![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
The Judicial Committee of the Privy Council Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> The Judicial Committee of the Privy Council Decisions >> Consolidated Contractors International Company SAL v Masri (Bermuda) [2011] UKPC 29 (9 August 2011) URL: https://www.bailii.org/uk/cases/UKPC/2011/29.html Cite as: [2011] UKPC 29 |
[New search] [View without highlighting] [Printable PDF version] [Help]
[2011] UKPC 29
Privy Council Appeal No 0077 of 2010
JUDGMENT
Consolidated Contractors International Company SAL (Appellant) v Mr. Munib Masri (Respondent)
From the Court of Appeal of Bermuda
before
Lord Walker
Lord Mance
Lord Collins
JUDGMENT DELIVERED BY
Lord Mance
ON
9 August 2011
Heard on 26 May 2011
Appellant Charles Hollander QC Adrian Briggs (Instructed by S C Andrew LLP) |
Respondent Simon Salzedo QC Colin West (Instructed by Simmons & Simmons LLP) |
LORD MANCE:
Introduction
Obtained by fraud
"A….. I know I signed the thing on CCUK, but I did not know, at the time, really the structure of the CC group of companies. I was not aware.
Q. Yes, it is not so much the structure of the group companies I am asking you about. It is your knowledge of which company within that structure was the original contracting party to the concession.
A. I did not know. It was – to me it was the CCC so far as I am concerned.
Q. May I put a more specific question? Did you know that CCIC was the original contracting party as at 6th November 1992?
A. Definitely not."
"72. In my judgment the suggestion that Mr. Khoury was contracting on behalf of CCUK, an English company with a limited role within CCC, merely because its writing paper was used for the purpose of setting out the terms of the 1992 Agreement, has an air of total unreality about it. Although I consider, on the basis of Mr. Brawley's evidence that Mr. Khoury would have had actual authority to contract on CCUK's behalf (and not merely ostensible authority), it was not the legal or beneficial owner of any interest in the Concession and an identification of it as the contracting party would have been wholly inconsistent with the express terms of the 1992 Agreement, as Mr. Aldous submitted, and indeed with the factual matrix which I have set out above. Not only was Mr. Masri aware that the entity that held the legal interest in the Concession was CCIC and that it was the contracting party under the PSA, but he had never suggested at any time, prior to serving his proceedings in June 2004, that CCUK, the English company, was in any way involved or liable to him. Nor is there any basis for suggesting that Mr. Khoury, in his personal, individual, capacity was a party to the 1992 Agreement. He clearly contracted as an officer, and on behalf of, the relevant CCC entities and there is no reason to suppose that he was assuming any personal liability thereunder.
73. In my judgment, the correct analysis, given the facts which I have set out above, was that Mr. Khoury, as the controlling shareholder in the CCC group, with Mr. Sabbagh's blessing, had the necessary actual authority to enter into the 1992 Agreement on behalf of whichever one or more company, or companies, within the CCC group was the appropriate corporate entity to agree to grant Mr. Masri an interest in the Concession. It was simply not a matter that concerned Mr. Masri or Mr. Khoury which precise corporate entity was the appropriate corporate entity; as far as they were concerned, Mr. Khoury was agreeing on behalf of 'CCC' and that was enough. …."
Abuse of process resulting from CCIC's contempt
"Since the date of the liability judgment, the actions of the Defendants have demonstrated in a patently obvious fashion that they propose to take advantage of any opportunity open to them to resist enforcement of the judgments of the English courts, to evade their responsibility to pay Mr Masri what is due to him, as found by the English courts, and to put every obstacle in his way to prevent him from enforcing judgment against them."
"The present application is demonstrably part of a wider litigation strategy by the Applicant in various parts of the world (including the jurisdiction where the registered judgments were first obtained) to frustrate the Judgment Creditor's legitimate efforts to obtain the fruits of his hard-earned judgments".
More recently, in the English proceedings on 21 September 2010, CCIC's attitude has been expressed by Mr Seamus Andrew of SC Andrew LLP (CCIC's solicitors) in these terms:
"[They] have …. failed to make voluntary payment of the judgment debt, while seeking, on advice, to take more or less every legitimate point that was open to them, including appeals on procedural matters, to resist enforcement" (para 22).
Mr Andrew cited a statement by HHJ Mackie in a judgment of 25 May 2007 distinguishing between "attempts to resist enforcement, which of course the defendants are entitled to take" and "attempts to relitigate [in the circumstances before HHJ Mackie, in the Yemen] what has already been decided in a case as part of a plan of campaign to make enforcement more difficult" (para 23), and went on to say that in September 2010:
"The Companies are resisting enforcement by all legal means as instructed by the Lebanese Court which also prohibits payment of the judgment debt unless and until the Applicant obtains an order for exequatur in the Lebanon" (para 25).
