England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		7th March 2008

MR JUSTICE NORRIS:

1. Dominion Petroleum Limited, (DPL) was incorporated under the laws of Bermuda and has its registered office in Bermuda. The majority of the board are not resident in the United Kingdom and it has no United Kingdom offices. It is a holding company for various operating subsidiaries, which undertake oil and gas exploration in East Africa. One of those subsidiaries, which conducts DPL's administration and management, is Dominion Petroleum Administration Services Limited (DP Admin). This is a UK company, which operates a London office.
2. DPL itself is AIM-listed as the result of a placing on 12 December 2006. It is currently in the "cash bum" stage and issued further shares in July 2007, some convertible loan notes in October 2007 and currently anticipates the need for further funding (as is customary with companies of this sort).
3. Only 12 per cent of its shares are in what could be called "public hands", notwithstanding its listing. Eighty-eight per cent of its shares are in the hands of its major participants, some 77.5 per cent being in the hands of directors, related parties and highly significant shareholders who have between them entered into "lock-in" arrangements. Of that 77.5 per cent, some 16 per cent of the shares are in the hands of a Mr Seidel. Slightly more than that are in the hands of Mr Seidel's former colleague, Mr Michael Garland, who is now coordinating the litigation campaign against Mr Seidel. Mr Seidel originally had a shareholding in the predecessor of DPL and became a shareholder in DPL well in advance of the admission to the market. There is a dispute as to whether the shares he so acquired can be characterised as "management or employee shares" or whether they were shares awarded for being a "founding investor" or shares awarded to him as a form of "sweat equity". He holds some 44,807,000 shares in that way. In addition to that original holding, he also acquired further shares amounting to some 20,429,000 odd from other participators under arrangements made between August and November 2006. In his evidence without any attempt to colour the judicial mind, Mr Garland calls these shares "the duress shares" because it is DPL's case that these shares were obtained by Mr Seidel as a result of blackmailing his colleagues. Mr Seidel also holds an option to acquire further shares under an option agreement dated 6 December, which is governed by Bermuda law.
4. As I indicated, the company came to the market and at that time Mr Seidel entered into a Placing Agreement along with the other major participators. He did so on 7 December 2006. Clause 14.3 of that Agreement contains the relevant lock-in provision. The initial lock-in period is from 12 December 2006 to 12 December 2007. There is then a subsequent lock-in period until 12 December 2008 imposed by clause 14.3 and it is that which is relevant in this case. By clause 14.3 the signatory directors irrevocably undertook to the company that they would not, before 12 December 2008, undertake any disposal of common shares held by them without the written consent of the company and its then brokers, and would only effect the sale through the then brokers, (who are named) in an orderly fashion. For the purposes of that clause, "disposal" is defined as meaning "directly or indirectly a sale or transfer or any disposition whatsoever including an agreement to effect any of the foregoing or the creation of any option or charge which could lead to any of the foregoing".
5. The Placing Agreement also contains substantial warranties and Mr Seidel gave a warranty limited to £540,000. The Placing Agreement states in Clause 18 that it shall be governed by and interpreted in accordance with English law and the parties thereby submitted to the nonexclusive jurisdiction of the English courts.
6. As well as being a shareholder in DPL, Mr Seidel is also an employee and a director. His employment is as follows. First, he is the Chief Financial Officer of DPL under a contract of employment dated 6 December 2006 and effective from 1 December 2006. I will call that "the DPL contract". The DPL contract contains in Clause 20.3 a provision which entitles DPL to terminate Mr Seidel's employment without notice, "where the director commits conduct including without limitation... (i) serious misconduct". Clause 20.4 contains a provision that forthwith on the termination of the employment or the giving of notice to terminate the employment Mr Seidel will resign, "from all offices held by him in DPL or any other member of the group". Clause 20.5 also contains a cross-termination provision. As I shall explain, Mr Seidel is also an employee of DP Admin under a contract referred to in the DPL Contract as "the UK agreement". Clause 20.5 provides that if the UK agreement is terminated, then DPL may in its sole discretion terminate the DPL contract with or without notice. The DPL contract contains a proper law clause, which says that the agreement is governed by and interpreted in accordance with the laws of Bermuda "and the parties submit to the exclusive jurisdiction of the courts of Bermuda". It also contains in Clause 22.3 a provision that the agreement contains the entire terms of the employment agreed between Mr Seidel and DPL, "and supersedes and replaces all prior agreements, arrangements or understandings between Mr Seidel and DPL or any member of the group relating to Mr Seidel's employment and services as a director with DPL or any member of the group, all of which will be deemed to have been cancelled by mutual agreement of the parties".
7. The DPL contract refers to "the UK agreement" and I now turn to that. Mr Seidel is also the Chief Executive Officer of DP Admin under a contract of employment also dated 6 December 2006 (the DP Admin contract). This contract is in very similar form to the DPL contract, though it contains in Clause 17 a provision that disciplinary and grievance issues are to be dealt with in accordance with the Employment Act 2002 (Dispute Resolution) Regulations 2004. It contains the same provision for termination on serious misconduct. It contains in Clause 19.4 a term which says that forthwith on the termination of the DP Admin contract or the giving of notice to terminate it, Mr Seidel will, on the request of DP Admin, resign from all offices held by him in DP Admin or any other member of the group, and it contains a Power of Attorney whereby Mr Seidel irrevocably authorises DP Admin to appoint some person in his name and on his behalf to execute any requisite documents. There is the same cross termination provision (but referring to the DPL contract) and a proper law clause, which in this case provides that the DP Admin contract is governed by and to be interpreted in accordance with the laws of England, "and the parties submit to the exclusive jurisdiction of the courts of England". Clause 21.3 contains the same provisions in relation to prior agreements as those to which I have referred in relation to the DPL contract. Those are the only contracts of employment which call for consideration, although the evidence contains statements by Mr Garland that Mr Seidel had worked in association with the participants in DPL and its predecessor companies since about 2005. Mr Seidel was a director of DPL and (with Mr garland) one of the two directors of DP Admin.
8. Although the DPL contract and the DP Admin contract were only entered into on 6 December 2006, immediately before the placing, the DP Admin contract was summarily terminated on 18 January 2007. For the purposes of this part of the narrative, I will simply recount the events as they appear in the documents. The first letter in time is one written on the notepaper of DP Admin from its London office and signed simply by Mr Garland, his capacity not being disclosed by the form of the letter. It refers to recent telephone conversations and records his regret that he was having to write to confirm that Mr Seidel's employment with DP Admin was to be terminated with immediate effect. The next paragraph reads,

"We have reached this decision as a result of your serious breaches of your Executive Services Agreement with the company dated 6 December 2006 resulting in a fundamental breakdown of your relationship of mutual trust and confidence with the company. As such, the company is entitled to terminate your employment under Clause 19.3 of the UK contract without notice or payment in lieu. Your employment will end today."

