Before : |
Advocate Matthew John Thompson, Master of the Royal Court, sitting alone. |
Between |
Gas Plus Khalakan Limited |
Plaintiff |
And |
New Age Al Zarooni 2 Limited |
Defendant |
And |
Range Energy Resources Inc. |
Third Party |
Advocate J. Garrood for the Plaintiff.
Advocate J. M. Dann for the Defendant.
Advocate K. L. Hooper for the Third Party.
CONTENTS OF THE JUDGMENT
|
|
Paras |
1 |
Introduction |
1 |
2 |
Background |
2-9 |
3 |
Procedural history |
10-18 |
4 |
The jurisdiction question |
19-29 |
5 |
The declaratory judgment application |
30-35 |
6 |
Costs |
36-37 |
judgment
the master:
1. This judgment represents my detailed written reasons for declaring that neither the Judicial Greffier nor the Master of the Royal Court have power to grant injunctions other than by consent in relation to an application for summary judgment and for adjourning the summonses issued by the plaintiff and third party for determination at the trial of this matter which is scheduled to take place on 1st to 3rd June, 2015, as a cause de brièveté.
2. The plaintiff's application for summary judgment arises out an order of justice signed by Bailhache W.J., Deputy Bailiff, as he then was, on 12th January, 2015.
3. The background to the matters contained in the order of justice arises out of a dispute relating to the development of oil reserves in the Khalakan block found in the Kurdistan region of Iraq.
4. The plaintiff is a Jersey company. 50% percent of its shares are held by the defendant. The other 50% are held by a company known as New Age (African Global Energy) Limited ("New Age African").
5. The defendant is also a Jersey company. 49.9% of the shares of the defendant are held by the third party. 50.1% of the share capital of the defendant is held by a company known as Black Gold Khalakan Limited ("Black Gold"). Black Gold is wholly owned by New Age African.
6. The plaintiff is the assignee of a production sharing contract dated 11th June, 2009, with the Kurdistan Regional Government of Iraq. On 10th June, 2009, a shareholders' agreement was entered into between the plaintiff and its shareholders including the defendant ("the plaintiff shareholders' agreement"). It is not necessary for the purposes of this judgment to refer to the detailed terms of the plaintiff shareholders' agreement.
7. On 17th November, 2009, a shareholders' agreement was entered into in respect of the defendant by the defendant, the third party and Black Gold ("the defendant shareholders' agreement"). Again it is not necessary to set out the details of the defendant shareholders' agreement.
8. Subsequently a dispute arose between Black Gold, the third party and the defendant in relation to the defendant shareholders' agreement. This dispute ultimately led to arbitration and an award dated 22nd May, 2014, ("the award") under the auspices of the International Chamber of Commerce in London. The award required the defendant to make disclosure of information concerning the Khalakan Block to the third party. A challenge was made by the defendant and Black Gold to the award before the High Court in England under section 68 of the Arbitration Act 1996 which application was unsuccessful.
9. The plaintiff brought the present proceedings seeking injunctive relief against the defendant, preventing the defendant from disclosing information to the third party pursuant to the award because it was concerned that disclosure would breach the plaintiff shareholders' agreement or would be a breach of rights of the Kurdistan Regional Government as owners of the confidential information under the production sharing contract. The relief sought by the plaintiff included a permanent injunction, restraining the defendant from disclosing any confidential information and a declaration that the defendant was not entitled to disclose to any third party any confidential information unless authorised by the production sharing contract or the plaintiff shareholders' agreement.
10. When the Deputy Bailiff granted the injunctions on 12th January, 2015, he ordered that a copy of the order of justice be provided to the third party (although it was not a third party at that stage) and to Black Gold with 24 hours of service on the defendant, so that the third party and Black Gold could consider whether they wished to seek leave to join in the proceedings.