"If the shareholders had appointed new boards for the judgment debtors and they had decided to honour the English judgments, the judicial administration would, in all probability, have been put to an end by the judge" (para 129(i));
He held that CCIC and CCOG were in contempt of various of the English court's orders - in the case of CCIC, orders relating to the provision of documents or disclosure of information for the purposes of enforcement of the English judgments. At the end of his judgment he also said this:
"429. I must not be understood as passing any judgment on the decisions of the Lebanese Court on matters of Lebanese Law, which are entirely a matter for them. What I do say is that when this court is faced with a deliberate refusal to honour a judgment obtained from it after a full trial, which the judgment debtors could have appealed, followed by breaches of further orders made with a view to securing that that judgment, and subsequent orders giving effect to it, are honoured, and when, as I am sure is so, the controlling shareholders could readily regain control of the judgment debtors and cause them to honour the judgment, it should give little weight to the protestation of the contemnors that they are bound by restrictions obtained at the behest and with the approval of themselves and their shareholders. A party cannot suffer himself to be bound in chains, from which he could, if he wished, release himself and rely upon those chains as a restraint which should mitigate his failure to comply with the orders of the court. I also regard it as in the highest degree unlikely that the judgment debtors or their administrators or their officers would in practice suffer any prosecution or incur any penalty under Lebanese law if they were to comply with the orders of this court.
430. I should also add that it is not clear to me that the Lebanese Court has had all the relevant considerations put before it. Mr Chedid told me, I am sure correctly, as did Professor El Khoury, that under Lebanese Law it was the duty of the judicial administrator to act in the best interests of the companies and not, if there was any difference, the shareholders. If there was a conflict of interest between the shareholders and the companies it was his duty to prefer the interests of the companies. There was, also, no practical or legal impediment to the judgment debtors honouring the orders of this court when they were made. The stance that has been taken by the judgment debtors in deciding not to pay the judgment debt, and in resisting any attempt to secure payment, coupled with the running down of their respective businesses in order to avoid enforcement against the assets thereof, appears to me to be in the interests of the shareholders, whose desire it is that Mr Masri should never be paid a cent, but not of the companies. I accept Mr Chedid's evidence that there is, indeed, a conflict of interest between the shareholders and the companies.
431. It would appear to me, although this is a matter for the Lebanese Court, that it is incumbent on the judicial administrator to lay these considerations fully before the Lebanese court, with a full explanation of all the steps that the companies have been and are taking to avoid enforcement and the actual and likely future effect of that on the companies, in particular in relation to new business, expressing his opinion as to what, in the light of that explanation it is in the interest of the companies (as opposed to their shareholders) to do, and to seek directions as to whether, in the light of that, he should procure the companies to pay the judgment debts. I note from Mr Joujou's report of November 2010, that the dispute has already caused the companies to be severely hampered in their attempts to obtain new business and reputationally, and, as is common knowledge, they are not taking new business. Other companies in the Group have taken over. Employees have been moved to other companies. The overall picture is of prosperous companies being run down in order not to pay a particular judgment debt, which its shareholders insist on not honouring."
"Certainly in a case where a contemnor not only fails wilfully and contumaciously to comply with an order of the court but makes it clear that he will continue to defy the court's authority if the order should be affirmed on appeal, the court must, in my opinion, have a discretion to decline to entertain his appeal against the order."
That statement is not precisely applicable to the present situation, since the contempts which have been established do not relate to the registration of the English judgments in Bermuda or to the judgments of the Bermudian courts upholding such registration, but to orders of the English courts designed to facilitate enforcement of the English judgments. But the statement is in the Committee's view still of some relevance. CCIC, as a judgment debtor, is a proven contemnor in relation to the enforcement of the English judgments against it. The Bermudian registration is only necessary because CCIC has by its contempts and conduct in England hampered the enforcement of the English judgments wherever and as far as it could. CCIC now attempts to challenge the Bermudian registration by reference to Mr Masri's supposed fraud in obtaining jurisdiction over CCUK and so CCIC in England. It is not credible to think that CCIC has any intention of complying with the Bermudian judgments, even if the Bermudian registration of the English judgments stands. If there were otherwise any doubt about the appropriateness of striking out this appeal on the merits, the Committee considers that the appeal should be struck out as abusive in the light of the history of CCIC's contempt and conduct in relation to the English judgments and its lack of any real intention or willingness to comply with the Bermudian judgments if the appeal fails.
Conclusion