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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Imamovic v Cinergy Global Trading Ltd [2007] EWCA Civ 284 (30 March 2007)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2007/284.html
Cite as: [2007] EWCA Civ 284
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
The Honourable Mr Justice Cooke
Strand, London, WC2A 2LL |
||
B e f o r e :
____________________
| Dr Nedzad Imamovic |
Appellant |
|
| - and - |
||
| Cinergy Global Trading Ltd |
Respondent |
____________________
WordWave International Ltd
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
____________________
Crown Copyright ©
- This application for permission to appeal the decision of Cooke J dated 28 February 2006 was listed before me for oral hearing on 24th November 2006. At the conclusion of the hearing which lasted for more than a morning, the appellant asked permission to put in further submissions. I gave him permission and later further extended the time during which the submission had to be served on the Court. The 165 page submissions arrived on 23 January 2007. There is considerable repetition in the written submissions but I bear in mind that the appellant is not a lawyer. Much of the material is a re-arguing of the case.
- I make it clear that I have not read any submissions from the Respondent which were not available to Cooke J.
- In paragraphs 1 and 2 of his judgment, Cooke J briefly describes the nature of the appellant's claims.
- During the course of his necessarily extensive judgment Cooke J rejected the primary case and the two alternatives: representation and ratification.
- It is the case of Dr Imamovic that Energa was in "partnership" with CGTL and the Agricultural Bank of Greece (ATE) and that all are equally bound by the Contract. Throughout the appellant's pleadings there is reference to the defendant being in "partnership" with Energa and the Bank. Before the trial judge he relied on many public notices in Greek newspapers and other public representations showing, so he claimed, that there was a partnership between Energa, the respondent and the Bank. He relied on those documents before me to show that there was in Greek law a 'kinopraxia' formed by them.
- In his amended particulars of claim dated 13 May 2005 the appellant wrote (9.9) that he "was aware that the contractual relationship between the Defendants and Energa was governed by the English law". In paragraph 10.8 the appellant alleged:
- The thrust of the appellant's primary case as developed before Cooke J was that the respondent was, in English law, in partnership with Energa and thus bound by the terms of the July 16 agreement.
- The 16 July Contract is headed 'Private Agreement', Athens, July 16th 2001. It is, as the judge found, governed by English law. The first part of the contract, signed by Achille Floros and the appellant, reads as follows:
- The reference to a co-operation agreement is a reference to what the judge was to call a second Joint Co-operation Agreement dated 7 November 2000, to which the Bank was not a party. I set out the terms of that below.
- Both that agreement and the earlier one were governed by English law (see paragraph 12).
- The penultimate recital (the reference to the decision to set up a power company) is a reference to an agreement dated 15 February 2001, to which I turn later.
- The contract continues:
- Cooke J said, about the July 16 contract:
- In my view Cooke J's conclusion in paragraphs 10 and 11 are unassailable for the reasons he gives.
- It follows that if the appellant is to succeed he must show that, notwithstanding the terms of the July 16 agreement, CGTL is nonetheless bound by the terms of the contract.
- Cooke J examined two joint co-operation agreements between Energa and CGTL to see whether they helped the appellant to show that CGTL was bound by the terms of the contract
- Cooke J reached the following conclusion about this agreement:
- In the judgment of Cooke J this agreement does not help the appellant, indeed the opposite. His conclusion is again unassailable for the reasons given by him.
- Cooke J continued:
- As the second joint co-operation agreement Cooke J said:
- Cooke J continued:
- In paragraph 21 Cooke J held that this agreement: "could not support any conclusion that a partnership in English law existed between CGTL and Energa". He said:
- This conclusion is unassailable for the reasons given by the judge.
- Cooke J then refers to another document, which is central to the appellant's application for permission to appeal. The appellant told me that he received a copy in February 2005.
- Later in the judgment Cooke J said:
- Cooke J in paragraph 24 set out the relevant provisions of the agreement:
- Cooke J continued:
- In paragraph 29 Cooke J concluded:
- This conclusion, particularly the underlined passage, is again not open to challenge on an appeal.
- Cooke J says that it is clear that Energa continued to work with CGTL in 2001 and 2002 in seeking to obtain the supply of electricity from countries outside the Greek borders and that Dr Imamovic sought to obtain offers or indications of availability from Bosnia in particular.
- Cooke J then refers to a further agreement:
- Cooke J then refers to a Joint Venture Agreement dated 18 May 2004, the relevant terms of which were:
- Cooke J, after setting out these terms, continued:
- In paragraph 37 he reached the only conclusion about the documents which, in my view, was open to him, namely:
- Cooke J then examined one of a number of attempts by CGTK and Energa to conclude joint venture agreements with other parties. In paragraph 38 and following he said:
- The appellant submitted to Cooke J:
- To evaluate this submission Cooke J examined the history of the matter and reached conclusions about the credibility of the witnesses. As to the witnesses Cooke J said:
- The judge said:
- The judge found (paragraph 54) that Mr Contomichalos was inclined to overstate the position in order to rebut what he saw as a speculative and fanciful claim by Dr Imamovic. However the judge concluded that the main thrust of the evidence of Mr Contomichalos:
- Cooke J examined a number of documents dated June 2001, and thus preceding the 16 July contract, and concluded:
- Cooke J then analysed the appellant's evidence about a meeting dated 29 June 2001. According to the appellant he met Mr Contomichalos on that date and:
- The judge then quoted from the appellant's witness statement:
- The judge continued:
- It was the evidence of Mr Contomichalos that the appellant had invented this meeting. Having considered this evidence and having examined a number of documents the judge concluded:
- The judge's detailed conclusion about this alleged meeting with Mr Contomichalos is again unassailable. The judge clearly and unappealably rejected the appellant's evidence that representations had been made to him by Mr Contomichalos that CGTL, ATE and Energa were partners.
- The judge then examined the evidence about an alleged meeting on 7 September and again rejected much of the evidence of the appellant about that meeting.
- I turn to 4 October. As the judge said at the start of his judgment:
- The judge looked at a fax of 4 October and concluded:
- The judge examined the evidence of the appellant about a telephone call on 4 October. According to the appellant he requested Mr Contomichalos to affirm and ratify the July 16 contract and was told that the contract was binding on the respondent. The judge examined the evidence and concluded:
- As to a fax dated 4 October sent by the appellant to Mr Floros and a post-script. The judge concluded:
- The judge found a number of things about the appellant's case, "inconceivable". "They do not ring true". "They have the look of fabricated statements introduced into the story in an attempt to make a case, after reading or being advised on the relevant law". (See paragraphs 107-109)
- In this part of the judgment the judge rejected this alternative case.
- In paragraphs 112-113 the judge said:
- After an extensive analysis of the appellant's evidence about other meeting and documents, Cooke J reached the following conclusions:
- I turn to the various grounds of appeal.
- The appellant submits that the decision of Cooke J should be quashed and either that the appeal be allowed or the case be remitted for a further trial.
- It is submitted that the defendants obtained the decision by misrepresentation which resulted in the use of the wrong law by the judge. The use of the wrong law resulted in a wrong decision about the subsistence of a partnership, affected the evidence of the witnesses and the assessment of their credibility and the whole judgment was thereby affected.
- I repeat what Cooke J said about the relevant law:
- The appellant accepts that the claimant was pursuing legal argument before the learned judge using English rather than Greek law (paragraph 44 of Skeleton Argument).
- He writes:
- He continues:
- As I have already pointed out the appellant never argued that Greek law applied. The appellant continues in an attempt to justify his changed position:
- The thrust of his case is that, had the appellant known in advance that the judge would find that the ATE had signed the 15 February agreement and that it was in force, then he would have argued that under Greek law when Energa signed the July 216 agreement, they signed it on behalf of the respondent and the Bank.
- Mr Contomichalos had said in his witness statement dated 24 June 2005:
- I have considerable doubt whether the appellant has laid a sufficient basis under Ladd v. Marshall [1954] 1 WLR 1489 (cited by the appellant in paragraph 60 of his skeleton argument) for introducing the fresh evidence. He ran the whole case on the basis that English law applied notwithstanding paragraph 32 of the witness statement, and, having lost, he now wishes to argue that Geek law applied to define the relationship of the respondent, Energa and ATE. He sets out the procedural history at paragraphs 36 and following of the 22 January 2007 submissions.
