BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building, Fetter Lane, London, EC4A 1NL |
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B e f o r e :
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NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ VOOR ONTWIKKELINGSLANDEN N.V. |
Claimant |
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- and - |
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SOCIÉTÉ BENGAZ S.A. (a société anonyme incorporated and existing under the laws of the Republic of Benin) (2) WEST AFRICAN GAS PIPELINE COMPANY LIMITED (a company incorporated and existing under the laws of Bermuda) |
Defendants |
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Edgar Yves Monnou (Chairman of the First Defendant) for the First Defendant
Abdul Jinadu (instructed by AO Law Ltd) for the Second Defendant
Hearing date: 8 March 2024
Draft judgment circulated on:
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HTML VERSION OF JUDGMENT APPROVED
Crown Copyright ©
Mr Justice Henshaw:
(A) INTRODUCTION
(B) FACTS
(1) The parties
(2) WAGPCO shareholders' agreements
(3) The Credit Agreement between FMO and Bengaz
(4) Security arrangements
(5) Transactions undertaken
(6) Diversion of funds
(7) Procedural history
(C) PERMISSION TO APPLY FOR SUMMARY JUDGMENT
(D) SUMMARY JUDGMENT
(1) Principles
(2) FMO's debt claim against Bengaz
(3) Declaration claims
(a) Proceeds Account
(b) Segregated Funds
(c) Rights exercisable by FMO as Receiver
(d) FMO as Bengaz's attorney
(e) Missing Payments
(f) Conclusion on declaration claims
(4) Specific performance and injunctive relief
(a) Specific performance against Bengaz
(b) Injunctive relief against WAGPCO
(5) Disclosure relating to Missing Payments
(6) Indemnity sought by WAGPCO
(7) Other relief
(E) CONCLUSIONS
(A) INTRODUCTION
(B) FACTS
(1) The parties
(2) WAGPCO shareholders' agreements
i) a Shareholders Agreement dated 19 May 2003 between WAGPCO and its shareholders, governed by English law, subsequently amended by seven amendment agreements dated 16 December 2004 (two agreements), 27 July 2005, 11 August 2005, 18 May 2007, 10 February 2022 and 23 June 2022 (together "the Shareholders Agreement"); and
ii) an Escrow Agreement dated 19 May 2003 between WAGPCO, its shareholders and Standard Chartered Bank, governed by English law, supplemented by a further agreement dated 19 May 2003 and amended by an agreement dated 11 August 2005 (together "the Escrow Agreement").
(3) The Credit Agreement between FMO and Bengaz
"Subject to the terms of this Agreement, FMO makes available to the Borrower [Bengaz]: (a) a term facility in an amount of $24,459,710..."
This term facility is defined as "Facility A" in clause 1.1, which sets out the definitions used in the Credit Agreement.
i) Clause 8.1(a): "The rate of interest on: (i) each Facility A Loan is the Fixed Rate", defined as "6 per cent. per annum".
ii) Clause 8.3(a): "Subject to paragraphs (b) and (c) below, the Borrower shall pay accrued interest: (i) on each Facility A Loan on each Interest Payment Date...", defined as 15th April and 15th October in any year.
iii) Clause 8.3(b):
"From the first Utilisation Date up to (and including) the last day of the Availability Period any accrued interest on each Facility A Loan will be capitalised on each Interest Payment Date and the Capitalised Interest Amount in respect of that Facility A Loan shall not be paid by the Borrower but instead shall be capitalised so as to form part of that Facility A Loan and each amount of accrued interest shall bear interest together with the rest of that Facility A Loan in accordance with Subclause 8.1 (Calculation of interest) and as set out in Schedule 8 (Calculation of Interest)."
"Utilisation Date" is defined as "the date of a Utilisation, being the date on which a Loan is to be made", and "Utilisation" is defined as "the utilisation of a Facility".
iv) Clause 8.3(d):
"All amounts of accrued interest (including, for the avoidance of doubt, any deferred interest pursuant to paragraph (c) above) shall be repaid in full no later than on the Termination Date."
"The Borrower shall, within 5 Business Days of demand, indemnify FMO against any cost, loss or liability incurred by FMO as a result of: (a) the occurrence of any Event of Default; [or] (b) a failure by the Borrower to pay any amount due under any Finance Document on its due date..."
"The Borrower shall, within 5 Business Days of demand, pay to FMO the amount of all costs and expenses (including legal fees and any travel expenses) incurred by FMO in connection with the enforcement of, or the preservation of any rights under, any Finance Document."
"Finance Document" is defined as "this Agreement, the Supplemental Agreement, the Accounts Agreement, any Security Document, an Option Agreement, or any other document designated as such by FMO and the Borrower".
i) Clause 19.1 ("Non-payment"):
"An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable, unless the non-payment:
(a) is in respect of any amount other than principal and interest payable under this Agreement;
(b) is caused by technical or administrative error; and
(c) is remedied within three Business days of the due date."