11. On 22nd January, 2015, the third party issued a summons as follows:-
"1. Time be abridged for the fixing of a date and the hearing of this summons pursuant to Rule 1/5 of the Royal Court Rules 2004 and Practice Direction 05/23;
2. Range Energy Resources Inc. ("Range") be joined as a third party to the proceedings pursuant to Rule 6/36(b)(i) and/or (ii) of the Royal Court Rules 2004;
3. The Plaintiff shall provide to Range forthwith copies of all papers provided to the Deputy Bailiff in support of the ex parte application for injunctive relief in the Order of Justice signed by the Deputy Bailiff on 12 January 2015;
4. The hearing of the balance of the relief sought in the Order of Justice signed by the Deputy Bailiff on 12 January 2015 be adjourned to a hearing already fixed to take place on 9 February 2015 at 2.30pm before Commissioner Birt QC in Representation proceedings between Range and Black Gold Khalakan Limited in respect of enforcement of an arbitration award which the injunction in the present proceedings directly affects;
5. The injunction contained in the Order of Justice signed by the Deputy Bailiff on 12 January 2015 be discharged;
6. Range be awarded damages, to be assessed;
7. The Court makes such further or other orders as it sees fit;
8. The Plaintiff pays Range's costs of and incidental to this Summons on such basis as the Court considers just."
12. Time was abridged by Sir Michael Birt, QC, as then Bailiff, for paragraphs 2, 3 and 4 of the summons to be considered the following day at the usual sitting of the Friday court at 2:30pm.
13. On 23rd January, 2015, the Royal Court made the following order:-
"Upon reading the Plaintiff's Order of Justice dated 12th January, 2015, upon hearing the Advocates for the Plaintiff and the Defendant and having considered Advocate Mark Temple's application by summons dated the 22nd January, 2015, for Range Energy Resources Inc. to be joined as a third party to these proceedings, the Court:-
adjourned the further consideration of the application until 9th February, 2015, at 2.30 p.m.;
ordered that the interim injunctions contained within the said Order of Justice remain in force until further order of the Court;
ordered Advocate Mark Temple to file a skeleton argument and affidavit in support of his application with the Court and the Plaintiff by 5.00 p.m. on 29th January, 2015; and
ordered the Plaintiff to file any skeleton argument and evidence in support of the said Order of Justice with the Court and Advocate Mark Temple by 5.00 p.m. on 5th February, 2015."
14. Ultimately the third party's application to intervene was not heard on 9th February, 2015, as contemplated by the act of court 23rd January, 2015, but rather was resolved by consent as recorded in a consent order signed by the parties on 5th February, 2015, and annexed to an act of court dated 17th February, 2015. The relevant parts of the consent order provide as follows:-
"1. Range Energy Resources be joined to this action pursuant to Rule 6/36 of the Royal Court Rules 2004;
2. The Plaintiff shall forthwith serve on the Third Party the covering letter and affidavits filed and served in support of the Plaintiff's application for an interlocutory injunction made on 7 January 2015;
3. Paragraphs 4 -8 of the summons dated 22 January 2015 be adjourned to a date to be fixed and the hearing directed by paragraph 1 of the Act of Court dated 23 January 2015 be vacated insofar as that hearing is to address the aforesaid summons;
4. No later than 13 February 2015 the Plaintiff shall apply to the Bailiff's Judicial; Secretary for an appointment to fix a date for trial of the action and determination of paragraphs 4 - 8 of the Summons dated 22 January 2015."
15. On 11th February, 2015, at 10:13am by email, notification was given by Messr Carey Olsen on behalf of the plaintiff for the defendant and the third party through their advocates to attend a date fix appointment before the Bailiff's Judicial Secretary in accordance with paragraph 4 of the consent order signed on 5th February, 2015. The date fix appointment before the Bailiff's Judicial Secretary was for Wednesday, 18th February, 2015, at 10:15am.
16. By an email sent later the same day at 10:53am, the plaintiff also gave notice to the other parties to attend before my Secretary for a date fix appointment for an application for summary judgment. The date fix appointment before my Secretary was listed for 9am Tuesday, 17th February, 2015.