9. The second letter in time is written on the notepaper of DPL, ostensibly from an address in Hamilton, Bermuda. It begins: "I refer to the letter from Dominion Petroleum Administrative Services Limited of today's date." It continues: "Following the termination of your employment with Dominion Petroleum Administrative Services Limited, I am writing to confirm that your employment with Dominion Petroleum Limited has been terminated with effective from today without notice. The termination is pursuant to Clause of your contract with Dominion dated 6 December 2006, which provides for the termination of the Bermudan contract following the termination of your UK contract. Your employment will end today, 18 January 2007". Its penultimate paragraph reads,

"We will contact you separately in relation to your shareholding in Dominion. You are now required to resign forthwith as a director of Dominion [that is, DPL] pursuant to Clause 20.4 of the Bermudan contract."

10. It is the evidence of Mr Garland that the sending of this letter had been preceded by a meeting or round robin telephone conference held on 16 January with a number of people who were directors of DPL. The dismissal letters were followed by a letter from DPL's solicitors, Nabarro Nathanson, whom the evidence indicates may well have assisted in drafting the dismissal letters themselves. The letter is dated 22 February 2007. It states, (1), that the decision to terminate Mr Seidel's employment with DP Admin and his employment with DPL was agreed by all members of the board except Mr Seidel; (2) that DPL relies on the following matters: (a), that relations between Mr Seidel and all significant individuals had broken down; (b), that Mr Seidel had acted in breach of his fiduciary duties owed to DPL as its finance director in that on or about 23 and 25 November 2006 he threatened Mr Dibb, Mr Robinson and Mr Kennedy that unless a substantial number of shares in DPL were transferred to him by those persons, then he would scupper the financing of DPL then being undertaken, and the intended listing of DPL on AIM, (which the letter says are to be regarded as constituting breaches of fiduciary duty as well as further evidencing the breakdown of trust and confidence). It is worth drawing attention at this point to the fact that the alleged acts of blackmail, the alleged breakdown of trust and confidence pre-date the entry of the employment contracts to which I have referred. (3) Finally, the letter says that the reasons for the termination of Mr Seidel's employment are set out in the letters dated 18 January 2007 and that it is not felt that any further explanation is necessary.
11. That letter was sent in February 2007 and for the purposes of this application I can now skip in the narrative to 2 August 2007. On that date there was a meeting of the directors and members of DPL at which an amendment to DPL's Bye-law was effected. The amendment was to introduce a Bye-law entitled, "Compulsory transfer of shares on cessation of office or employment", colloquially called "a bad leaver provision".
12. Article 7A.1(a) says that the Bye-law applies, "when a director or employee of the company who has been allotted, granted or transferred common shares in the company by reason of or in connection with his office or employment ceases to be a director or employee or either of them of the company, [that is, DPL], or any of the company's subsidiaries or subsidiary undertakings". There is then a provision that Bye-law 7A only applies where the person so leaving "is not continuing as a director or employee of the company or of any of its subsidiaries or subsidiary undertakings". The two conditions to be satisfied are accordingly that the director or employee should have acquired his shares in a particular way and secondly that he should have ceased to be a director or employee of DPL or its subsidiaries and should not be continuing as a director or employee of DPL or its subsidiaries in respect of any other office or employment.
13. The Bye-law goes on to provide that in those events DPL may serve a notice requiring the leaver to offer his shares or a percentage of them to persons intended to take the leaver's place or to any of the existing directors or employees of the company or any of its subsidiaries or to any other person approved by the board or to the company itself. Bye-law 7A.5, which I will not recite in full, effectively provides that everybody who leaves in any circumstances is deemed to be a bad leaver unless they fall within a number of closely defined categories. The price at which the transfer is to take place is stated by Clause 7A.7 as being the higher of the amount of the subscription price paid and the nominal value of the leaver's shares. The reference to subscription price is to be noted.
14. Clause 7A. 12 then contains the following provision: "While common shares are liable to be leavers' shares by virtue of Bye-law 7A.2 and pending resolution by agreement or decision of a tribunal or court in Bermuda of competent jurisdiction of any dispute as to whether a leaver is a bad leaver or either of them, such shares shall not be transferred, sold, charged or otherwise howsoever dealt with by the leaver". The article elsewhere provides the power for persons nominated by the company to carry into effect the signature of all relevant documents to give effect to the compulsory transfer provisions.
15. It is to be noted that this Bye-law does not create a separate class of shares. There continue to be only common shares of the company but this article purports to attach different rights to certain shares within the same class by requiring them to be subject to compulsory transfer provisions which do not apply to other shares in the same class.
16. At the meeting at which that Bye-law was approved by the board, it was also resolved that Mr Seidel was a bad leaver and that notice be given to him under Bye-law 7A. In consequence, on 14 September 2007, Mr Garland, this time in his capacity as Chief Executive Officer and Director of DPL, wrote to Mr Seidel requiring him to offer all of his shares to the company free from all liens, charges and encumbrances at the price provided for. The shares at this time had a market value of the order of 25 pence. The letter said that Mr Seidel was required to transfer his shares at a price of US 0.004 cents in respect of his holding of 44.8 million shares and at a price of US 2 cents per share in respect of his 20,429,000 shares acquired from co-participators.
17. It is out of these events that the Bermudan proceedings have arisen. They were commenced by DPL on 8 October 2007 and have since been subject to an amendment and to reamendments, those amendments being only to the originating process since the action has proceeded no further. By its original claim, the Bermuda proceedings sought a simple enforcement of Bylaw 7A of the Bye-laws. By subsequent amendments, they now seek a declaration that DPL was entitled to dismiss Mr Seidel summarily under the DPL contract, alternatively, a declaration that his dismissal from DPL was not unfair or wrongful. They seek declaratory relief in respect of the option to which I have referred and a declaration that Mr Seidel was a "bad leaver" within the meaning of the relevant Bye-law. There is, as I have indicated, as yet no detailed statement of case in support of the claim for this relief. Consequent upon the commencement of the Bermuda proceedings, DPL commenced the proceedings now before me in this jurisdiction. These proceedings under the Part 8 seek an order for interim relief under Section 25 of the Civil Judgments and Jurisdiction Act 1982 to prevent Mr Seidel from disposing of or otherwise dealing with any of his 65.2 million common shares in DPL.
18. Mr Seidel has also commenced his own proceedings in England. These are conveniently referred to as "the Employment Proceedings". They were commenced on 21 January 2008 and are supported by full and detailed Particulars of Claim. In these proceedings Mr Seidel seeks a declaration (a) that he is still a director and company secretary of DP Admin; (b) that he is still an employee of DP Admin under the DP Admin contract and has not been and is not in breach thereof; alternatively (c) a declaration that he has been wrongfully dismissed from DP Admin. He also seeks an inquiry as to the remuneration to which he is entitled, and damages. I will refer to the principal heads of relief as "the declaratory relief'.
19. At the hearing before me, what was originally sought by DFL was a form of quasi freezing order, freezing the 65 million shares held by Mr Seidel and requiring disclosure of information. During the course of this hearing that prayer has been modified, first by recasting the relief claimed as a restraining injunction and pruning away all of the "freezing order" aspects, and secondly by inserting a term that the only disposals to be prevented are those which take place without the consent of DPL.
20. The jurisdiction being invoked is, as the Part 8 claim makes plain, Section 25 of the 1982 Act. Section 25(1) says that the High Court, "shall have power to grant interim relief' in the circumstances which it is common ground now obtain. Section 25(2) goes on to provide that on an application for interim relief under the section, "the court may refuse to grant that relief if in the opinion of the court the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings in question makes it inexpedient for the court to grant it".