- The appellant knew about the agreement, he knew that it was governed by Greek law, he knew about the pleadings in the separate Greek action involving the 'kinopraxia' and knew that the date ascribed to the Memorandum in the pleadings by Energa and ATE was 15 February 2001. The appellant could have obtained evidence from Energa or ATE if he had thought that the Memorandum was of the significance which he says it is. He set out to prove that the agreement was in force (see pages 37-44 of the 22 January submissions) and therefore he should have anticipated that the judge might well find in his favour on this point and have called an expert on Greek law if he had wanted to do so. The absence of any evidence of Greek law is not, as the appellant claims, due to misrepresentation but due to the way that the appellant decided to pursue his claim. Mr Contomichalos made it clear in answer to questions from the appellant that it was his understanding that the document had not been signed by the Bank. He said that he would have expected Energa to advise him had it been signed by the Bank and he would have expected to be sent a copy of the agreement signed by all three. He accepted that another copy of the document was signed by the Bank and that he was not aware of it. In my view it is not arguable that the witness statement and the answers given by Mr Contomichalos can properly be described as misleading or a misrepresentation. The judge found in paragraph 51 that Mr Contomichalos was not seeking to mislead the court on this issue. That is a finding not open to challenge on appeal.
- As the judge pointed out during the course of the trial,:
- The fresh evidence takes the form of the judgment in the Greek Court and expert evidence about the application of what is called de facto kinopraxia to this case. The expert upon whom the appellant now relies examines the Memorandum, notes the non-binding clause and states in paragraph 149 that the Memorandum is not a contract in law and should not be treated as a contract. It is irrelevant he says because what he finds established is a de facto partnership arising from the documents to which the appellant referred both the judge and myself. The judge's conclusion set out in the previous paragraph was therefore right in Greek law also. The report on which the appellant now wishes to rely undermines his case for calling fresh evidence. The Memorandum, according to the expert is irrelevant. If that is right then the appellant could have called at trial evidence that what the parties had done in Greece created a de facto partnership or kinopraxia.
- The appellant took me through the substance of the Greek judgment. The facts, set out by the appellant at page 53 of appeal bundle A, have some similarities with the present case. The Bank pleaded the non-binding nature of the Memorandum, as reflected in its terms. The respondent did not take part in the proceedings. Energa pleaded that 'kinopraxia' was formed and, if liable, their liability should be no more than 20%. (It is of note that Energa was not sued by the appellant in the instant case and took no part at all in the proceedings before Cooke J).
- According to the translation provided to me, the judge in Greece held:
- It will be noted that the judge does not decide the case in favour of the claimant, albeit he seems to accept that there was or may have been a joint liability towards the claimant. In an earlier paragraph the judge refers to the claimant entering into a contract with Energa and subsequently with Energa as the representative also of the other defendant companies'. The terms of any agreement may therefore be quite different to the July 16 contract in the instant case.
- Although I have doubts about whether the Greek judgment is admissible on the appeal, given the way that the appellant conducted the trial, I shall assume, only for the purposes of this application, that it is. I also doubt whether, at a trial, a judge would find that in Greek law a non-binding agreement could have the effect for which the appellant contends and which his expert denies. In any event I shall assume that in Greek law there was some form of kinopraxia. I must then ask whether it is arguable that the fresh evidence, if admitted before Cooke J, would probably have had an important influence on the outcome of the case. As to that I have no doubt that it would not.
- The primary case depended on the interpretation of the July 16th agreement. As I have pointed out the two alternative cases were rejected on the facts. The fresh evidence would not have affected those findings. The interpretation was a matter of English law. As Cooke J concluded, giving full and unassailable reasons for the conclusion:
- If in Greek law there was a kinopraxia between the respondent, Energa and ATE that could have no effect on the construction of the July 16 contract or on the judge's conclusion for dismissing the two alternative cases put forward by the appellant. It is of particular note that the judge found as a fact that the appellant was well aware that he had a contract with Energa alone (see eg page 156).
- I therefore reject the application to introduce the fresh evidence.
- The appellant repeats this same argument in various forms in other grounds, to which it is not necessary to refer. Suffice it to say, they also have no merit.
- In the second ground the appellant criticises the judge for saying:
- The appellant submits that it is not necessary have a knowledge of English law to rely on English law and he objects to the reference to him being brought up in Bosnia. I see no merit in this ground nor in the ground that attacks the finding:
- These findings were proper comments on the appellant's attempts, with the benefit of hindsight in the judge's view, to rely on the English law of partnership.
- The appellant makes a number of attacks on the judge's findings of fact in the various documents which he has produced for the Court of Appeal. I have gone through the judge's findings in some detail. The judge went through the facts necessarily in much greater detail. In my view there was overwhelming evidence to support his adverse credibility findings, particularly those relating to the second and third alternative way in which the appellant put his case at trial. I have no doubt that permission to appeal must be refused.
LORD JUSTICE HOOPER :
1. In this action the claimant (Dr Imamovic) claims damages from the defendant (CGTL) for breach of a contract dated 16 July 2001 (the Contract) and made between Energa SA, a Greek company and himself, when trading as Independent Consultants Group (ICG). Dr Imamovic alleges that Energa was in partnership with CGTL and the Agricultural Bank of Greece (ATE) and that all are equally bound by the Contract. Alternatively, he alleges that, on 29 June 2001, CGTL in the person of Mr Contomichalos represented to him that CGTL was in partnership with Energa and ATE and held out those entities as its partners.
2. As a further alternative, Dr Imamovic alleges that Energa purportedly concluded the Contract as agent for CGTL and that on 4 October 2001 Mr Contomichalos ratified the Contract on behalf of CGTL, such ratification being confirmed in a fax message from Dr Imamovic to Mr Contomichalos. There was allegedly further ratification by conduct, most of which post dated the 4 October conversation.
The Contract provides that in case of any dispute the arbitration would be carried out in London as the Claimant was resident in the UK and wished the Contract to be governed by the English Law as the contract between the defendants and Energa is governed by the English Law.
1. "Energa S.A., a company established in Greece and having its registered address in Athens, 118B Kifissias Ave. 115 26, legally represented by Mr Achille Floros, President (hereinafter referred to as "Energa")
2. INDEPENDENT CONSULTANTS GROUP (ICG), a company established in England and having its registered address 51A Chase Side, London N14 5BU, legally represented by Dr. Nedzad Imamovic (hereinafter referred to as "ICG").
Hereinafter collectively referred to as "the parties".
Whereas ENERGA S.A. is an engineering consultants company engaged mainly in energy business and more specifically in the electric power trading sector in the Balkans and mainly in Greece.
Whereas ENERGA S.A. has signed a co-operation agreement with the British-American company Cinergy Global Trading Ltd. according to which the two companies co-operate to trade electric power in Greece.
Whereas Cinergy & Energa & the Agricultural Bank of Greece decided to set up a power company in which they participate in the following proportion: Cinergy 40%, Agricultural Bank 40%, Energa 20% and they have also submitted an application to obtain a licence for the supply of electric power to Greece.
Whereas ICG is a consultants company which is occupied, inter alia, in the trading of electric power generated in former Yugoslavia (FYROM, Serbia, Montenegro, Kosovo, Bosnia, Croatia and Slovenia) and has high level contacts in this country regarding energy.
The Parties hereby agree upon the following:
1. They will co-operate jointly in order to be able to supply electric power generated in former Yugoslavia and will be delivered at the Greek borders (via Albania or Serbia FYROM).
2. This co-operation is at a mutual exclusivity basis for its duration.
3. The fee of ICG will be equal to 5% of the profits from the sale of the electric power generated in the former Yugoslavia and delivered at the Greek borders and sold to the Greece energy company P.P.C. or other industrial consumer.
4. This agreement done with Energa, will be in force under the new legal entity that will result from the co-operation between CINERGY A.B.G. ENERGA, based on the expansion of the present agreement.
5. The above mentioned expansion of the present agreement with the new company will take place by care of Energa.
6. The duration of the co-operation is three (3) years and can be extended further with the consent of both the parties.
7. If no commercial act has been reached within six (6) month, this agreement is terminated by right without any claims by either of the parties unless the parties mutually decide otherwise.
8. Further to the agreement being extended as foreseen in 4 & 5 above and no later than September 15th 2001, ICG will receive the amount of 500£/month as partial reimbursement of its operational expenses. In case the operational expenses exceed the above agreed amount due to extra travel expenses or similar then ICG will inform Energa and these extra expenses can be covered by the company subject to prior agreement. All extra costs of ICG have to be claimed with the company by presenting original receipts and any other further documentation.
9. In case ICG proposes other energy or investment projects in the former Yugoslavia or the wider area, there will be a separate agreement as the case may be.
10. In case of dispute this will be resolved by arbitration according to the standards of London Chamber of Commerce.
11. The parties agree to exchange information regarding the object of their co-operation which will be ruled by the principle of confidentiality. Energa therefore has already sent on July 12th, 2001 the Bidding Inquiry of PPC Greece for the purchase of a significant amount of electric power for three (3) years.
Given that the final date for submission of offers is September 3rd, 2001 the parties agree to intensify their efforts in order to be able to participate effectively in the above mentioned bidding Inquiry.
For that purpose ICG is expected to make specific proposals for the possibility to supply electric power from the former Yugoslavia to be delivered at the Greek borders according to the above mentioned bidding inquiry.