"Obligor" is defined as "the Borrower or an SPV", with "SPV" meaning "any company in which the Borrower owns, legally or beneficially, directly or indirectly (or otherwise has any interest) in any share (or equivalent equity participation) in that company".
ii) Clause 19.3 ("Other obligations"):
"(a) The Borrower does not comply with any provision of the Finance Documents (other than those referred to in Subclause 19.1 (Non-payment) and Subclause 19.2 (Major covenants)).
(b) No Event of Default under paragraph (a) above will occur if the failure to comply, is capable of remedy and is remedied within the earlier of 30 days of FMO giving notice to the Borrower and any Obligor becoming aware of the failure to comply."
"Any certification or determination by FMO of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates."
and under clause 26.3 ("Day count convention"):
"Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or otherwise, depending on what FMO determines is market practice."
"31. ARBITRATION
31.1 Arbitration
Subject to Subclause 31.4 (Option), any Dispute shall be referred to and finally resolved by arbitration under the Arbitration Rules (the Rules) of the London Court of International Arbitration.
31.2 Procedure for arbitration
...
31.3 Recourse to courts
Save as provided in Subclause 31.4 (Option),the parties exclude the jurisdiction of the courts under Sections 45 and 69 of the Arbitration Act 1996.
31.4 Option
Before an arbitrator has been appointed to determine a Dispute, each of FMO and the Borrower may by notice in writing to all other parties to this Agreement require that all Disputes or a specific Dispute be heard by a court of law. If FMO or the Borrower gives such notice, the Dispute to which such notice refers shall be determined in accordance with Clause 32 (Enforcement).
32. ENFORCEMENT
32.1 Jurisdiction
(a) The courts of England have exclusive jurisdiction to settle any Dispute.
(b) The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
(c) This Subclause is for the benefit of FMO only. As a result, FMO shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, FMO may take concurrent proceedings in any number of jurisdictions.
32.2 Service of process
Without prejudice to any other mode of service allowed under any relevant law, the Borrower:
(a) irrevocably appoints David Doble Solicitors of 6-7 Bedford Row, London WC1R 4BS as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(b) agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.
32.3 Waiver of immunity
The Borrower irrevocably and unconditionally:
(a) agrees not to claim any immunity from proceedings brought by FMO against the Borrower in relation to a Finance Document and to ensure that no such claim is made on its behalf;
(b) consents generally to the giving of any relief or the issue of any process in connection with those proceedings; and
(c) waives all rights of immunity in respect of it or its assets."
(4) Security arrangements
i) Under clause 2 ("CREATION OF SECURITY"), clause 2.1(a) ("General") states:
"All the security created under this Deed:
(i) is created in favour of the Lender [FMO];
(ii) is created over present and future assets of the Chargor [i.e. the First Defendant];
(iii) is security for payment of all the Secured Liabilities; and
(iv) is made with full title guarantee...".
The 2 April 2009 Security Agreement adds, at (v), that the security created under that Deed "is in addition and without prejudice to the security created under the Original Security Agreement."
ii) The "Secured Liabilities" are defined as:
"all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of the Chargor to the Lender under each Finance Document, except for any obligation which, if it were so included, would result in this Deed contravening Section 151 of the Companies Act 1985"
and "Finance Document" is (via § 1.2(a)) defined as having the same meaning as in the Credit Agreement.
iii) Clause 2.2 ("Credit balances") states:
"The Chargor charges by way of a first fixed charge all of its rights in respect of any amount standing to the credit of any account contemplated by this Deed and the debt represented by it."
iv) Clause 2.3 ("Other Contracts") states:
"The Chargor charges by way of a first fixed charge, all of its rights in respect of the Company Shareholders Agreement [i.e. the Shareholders Agreement] and the Escrow Agreement."
v) In Clause 5 ("ACCOUNTS"), clause 5.1 ("General") defines "Receipts Account" as "the income account no. 01 01 2549859 50 with the Account Bank." The "Account Bank" is Standard Chartered Bank. Clause 5.5 includes the following provisions:
Clause 5.5(a): "The Chargor must get in and realise its:
(i) securities to the extent held by way of temporary investment;
(ii) book and other debts and other moneys due and owing to it; and
(iii) royalties, fees and income of any nature owed to it,
in the ordinary course of its business and in accordance with the terms of the Escrow Agreement to the extent applicable, and hold the proceeds of the getting in and realisation (until payment into the Receipts Account if required in accordance with paragraph (b) below) on trust for the Lender."
Clause 5.5(b): "The Chargor must, except to the extent that the Lender otherwise agrees, pay all the proceeds of the getting in and realisation into the Receipts Account and in accordance with the Escrow Agreement to the extent applicable."
As noted above and below, this clause was subsequently varied, in respect of payments from WAGPCO, to provide for payment into the Proceeds Account.
vi) Clause 7 ("WHEN SECURITY BECOMES ENFORCEABLE") includes these provisions:
Clause 7.1 ("Event of Default"): "This Security will become immediately enforceable if an Event of Default occurs."