21. It is common ground that DPL is enabled to bring the claim under Section 25 because it seeks in personam relief against Mr Seidel, who is resident in England and Wales, for an order capable of enforcement in this jurisdiction. It is also common ground that under the section a two-stage approach is required, articulated in Refco Incorporated v Easter Trading and conveniently referred to as "the Refco test". Refco stage one is whether the facts would warrant the relief sought if the substantive proceedings were brought in England. Stage two of the Refco test is to ask (if that question is answered in the affirmative) whether in the terms of Section 25(2) the fact that the court has no jurisdiction apart from that section makes it inexpedient to grant the relief sought. I must therefore apply the Refco test to the matters before me.
22. The first inquiry is whether the facts would warrant the relief sought in the Part 8 claim if the substantive proceedings had been brought in England. I will address that question first in the context of Bye-law 7A. The question must, of course, be answered by reference to Bermudan law but so far as the evidence before me discloses, there is no material difference between Bermudan law and English law.
23. The English court would apply the test for interim relief stated in American Cyanamid in what I will call its mainstream form, that is to say first to inquire whether it is demonstrated that there is a serious issue to be tried and then if the answer to that question is the affirmative, to go on to consider where the balance of injustice lies. The American Cyanamid approach requires me to identify the issues but not to attempt a consideration of the merits of those issues, save in relation to applying the threshold test of whether there is a serious issue to be tried. I must not be drawn into what is, in effect, a trial on affidavit evidence. Although my attention has not been drawn to any authority bearing on the question, as the authorities stand there is no formal assimilation of the test of "a serious issue to be tried" with that of the test for the grant of summary relief under CPR Part 24; but observations in older cases that the test for the grant of an injunction and the test for the grant of summary relief may be different might need to be revisited in the light of differences (as regards the test for summary judgment) between the Rules of the Supreme Court and the CPR. For present purposes the test which I propose to apply is whether there is in relation to the claim advanced some supporting evidence and whether the outcome of the claim in the light of that evidence is uncertain. In practical terms I think this is more or less the same as, if not identical to, the test for summary judgment under Part 24.
24. DPL says that it satisfies this test and advances a cast of utmost simplicity. It asserts that a share is simply a bundle of rights included amongst which may be a right to amend other rights; that the rights attaching to Mr Seidel's shares at the time of his dismissal have been subsequently altered by the introduction of a valid amendment; that there can be no objection in principle to compulsory transfer clauses; that the test to be applied when such clauses are introduced is whether the amendment so introducing them is for the benefit of the company as a whole, with that benefit being assessed by the company and not by the court. In that connection they rely upon the decision of Mr Christopher Nugee QC in Constable v Executive Communications Limited [2005] 2 BCLC at 538. They say in relation to that test that the evidence of Mr Michael Garland contains an explanation that in August 2007 the board decided that the introduction of bad leaver provisions were generally appropriate so that shares which had been allotted to incentivise management could be recovered if that management failed to perform. Lastly, Mr Gillis QC, draws my attention to a footnote in Gore-Brown on Companies, paragraph 23.5 of footnote 3, which says (on the authority of an Australian case) that an employee who holds employee shares may be required to transfer them on leaving the company's employment and that it is immaterial that the shareholder is required to transfer their shares at less than their true worth. (It should be recorded, however, that an examination of the authority on which that footnote depends discloses that the shares which were the subject of compulsory transfer provisions at an under value were shares in a separate class which had that incident from the outset).
25. So far as Mr Seidel is concerned, his case is equally straightforward. Mr Dagnall submits that Bye-law 7A is simply a straightforward expropriation provision strictly so called and one introduced purportedly with retrospective effect. He says that such a clause has nothing to do with fair value compulsory transfer provisions with which cases like Constable and the other authorities referred to in it are concerned. He says that this is apparent from Constable itself where at page 649, Mr Nugee QC collects together observations made in the course of earlier judgments which show that however honestly transfer provisions are introduced, their terms may be, to quote one citation, "so oppressive as to cast suspicion on the honesty of the persons responsible for it or so extravagant that no reasonable man could really consider it for the benefit of the company", and to quote another citation, "that the circumstances may be such as to lead to one conclusion only, that the majority of the shareholders are acting so oppressively that they cannot be acting in good faith". He says that by that test Bye-law 7A is plainly invalid.
26. He submits that his allegation of bad faith is reinforced by an examination of the facts in this case. Before the Placing Agreement came to be entered, there was a debate about bad leaver provisions in the course of which Mr Dibb, one of the participants from whom Mr Seidel acquired his shares, and a director of DPL, made plain in e-mail that his "final requirement is that we do not pursue a bad leaver provision", a point Mr Dibb reinforced immediately before entering the placing agreement by e-mailing a term, "I will sign it [that is a reference to his own service agreement,] on your assurance that you will not seek to introduce a bad leaver provision which would adversely affect my personal shareholding". Mr Dagnall refers also to an e-mail sent from Mr Seidel to another participator, Dr Andrew Robinson, who incidentally also is one of those allegedly subjected to blackmail, in which Mr Seidel recorded what Mr Dagnall says was the common view at the time, "We furthermore agree to drop standard bad leaver provisions from the options and not to insert such provisions in the company's Bye-laws". Mr Dagnall says that in the light of such e- mails, it was clear bad faith to introduce a bad leaver provision only after Mr Seidel had been dismissed and with the intention of expropriating his shares.
27. Thirdly, Mr Dagnall submits that if the clause is to be regarded as valid and is to be regarded as having been introduced honestly and without bad faith, then it undoubtedly constitutes a fraud on a minority or oppression under Bermudan law and on that ground the court ought to do nothing to assist its enforcement.
28. Fourthly, he submits that if it is valid it cannot extend to what Mr Garland calls "the duress shares", which came to Mr Seidel (on DPL's case) as the result of the exercise of blackmail.
29. Fifthly he asserts that if the clause is by reference to any of the preceding matters still to be regarded as valid, it is nonetheless dependent on Mr Seidel's having ceased to be a director and employee of DPL and not be continuing in office as a director or continuing to be an employee of DP Admin. He says that Mr Seidel was on the basis of the letters of 18 January 2007 clearly dismissed as an employee and director of DPL under the crosstermination provision in the DPL contract and that accordingly that dismissal is dependent on his having been dismissed as an employee of DP Admin and as a director of DP Admin. But he says that an examination of the terms of the letter of 18 January 2007 so far as it relates to DP Admin discloses that as a matter of company law Mr Seidel cannot have been dismissed as a director and as Chief Executive Officer unilaterally at the behest of Mr Garland, and he further submits that the grounds for dismissal, which I have summarised, are transparently spurious on the facts.