10. In my judgment the terms of the Contract with Dr Imamovic do not themselves give rise to any suggestion that any entity other than Energa undertook obligations towards him. The agreement specifically draws attention to the three distinct entities, Energa, CGTL and ATE, refers to the nature of the agreement between them as one of co-operation and requires Energa to ensure that, if a joint venture company is formed, the agreement will then become binding upon that company. It is clear that if Energa should fail to procure such liability on the part of the new joint venture company, when formed, Energa would be liable for such failure. There is express provision for Energa's obligation in this respect, in the context of the Contract which contains reference to the co-operation agreement between CGTL and Energa and the new joint venture company resulting from co-operation between the three distinct entities. Clause 4 thus draws a distinction between the 'private agreement' between Energa and Dr Imamovic and an 'expansion' of it on the one hand, as and when a joint venture company is formed, and the existing co-operation of the other entities and/or an existing (or past) co-operation agreement between CGTL and Energa on the other.
11. In my judgment, there is nothing on the face of the document to suggest that Energa was contracting as a partner of CGTL or ATE or as an agent for either or both of them. The terms of the agreement are, to the contrary, inconsistent with any such suggestion.
12. There are two 'joint co-operation agreements' between Energa and CGTL dated 31 January 2000 and 7 November 2000 respectively, both governed by English law. The first contract recited the intention of PPC to issue a tender in February 2000 for the supply at the Greek border of electric energy during the summer months for a period of four years (2000-2004) (the Project) and the desire of Energa and CGTL to work together to join forces in the preparation and submission of a bid (the offer). It also referred to CGTL's interest in establishing itself in electricity trading in the Balkans in cooperation with a suitable regional partner such as Energa.
13. The first Joint Co-operation Agreement included the following:-
Article 1 SUBJECT
1.1 The Parties shall co-operate for the joint preparation and submission of the Offer and in case of success the implementation of the Project.
1.2 The Parties shall constitute the appropriate legal body according to the tender requirements for submitting the Offer to PPC.
1.3 The Parties agree, subsequent to the successful submission of the Offer, to enter into a joint venture agreement ("JVA") and to establish an appropriate joint venture corporate vehicle ("JVCo") for developing and implementing their joint co-operation on the Project. For this purpose, CINERGY may designate any of its subsidiaries or affiliates in holding CINERGY'S interest in the Project.
Article 2 TERMS OF CO-OPERATION
2.1 EG and CINERGY shall endeavour to source electric energy for the Project at the most competitive terms and conditions. In particular, the Parties will obtain proposals from the Romanian electric system and other possible suppliers of energy outside of the Balkans.
2.2 EG will use its connections for establishing appropriate transit/swap pre-agreements (and later agreements) and other required agreements with the various Balkan countries involved from the point of origin of the energy to the Greek borders. Any such agreements will be subject to the review and approval of the JVCo. CINERGY will endeavour to provide support at the government/public organisations level in those countries through U.S. diplomatic and other channels.
2.3 The scope of responsibility of each Party shall be agreed and detailed in the JVA. The day-to-day management of the Project will be entrusted to ENERGA S.A. and detailed in the JVA. ENERGA S.A. will at all times act in the interests of the JVCo in accordance with the terms of the JVA. The financial control of all the Project cash-flows will be entrusted to CINERGY and detailed in the JVA.
2.4 EG and CINERGY will establish jointly and agree the budget/costing of the Offer. All such costs shall be directly related to the Project, including but not limited to, for primary energy buying, transit/swap costs, management costs and other third party costs. The equity capital of the Parties in the JVCo to be established pursuant to Article 1.3 and the sharing of profits of the JVCo shall be as follows:
CINERGY 60%
EG 40% of which 20% is carried interest according to Article 2.5
2.5 The participation of the Parties in the financial obligations (including all bonds and letters of credit and other liabilities) relative to the submission of the Offer for the Project including the issuance of the participation bond and if successful of the performance bond shall be:
- CINERGY 80%
- EG 20%
It is hereby understood that EG is granted a 20% carried interest in the risk/benefit ratio, such carried interest being equal to the contribution of goodwill and regional know-how by EG to the development of the joint venture.
2.7 No less than twenty (20) days prior to the date for submission of the Offer, EG must provide evidence from its bankers that it is prepared to issue the form of financial obligation required in accordance with EG's obligations herein with respect to all bonds and Letters of Credit. Notwithstanding any other provision to the contrary, in the event EG fails to comply with its obligations in Article 2.5, CINERGY shall have the right to proceed in submitting the Offer on its own and the Parties shall endeavour to agree an alternative form of joint co-operation with respect to the Project. Each Party acknowledges its intention to support the Project and will provide such undertakings, including by way of equity funding obligations or credit support, in accordance with the allocation stated in Article 2.5"
14. Not only is there no suggestion of partnership in this document but there is express provision for the future creation of a joint venture corporate vehicle and the conclusion of a joint venture agreement, once an offer had been accepted by PPC. In the context of the agreement, the parties obviously intended, once a deal was struck with PPC, to conclude an agreement and form a joint venture company through which that deal would be channelled. The reference to a "suitable regional partner" was plainly not intended to speak of partnership in the technical sense and could not reasonably be so understood. Article 5.1 provided for the Parties to co-operate with each other for their mutual benefit in pursuit of the Project and not to compete. Article 3 moreover expressly provided as follows:-
"No partnership, agency or sharing of profits or losses between the parties shall be created or intended by this Agreement, and the parties shall ensure that their respective rights, obligations and liabilities under the Project will be set out clearly and separately in the JVA. Nothing in this Agreement shall entitle any Party to pledge the credit or incur any liabilities or obligations binding upon any other Party except as may be expressly agreed by each of the Parties."
15. Article 6 is a "entire agreement" clause and Article 7.1 provided that the agreement would terminate upon the happening of any one of a number of events including "execution of the JVA", "notification from PPC that the offer is unsuccessful" or July 31 2000.
16. Nothing ever resulted from this agreement and no joint venture co-operation vehicle was ever formed or joint venture agreement made, but on 7 November 2000 a second "joint co-operation agreement" was concluded between Energa and CGTL. In this case the recitals referred to Energa's experience and know-how in sourcing energy, transiting through the Balkan region and accessing the organisation and operating system of PPC, whilst also (as in the first agreement) referring to CGTL's interest in establishing itself in electric energy trading in the Balkans "in co-operation with a suitable regional partner such as [Energa]". Recital D referred to Energa and CGTL's desire to work together and their decision to join forces to the end of trading electricity in the Balkan region.
17. The second Joint Co-operation Agreement contained the following provisions:-
"1.1 The Parties shall co-operate to trade electricity from the Balkan region to Greek customers and/or sell electricity to other customers through Greece.
The Parties agree, subsequent to the conclusion of the first transaction, to enter into a joint venture agreement ("JVA") and to establish an appropriate joint venture corporate vehicle ("JVCo") for developing and implementing their joint co-operation on the Project. For this purpose, CINERGY may designate any of its subsidiaries or affiliates in holding CINERGY'S interest in the Project
Article 2 TERMS OF CO-OPERATION
2.1 EG and CINERGY shall endeavour to source electric energy for the Project at the most competitive terms and conditions. In particular, the Parties will obtain proposals from the Romanian, Bulgarian, Serbian electric systems and other possible suppliers of energy outside of the Balkans.
2.2 EG will use its connections for establishing appropriate transit/swap pre-agreements (and later agreements) and other required agreements with the various Balkan countries involved from the point of origin of the energy to the Greek borders. Any such agreements will be subject to the review and approval of the JVCo. CINERGY will endeavour to provide support at the government/public organisations level in those countries through U.S. diplomatic and other channels.
2.3 The scope of responsibility of each Party shall be agreed and detailed in the JVA. The day-to-day management of the Project will be entrusted to CINERGY while ENERGA S.A. will participate as consultant as the above shall be detailed in the JVA. ENERGA S.A. will at all times act in the interests of the JVCo in accordance with the terms of the JVA. The financial control of all the Project cash-flows will be entrusted to CINERGY and detailed in the JVA.
2.4 EG and CNERGY will establish jointly and agree the budget/costing of the Project. All such costs shall be directly related to the Project, including but not limited to, for primary energy buying, transit/swap costs, management costs and other third party costs. The equity capital of the Parties in the JVCo to be established pursuant to Article 1.3 and the sharing of profits of the JVCo shall be as follows: CINERGY (60%) and EG (40%). In the case that the energy supplies will be effected via CZECHPOL ENERGY and/or ENEL. companies already related on business terms with CINERGY, the parties will re-examine the percentages of their participation with good faith and to the interest of the JVCo.
2.5 The management of the JVCo is agreed to be exercised and conducted jointly by CINERGY and EWG. The registered offices of the JVCo is agreed to be the offices of EG or CINERGY's offices in Athens.