Clause 7.2 ("Discretion"): "After this Security has become enforceable, the Lender may in its absolute discretion enforce all or any part of this Security in any manner it sees fit."
vii) Clause 9 ("RECEIVER") empowers FMO to appoint one or more persons to be a Receiver of all or any part of the Security Assets if the Security has become enforceable. However, by clause 9.5 ("Relationship with Lender"):
"To the fullest extent allowed by law, any right, power or discretion conferred by this Deed (either expressly or impliedly) or by law on a Receiver may after this Security becomes enforceable be exercised by the Lender in relation to any Security Asset without first appointing a Receiver and notwithstanding the appointment of a Receiver."
"Security Assets" are defined as "all assets of the Chargor the subject of any security created by this Deed".
viii) Clause 10 ("POWERS OF RECEIVER") sets out the powers exercisable by any Receiver (which are, by reason of clause 9.5, also exercisable by FMO itself) after the Security becomes enforceable. The powers include the following:
10.1(a) ("General"): "A Receiver has all the rights powers and discretions set out below in this Clause in addition to those conferred on it by law; including all the rights, powers and discretions conferred on a receiver under the Act [i.e. the Law of Property Act 1925] and a receiver or an administrative receiver under the Insolvency Act, 1986."
10.2 ("Possession"): "A Receiver may take immediate possession of, get in and collect any Security Asset."
10.8 ("Legal Actions"): "A Receiver may bring, prosecute, enforce, defend and abandon any action, suit or proceedings in relation to any Security Asset which he thinks fit."
10.9 ("Receipts"): "A Receiver may give a valid receipt for any moneys and execute any assurance or thing which may be proper or desirable for realising any Security Asset."
10.14 ("Other powers"): "A Receiver may:
(a) do all other acts and things which he may consider desirable or necessary for realising any Security Asset or incidental or conducive to any of the rights, powers or discretions conferred on a Receiver under or by virtue of this Deed or law;
(b) exercise in relation to any Security Asset all powers, authorities and things which he would be capable of exercising if he were the absolute beneficial owner of that Security Asset; and
(c) use the name of the Chargor for any of the above purposes."
ix) Clause 12 ("EXPENSES AND INDEMNITY") states:
"The Chargor must:
(a) immediately and on demand pay all costs and expenses (including legal fees) incurred in connection with this Deed by the Lender, any Receiver, attorney, manager, agent or other person appointed by the Lender under this Deed...;
and (b) keep each of them indemnified against any failure or delay in paying those costs or expenses ..."
x) Clause 15 ("POWER OF ATTORNEY") provides:
"The Chargor, by way of security, irrevocably and severally appoints the Lender, each Receiver and any of its delegates or sub-delegates to be its attorney to take any action which the Chargor is obliged to take under this Deed. The Chargor ratifies and confirms whatever any attorney does or purports to do under its appointment under this Clause."
xi) Clause 18 ("GOVERNING LAW"): states (in the first security agreement) "This Deed is governed by English law", or (in the second security agreement) "This Deed, and any non-contractual obligations arising out or of in connection with it shall be governed and construed in accordance with English law."
xii) Clause 19 ("JURISDICTION") provides: "Each Party agrees that any claim or dispute under this Deed shall, mutatis mutandis, be resolved in accordance with clauses 31 and 32 of the Credit Agreement, except that the term "Parties" shall mean the parties to this Deed."
i) In clause 2 ("CREATION OF SECURITY"), clause 2.1 ("General") provides that:
"All the security created under this Deed:
(i) is created in favour of the Lender;
(ii) is security for the payment, discharge and performance of all the Secured Liabilities; and
(iii) is made with full title guarantee...".
"Secured Liabilities" are defined as "all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of the Chargor to the Lender under each Finance Document, except for any obligation which, if it were so included, would result in this Deed contravening any law (including Section 151 of the Companies Act 1985)."
ii) Under clause 2.2 ("Charged Debt"), the Chargor charges by way of a first fixed charge all of its rights in respect of the Charged Debt. The "Charged Debt" is defined as "the debt owed by the Account Bank to the Chargor represented by the Credit Balance." The "Credit Balance" is defined as "the credit balance from time to time on the Account, including all interest accrued on that balance."
iii) Clause 12 ("EXPENSES AND INDEMNITY") states:
"The Chargor must:
(a) immediately and on demand pay all costs and expenses (including legal fees) incurred in connection with this Deed by the Lender; and
(b) keep the Lender indemnified against any loss or liability incurred by it in connection with any litigation, arbitration or administrative proceedings concerning this Security."
iv) Clause 16 ("GOVERNING LAW") provides: "This Deed and any non-contractual obligations arising out of or in connection with it are governed by English law."
i) Clause 2.6(a) (under "Security"):
"This Agreement constitutes notice to the Account Bank that under the Security Agreement the Borrower has charged (by way of a first fixed charge) in favour of the Lender all its rights in respect of any amount standing to the credit of the Proceeds Account and the debt represented by it."