30. So far as blackmail is concerned, he says that in the documents there will be found clear evidence that the persons allegedly blackmailed participated in the placing and entered into obligations alongside the person by whom they were allegedly blackmailed, and who was giving promises in relation to the very shares which he allegedly acquired by blackmail; and that they have never made any attempt themselves to assert blackmail or to seek to recover the shares which they say they were forced against their will to hand over. So far as questions of incompatibility are concerned, he says that it is demonstrable from the evidence that this case cannot be made good and it has, indeed, now been abandoned. What has taken its place is an assertion now to be found in the evidence of Mr Garland (a) that Mr Seidel, over Christmas 2006 said that he was going to Bermuda but in fact went to Miami and met with another director of DPL and may have discussed the affairs of some other company in which they were both involved and (b) that a conversation took place between Mr Seidel and Mr David Garland, QC, Mr Michael Garland's brother, in which Mr Seidel is said to have asserted that he intended to spend some time working for his other company. It is said that once those facts are examined, it is quite plain that where you go on holiday and who you speak to and what you say on the telephone as to your prospective intentions (which you do not carry into effect) can never of themselves be so serious as breaches of contractual duty, if they be such at all, as to warrant instant dismissal without adherence to any disciplinary procedure.
31. Mr Dagnall says that insofar as there is an attempt by DPL to rebut these points in the evidence, the entire case in rebuttal is founded upon undocumented hearsay relating to events which are nowhere referred to in contemporaneous correspondence; and that all DPL does is to decline to provide any explanation, telling Mr Seidel to wait and see what happens in the Bermuda proceedings. He says that once one takes all of those matters in the round, it must be clear that there is no serious issue that Bye-law 7(a) is effective and has been effectively invoked.
32. I have reached the conclusion that the claim, under Bye-law 7A, to the shares issued and allotted to Mr Seidel by DPL itself cannot be regarded as having no real prospect of success, and it must be accepted that it raises a serious issue. Under English law (and on the state of the evidence before me also on Bermudan law) the jurisprudence relating to the introduction of compulsory transfer provisions, including expropriation provisions, cannot be declared to be certain and calls for detailed argument and consideration in the context of firmly found facts. It cannot be said with certainty that there is any doctrine of "fundamental invalidity" relating to such terms, applicable even if the power of amendment has been honestly exercised. Furthermore, although there is, about all of these events, a strong air of contrivance, it is not appropriate at this stage to make a finding that the power of amendment has been exercised in bad faith and not in honest belief There may well be exceptional cases where the quality of the evidence enables a court to make a finding of bad faith even in the absence of hearing from the actors in the events themselves, but I am clear that this is not one of these cases. Furthermore, whilst on the evidence so far adduced, the claim to have dismissed Mr Seidel from DPL appears weak, and the confidence expressed as to the outcome of this litigation in regulatory statements issued to the market may need to be revisited, the claim cannot be ignored. On the evidence before me, I could not grant summary judgment in favour of Mr Seidel in the Employment Proceedings. It would therefore seem to follow that there is a "real prospect" (as that term is understood, for the purposes of the CPR) that DPL will establish that they have validly dismissed Mr Seidel. Indeed, Mr Dagnall accepts that the employment claim should go to trial and he asks me to make directions to that end.
33. Faced with the exposure of the legal and factual weaknesses in DPL's case on dismissal, Mr Gillis QC bravely rewrote history. He said that whatever the dismissal letters themselves said, they could effectively be ignored, and the position could be analysed not in terms of what DPL actually did, but in terms of what they might have done. He pointed out that under Bye-law 51-1 (g) of the Bye-laws, it would be possible for Mr Seidel to be removed as a director of DPL by a notice signed by or on behalf of all of the directors. He accepted thatthere was no such notice, but he said that the letter of the 18th January 2007 from DPL, which on its face appeared to require the resignation of Mr Seidel, was in fact a notice under this article. He said that once that hurdle had been overcome, then the dismissal as a director of DPL would lead to the termination of the employment as executive of DPL and that in turn would lead to the termination of the DP Admin contract, and he said - though he did not explain this further - the removal of Mr Seidel as a director of DP Admin. This alternative argument strikes me as lightweight, but it has not been demonstrated by clear authority that this analysis is completely unarguable.
34. For these reasons, I am forced to accept that there is a serious issue to be tried in relation to the 44 million common shares issued or allotted to Mr Seidel. But it seems to me that to extend Bye-law 7A to the "duress shares" is completely unarguable on the case that DPL advances. On the construction of Bye-law 7A itself, which contains(in Bye-law 7A.4) its own internal provisions for the transfer of shares as a result of the exercise of Bye-law 7A rights, there is no ground for construing the reference to "transfer" in clause 7A.1(a) as referring to transfers generally between participants in DPL whether on- or off-market. I simply do not regard that as a permissible construction. Furthermore, given that the company's case is that the "duress shares" were acquired by Mr Seidel as a result of blackmail and not by reason of participation in any management incentivisation scheme, it seems to me that whatever Bye-law 7A means as a matter of fact it is incapable of applying.
35. This leads me, albeit at some length, to the conclusion that there is a serious issue in relation to the legal basis for asserting the Bye-law 7A rights. However, I must also ask whether there is a serious case for a permanent injunction in support of those rights at trial. This is a matter which troubled me. Mr Dagnall submitted that if Mr Seidel sold his shares, (and I will introduce into the hypothesis that he does so without the consent of DPL), then there is no need for an injunction because DPL has the right, under its Bye-laws, to refuse to register the transfer, and it can even execute the requisite transfer documents in its own favour through its appointed attorneys under Bye-law 7A.11. There is therefore no need for any injunction to be granted in order to secure DPL's legal title to the expropriation shares.
36. In response, Mr Gillis submitted that whilst that may be so in relation to the legal title, DPL may have to face claims from the purchaser who acquired the shares from Mr Seidel. He accepted that such a purchaser may face difficulties in showing that he or she was a bona fide purchaser for value of a legal interest without notice. Given (a) that as a matter of public record, the compulsory transfer provisions themselves are available to potential purchasers, (b) that everyone will know that Mr Seidel was a director and employee from the admission documents and from the company's filed accounts (c) that the terms of the article make plain that everybody who is an employee or director is a 'bad leaver' for the purposes of compulsory transfer (d) that the dispute now before me is referred to in regulatory statements made to the market; Mr Gillis QC accepted that a bona fide purchaser, able to assert prior rights to the compulsory transfer provisions, was perhaps unlikely. But he said that an injunction ought to be granted because the whole point of the compulsory transfer provisions was that DPL should not be drawn into disputes of that sort.
37. In answer to that, Mr Dagnall submitted that it would not be necessary to be drawn into disputes of that sort since these were publicly quoted shares and the company could always go into the market if it needed shares urgently.
38. I have ultimately been persuaded that there is a real prospect that a permanent injunction would be granted at trial. One only gets to the point of considering relief if DPL has successfully established that Bye-law 7A is valid. If that is so, then Bye-law 7A.12 contains a perfectly straightforward prohibitory obligation for which DFL has stipulated in its articles. If it has stipulated for no dealing, it is entitled to rely on that, and entitled to say that it does not wish to be drawn into disputes with persons who might acquire their shares from Mr Seidel in breach of that obligation. Nor, I think, does the market provide any answer.
39. Mr Seidel has (if the duress shares are ignored) a 10% holding. Only 12% of the shares are in public hands. It is not realistic to look to the market to make up for any deficiencies in being able to operate immediately the expropriation provisions.
40. Being satisfied accordingly that there is a serious question to be tried, this opens the gateway to consider the adequacy of damages and the balance of convenience. If I wrongly withhold an injunction from DPL, I may deprive the company of the benefit for which it has specifically stipulated namely, no dealing and redistribution of expropriated shares. It may be difficult to assess the loss that is thereby caused. Whilst it is true that in one sense DPL can go into the market and buy replacement shares and one can assess the difference between the price that DPL has to pay and the expropriation price which it would have to pay under Bye-law 7A, it must be recognised, as I have just indicated, that the market is very tight. Moreover, I am not satisfied on the evidence that Mr Seidel would be good for any loss that is thereby established. On his own evidence, he has no substantial free means, (apart from the shares) which have been disclosed. Although on the hypothesis that he has sold those shares, he will have the share proceeds, it is also plain from his evidence that he needs to resort to these in order to fund the litigation. In these circumstances, I would be inclined to afford DPL the protection of an injunction.