2.6 EG reserves the right to transfer up to 50% of its participation in the JVCo to the Agriculture Bank of Greece or to another equivalent bank institution.
2.7 The Parties will co-operate to the end of acquiring a licence to supply electricity following the provisions of Law 2773/99 and also to extend the scope of their co-operation so as to include development of wind parks and hydro-electrical stations.
2.8 The participation of the Parties in the financial obligations (including all bonds and letters of credit and guarantee and other liabilities) relative to the Project shall be:
- CINERGY 80%
- EG 20%
It is hereby understood that EG is granted a 20% carried interest in the risk/benefit ratio, such carried interest being equal to the contribution of goodwill and regional know-how by EG to the development of the joint venture."
18. The agreement contained a similar exclusivity and confidentiality clause to that contained in the first co-operation agreement whereby the Parties agreed not only to co-operate but also not to compete. Once again there was an entire agreement clause and Article 3 of this agreement was in identical terms to Article 3 of the earlier agreement, negating any partnership or agency and debarring either Party from incurring any liability or obligation which would be binding upon the other, unless this was expressly agreed by them.
19. The agreement was to be effective from the date of signature and would expire on the execution of the JVA or June 30 2001, whichever occurred first.
20. Once again, nothing happened under this agreement in terms of business concluded. Nor was a joint venture agreement concluded or a joint venture corporate vehicle formed. None of the provisions in Article 2.3 - 2.6 ever became operative therefore, including the provision as to sharing of profits whilst the remaining provisions, including those relating to expenditure in Article 2.8 were largely to be effective prior to the occurrence of those events. The Agreement expired on June 30 2001.
21. This and the previous agreement, on their own terms, could not support any conclusion that a partnership in English law existed between CGTL and Energa. All that the parties had agreed to do was to "co-operate", with a view to obtaining a deal and setting up a joint venture vehicle of a corporate nature, making it clear that their relationship was not one of partnership in the meantime and that neither party could act in such a way as to bind the other. They were not therefore, by putting this agreement into effect and carrying out obligations under it, carrying on a business in common with a view of profit, within the meaning of the Partnership Act 1890. There was no common business, merely a joint objective for which they agreed to strive and no agreement to share profits until the joint venture vehicle was established. The parties went out of their way to agree that this was not to be a partnership and in that they succeeded.
22. Moreover this agreement only made passing reference to ATE which was not a party to it. Energa reserved the right to bring in its bankers in the future under Article 2.6, once the joint venture vehicle was established. There is no possible basis for asserting a partnership in which ATE was involved in consequence of this agreement.
23. In paragraph 32 of his witness statement [dated 24 June 2005] Mr Contomichalos referred to a draft Memorandum of Co-operation in Greek which he signed for CGTL and Energa also executed in February 2001. A copy was put before the Court, with a translation. It was governed by Greek law. His evidence was that he was told by Energa that this was never signed by ATE, the third party named in the document but in pleadings in a Greek action, both Energa and ATE refer to a document signed and dated 15th February 2001, in terms which make it plain that it is the same document. (Underlining added)
Although Mr Contomichalos said that he had never seen a fully signed copy of the tripartite Memorandum of Co-operation referred to earlier in this judgment, and his evidence was that this was never signed by ATE, I find that it was signed by ATE and that this must, in all probability, have occurred on 15 February, the date ascribed to the Memorandum by Energa and ATE in their pleadings in a separate Greek action.
"The present text is a memorandum of cooperation between ..[ATE] CGT . Energa . The aforementioned companies intending to engage in the exploitation of the energy sector in Greece . agreed and covenanted as follows:
1. This memorandum is not a contract and none of its clauses is legally binding. It simply forms the basis of negotiations for future cooperation and the drawing up of the relevant documents.
2. The parties intend to submit to the Regulatory Authority for Energy (RAE), on the 19th of February 2001, a joint dossier of expression of interest to obtain the relevant Electric Power Generation and Supply Licenses for the projects referenced in the attached list, which forms an integral part herein, and form relevant Consortia, if they are granted these licenses and the final agreements are approved by the competent statutory bodies of the ATE [handwritten] and CINERGY GLOBAL TRADING respectively.
3. The percentage of participation in the Consortium to be formed for the Electric Power Supply License is agreed as follows:
ATE 20%
CINERGY GLOBAL TRADING LTD 60%
ENERGA SA 20%
4. Any expenses incurred by the parties for the preparation of the dossier of expression of interest described above, as well any other expenses incurred until the formation of the consortia or any other legal form of co-operation (company, society etc.) for achieving the aforementioned or other relevant purposes, shall burden them pro rata to their above percentages of participation.
5. In the event that the parties form companies between them in order to engage in the purchase and supply of electric power, the participation of each party in their share capital shall amount to the above percentages, and the share capital of such companies shall not exceed the amount of 1 billion drachmas. Once such companies are formed, the second and third parties declare that they shall transfer to these companies all business activities of the already existing consortium between them. The business relationships between the parties as shareholders shall be defined by relevant agreements to be executed between them.
6. ATE undertakes the temporary administration and payment of required fees to the RAE for the licenses applied for, allocating the above expenses to CINERGY GLOBAL TRADING LTD and ENERGA SA pro rata to their participation in the aforementioned Consortia and/or Company.
7. The contents of this memorandum are confidential and it is explicitly agreed that none of its clauses shall be communicated or disclosed to a third party, unless it is required by Law or a final magisterial decision.
This Memorandum of Understanding is the only written record of any agreement between CGTL, Energa and ATE, the entities alleged to be partners by Dr Imamovic.
25. The intention expressed in the Memorandum of Understanding was to form a consortium or corporate body, with the percentages expressed owned by CGTL, Energa and ATE, if the power supply licence was granted and if the Boards of ATE and CGTL approved. The word translated "consortium" is apparently the Greek word "kinopraxia" which appears to have a known meaning in Greek law, although no evidence of Greek law was adduced by either party. The intention in the second joint co-operation agreement was to enter into a joint venture agreement, after the first transaction had been concluded in consequence of co-operation and also to establish a joint venture vehicle, namely a company, with a split of equity capital between CGTL and Energa alone. No joint venture entity or company was ever established as envisaged by either agreement, whether between two parties or three and whether to receive the transfer of the business activities, or otherwise. (Underlining added)
26. Under the Memorandum, expenses prior to the formation of the consortium "or any other form of co-operation", whether a company or society or anything else, were also to be apportioned, although it is unclear whether this provision, on its true construction, was to apply only if the company or consortium was actually formed.
27. The Memorandum however was agreed not to be binding in law and no evidence was presented by either party to show that the effect of this in Greek law was different from that in English law (which expressly governed the earlier two Co-operation Agreements). The Memorandum therefore gave rise to no obligations binding in law upon the parties to it and the earlier co-operation agreements, in terms nullified any suggestion of partnership.
28. The reference in the recitals to the Contract between Energa and Dr Imamovic to a signed co-operation agreement between Energa and CGTL, could only be to the second joint co-operation Agreement since ATE was a party to the Memorandum and is not referred to in that recital. The reference to CGTL and Energa alone in the relevant recital and to a "co-operation agreement according to which each agreed to co-operate to trade electric power in Greece" (which is reminiscent of recital D and Clause 1.1 of the second joint co-operation agreement) inevitably leads to this conclusion. In the following paragraph in the recitals to the Contract however, there is reference to the tripartite split of profit between CGTL, Energa and ATE, which clearly suggests that the Memorandum was there in mind. Although the second joint co-operation agreement was apparently no longer extant at the time when Energa and Dr Imamovic concluded their "private agreement" in the shape of the Contract, and there is no evidence of any extension to it, it appears that the Contract had reference to both these documents.
CGTL and Energa were, if these agreements governed the position between them, not in a partnership as a matter of English law and Energa had no actual authority to conclude any agreement binding upon CGTL at all, whether in the form of the Contract or at all. At most, all there could be between them in July 2001 was an agreement, as separate legal entities, to cooperate on the terms of the second joint co-operation agreement, if extended, and a non binding understanding as to sharing of certain expenditure under the Memorandum in relation to the licenses obtained in consequence of such co-operation. (Underlining added)
31. It was not however until April 2002, according to Mr Contomichalos, that there was any further agreement between CGTL and Energa, although there remained an understanding between them at all times after expiry of the second joint co-operation agreement that Energa would be entitled to 20% of the profits on any electricity deal of the kind envisaged by that agreement. At that stage, in April 2002, Mr Contomichalos' evidence is that he agreed with Mr Achille Floros, in relation to the securing of a likely future deal with APT/Verbund, that if any electricity power trading deals facilitated by Energa were successfully executed, Energy would receive 20% of any net profit accruing to CGTL on the deal but would also accept 20% of the risk and any net loss resulting. This was not however recorded in a new joint co-operation agreement. ATE did not feature in this agreement as it was by this stage losing interest, or had lost interest, in such activities.