"Security Agreement" is defined for the purposes of this agreement as the Bank Account Charge.
ii) Clause 3.1 ("Payments in"):
"The Borrower must ensure that all income received by the Borrower from the Company is paid directly into the Proceeds Account."
iii) Clause 3.2 ("Withdrawals"):
"The Borrower may only withdraw amounts from the Proceeds Account if they are applied for the following purposes in the following order:
(a) immediately following the end of the half of any financial year of the Borrower, in or towards satisfaction of the costs and expenses (including any operating expenditure) forecast to be incurred by the Borrower for the then next following half financial year as may be approved by FMO;
(b) in or towards satisfaction of any deferred interest payment obligations under the Supplemental Agreement [i.e. the Credit Agreement];
(c) in or towards satisfaction of any other interest payment obligations under the Supplemental Agreement;
(d) in or towards satisfaction of any mandatory prepayment obligations under the Supplemental Agreement; and
(e) in or towards any other amounts outstanding under the Finance Documents."
iv) Clause 4.2 ("Default"):
"(a) Except as set out below, the Borrower may only make a withdrawal from the Proceeds Account if no Default is outstanding or will occur as a result of the withdrawal.
(b) If a Default (other than an Event of Default) is outstanding, the Borrower may withdraw amounts standing to the credit of the Proceeds account for any purpose permitted by the Agreement.
(c) Notwithstanding the above, if a Default is outstanding, the Lender may, and is irrevocably authorised to operate the Proceeds Account in accordance with this Agreement.
(d) If an Event of Default is outstanding, the Lender: (i) will, on notice by it to the Account Bank, have sole signing rights in relation to the Proceeds Account; and (ii) may apply any amounts in the Proceeds Account in or towards amounts outstanding under any Finance Document in such order and from the Proceeds Account as the Lender thinks fit.
(e) The Lender must notify the Account Bank if a Default occurs and the Account Bank must treat that notification as conclusive evidence that a Default has occurred and (until notified to the contrary by the Lender) is continuing."
v) Clause 8 ("GOVERNING LAW"): "This Agreement and any non-contractual obligations arising out of or in connection with it, shall be is [sic] governed by and construed in accordance with English law."
(5) Transactions undertaken
i) In an email on 11 October 2013, Mr Andrew Naylor, Managing Director of an entity called Development Capital Partners Limited, who it appears was advising the First Defendant in its negotiations with the Claimant at this time, states that the First Defendant does "take seriously" its obligations under the Credit Agreement and apologises for "having let these slip".
ii) On 4 December 2013, Mr Sommissou (who, Mr Salem understands, took over from Mr Monnou in the negotiations with the Claimant at this time as Mr Monnou was injured) conveyed an email from Mr Monnou, in which Mr Monnou stated that "there is only one question to solve between F.M.O and Bengaz SA: How do we get organised to allow F.M.O. to do anything ... We clearly know that as a creditor you will use all means at your disposal to recover the money owed to you, including enforcing your securities".
iii) Following a meeting between Mr Monnou and Ms Diana Arteaga (the Claimant's representative with responsibility for the First Defendant at this time) in September 2014 or early October 2014, Mr Monnou set out a number of proposals by email on 8 October 2014, to which Ms Arteaga responded in red text on 18 October 2014. Mr Monnou's email of 8 October states: "We owe you money and we have to find a way to pay you back as quickly as possible, and doing our best by the same time to keep BENGAZ SA alive for new business."
iv) After the Proceedings were commenced, Mr Monnou on 17 July 2023, in an email to Mr Salem's firm, stated that after the "dispute within BENGAZ SA" was "finished", "the next step will be to succeed the challenge of coming to a friendly agreement with FMO for the payment of our debt, save the future and get the company run".
v) At the return date hearing on 21 July 2023 Mr Monnou stated "FMO has not been paid for more than 30 years now".
(6) Diversion of funds
i) Payment of US$300,000.00 made on 20 April 2012 to account number 031897420101 held at Societe Generale De Banques AU Benin, account name BenGaz SA
ii) Payment of US$440,000.00 made on 25 May 2012 to account number 031897420101 held at Societe Generale De Banques AU Benin, account name BenGaz SA
iii) Payment of US$555,043.21 made on 8 January 2014 to account number 121123315501 held at Ecobank Benin, account name BenGaz SA
iv) Payment of US$557,987.50 made on 8 July 2014 to account number 121123315501 held at Ecobank Benin, account name BenGaz SA
v) Payment of US$565,027.89 made on 7 October 2014 to account number 121123315501 held at Ecobank Benin, account name BenGaz SA
vi) Payment of US$565,027.89 made on 8 January 2015 to account number 121123315501 held at Ecobank Benin, account name BenGaz SA
vii) Payment of US$1,186,670.06 made on 8 August 2016 to account number IBAN BJ66BJ1150100103011995000013 held at Banque Atlantique Du Benin, account name Societe Bengaz.
(7) Procedural history
"[59](a) On 17 July 2023, a copy of the Claim Form (including accompanying documents and a response pack) was couriered to the four addresses of the First Defendant in Benin known by this firm. The addresses are set out in full in Schedule C hereto and below.