41. I turn to consider the alternative: if I grant a temporary injunction in relation to the shares, and it is ultimately shown that DPL is not entitled to that relief, then I will have prevented Mr Seidel from a free disposition of his shares. He can say, "I could have sold on this day at X pence. Because of your injunction, I did not, and I can now only sell at X minus10 pence". That makes his loss easy to compute. The question is whether DPL would be good for any loss so assessed. This is ultimately a question, as I see it, of balance sheet solvency and will depend on the fluctuating value of the oil exploration concessions which DPL acquires. But it is in precisely this fluctuating value that Mr Seidel has chosen to speculate by acquiring shares. It would be possible to attach conditions to any injunction which afford him protection against a decline in share value in the short term.
42. On the hypothesis that the injunction binds only 44 million shares, it seems to me that the risk of injustice to the company is greater than the risk of injustice to Mr Seidel. On that material, the English court would grant an injunction.
43. This then brings one, in this lengthy journey, to what I have called Refco Stage 2: the consideration of whether the fact that this court has no jurisdiction over a claim based on Bye-law 7A apart from under section 25 itself makes it inexpedient for the court to grant relief that is purely ancillary. It is here common ground that the principle questions which the court must consider under this heading are to be found in Motorola v Uzan [2004] 1 WLR 113, and, in summary, require the court to address five questions. Whether the making of the order will interfere with the management of the case in Bermuda, to which the answer is no. Whether it is the policy in Bermuda not to make extraterritorial orders, to which the answer is no. Whether there is a danger that the orders made will give rise to disharmony or confusion, or the risk of conflicting or overlapping orders in other jurisdictions, to which I think the answer is again no. Whether, at the time the order is sought, there is likely to be a potential conflict as to jurisdiction rendering it inappropriate and expedient to make an order, to which I think the answer is no. Whether, in a case where jurisdiction is resisted and disobedience is to be expected, the court will be making an order that it cannot enforce; to which, again, the answer is "no" because Mr Seidel is resident in this jurisdiction and the order can be enforced in personam against him. A simple consideration of those factors would therefore indicate that an order in aid ought to be made under Section 25.
44. But the question arises: are those the only factors to be considered? Mr Dagnall points to the fact that Section 25 itself confers a power. It does not prescribe the circumstances in which that power must be exercised. All that S.25(2)2 does is to direct attention to certain fundamental considerations which must be addressed in the circumstances adumbrated in the subsection. It does not preclude the consideration of other factors.
45. I agree with that submission. Although "the Refco Test" is described as having two parts, and although in considering the first part I have had to take into account certain discretionary matters, there seems to me to be an overall discretion vested in the court as to whether to exercise the section 25 power or not. Mr Dagnall submits that I should not exercise the power because, he says, the position is now governed by Council Regulation number 44/2001 ("the Judgments Regulation"). In relation to this Regulation, Bermuda is of course not a contracting state, but a Bermudan company litigating in this jurisdiction must comply with English law of which the Regulation is part.
46. That appears from the decision in Owusu v Jackson [2005] QB 801, a case which was in fact concerned with whether, in the light of the existence of the Judgments Regulation, it was possible for the local court to apply a doctrine of forum non conveniens. In order to consider that issue, the court decided that it must first determine whether Article 2 of the Brussels Convention was applicable in circumstances where two of the parties were domiciled in the same contracting state, and the case between them, before the courts of that state, had certain connecting factors with a non-contracting state (but not with another contracting state). It answered that question by saying that Article 2 of the Brussels Convention applied to circumstances involving a relationship between the courts of a single contracting state and those of non-contracting states (rather than purely to relationships between the courts of a number of contracting states). In paragraph 46, the court held: 'The Brussels Convention precludes a court of a contracting state from declining the jurisdiction conferred on it by Article 2 of the Convention on the ground that a court of a non-contracting state would be a more appropriate forum for the trial of the action even if the jurisdiction of no other contracting state is in issue or the proceedings have no connecting factors to any other contracting state.' Thus in the context of "convenient forum" the Judgments Regulation determines the position not only between contracting states, but also between contracting states and others.
47. The question is: what is the effect of this decision in the context of the application of Section 25 of the 1982 Act with which Owusu v Jackson was not concerned? Mr Dagnall submits that it is plain from the reasoning in that case that the Judgments Regulation must "trump" Section 25. The decision whether to exercise the S. 25 power is determined entirely by where the Judgments Regulation says jurisdiction lies.
48. This proposition was not the subject of lengthy argument or examination, although my attention was drawn to the decision of Mrs Justice Gloster in Antec International v Biosafety [2006] EWHC 47 (Comm) (another forum non conveniens case). She held that in that context it was a moot point and decided to leave it undecided (see paragraphs 18 and 24).
49. I would find the proposition that the Judgments Regulation effectively "trumps" Section 25 (so that one simply determines the position entirely by reference to the Regulation) as surprising.
50. First, Owusu v Jackson itself was about declining jurisdiction or imposing a stay on English proceedings and the availability of forum non conveniens arguments. The considerations under Section 25 are, I think, different. They are about offering assistance to a foreign court.
51. Secondly, Owusu v Jackson itself leaves open the possibility even in forum cases that the Regulation does not "trump" in all circumstances. There was, in Owusu. a second question, which it is unnecessary for me to lengthen this judgment by examining, which the court then declined to answer, but which leaves open the possibility that the reasoning in Owusu v Jackson does not apply, inevitably, even in all forum non conveniens cases.
52. Thirdly, if the Judgments Regulation were to "trump" Section 25, it would render Section 25 largely inoperable. Since Section 25 is dependent on the residency of one of the parties in this jurisdiction, and residency will also be a requirement under the Judgments Regulation, it is difficult to see what scope there would be for any content to be given to Section 25 itself.
53. That said, even if Owusu v Jackson is not capable of direct application, it undoubtedly raises the same policy considerations as arise in Section 25 cases. Those were identified in Owusu v Jackson as being three in number. First, the Judgments Regulation was designed to embody the principle of legal certainty, and that would not be guaranteed if a court, having jurisdiction under the Convention, was allowed to apply a discretionary forum non conveniens doctrine. Secondly, that the application of the forum non conveniens doctrine is liable to undermine the predictability of the rules of jurisdiction. Thirdly, the legal protection of persons established in the Community would also be undermined because they would not be able reasonably to foresee before which courts they might be sued. These considerations must, I think, also be relevant to the exercise of the power under Section 25 in deciding whether (as a matter of discretion) the High Court should assist a foreign court seized of a case.
54. Mr Dagnall says that the answer is to be found in Article 2 of the Judgments Regulation. He says that if this embodies relevant principles, then Article 2 provides that 'persons domiciled in a member state shall, whatever their nationality, be sued in the courts of that member state.' He says Mr Seidel is domiciled in England and therefore must be sued in England, and I should not assist his being sued in Bermuda