32. I have no reason to doubt Mr Contomichalos' evidence on this point, supported as it is by later documents which show CGTL and Energa debating and agreeing a division of the 2002 profits and taking into account the loss of the 2003 year, in order to calculate the amount owing to Energa on an 80/20 basis. An in- principle set off was agreed at the end of 2002 and the practical financial outworkings of this were finally resolved in late 2004.
"Scope
(a) Energa shall provide the services ("the Services") as described in Clause 1(b) below and in the attached Schedule A in connection with those electricity sale and purchase and/or transmission and distribution transaction(s) described in the attached Schedule B. Where used in this Agreement the term "Transaction" means any transaction referred to in the attached Schedule B and any other transaction(s) hereafter added to Schedule B by agreement in writing (which agreement to be effective must state that it amends Schedule B of this Agreement) (together "the Transaction(s)").
(b) Energa shall use know-how and resources at its disposal to actively search for and seek to identify and define opportunities which may be or become technically and financially viable electricity sale and purchase and/or transmission and distribution transaction(s) in Greece. Energa shall introduce such opportunities to Cinergy with as much information relating thereto as is reasonably available to Energa. Cinergy and Energa shall promptly review each opportunity introduced by Energa and use their reasonable endeavours to agree whether they are of interest to Cinergy and so should be included as a Transaction for the purposes of this Agreement. Energa shall give Cinergy a reasonable period in which to assess the opportunity (with the intention that it may then be added as a Transaction for the purposes of this Agreement) before such opportunity is offered to any other client or contact of Energa.
(c) Energa shall provide the Services to Cinergy in accordance with the instructions, requests and directions of Cinergy
Nature of Relationship
(d) Energa is an independent contractor (and shall not under any circumstances act as, or be deemed to be, agent or employee of Cinergy or any other member of the Cinergy Group) and shall have no right, power or authority to bind any member of the Cinergy Group to the execution, delivery, incurrence or fulfilment of any condition, contract or obligation, express or implied, between any member of the Cinergy Group and any third party (and shall not hold itself out as having any such right, power or authority) without Cinergy's prior written approval. Non of the agents, staff, officers or employees of Energa shall be deemed an agent or employee of Cinergy or any other member of the Cinergy Group for any purpose, including for purposes of any of the employee benefit programmes, income, withholding taxes, social security or similar withholding taxes, or employment benefits or rights under the law of any jurisdiction
Payment of Transaction Net Profits and Transaction Net Losses
(e) Cinergy will pay Energa twenty (2) percent of Transaction Net Profits and Energa will pay Cinergy twenty (20) percent of Transaction Net Losses for the duration of this Agreement as described in and in accordance with the provisions of Schedule C of this Agreement. For the avoidance of doubt it is stipulated that in the absence of a Transaction reaching Transaction Close no compensation shall be due to Energa for Services provided.
Services
The following services will be provided by Energa:
(a) Energa will use its best endeavours (and using its experience, skill and resources) to identify and notify Cinergy of persons (all of whom must be Permitted Persons) who may have, or who have expressed, a serious interest in participating in some or all of the Transaction(s).
(b) Energa will provide the following further services in connection with any transaction or potential transaction in connection with any of the Transaction(s):
• Energa will advise on the optimum strategy for engaging or negotiating with Energa Introduced Parties with respect of their participating in the Transaction(s) (or any part thereof);
• Energa will effect appropriate introductions between representatives of Cinergy and representatives of Energa Introduced Parties;
• Energa will facilitate liaison and discussions between Cinergy and Energa Introduced Parties;
• Energa will use all reasonable endeavours to ascertain the requirements of each relevant counterparty with regard to its participating in the Transaction(s) (or any part thereof) and the terms and conditions upon which such relevant counterparty may be prepared to participate, and Energa will promptly inform Cinergy of all such requirements, terms and conditions to the extent that Energa is aware of the same;
• If requested by Cinergy, Energa will perform such other services which are reasonably incidental to any or all of the foregoing and/or which may be reasonably required by Cinergy in connection with any or all of the foregoing, while if necessary for the purposes of the present, Energa will concede adequate space of its premises to Cinergy, without any consideration."
34. This Joint Venture Agreement was expressly governed by English law and provided for termination on 31st December 2004. Schedule B referred to transactions with 7 identified customers, to every power delivery to the Greek System, to every power purchase agreement concluded by CGTL for delivery of electricity to the Greek System and/or to Greek customers "and such other transactions as the parties agree in writing shall be transactions for the purposes of this Agreement". Whilst post-dating the events with which the Court is concerned, and the dispute arising out of them, this Joint Venture Agreement nonetheless falls to be taken into account in determining the nature of the relationship between CGTL and Energa in the intervening period and the evidence of Mr Contomichalos and the allegations of Dr Imamovic about it.
In evaluating these matters the existence of the two joint co-operation agreements and the Memorandum of Co-operation between Energa and CGTL and the terms of Article 3 of the former form a valuable background in showing the intentions of those entities in the period immediately preceding the relevant period. The first two agreements show a clear intention not to form a partnership within the meaning of the Partnership Act 1890, as a matter of English law, whilst the Memorandum refers to "consortia" to be formed, possibly referring to a concept of Greek law, but not to any English law concept of partnership under that Act.
38. ... One such such attempt is reflected in a draft joint venture agreement dated 24 January 2003, governed by the law of Greece. The recitals to this draft contract have some significance, if they reflect, as I find they largely do, the sequence of events from November 7 2000 to 24 January 2003, albeit in abbreviated form.
39. The recitals read as follows:-
"1. The contracting parties have commenced co-operation in the Greek and Balkan energy market following a joint co-operation agreement executed in November 7 2000.
2. The initial outcome of the co-operation of the contracting hereby parties was the formation of a joint-venture with Agriculture Bank of Greece ("ATE"). The subsequent submittal, on 19.2.001, of all required applications to R.A.E. and eventually the acquisition of a 5 years licence for the supply) electricity by R.A.E.
3. The above joint venture, following a suggestion of ATE, attempted to co-operate with Alamanis group of companies so as to establish a corporation in the form of a "societe anonyme" to carry out the business of supplying energy within the bounds of the licence granted by R.A.E. The relevant negotiations lasted 18 months and proved unsuccessful. ATE also withdrew from the joint venture.
4. Nevertheless, CINERY & ENERGA continued their co-operation and achieved to be awarded supply contracts by Public Power Corporation of Greece ("PPC") which were fully performed at a value of 4.4 million of US dollars in the year 2002. Thus, they now wish to renew their joint co-operation agreement (by taking into account their recent experience in the relevant market and its prospects."
40. This reveals that attempts to set up a joint venture vehicle in the form of a corporate body came to nothing, as between CGTL, Energa, ATE and the Alamanis Group which is also referred to elsewhere in the documents as Alfa or Alfalfa. The document refers to a joint venture with ATE from which it later withdrew. It also states that, CGTL and Energa, having commenced co-operation in 2000, continued such co-operation following the breakdown of the negotiations for a joint venture company, which appears to have been 18 months from 7 November 2000 or possibly 18 months from February 2001. Whichever way this is read, the attempt to establish a joint venture agreement with a joint venture vehicle was over by the summer of 2002. In the interim, whilst there is said to have been a "joint venture" between CGTL, ATE and Energa, there is no suggestion that this was a "partnership" or even a "kinopraxia", whatever that concept involves. All that the phraseology could refer to is the Memorandum of Understanding and acts done pursuant to it. By way of contrast, the draft agreement goes on to provide for CGTL and Energa to enter into a joint venture agreement and to establish an appropriate joint venture corporate vehicle ("JVCo") or use the JV type ("kinopraxia") which is referred to as "an acknowledged type of carrying out business for further developing their actual joint co-operation in the trade of electricity in Greece and in the countries which are inter-connected electricity-wise with Greece".
41. Whilst this draft joint venture agreement was never signed, the form of it is consistent with the agreements to which I have already made reference and the construction of them set out in this judgment.
42. ... that he was expressly told of the existence of a partnership, in the English law sense, between CGTL and Energa, by representatives of Energa and by Mr Contomichalos of CGTL, that he saw documents which showed there was such a partnership and that there are now documents before this Court from which such a partnership should be inferred.
43. Dr Imamovic gave evidence in support of his case whilst CGTL called Mr Contomichalos, a Director and the person at CGTL who was responsible for the trading of electricity in Greece. On nearly all the points which mattered, the evidence of each contradicted that of the other. Their evidence of what passed between them was irreconcilably different. Neither party called Mr Achille Floros, Aris Floros or anyone else from Energa to give evidence, so that I have had to decide whose evidence I accept on many issues in the light of the contemporary documents and commercial probabilities.