(i) Cotonou, Avlékété district Lot No. 136-137, Rue du Dahomey 01 BP: 4690-RP. I was first informed of this address by the Claimant. I note that during the 21 July Hearing, Mr Monnou expressly confirmed the address of the First Defendant to be "136 –137 Rue de Dahomey". The full address was also stated by Mr Monnou in an email to Hogan Lovells on 17 July 2023 to be "lot 136 - 137 Avlékété, rue du Dahomey, in Cotonou (Bénin)".
(ii) Place Ganhi 01 BP 1519 Cotonou, Republic of Benin. After swearing Salem 1, this address was given to me as an alternate address by Ms Smolenska-Green.
(iii) Ilot 451 Ganhi, Cotonou, Benin. My firm identified this address from a document relating to Court proceedings in Benin I note that on 27 July 2023, Mr Sossa confirmed by email to Hogan Lovells that "the claim form was served to the BenGaz (a) by DHL (b) by a Bailiff at address below; BenGaz SA Ilot 451 Place Ganhi 01 BP 1519 Cotonou Republic".
(iv) Place Ghani 01 BP 5136 Cotonou, Republic of Benin. My firm also identified this address from a document relating to Court proceedings in Benin.
(b) On 19 July 2023, the Claim Form (including accompanying documents and a response pack) was served via Bailiff in Benin at the addresses set out in Schedule C hereto.
60. Strictly without waiving privilege, I understand from the Claimant's Benin Counsel that service in Benin can take two forms: service by bailiff and a notification (being a simple letter sent to the First Defendant) and that as such, the precautionary service of the Claim Form (by both methods specified above) on the First Defendant in Benin amounts to valid service. This derives from Article 92 of the Code of Civil, Commercial, Social, Administrative and Accounting Procedure (the "Benin Code") which translates into English as "Legal documents from a foreign State whose notification is requested by the authorities of that State shall be notified by means of simple delivery or service through bailiff"."
(exhibit references omitted)
I accept that evidence.
"In all the circumstances, the Claimant has (and exercises) each of the following contractual rights, which it is just and appropriate for the Court to (a) confirm by way of declaration, (b) enforce by way of specific performance, (c) enforce, insofar as necessary, by way of injunction and (d) enforce, insofar as necessary, by further or consequential orders:
(1) The right, pursuant to clause 3.1 of the Accounts Agreement, to require the First Defendant to ensure that the contents of the Segregated Account and all future Shareholder Payments be paid by the Second Defendant into the Proceeds Account;
(2) The right, pursuant to clause 9.5 of the Security Agreements, to exercise the powers which would be exercisable by a Receiver appointed over the First Defendant's entitlement to Shareholder Payments under the Shareholder Agreement (which form part of the "Security Assets" within the terms of the Security Agreements as set out above) and thereby require the Second Defendant to pay the contents of the Segregated Account and all future Shareholder Payments into the Proceeds Account; and
(3) The right, pursuant to clause 15 of the Security Agreements, to act as the First Defendant's attorney and thereby require the Second Defendant to pay the contents of the Segregated Account and all future Shareholder Payments into the Proceeds Account."
i) Candey had been on the record since 7 September 2023, and been approached by Bengaz as long ago as 11 July 2023, so Bengaz had had the benefit of English legal representation since then;
ii) the 21 July Order made express provision for Bengaz to spend a reasonable sum on legal advice and representation, which Bengaz had indeed relied on (albeit improperly without explaining the source of funds); and there was no basis to seek to use funds subject to proprietary claims;
iii) Bengaz's position was not credible where it was pursuing the Opposition proceedings in Benin;
iv) Bengaz had still failed to comply, or even attempted to comply, with its asset disclosure obligations under the 21 July Order; and
v) in any event, the relief being sought by Bengaz was far too late.
i) Bengaz had had representation by English solicitors (Candey), who were involved at least to some degree from 11 July 2023, and then formally on the record from 7 September 2023 until 21 February 2024, i.e. shortly before the hearing.
ii) During that time, no Acknowledgement of Service was filed and no Defence was filed.
iii) No application was made (during that period or at all) for any variation to the worldwide freezing order in order to allow money to be spent on legal representation.
iv) The worldwide freezing order, insofar as it dealt with non-proprietary assets, included the usual exception for money to be spent on legal expenditure. It did not contain such an exception in relation to assets to which a proprietary claim was made. However, the evidence before me indicated that a substantial sum of money, of the order of US$4 million (i.e. the Missing Payments), had been paid to Bengaz rather than to the account specified in the Credit Agreement.
v) Importantly, in spite of orders made by the court, there had been no asset disclosure by Bengaz (in relation to the Missing Payments or anything else).
vi) I was therefore not persuaded that Bengaz had shown that it was unable to instruct lawyers due to a lack of funds; and I was in any event not persuaded that it would be appropriate to adjourn the applications.
(C) PERMISSION TO APPLY FOR SUMMARY JUDGMENT
"56. CPR 24.4(1) provides:
"A claimant may not apply for summary judgment until the defendant against whom the application is made has filed – (a) an acknowledgement of service; or (b) a defence, unless – (i) the court gives permission; or (ii) a practice direction provides otherwise."