55. Mr Gillis says that the Regulation provides no such clear answer. He points out that Article 2 itself beings with the words 'subject to this Regulation,' and he draws attention to Article 22.2 which says that in proceedings which have as their object the validity of the constitution of companies or the validity of the decisions of their organs, then the court of the member state in which the company has its seat is the one having exclusive jurisdiction. He says that although of course Bermuda is not a member state and the article is not capable of direct application, the policy which it embodies - namely that the seat of the company is the appropriate jurisdiction - plainly indicates that Bermuda is appropriate and, accordingly, that even if one takes into account the Judgments Regulation, assistance should be provided to the Bermuda court.
56. I agree with Mr Gillis. In so far as the Judgments Regulation indicates policy considerations that ought to be taken into account in the exercise of the power under Section 25 they point to Bermuda being the appropriate place to conduct this litigation and for it to be appropriate for this court to aid the Bermudan court.
57. Mr Dagnall then says that if that is the case, then his client will suffer a disadvantage. He says that Mr Seidel intends to conduct litigation in this country under a conditional fee arrangement. But such arrangements are not open to him in Bermuda and that, accordingly, this court should not as a matter of discretion assist the Bermuda court in the conduct of litigation in Bermuda in which he will be placed at a disadvantage. I was in this connection referred to the observations of Lord Goff in Connelly -v- RTZ [1998] AC 854 at 873 E-H that whilst in general the absence of financial assistance in what is otherwise the appropriate jurisdiction is not relevant it may in exceptional cases (for example if substantial justice could not be done in what is otherwise the appropriate jurisdiction).
58. In the context of the Bye-law 7A claim, I am unimpressed by this argument. Mr Seidel acquired shares in a Bermudan company. He became a director of a Bermudan company. He became an employee of a Bermudan company under a contract which provided for exclusive jurisdiction of the Bermuda court. The fact that he faces funding difficulties in fighting cases in the Bermuda court is a consequence of those deliberate choices.
59. In the circumstances, I propose to grant an injunction under Section 25 in aid of the Bermuda proceedings, the terms of which I will come to later.
60. So far I have gone through the entire process in relation to the Bye-law 7A claim: and I have held that (in relation to the Bye-law 7A claim) I am going to refuse an injunction in relation to the duress shares. The question arises: whether I ought to grant an injunction in relation to the duress shares because of the "placing agreement" claim. The placing agreement imposed an obligation to obtain the consent of the company to a disposal and to undertake only an orderly disposal through a nominated representative for a period expiring on the 12th December 2008. It is plain that there is a real risk that there will be no trial, at which the enforceability of this obligation against Mr Seidel will be finally determined, that can be held before the obligation expires. There is, accordingly, in one sense, no "serious issue to be tried" because there will not be a trial within the relevant period, and American Cyanamid principles are difficult to apply.
61. The approach to this difficulty is set out in Lansing & Linde Ltd v Kerr [1991] 1 WLR 251, in particular at page 258, where Lord Justice Staughton stated the rule that if it is not possible to hold a trial during the restriction period, justice requires that some consideration must be given to whether the claimant would be likely to succeed at trial. In those circumstances, it is not enough merely to decide that there is "a serious issue to be tried". Some assessment of the prospects of success is required, but it is for the judge to control the extent of that assessment. In fact, a provisional view as to the likely merits of this claim overall is fairly straightforward in the instant case. Clause 14.3 of the placing agreement imposes a plain contractual obligation which is negative in nature. These obligations are routinely enforced by the court, which is simply by its injunction giving effect to the bargain which the parties themselves have chosen to enter.
62. Mr Dagnall says that it is not so plain in this case for four reasons. First, because there has been a possible repudiation of the placing agreement. Secondly, because it may be necessary to rectify the placing agreement, having regard to events which occurred and which I need not recount. Thirdly, that there is no need for an injunction at all because share transfers made in breach of obligation need not be registered. Fourthly, that it is not enough for DPL to say that it fears Mr Seidel may dispose of his shares; it must show that there is a risk of him doing so.
63. The first three of those arguments do not, I think, on the evidence require examination; but the fourth does. I have been taken through the various statements made by Mr Seidel in the course of evidence, the general tenor of which is that he has "no present intention" of selling any shares. But without subjecting Mr Seidel's evidence to minute textual analysis, I am left at the end, as Mr Gillis submitted, with a feeling that Mr Seidel is reserving to himself the right to dispose of the duress shares without first seeking the consent of DPL, albeit in circumstances which he cannot, at present, elaborate. As he puts it, in paragraph 117, of his witness statement, 'I do not know what I would do about seeking consent at that point as I do not know what would be the circumstances of my wishing to effectively dispose of them, and which circumstances do not presently exist.'
64. I would therefore grant an injunction in respect of the duress shares under the placing agreement were this being considered in the context of proceedings in England. I therefore move again to the second stage of the Refco Test, considering now the placement agreement claim. Here it is to be observed that the placing agreement is an English contract, governed by English law, but with a non-exclusive jurisdiction clause. This is a case in which the English court does have jurisdiction.
65. If one reminds oneself about the terms of Section 25(2) they are: that the court may refuse to grant relief in aid if, in the opinion of the court, 'the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings in question' makes it inexpedient. The fact, the existence of which engages that subsection, is absent in the present case. The court does have jurisdiction, it is simply not being invoked. If it were relevant to consider the Section 25(2) matters, I would have reached the same conclusion in relation to the placing agreement claim as I reached in relation to the Motorola v Ozan considerations in relation to the Bye-law 7A claim.
66. I therefore turn to the broad discretion under Section 25, and again Mr Dagnall relies on the Judgments Regulation as saying that the answer must be to refuse an order in aid because under Article 2 of the Judgments Regulation this is an English contract, the obligation is being forced against a person domiciled in this country, and this country should not aid Bermuda to enforce the obligation in Bermuda.
67. For the reasons given in relation to the Bye-law 7A claim, I think this is a factor to be taken into account in the exercise of discretion, but it does not provide a compelling or mandatory answer. There are other factors to be taken into account. One of these is the non-exclusive jurisdiction clause. The significance of this was explained in Antec International v Biosafety, a decision of Mrs Justice Gloster to which I have already referred.
68. I take as my guidance, (though I do not set out at length in this judgment,) the principles which she summarised in paragraph 7 of her judgment to the effect that a non-exclusive jurisdiction clause is a freely negotiated contract which presents a strong prima facie case that England is the correct jurisdiction; that the court will, as a general rule, hold the parties to their contractual choice, unless there are overwhelming or very strong reasons for departing from this rule; and that such overwhelming or very strong reasons do not include factors of convenience that were foreseeable at the time the contract was entered although, unless in exceptional circumstances, they involve the interests of justice.