17. Advocate Hooper for the third party responded at 12:07pm on 11th February, 2015, and suggested that the plaintiff's application for summary judgment should be heard at the same time as the substantive hearing of the plaintiff's order of justice. This proposal was rejected by an email in reply sent at 12:43pm. As a consequence the third party in response issued a summons before me seeking to strike out the plaintiff's summons on the basis that it was scandalous, frivolous or vexatious, it might prejudice and delay a fair trial or was otherwise an abuse of process. The summons was accompanied by a lengthy letter to me dated 12th February, 2015, which was also sent to the plaintiff and defendant's legal advisers. In the final page of her letter Advocate Hooper stated:-
"For these reasons, it is Range's position that, if the learned Master has jurisdiction at all to give summary judgment in injunctive proceedings signed by the Bailiff, GPK's application for summary judgment is vexatious and an abuse of process given the initiation by GPK of (a) a claim which necessitates a return date but which has not yet been held; and (b) a parallel date fix appointment before the Royal Court to set a date for the trial of the action in a cause de brièveté. Additionally, such applications, being so clearly inappropriate for this particular case, will only serve to delay resolution a cause de brièveté contrary to the wishes of Commissioner Birt." (emphasis added).
18. I directed that the third party summons should be listed for hearing and heard at the same time as the plaintiff's summons for summary judgment.
19. When the summary judgment application came before me, I invited the parties to deal with the question of whether or not the Judicial Greffier or the Master of the Royal Court had jurisdiction to grant the injunctive relief sought by the plaintiff as part of its summary judgment application. This had been raised by the third party in the letter of 12th February, 2015, referred to above and in the third party's skeleton argument.
20. Advocate Garrood contended that I did possess such jurisdiction by analogy with my decision of Vautier v Manning [2013] JRC 244A, where I held at paragraph 5 that I had jurisdiction to make a declaratory judgment under Rule 7/2(1) of the Royal Court Rules 2004, as amended ("the Rules") because I had power to make such an order as may be just having regard to the nature or the relief claimed. At paragraph 6 of Vautier v Manning I concluded that this power was broad enough to include a power to grant a declaratory judgment if I was otherwise satisfied that the legal test for the granting of a summary judgment had been met. I also held that I did not consider it just to restrict the jurisdiction vested in me to only monetary judgments and to require parties to go to the expense of an application to the Royal Court if the matter was one that could otherwise be dealt with summarily.
21. By reference to this passage Advocate Garrood contended that if I could grant the declaratory relief sought by the plaintiff based on Vautier v Manning, I could then grant injunctive relief to restrain confidential information being provided for exactly the same reasons that had led me to conclude that I could grant declaratory relief.
22. Advocate Hooper contended in response that I did not have power to grant such injunctive relief on a summary judgment application. She relied on the decision of Judicial Greffier Le Marquand in Showlag v Mansour [1991] JLR Note 10c and unreported judgment No. 79 of 1991. At page 12 of the unreported judgment, Judicial Greffier Le Marquand said as follows:-
"In a recent circular letter to the members of the legal profession, I indicated that I did not think that I had the power to confirm an interim injunction. My reason for this statement is that prior to the inclusion of the present Rule 6/28 in the Royal Court Rules, the Judicial Greffier had never exercised any jurisdiction whatsoever in relation to injunctions other than in relation to the matrimonial causes division. Rule 6/28 reads -
"Any injunctions may be varied by the Greffier in the terms agreed by the parties to the proceedings in which the injunction has been obtained."
That Rule is permissive and clearly implies that it was granting to the Judicial Greffier a jurisdiction which he previously did not enjoy."
23. On appeal against Judicial Greffier Le Marquand's decision in respect of other matters, Hamon, Commissioner in the Royal Court decision reported at Showlag v Mansour [1991] JLR 367 stated as follows:-
"The Judicial Greffier, in a reasoned judgment, struck out the answers but declined to give judgment in the terms of the prayers of the Order of Justice. Because those prayers include in both cases (and amongst other relief sought) a request that certain injunctions be confirmed, the Judicial Greffier felt, we think, quite rightly, that by the wording of r.6/28 of the Royal Court Rules, 1982, as amended, he was granted a limited jurisdiction to vary an injunction which showed by its persuasive nature that he was given no other jurisdiction over injunctions other than that there extended to him." (emphasis added).
24. The relevant part of Rule 6/28 is set out in the extract from the judgment of Judicial Greffier Le Marquand above. Rule 6/28 is now found in Rule 6/35 which provides as follows:-
"6/35 Injunctions
(1) Any injunction may be varied by the Bailiff or the Greffier in the terms agreed by the parties to the proceedings in which the injunction has been obtained.
(2) If any variation is made in the absence of the Greffier, the Bailiff shall make his order in writing and transmit it to the Greffier."