57. There is no requirement for a party to obtain permission under CPR 24.4(1) before issuing a summary judgment application: both applications can be made in the same application notice: F BN Bank (UK) Ltd v Leaf Tobacco A Michailides SA [2017] EWHC 3017 (Comm) § 17 (Andrew Baker QC); European Union v Syria [2018] EWHC 1712 (Comm) § 62 (Bryan J); and Punjab National Bank (International) Ltd v Boris Shipping Ltd [2019] EWHC 1280 (QB) § 30-32 (Christopher Hancock QC).
58. Bryan J summarised the principles relevant to the exercise of the court's discretion under CPR 24.4(1) in European Union v Syria:
'(1) The purpose of the rule are to ensure that no application for summary judgment is made before a defendant has had an opportunity to participate in the proceedings and to protect a defendant who wishes to challenge the Court's jurisdiction from having to engage on the merits pending such application.
(2) Generally, permission should be granted only where the Court is satisfied that the claim has been validly served and that the Court has jurisdiction to hear it. Once those conditions are met there is generally no reason why the Court should prevent a claimant with a legitimate claim from seeking summary judgment.
(3) The fact that a summary judgment may be more readily enforced in other jurisdictions than a default judgment is a proper reason for seeking permission under CPR 24.4(1).' (§ 61)
I would add, in relation to (3), that it would in my view be sufficient that the claimant has a reasonable belief that a summary judgment may be more readily enforced than a default judgment. There is no justification for the court subjecting any such belief to minute examination, when the permission the claimant is seeking is in reality no more than the opportunity to obtain a reasoned judgment on the merits of its claim."
"66. Strictly without waiving privilege, the Claimant has given careful thought as to whether it would be most appropriate to seek default judgment or summary judgment in the circumstances. The Claimant seeks an order for summary judgment (rather than default judgment) in the following circumstances.
(a) The nature of the relief sought in the Summary Judgment Application includes declaratory and injunctive relief. It also necessitates the Second Defendant to be a respondent to the Applications in circumstances where it is the holder of the Segregated Account and has control over the Shareholder Payments. The Second Defendant has filed an Acknowledgment of Service in these proceedings and its defence deadline has been extended by agreement. Default judgment is therefore not an appropriate or adequate remedy.
(b) As set out above, the First Defendant is a company incorporated in Benin the Second Defendant is a company incorporated in Bermuda. It may therefore be necessary to enforce any judgment obtained overseas (including in Benin or Bermuda), given that the Defendants are incorporated in other jurisdictions, the cross-border nature of the claims, and the fact that there have been and/or are proceedings before the courts of Benin and Togo ...
(c) As already noted, the First Defendant has failed to give any asset disclosure, and therefore it is important for the Claimant (having little knowledge of where assets of the First Defendant it may wish to enforce against are located) to ensure it has the best possible chance of enforcing a judgment of the English Court in other jurisdictions."
(D) SUMMARY JUDGMENT
(1) Principles
i) the court must consider whether the respondent has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 1 All ER 91;
ii) a "realistic" claim or defence is one that carries some degree of conviction. This means a claim or defence that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 § 8;
iii) in reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman;
iv) this does not mean that the court must take at face value and without analysis everything that a respondent says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel § 10;
v) however, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 3;
vii) on the other hand, it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725; and
viii) a judge in appropriate cases should make use of the powers contained in Part 24. In doing so, he or she gives effect to the overriding objective as contained in Part 1. It saves expense; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose; and it is in the interests of justice. If the respondent has a case which is bound to fail, then it is in their interests to know as soon as possible that that is the position: Swain v Hillman [2001] 1 All ER 91 § 94.
"It is incumbent on a party responding to an application for summary judgment to put forward sufficient evidence to satisfy the court that it has a real prospect of succeeding at trial. If it wishes to rely on the likelihood that further evidence will be available at that stage, it must substantiate that assertion by describing, at least in general terms, the nature of the evidence, its source and its relevance to the issues before the court. The court may then be able to see that there is some substance in the point and that the party in question is not simply playing for time in the hope that something will turn up. It is not sufficient, therefore, for a party simply to say that further evidence will or may be available, especially when that evidence is, or can be expected to be, already within its possession, as is the case here. …" (§ 14 per Moore-Bick LJ)
(2) FMO's debt claim against Bengaz
(3) Declaration claims
"The court may make binding declarations whether or not any other remedy is claimed."