69. It is worth examining one of those principles at a little greater depth, because this is not a case in which proceedings have been commenced in the court having non-exclusive jurisdiction (England) which proceedings it is sought to stay in favour of some other court. This is a case in which proceedings have been commenced elsewhere and the court with non exclusive jurisdiction is being asked to aid those proceedings. This is more akin to the situation considered by Mr Justice Coleman in BP v Aon Ltd [2006] Lloyds Law Rep 459, in particular at passages on page 553. As he there pointed out, under a non-exclusive jurisdiction clause, either party is free to commence proceedings in any court having jurisdiction and to do so is not a breach of the non-exclusive jurisdiction clause. It is, however, implicit in the very existence of such a clause, that both parties accepted when they entered it that the chosen jurisdiction was likely to be the appropriate one in the interests of justice to rule over disputes which could reasonably be envisaged as arising in relation to the agreement, (though this did not necessarily dictate the answer in relation to circumstances which were not so foreseen). Accordingly, that where there were no pending proceedings in the nominated jurisdiction, since it was not a breach of contract to commence proceedings elsewhere, they could be so commenced and the party commencing them was not to be called upon to justify commencing them in that jurisdiction by establishing strong reasons for preferring to it over the nominated jurisdiction. All that had to be shown was what he called a clear balance of justice and fairness as between the parties "in favour of the jurisdiction in which the proceedings had been commenced. He went on to explain that, by 'a clear balance' he meant one that while not overwhelming was substantially more than a fine balance.
70. That is the consideration to which I should have regard. If I ask myself whether Bermuda is the appropriate court, because by a clear balance there are strong reasons or a significant advantage to litigating there, I would answer that question in the negative. I do not consider that it is necessary in the interests of justice to aid DPL to prosecute proceedings in a court other than that which the parties at the time selected as probably appropriate for the sort of disputes that would arise in relation to their agreement, of which clause 14.3 in the placing agreement is a mainstream example. Enforcing that clause is a simple and straightforward enforcement of a central obligation. In relation to that, the parties thought that England would probably be the appropriate jurisdiction, and I consider that it is. In these circumstances, I do not see why I should compel Mr Seidel to litigate the question in Bermuda simply because that is where DPL has chosen to commence the proceedings. There is no clear balance of justice and fairness deriving from considerations not apparent at the time when the placing agreement was entered that suggests that I should aid the Bermuda court by granting an injunction. In these circumstances, I refuse the injunction under S.25 in relation to the duress shares.
71. It is now necessary to consider the terms of the injunction. The injunction will restrain the disposal by Mr Seidel of the expropriation shares (which will need to be specified) without the consent of DPL for a period expiring on the 12 December 2008. The consent and the time-limiting both derive from the latest form of draft put before me by DPL as to the terms they seek. I consider the consent requirement is appropriate because it will assist in the assessment of any damages in the event that Mr Seidel applies for consent and it is refused, and it is subsequently established that the ground for refusal was misplaced. The injunction will be conditional upon and will not come into effect until DPL has lodged the bond of a London bank in the sum of £2.5 million. This condition requires some explanation. As I have indicated already the risk to which Mr Seidel is exposed is adverse price movements in volatile shares. The company itself is in its cash-bum stage and is likely to come to the market for further funding. The company says that it has a historic record of raising funds to which I have briefly referred and that it anticipates no difficulty in doing so again. If that evidence was meant to impress the court, then undoubtedly it will impress a London bank asked to provide a bond, especially if it is supported by the counter indemnity of Mr Garland and of the other directors who are confident in the outcome of their case and stand to benefit from the expropriation provisions. The sum of £2.5 million simply represents a relatively modest protection against the share price movement. The shares have had a high of 64 pence. Since the commencement of this dispute, they have declined from something like 27 pence to something like 17 pence. It is plain that there is the possibility that they may fall further. Mr Seidel should be afforded some protection against that risk.
72. Those are the terms of the injunction which I propose to grant. I must now deal with the subsequent applications which have arisen. Given the hour, I will seek to do so shortly. I have referred to the commencement of employment proceedings against DP Admin. DPL seek a stay of those proceedings. The basis on which they do so is that they seek what is called a 'case management stay' under Reichold Norway v Goldman Sachs [2000] 1 WLR 173. That case established that the court had a procedural case management power (independent of any substantive rule conferring such jurisdiction) to grant a stay of English proceedings pending the conclusion of proceedings in another jurisdiction; but that such a stay should only be granted in what were called 'exceptional and compelling circumstances' which would not stifle the English claim indefinitely.
73. Shortly put, Mr Gillis submits that such circumstances exist here. He says that although the DP Admin contract is an English contract with an English exclusive jurisdiction clause, it is appropriate to deal with it in Bermuda because it is so intimately tied up with the other considerations before the Bermuda court. He says that in fact DP Admin, the defendant in the English proceedings, is willing to be bound by the outcome of the employment dispute relating to the DP Admin contract in Bermuda and that, accordingly, it is appropriate to stay the English proceedings to see what happens in Bermuda. If Mr Seidel loses in Bermuda then he is free to revive the employment claim here. But if DP Admin loses, it accepts that it will be bound by the decision in Bermuda. Accordingly, he submits that this arrangement of staying the English proceedings offers the possibility, if not the guarantee, of avoiding conflicting decisions in Bermuda and England and in the duplication of costs.
74. I do not consider that there are any "exceptional and compelling" circumstances such as would warrant a Reichold stay of the employment claim. The supposed advantage derives from DP Admin's undertaking to be bound by the Bermuda proceedings and by the refusal of DPL to be bound by the outcome of the employment claim in England. I do not consider that the court should be manipulated by such artifice. Every consideration, whether it be the exclusive jurisdiction clause itself in the DP Admin contract (especially in the light of the observations made in Konkola Copper Mine -v- Coromin (2006) 2 LI.L.R 446 at 452 para.32, the terms of the Judgment Regulation (in particular, Articles 22.4 and 23.1) the policy considerations in Owusu or the availability of CFA funding indicate that the DP Admin contract should be litigated and decided upon in England. I accordingly refuse that stay.
75. Having refused the stay, Mr Dagnall invited me to give some case management directions as to the employment claim with the objective that the declaratory relief in it should proceed with expedition, and he invited me to lay down a timetable. I propose to give directions. I see no reason why DP Admin cannot produce a defence to the employment claim within28 days. There should thereafter be seven days for a reply from Mr Seidel. Disclosure should follow 21 days thereafter. Inspection seven days thereafter. Witness statements 14 days thereafter. I consider that the case should be listed for trial with an initial time estimate of four days on the first open date 28 days thereafter.
76. If these directions need to be the subject of further consideration, since counsel have not had the opportunity of addressing me on the timetable, I will hear such submissions.
77. There remains one contingent application which I propose to deal with extremely shortly. Mr Dagnall submitted that I should, in fact, make DPL a party to the employment claim. He submitted that he was seeking only declaratory relief so that the only question was whether it was proper and appropriate to join DPL. He said that it was so proper and so appropriate because, as the letters of the 18th January 2007 showed, and as Mr Gillis's alternative argument as to the mode of Mr Seidel's dismissal showed, there was an extremely close connection between DP Admin and DPL which made a single case which disposed in a binding manner of all issues appropriate. I do not, in the circumstances, consider it right to force DPL to litigate a claim relating to the DP Admin contract in this country. It may well choose to do so. It may join as a party, if it wishes, and it will undoubtedly have to participate if Mr Gillis's alternative argument as to the mode of dismissal was right; participate in the sense of being a witness and affording documents. That consideration does not mean that I think it right to introduce DPL itself as an additional party.
78. The employment proceedings should proceed as constituted with utmost expedition because, in my judgment, they in a sense provide the key to what is going on in Bermuda, and I so order.

