by nothing short of the exclusion of the public can justice be done. Exclusions must be no more than the minimum strictly necessary to ensure justice is done and parties are expected to consider before applying for such an exclusion whether something short of exclusion can meet their concerns, as will normally be the case: Ambrosiadou v Coward  EMLR 419 , paras 50–54. Anonymity will only be granted where it is strictly necessary, and then only to that extent.
13 The burden of establishing any derogation from the general principle lies on the person seeking it. It must be established by clear and cogent evidence: Scott v Scott  AC 417, 438–439, 463, 477; Lord Browne of Madingley v Associated Newspapers  QB 103, paras 2–3; Secretary of State for the Home Department v AP (No. 2)  1 WLR 1652 , para 7; Gray v W  EWHC 2367 (QB) at –; and H v News Group Newspapers Ltd (Practice Note)  1 WLR 1645, para 21.
14 When considering the imposition of any derogation from open justice, the court will have regard to the respective and sometimes competing Convention rights of the parties as well as the general public interest in open justice and in the public reporting of court proceedings. It will also adopt procedures which seek to ensure that any ultimate vindication of article 8 of the Convention, where that is engaged, is not undermined by the way in which the court has processed an interim application. On the other hand, the principle of open justice requires that any restrictions are the least that can be imposed consistent with the protection to which the party relying on their article 8 Convention right is entitled. The proper approach is set out in H's case  1 WLR 1645.
15 It will only be in the rarest cases that an interim non-disclosure order containing a prohibition on reporting the fact of proceedings (a super-injunction) will be justified on grounds of strict necessity, ie, anti-tipping-off situations, where short-term secrecy is required to ensure the applicant can notify the respondent that the order is made: T v D  EWHC 2335 (QB). It is then only in truly exceptional circumstances that such an order should be granted for a longer period: Terry v Persons Unknown  EMLR 400, para 41."
Conclusions on the application under CPR rule 39.2
The applications in relation to CPR rule 5.4C
"5.4C.— Supply of documents to a non-party from court records
(1) The general rule is that a person who is not a party to proceedings may obtain from the court records a copy of—
(a) a statement of case, but not any documents filed with or attached to the statement of case, or intended by the party whose statement it is to be served with it;
(b) a judgment or order given or made in public (whether made at a hearing or without a hearing), subject to paragraph (1B).
(2) A non-party may, if the court gives permission, obtain from the records of the court a copy of any other document filed by a party, or communication between the court and a party or another person.
(3) A non-party may obtain a copy of a statement of case or judgment or order under paragraph (1) only if—
(a) where there is one defendant, the defendant has filed an acknowledgment of service or a defence;
(b) where there is more than one defendant, either—
(i) all the defendants have filed an acknowledgment of service or a defence;
(ii) at least one defendant has filed an acknowledgment of service or a defence, and the court gives permission;
(c) the claim has been listed for a hearing; or
(d) judgment has been entered in the claim.
(4) The court may, on the application of a party or of any person identified in a statement of case—
(a) order that a non-party may not obtain a copy of a statement of case under paragraph (1);
(b) restrict the persons or classes of persons who may obtain a copy of a statement of case;
(c) order that persons or classes of persons may only obtain a copy of a statement of case if it is edited in accordance with the directions of the court; or
(d) make such other order as it thinks fit.
"In a case where documents have been placed before a judge and referred to in the course of proceedings, in my judgment the default position should be that access should be permitted on the open justice principle; and where access is sought for a proper journalistic purpose, the case for allowing it will be particularly strong. However, there may be countervailing reasons. In company with the US Court of Appeals, 2nd Circuit, and the Constitutional Court of South Africa, I do not think that it is sensible or practical to look for a standard formula for determining how strong the grounds of opposition need to be in order to outweigh the merits of the application. The court has to carry out a proportionality exercise which will be fact-specific. Central to the court's evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others."
The Confidential Schedule