(a) Proceeds Account
(b) Segregated Funds
i) the contents of the Segregated Account, being amounts ringfenced by WAGPCO in respect of Bengaz's payment entitlements; and
ii) any further payments from WAGPCO in respect of Bengaz's entitlements pursuant to its various rights as shareholder in WAGPCO, as creditor in respect of shareholder loans to WAGPCO, and as party to (i) the Shareholders Agreement and (ii) the Escrow Agreement (together, "the Shareholder Payments"), in respect of which funds have been or may in future be segregated by WAGPCO.
i) these funds comprise Bengaz's Shareholder Payments pursuant to the Shareholders Agreement and Amendment No. 4 to it;
ii) they have been segregated from WAGPCO's own monies;
iii) the Segregated Account has the account name "W/A GPCo Limited BenGaz Holding Account";
iv) interest is treated by WAGPCO as part of the total, rather than being withdrawn for the benefit of WAGPCO;
v) in management reports for May 2022 and January 2023, WAGPCO describes these funds as being held "on behalf of" Bengaz;
vi) Mr Adamade in his 1st affidavit describes the Segregated Funds as being held both "for the benefit of" and "on behalf of" Bengaz.
(c) Rights exercisable by FMO as Receiver
(d) FMO as Bengaz's attorney
(e) Missing Payments
(f) Conclusion on declaration claims
(4) Specific performance and injunctive relief
(a) Specific performance against Bengaz
(b) Injunctive relief against WAGPCO
i) its right, under the Accounts Agreement, that all income received by Bengaz from WAGPCO be paid into the Proceeds Account;
ii) its right, as both Bengaz's attorney and its quasi-receiver, to direct that all payments from WAGPCO are paid into the Proceeds Account; and
iii) its proprietary rights in respect of the funds segregated by WAGPCO in respect of Shareholder Payments, i.e. the Segregated Funds.
i) the Missing Payments were paid away at Bengaz's direction;
ii) the Segregated Funds have not to date been paid into the Proceeds Account but instead held in the Segregated Account;
iii) there are ongoing disputes about the management and control of Bengaz;
iv) Mr Monnou appears at present to be recognised as being entitled to act on Bengaz's behalf, and has (according to FMO's evidence) been alleged, by a temporary interim administrator of Bengaz and by other shareholders in Bengaz, to have been involved in the misappropriation of the Missing Payments;
v) shortly before proceedings were commenced, Bengaz asked WAGPCO to pay all funds held for its benefit into bank accounts in Benin;
vi) Bengaz has failed to comply with orders to disclose what has happened to the Missing Payments;
vii) at least the last of the Missing Payments was made after WAGPCO was put on notice of Bengaz's obligations under the Accounts Agreement; and
viii) WAGPCO has failed to recognise FMO's rights over the monies flowing (prima facie) from WAGPCO to Bengaz, in letters/memos dated 7 September 2015, 24 April 2022 and 29 June 2023, and in evidence filed on 14 July 2023 stating that "[b]ut for the uncertainty surrounding the authorised legal representatives of Bengaz and the myriad of court orders, the Company would not have been constrained to make payments into the Bengaz-FMO Proceeds Account, especially if clear instruction are received from appropriate representatives of Bengaz to do so".
(5) Disclosure relating to Missing Payments
(6) Indemnity sought by WAGPCO
i) Mr Adamade describes a "complex series of internal disputes" between shareholders of Bengaz as to its ownership and management structure, commencing around 2014, which resulted in Bengaz being unable effectively to engage with WAGPCO as a shareholder. This necessitated WAGPCO procuring a Scheme of Arrangement in Bermuda and England to allow for a capital restructuring to progress in the absence of Bengaz.
ii) WAGPCO relies on § 9.1 of Amendment No. l to the Shareholders Agreement whereby, as I note earlier, WAGPCO is obliged to make payments due to its shareholders pursuant to instructions received from its shareholders.
iii) From April 2012 to date, Bengaz has been due shareholder loan repayments. In the absence of a duly authorised representative for Bengaz to instruct WAGPCO and/or WAGPCO's inability to determine who from Bengaz it should rightfully deal with, WAGPCO in January 2018 commenced sequestering funds due to Bengaz.
iv) In broadly the same period, WAGPCO's decision-making processes were further disrupted by the attendance at its general meetings of certain uninvited individual shareholders of Bengaz. To stop these disruptions, the Benin Tribunal de Premiere Instance de Premiere Classe de Cotonou, on WAGPCO's application, declared in a judgment of 27 December 2017 (No 082/17 1ere Ch. COM) that, without prejudice to Bengaz's rights of participation in WAGPCO, Bengaz's individual shareholders were not entitled to be its representatives at WAGPCO's meetings, and restrained them from doing so by way of injunction pending appointment by the courts or other legally recognised administrative body of legal representatives for Bengaz. The Benin court made a further declaration in the same judgment that Bengaz did not, at that time, have a duly authorised person to represent it on WAGPCO's board of directors.
v) An appeal by Bengaz against the 27 December 2017 decision of the Benin Tribunal de Premiere Instance de Premiere Classe de Cotonou was upheld by the Benin Court of Appeal on 13 April 2022. The Benin Court of Appeal, inter alia, declared Mr Monnou as chairman of the board of directors of Bengaz and further ordered that he be allowed to participate in WAGPCO's meetings. The court ordered that failure to comply will attract a daily penalty of CFA 25 million. The court also ordered WAGPCO to pay damages of CFA 200 million to Bengaz. Pursuant to the court's order, and upon Bengaz's confirmation of Mr Monnou's appointment as its director to WAGPCO's board of directors, WAGPCO has since June 2022 recognized Mr Monnou as the director representing Bengaz on WAGPCO's board of directors.