MR JUSTICE NORRIS: Now have I managed to dispose of all of the issues which you wanted disposed of in the substantive applications that are before me? Are there any loose ends?

MR R GILLIS QC: My lord, I think that disposes of everything, but we will give the matter some thought over the short adjournment.

MR J DAGNALL: There was one point, and it may be that I was wrong in my note-taking, but I think when your lordship described the injunction it would give, I think your lordship indicated that the injunction would restrain the disposal of the blackmail shares.

MR JUSTICE NORRIS: No I didn't mean that. I meant the 44 million shares.

MR J DAGNALL: It's clear that is what your lordship intended.

MR JUSTICE NORRIS: Yes. Not the blackmail shares.

MR R GILLIS QC: My lord, I picked up the exact same point.

MR JUSTICE NORRIS: I'm very sorry. Forgive me: tiredness. It was not the blackmail shares, it was the 44.8 million shares. Thank you.

MR R GILLIS QC: I think that disposes of matters.

MR J DAGNALL: I have a very minor point. It is simply the Aldi point. I presume that your lordship is saying absolutely nothing about it.

MR JUSTICE NORRIS: I'm not saying anything about the Aldi point, no.

MR R GILLIS QC: My lord, might we just consider the position over the short adjournment?

MR JUSTICE NORRIS: Yes do. Come back at 2.15.

[Court rise]

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