I have had to form a view as to the credibility of these two witnesses in the light of the documents and the extensive cross examination which they both had to undergo. Dr Imamovic was cross examined for five days by counsel for CGTL whilst Mr Contomichalos was cross examined for 6 days by Dr Imamovic. Many of those days were extended days and I had a full opportunity to judge their credibility.
The judge found the appellant a most unsatisfactory witness and gave his reasons for that conclusion in paragraphs 43-53. In paragraphs 44-49 the judge said:
44. Dr Imamovic was a most unsatisfactory witness. Notwithstanding the fact that English was not his first language (which I bear in mind), he was articulate but gave long answers which often failed to respond to the question. His major problem was that e-mails and faxes sent by him at the time did not correspond with the evidence set out in his witness statement or that given by him in the witness box as to what occurred. The evidence which he gave about the views which he held and had expressed at the time in relation to the obstacles in effecting electricity deals bore no relation to messages emanating from him at the time. These messages graphically referred to extensive barriers in the way of trading contracts and in particular to obstacles in obtaining rights of transmission across intervening republics for electricity purchased in Bosnia. His willingness to ignore contemporary documents and to state the exact opposite of what they showed, exhibited a degree of disregard for the truth which tainted all his other evidence. His explanations in evidence, that he was deluded at the time, sent messages that Mr Contomichalos wished to hear and merely repeated what Mr Contomichalos had told him, did not bear examination, particularly where he had maintained in his messages that he had documents to substantiate the wild allegations he made of the difficulties that he faced. In his submissions he himself described the messages as embarrassing.
45. He was also prepared to make allegations of impropriety against CGTL and Energa, with regard to secret profits (as appears from the Particulars of Claim) and a number of allegations of fraud appear throughout the history of the proceedings. Whilst such allegations were muted at the trial, he still pursued the issue of "parallel payments" despite full financial disclosure from CGTL. The impression gained is of a man who readily sees conspiracies and obsessively looks for plots against him where in reality there is none. He may well believe in such theories but they appear unreal to any objective observer. His lack of grasp upon reality did not lend credence to his evidence.
46. He gave detailed evidence of a number of meetings and telephone conversations with Mr Contomichalos which the latter said had never taken place at all, let alone in the terms to which Dr Imamovic testified. In no case was there a document which supported Dr Imamovic's evidence as to what had taken place or what had been said, where this was an issue. Furthermore, the documents which had come into existence at around the time of these meetings and telephone calls belied his evidence, either by the absence of any reference to what he said had happened or because, in some cases, they were clearly inconsistent on their face with his testimony.
47. No notes of meetings or telephone conversations were produced by him and where there were issues about what had taken place at such meetings, I found the detailed evidence from Dr Imamovic, in relation to events in 2001 and 2002, impossible to believe. Much of what appeared in his statement was plainly framed with a view to making a case in relation to the English law of Partnership, of which he knew nothing at the time but which he had subsequently studied. The statement contained terminology which could only have been included after taking advice from a lawyer, reading a text book on Partnership or Agency or copying a pleading drafted by a lawyer. It transpired that many of the details which appeared in his statement as to the dates of telephone calls, where not garnered from the references in the documents, came from telephone company records which he only disclosed during the course of cross examining Mr Contomichalos.
48. Mr Contomichalos did not have a detailed recollection of events on a daily basis, but I did not find this at all surprising. He had a clear recall of the matters which he regarded as important at the time, although there were areas of his evidence which also failed to tie in with all of the documents. He received 70-100 emails a day and the long and elaborate messages from Dr Imamovic were not those which he considered of great importance, since power trading in Greece was only a peripheral activity in which he was involved at the time. He operated mainly out of London at the time, although in 2001 he was spending a lot of time in Greece in connection with the conclusion of a major gas project for another Cinergy subsidiary, the acquisition of the supplier and distributor of gas to Athens. Although that company had been awarded the bid in October 2000, the deal was not finally concluded until 27 November 2001 and this occupied a great deal of his attention and that of Energa who were consultants to the project. By comparison with this, the trading of electricity in Greece assumed minor importance.
49. The messages received from Dr Imamovic were long, not easy to read or understand, full of wild allegations, conspiracy theories, unfounded rumour and intricate plans for outwitting supposedly hostile entities in order to procure the supply of electricity from Bosnia to Greece. One of the most noticeable elements in the correspondence bundle is the extent of material sent to him by Dr Imamovic and the limited written responses from him to those messages. I conclude that he did not pay overmuch attention to much of what was in them and that much of his evidence in the witness box was reconstruction, based on the documents which were put to him, rather than real recollection.
accorded with the documents and with commercial probability and I therefore had no difficulty in accepting it, as opposed to Dr Imamovic's testimony which did not accord either with the documents or the commercial probabilities.
75. It is clear from these documents that Dr Imamovic regarded himself as engaged, if at all, at this point, by Energa only and that his client was Energa. He also understood that Energa had some arrangement with a Cinergy company, the details of which were not supplied to him, but which he took to be some form of consortium. When reference was made in the correspondence here, as elsewhere, to "partners", I am clear that the phrase was not being used in the sense of those involved in an English law partnership, but in a much looser sense, referring to those who worked in collaboration with one another, but without any legal analysis of their inter-relationship.
80. ... Mr Contomichalos asked him to provide services for and on behalf of Cinergy Corp and the partnership Cinergy-ATE-Energa with the objective to open negotiations and conclude trading contracts with the Government and generation companies in former Yugoslavia.
81. " ... Mr Contomichalos further stated that Energa was acting partner of the said partnership. Mr Contomichalos then told me that Energa would make a contract with me as representative of the said partnership (Cinergy-ATE-Energa) and partner of Cinergy and the Agricultural Bank of Greece and that any contract signed by Energa would bind the whole partnership. Mr Contomichalos further told me that a contract made between me and Energa would be binding on Cinergy because there was a signed written contract between Cinergy Global Trading Limited and Energa, pursuant to which Cinergy authorised Energa to do business for and on behalf of Cinergy in relation to their joint activity in power trading."
81. Dr Imamovic said that he believed everything he was told about the partnership and, on the faith of it, he made a contract with Energa which was acting as a partner of Cinergy and ATE. He said he required a provision in the agreement that should any new legal entity be created, it would be bound by the same agreement and Mr Contomichalos accepted this.
95. The inevitable conclusion which I reach on this point is that Dr Imamovic's evidence about the meeting of 29 June is entirely fictional in relation to the alleged presence of Mr Contomichalos and the statements made by him, whether about partnership or as to any contract between Energa and CGTL being binding upon the latter. ...
2. As a further alternative, Dr Imamovic alleges that Energa purportedly concluded the Contract as agent for CGTL and that on 4 October 2001 Mr Contomichalos ratified the Contract on behalf of CGTL, such ratification being confirmed in a fax message from Dr Imamovic to Mr Contomichalos. There was allegedly further ratification by conduct, most of which post dated the 4 October conversation.
99. That fax of 4 October to Energa is consistent only with Dr Imamovic regarding his engagement as with Energa alone and not with a partnership consisting of CGTL, ATE and Energa. In it, he says that, in order to secure a serious offer from a generating company in Bosnia, he needs an extension of his authority from Energa, as specified in the power of attorney, to the consortium of CGTL, ATE and Energa on the basis of the agreement already in place (ie the contract with Energa). He said he was ready to accept all necessary obligations to the consortium "just as I have to Energa SA at the moment". He asks that ICG should be appointed representative of the full consortium with authority to negotiate on behalf of the whole consortium or any new company associated with the licence, up to the point where a serious offer was produced. He wanted a letter from Energa SA in which he was given authority to act for and on behalf of the consortium in this respect, whilst saying that he would be proceeding under the 'agreement already in place', which was with Energa alone.
100. On its own terms, the fax does not suggest that Dr Imamovic was seeking anything other than the ability to represent the consortium in negotiations up to the point specified. He was not looking for a different agreement to that which was already in place with Energa but merely that Energa should authorise him to negotiate as representative of CGTL and ATE also. He thus would remain engaged by Energa only.
104. Once again I am driven to the conclusion that Dr Imamovic's evidence about this conversation is a fabrication. ...
105. Far from this document recording a ratification or affirmation by Mr Contomichalos in a telephone conversation of a contract made between Energa and Dr Imamovic, this comment appears to be letting Mr Contomichalos know that there is a contract between himself and Energa, by way of explanation for the activities he had been undertaking to obtain offers of power and informing him of his suggestions for the future. The post-script plainly refers to a contract with Energa and contains no suggestion that this could amount to a contract with CGTL.