i) Proceedings due for hearing on 1 March 2024 before the Commercial Court of Cotonou, Benin in Suit No. BJ/e-TCC/2023/0632 'Opposition a Paiement' (Objection to Payment), arising from a summons dated 21 June 2023, served on WAGPCO by minority shareholders of Bengaz (the Foundation Shareholders), notifying parties of FMO's objection to any payment and any return of funds, effects or assets belonging to Bengaz by WAGPCO.
ii) Proceedings pending before the Common Court of Justice and Arbitration, Abidjan, Cote D'Ivoire in Appeal No.029/2022, being an appeal from the Court of Appeal's orders referred to in § 104.v) above. The parties were awaiting a hearing in respect of this appeal.
iii) Proceedings pending before the Court of Appeal, Benin in Appeal No. 059/2023 in respect of a "consignment order" dated 17 June 2022 granted by the President of the Cotonou Commercial Court for payment of the CFA 200 million awarded by the Court of Appeal into court pending the outcome of WAGPCO's appeal pending before the Common Court of Justice and Arbitration. This appeal was scheduled for judgment on 15 March 2024.
iv) Proceedings pending before the Commercial Court of Cotonou, Benin in Suit No. BJ/e-TCC/2023/0738 commenced on 21 July 2023 in respect of Bengaz's objection to service by FMO in the present proceedings of "a foreign judgment and documents in a foreign language with writ of summons …". The application was scheduled for judgment on 1 March 2024.
i) In the proceedings referred to in § 105.i) above, the Foundation Shareholders object "to any payment and any return of funds, effects or assets belonging to BENGAZ Company and owned by the WEST AFRICAN GAS PIPELINE COMPANY LIMITED ...on the basis of a supposed meeting of the board of directors and of alleged null and illegitimate deliberations of the general assemblies of May 24 2023 at the Benin royal hotel"; and express concern that "[g]iven that the plaintiffs are particularly concerned that BENGAZ company assets, owned by WAGPCo company and intended for repaying FMO company, which is the lending bank for financing BENGAZ Company's participation in WAGPCO capital, disappear [sic], as was the case in August 2016, if they fall into the hands of a director stripped of any capacity this time". The Foundation Shareholders also ask the Benin court to order Bengaz and WAGPCO to pay them a sum equivalent to about US$22 million (CFA 13 billion converted at the 3 March 2024 rate 1 XAF = 0.0017 USD). However, any payment made pursuant to summary judgment granted by this court would not occur pursuant to any disputed board meeting of the kind to which the Foundation Shareholders object.
ii) The proceedings referred to in § 105.ii) above essentially relate to a dispute about WAGPCO having declined to recognise or invite Bengaz officers to its statutory shareholders' meetings for more than four years. In the course of these proceedings, the Cotonou Court of Appeal on 13 April 2022 ordered WAGPCO to pay CFA 200 million in damages to Bengaz, and WAGPCO seeks to overturn that order in cassation proceedings before the Common Court of Justice and Arbitration. The Commercial Court of Cotonou on 17 June 2022, by Consignment Order 0253, authorised WAGPCO to deposit that sum at the Caisse des Depots et Consignations in Benin pending the end of the proceedings for appeal in cassation. The proceedings have no apparent relevance to FMO's present applications.
iii) The proceedings mentioned in § 105.iii) are an appeal by Bengaz from the Consignment Order 0253 referred to above, and again have no relevance to FMO's present applications.
iv) The proceedings referred to in § 105.iv) above were brought by Bengaz on 21 July 2023, in breach of the jurisdiction clause in the Credit Agreement. The orders sought against WAGPCO derive from its English law obligations to make payments to Bengaz under Amendment No. 1 to the Shareholders' Agreement, in circumstances where FMO is entitled to act on Bengaz's behalf as set out above. There could be no proper basis for Bengaz or its shareholders to dispute FMO's entitlement to any order made by this court on its application, nor is it clear how any overseas court could properly entertain any attempt by them to do so.
i) they relate to interlocutory relief, whereas in the present case the court has made a final decision on the merits, holding that monies are due from Bengaz to FMO, that WAGPCO is obliged to make future payments into the Proceeds Account, and that Bengaz holds its interest in the Segregated Funds on trust for FMO, a trust of which WAGPCO is on notice; and
ii) WAGPCO is not an 'innocent third party' in the sense contemplated by the authorities it cites. Unlike the third parties in those cases, WAGPCO has pre-existing obligations to make payments to Bengaz, and under the contractual arrangements summarised earlier, FMO is entitled to act as Bengaz's receiver and attorney in that regard. WAGPCO is, to that extent, under obligations to make payments at FMO's direction, and the effect of this court's orders is to hold WAGPCO to those obligations. It is not entitled to an indemnity from any consequences that may arise from complying with those obligations.
(7) Other relief
(E) CONCLUSIONS