112. There is no evidence of any kind, other than Dr Imamovic's oral evidence, that Energa ever considered itself, in the person of Mr Floros, as acting as an agent or partner, in the English law sense, of CGTL when concluding its "Private Agreement" (the Contract) with Dr Imamovic. The written agreements which exist between CGTL and Energa expressly prohibited that and I find that at all times, whether during the operative periods of those contracts or outside them, Energa never had any reason to consider that it could bind CGTL in any way in a contract with a third party. There is no sufficient basis for concluding that Energa ever indicated to Dr Imamovic that in entering into the Contract, it was doing so in anything other than its own capacity, whilst representing that it did have a Co-operation Agreement with CGTL.
Whilst, throughout the correspondence and in documents which Dr Imamovic may have seen, there are references to "joint venture", "consortium" and to "partners" and the names of Cinergy, ATE and Energa were linked and even appeared together in hyphenated form, none of this could have suggested someone brought up in Bosnia, like he was, that there was an English law partnership between those entities, particularly as he could have had no knowledge of the English law of partnership at the time. To the contrary, what the documents show is that Dr Imamovic fully understood that he had been engaged by Energa and was in a contractual relationship with Energa alone, which he justifiably considered to have a Co-operation Agreement with CGTL. As at 4 October 2001 he may have spoken to Mr Contomichalos on the telephone but he had not met him and, as the fax of 4 October 2001 makes plain, he felt it necessary at that stage, in the first correspondence sent to him alongside Mr Floros, to explain that he (ICG) had a contract with Energa. (Underlining added)
The effect of the history:
149. The recitation of this history shows that there is nothing upon which Dr Imamovic can legitimately rely in support of his allegations of partnership or agency, nor in support of his allegations of holding out by CGTL of Energa as its partner or agent, nor in support of allegations that CGTL allowed itself to be held out by Energa as its partner.
150. Energa and CGTL, by agreement, shared the net profits obtained by CGTL on electricity supply business introduced by Energa to it, on an 80/20 basis. The net profit was calculated by taking into account CGTL's expense in obtaining import capacity in 2002 and 2003 as well as the profits on the two deals from Bulgaria which were concluded in the spring and summer of 2002. This was done on the basis of the April 2002 oral agreement between Achille Floros and Mr Contomichalos as well as the understanding which persisted after 30 June 2001 when the second joint co-operation agreement expired up to the date of this express agreement. During this period negotiations were still proceeding with a view to setting up a formal joint venture with a joint venture corporate vehicle of some kind, whether with ATE or the Alamanis Group or otherwise.
151. Nothing in the material to which I have referred nor indeed in other documents showing ATE, at the time of the licence applications, entering into various transactions which amounted to options for the purchase of land for proposed generating plants gives rise to any partnership agreement by conduct of CGTL, Energa or ATE. The non-binding Memorandum of Understanding is what it says it is and actions taken pursuant to it did not give rise to a partnership between them. Likewise all the material to which I have referred gives rise to no inference of a partnership agreement between CGTL and Energa, without ATE, in the face of the specific agreements to the contrary. In his closing Dr Imamovic maintained that the second joint co-operation agreement had been extended but if this was the case, that would not assist him, given its terms and the matters set out in this judgment.
152. Dr Imamovic contended that Energa always purported to act on behalf of the partnership in which it was involved with CGTL and ATE. I am unable to accept this submission. I am equally unable to accept the submission that Mr Contomichalos or CGTL held out Energa as its partner to Dr Imamovic or allowed Energa to represent itself as such. In a limited context, Mr Contomichalos was content for the three name letter-heading to be used, namely for the applications for licences and dealing with the R.A.E. Otherwise, he did not authorise the use of that letter heading for any purpose and the letter heading in itself does not unambiguously convey partnership, in any event. That applies equally to other usages of the three names by Energa or by others. In the context of use in Greece, it may convey other messages which bring into play concepts of Greek law which remained unexplored in the evidence before me.
153. Putting to one side the licence applications and the advertisements for the licence applications, the balance of Dr Imamovic's case on holding out relates to other documents where the three names appeared together or references were made to a "consortium" a "joint venture" or there was occasional use of the word "partners". Most of these references appear in documents produced by Energa or Dr Imamovic, as listed in Dr Imamovic's written submissions. There are 13 such documents referred to, only two of which emanate from CGTL where the word "partner" is used in the sense of referring to a local or regional partner without any hint of a technical meaning of partnership under English law.
154. An example, relied on by Dr Imamovic, is a letter written by Energa to EPRS on the three name letter-heading on 21 September 2001, before the grant of the licences, was not seen by Mr Contomichalos and its reference to "our consortium" does not unambiguously convey partnership in the English law sense.
155. On the basis of the material put forward, I cannot find any holding out by CGTL of Energa or ATE as its partner in the English law sense since all the expressions used and the references upon which Dr Imamovic relies are typical loose use of terminology which does not convey any particular legal status at all. All that could be reasonably understood by these references was that the entities referred to had some arrangement under which they collaborated, but there is no intimation that one would be bound by a contract made with the other.
156. Of crucial importance however is Dr Imamovic's understanding of the position at the time. As set out above, I have no hesitation in concluding that he was well aware that he had a contract with Energa alone, however dissatisfied he became with that in December 2001 and January 2002. He knew that he did not have a contract with CGTL although, at that stage, he might have liked one instead of his existing private agreement with Energa. I am certain that, at the relevant time, he had no knowledge of the English law of partnership and did not consider that CGTL and Energa were partners, in the English law sense, with one another or with ATE. Dr Imamovic would simply not have been thinking in these categories at all. Moreover although he fully appreciated that the ultimate decisions for electricity trading would be made by Mr Contomichalos and contacted him directly on many occasions, he knew that he had concluded the Contract with Energa in July 2001 and that he had only been subsequently introduced to Mr Contomichalos who throughout treated him as "Energa's man". At no time did Mr Contomichalos or CGTL hold out Energa as its agent to conclude a contract of any kind with Dr Imamovic nor at any time did Mr Contomichalos recognise that there was an obligation owed by CGTL to Dr Imamovic on the basis of the Contract. At no time did Mr Contomichalos think that Energa was CGTL's partner or agent in contracting with him.
157. The history thus shows and I find that Dr Imamovic at all times knew that he had a contract with Energa alone, which probably expired in January 2002, and that he never had a contractual relationship with CGTL, save in respect of reimbursement of his expenses for the trip to Bosnia in April 2002.
Conclusions on the central issues:
158. So far as the Contract between Energa and Dr Imamovic is concerned, I have already found, as a matter of construction, that this was a contract which Energa made on its own behalf. I find as a fact that in making the Contract Energa did not purport to contract on behalf of anyone other than itself, as appears from the terms of the Contract and all the surrounding circumstances to which I have referred. I also find that Dr Imamovic fully understood that he had contracted with Energa alone, as is made clear from the contemporary correspondence in which, on a number of occasions there is direct reference to his client being Energa and his Contract being with Energa, as opposed to anyone else. I find that he was well aware at all times that he was engaged by Energa alone, which he understood to have a Co-operation Agreement of some kind with CGTL.
159. I find also that, contrary to Dr Imamovic's oral evidence, no draft written contract naming CGTL and Energa as parties to a contract with Dr Imamovic was ever sent to CGTL, whether in January 2002 or at any other time and no agreement was ever made by CGTL to extend the Contract which he had made with Energa.
160. I find that there never was a partnership, as a matter of English law, between CGTL and Energa and that they had specifically agreed that there would not be such a partnership between them by the express terms of the written agreements to which I have referred. Nothing that they said or did at any time during the currency of those Agreements or in the intervening period between 30 June 2001 (when the second Joint Co-operation Agreement expired) and 18 May 2004 when the last written Agreement was executed, gave rise to any partnership between them. The oral agreement reached in April 2002 prior to the Verbund and Sempra deals, and carried through until the 18 May 2004 Agreement came into operation, itself operated in the same way as the second Joint Co-operation Agreement so as to exclude any question of partnership and gave rise to a sharing of profit on business introduced by Energa as a matter of contract alone. CGTL, Energa and ATE never carried on business in common with a view of profit, the fundamental requirement for a partnership in law. Energa always fulfilled functions of the kind referred to in the second Joint Co-operation Agreement and were to be paid by reference to a percentage of net profit on particular deals which they introduced.
161. Furthermore at no time did CGTL hold out Energa as being in partnership with it or allow Energa to hold itself out as its partner. Whilst CGTL, in the person of Mr Contomichalos, saw the first page of licence applications which set out the three names of those applying for the licence and which referred to them as companies which were to co-operate as "members of a consortium" and to form "a consortium or a company", that could not constitute a holding out of Energa as CGTL's partner as a matter of English law. Nor equally could the advertisements or any other correspondence or documents which Dr Imamovic may have seen, whether emanating from Energa or others and which referred to Cinergy, ATE and Energa in the same title, whether in the context of a consortium or a joint venture and whatever other wording appeared upon which he now relies.
162. Since Dr Imamovic had no knowledge of the English law of partnership, not only was there no holding out but there could have been no reliance by Dr Imamovic in any event. The fact that he did not rely upon any of these matters is plain from the correspondence and documents in which he described himself specifically as engaged by Energa, which itself was acting on behalf of a consortium, as opposed to referring to him being engaged by the consortium itself.
163. Equally and for much the same reasons, there can be no question of agency on the part of Energa for CGTL. Energa never purported to act as CGTL's agent and was never understood by Dr Imamovic to do so. In consequence there could also be no ratification or adoption of any contract between Energa and Dr Imamovic by CGTL. Moreover, as I have found as a matter of fact that conversations of the kind alleged by Dr Imamovic did not take place in October 2001 and January 2002 and no other conduct occurred which could amount to an acceptance of liability under the Contract, there could in any event be no basis for any allegation of ratification, adoption or recognition of the Contract between Energa and Dr Imamovic as binding upon CGTL.
164. Equally Energa did not have ostensible authority to bind CGTL to its contract with Dr Imamovic and was not held out by CGTL as its agent to contract with him, for all the same reasons as I have found for concluding that it did not hold out Energa as its partner.
165. Dr Imamovic's claim against CGTL under the Contract of 16 July 2001 therefore fails. Dr Imamovic is not entitled to any share in any net profit made by CGTL in the period July 2001 to July 2002 and has no claim in respect of any period of time thereafter for the simple reason that he never had any contractual relationship with CGTL other than under the oral contract by which CGTL agreed to reimburse him for the expenses of the Bosnian trip in April 2002, on production of appropriate invoices and receipts. As he failed to supply these at any stage, despite every opportunity to do so, both before and after these proceedings were commenced, any claim for such expenses, if made, also fails.
25. The intention expressed in the Memorandum of Understanding was to form a consortium or corporate body, with the percentages expressed owned by CGTL, Energa and ATE, if the power supply licence was granted and if the Boards of ATE and CGTL approved. The word translated "consortium" is apparently the Greek word "kinopraxia" which appears to have a known meaning in Greek law, although no evidence of Greek law was adduced by either party. (Underling added)
11. The Defendants teamed up with the Agricultural Bank of Greece ("ATE") and Energa, a Greek company, to form 'kinopraxia' (concept of partnership under Greek law) with objective to engage into trading and generation of power in South-eastern Europe. This 'kinopraxia' concept has specific and known legal meaning in Greek law.
12. 'Kinopraxia' between the Defendants, ATE and Energa was formed in February 2001 after all three entities signed and jointly submitted applications for licences for trading and generation of electric power in Greece.
13. Following various representations made to the Claimant in June 2001 the Claimant entered into an agreement ... with Energa acting on behalf of partnership or 'kinopaxia' between the Defendants, ATE and Energa.
Subsistence of partnership
33. The first ground for the appeal is that the decision of the learned Judge regarding subsistence of partnership is wrong. The learned Judge used wrong law when analysing subsistence of partnership. Greek law governs relationship between the Defendants, ATE and Energa rather than English law. In fact, the learned Judge concluded in his judgment that Greek law should be used but there was no evidence on Greek law due to misrepresentation by the Defendants.
Misrepresentation by the Defendants
34. The full details of misrepresentations by the defendants which led to use of wrong law is given in 13th witness statement of the claimant. The Defendants disclosed three agreements with their alleged partners. Two agreements were with Energa and governed by English law and one agreement was with ATE and Energa and governed by Greek law. The Defendants claimed up until and during the trial that the disclosed agreement with ATE and Energa was never signed by ATE.
35. However, it was proved during the trial that this agreement was signed by ATE but as this fact was decided only after the trial when the judgement was given there was evidence of Greek law adduced due to misrepresentation by the Defendants that the agreement governed by Greek law was never signed. Therefore it is evident that the Defendants obtained the judgement by misrepresentation.
Fresh Evidence that partnership subsists
36. The learned Judge erred in finding that 'kinopraxia' was not formed and that there was no partnership between the Defendants and other members of 'kinopraxia' by failing to consider all circumstances and facts of the case. The Greek court found that 'kinopraxia' was formed and that such 'kinopraxia' functioned as de facto general partnership. Application for permission to adduce fresh evidence, Greek court judgement and Greek law evidence is made at this stage of the proceedings.
37. There is fresh evidence in form of a judgement of a Greek court which found that the Defendants, ATE and Energa were in partnership.
38. Considering that the Greek court found on exactly the same facts that the Defendants, ATE and Energa were in partnership it is submitted that the Claimant have real prospect of success to prove that the Defendants were partners of Energa when the evidence of Greek law is considered.
32. In February 2001, CGTL, Energa and ATE drew up a draft Memorandum of Co-operation (see D/10). This document is in Greek. I signed this on behalf of CGTL and the draft was also signed by Energa. However, ATE never signed the draft and it was never dated. The draft was not in any event intended to be a legally binding contract and Clause 1 states this. Instead the document was intended to record the basis on which the parties had agreed to negotiate a future co-operation. It stated that the intention of the parties was to file applications for various electricity production and supply licences and that each party was to do what needed to be done by it in order to meet the requirements of the application process.
Then we have a Greek law memorandum of understanding, which [on its terms] is non-binding, and self-evidently one treats that as non-binding in the absence of any Greek law to the contrary."
The plaintiff company has its purpose, inter alia, to prepare electrical engineering studies. The defendant companies, with their February 2001 Memorandum of Co-operation, intending to become active in the exploitation o the energy environment, as it developed after the introduction of Law 2773/1999 and the liberalisation of the energy market, decided to submit jointly to the Regulatory Authority for Energy a joint file of expression of interest for the acquisition of a licence for the generation and supply of electrical energy and to form a 'kinopraxia' if they are given a licence. It was agreed that each of the parties would prepare a file in accordance with the legal framework in force and to submit such a file to the co-ordinator for the submission of a joint file to the Regulatory Authority for Energy. The first defendant was appointed co-ordinator. The percentage participation in the 'kinopraxia' that was being formed was fixed for each contracting defendant as follows: 1) 20% for the first, 2) 40% for the second and 3) 40% for the third defendants. This 'kinopraxia' functioned as a de facto general partnership because the publicity formalities had not been observed. Their legal representatives with a document to the Regulatory Authority for Energy made it known to it that they expected to co-operate as members of a 'kinopraxia' in order to implement the Peak Generation Station at Ayios Stephanos, Attica. They appointed St. Kolonis of ENERGA S.A. as correspondence/service contact and representative of the 'kinopraxia'.
Furthermore, the legal representative of the co-ordinating company Achilleas Floros appointed a group of Researchers to prepare a study regarding the licence for the generation of electrical energy of a capacity of 89MW for submission to the Regulatory Authority for Energy. The study was submitted to the latter on the 17/01/2001 and, following positive opinion, there was granted Licence No. A???????????28/88/3323/8-10-2001. The group of Researchers consisted of G. Kontoroupis and G. Sintzakakis, the latter being its representative (see his letter dated 05/11/2001 to the legal representative of the co-ordinating company). The contract for the compilation of the study was entered into between them and the co-ordinating company. At the time in question, G. Kontoroupis was not a partner of the plaintiff, because he left it on the 01/11/1995 and joined it again on the 08/04/2004 in the capacity of general partner and manager. Therefore, the plaintiff company has no legal justification to lodge the suit under trial.
Therefore, the suit must be rejected. The court costs of the defendants should be imposed against the plaintiff (Article 176 of the Code of Civil Procedure), as specified in the order.
For the above reasons
The discussion regarding the third defendant is declared inadmissible.
The plaintiff is ordered to pay the court costs of the first two defendants, which are fixed to the amount of five hundred and fifty (550) Euros each. (Underlining added)
10. In my judgment the terms of the Contract with Dr Imamovic do not themselves give rise to any suggestion that any entity other than Energa undertook obligations towards him.
113. Whilst, throughout the correspondence and in documents which Dr Imamovic may have seen, there are references to "joint venture", "consortium" and to "partners" and the names of Cinergy, ATE and Energa were linked and even appeared together in hyphenated form, none of this could have suggested someone brought up in Bosnia, like he was, that there was an English law partnership between those entities, particularly as he could have had no knowledge of the English law of partnership at the time.
47. No notes of meetings or telephone conversations were produced by him and where there were issues about what had taken place at such meetings, I found the detailed evidence from Dr Imamovic, in relation to events in 2001 and 2002, impossible to believe. Much of what appeared in his statement was plainly framed with a view to making a case in relation to the English law of Partnership, of which he knew nothing at the time but which he had subsequently studied. The statement contained terminology which could only have been included after taking advice from a lawyer, reading a text book on Partnership or Agency or copying a pleading drafted by a lawyer. It transpired that many of the details which appeared in his statement as to the dates of telephone calls, where not garnered from the references in the documents, came from telephone company records which he only disclosed during the course of cross examining Mr Contomichalos.