25. As far as the Judicial Greffier or the Master is concerned, the power vested in them by Rule 6/35 is no different to the power previously contained in Rule 6/28. Both the current rule and its predecessor merely permit the variation of an injunction by consent.
26. The decision I reached is that I do not have jurisdiction to grant injunctions under Rule 7. Whilst I construed Rule 7/2 in Vautier v Manning to allow me to grant a declaratory judgment, and Rule 7/2 is broad, I do not consider that the introduction of Rule 7 overrides or was intended to override the analysis of Judicial Greffier Le Marquand in Showlag v Mansour as approved by the Royal Court. I therefore consider I remain bound by Showlag v Mansour as a decision of the Royal Court that neither the Judicial Greffier nor the Master can grant injunctive relief other than following a consent order under what now is Rule 6/35.
27. I am confirmed in this view by the fact that I am not aware that any Judicial Greffier past or present, my predecessor as Master or I have ever made orders to grant injunctive relief other than by consent. Applications to discharge or vary injunctions are always made by the Royal Court. I therefore do not think it appropriate to depart from such long established practice, or to construe Rule 7 as intending to depart from this practice. In my judgment an express provision permitting me to grant an injunction following a successful summary judgment application is required for the Judicial Greffier/Master to possess such a power. An injunction is a discretionary remedy, even if there is no defence, which discretion has always been and, absent a rule change, is still for the Royal Court. By contrast, a declaratory judgment, when no defence has been found to exist, is a direct consequence of a finding that there is no defence.
28. During the course of argument, it was suggested that a Master in England could grant injunctive relief on a summary judgment application. In considering The Supreme Court Practice 1999 Edition ("the White Book"), I could not find anything in Order 14 (the former English equivalent of Rule 7) which suggests that a Master could grant such relief. Furthermore at paragraph 29/1/13, in the section dealing with interlocutory injunctions, it stated "however subject to some exceptions, the authority and jurisdiction so granted to Masters and Registrars does not extend to proceedings for the grant of injunctions under the Supreme Court Act 1981, Section 37." The exceptions are not relevant to the issue I had to decide. While I was not addressed or provided with any evidence on the current practice in England, this passage confirms the view I had reached.
29. For all these reasons I therefore concluded that I did not have power to grant the injunctive relief sought by the plaintiff as a consequence of any finding in the plaintiff's favour.
30. Having concluded that I could only grant part of the relief sought by the plaintiff, I then considered whether it was appropriate to determine the plaintiff's application for a declaratory judgment.
31. The view I reached was that it was not appropriate to do so. This was firstly because, assuming the plaintiff was successful, any decision as to whether or not to grant injunctive relief, following on from any declaratory judgment in the plaintiff's favour, would be a matter for the Royal Court. It was inevitable in such circumstances that the Royal Court would be revisiting the same issue that had led to a declaratory judgment.
32. Secondly, whatever I decided, whether in the plaintiff's favour or in favour of the defendant or the third party, given this litigation from the papers appears to be hard fought, any decision of mine would have been appealed. An appeal against a decision of the Master is one where the Royal Court exercises its discretion afresh, but having due regard to the decision of the Master. In other words the Royal Court has to form its own view. Again therefore, if I were to have determined the plaintiff's application, I regarded it as inevitable that the Royal Court would be hearing that same application all over again either on appeal or in respect of an application for injunctive relief or most likely a combination of the two.
33. Thirdly, the parties had by consent on 5th February, 2015, agreed a course of action that the matter was going to be dealt with by way of a cause de brièveté with a date to be fixed in short order. By then issuing an application for summary judgment, the plaintiff departed from that agreed path. In my judgment while the plaintiff is entitled to issue an application for summary judgment and entitled to have that summons heard (see Rokos v Brevan Howard (Jersey) Limited [2014] JRC 208), the approach taken created a procedural complexity when a procedure for a substantive resolution of the plaintiff's claim had been set. The dealing with the matter as a cause de brièveté also means that no question of prejudice due to delay arises.
34. Although ordinarily, applications for summary judgment should be heard before the Master, under Rule 20/1(6), I have power to refer matters to the Royal Court. Paragraph 6 provides as follows:-
"If the summons is heard before the Greffier, the Greffier may make such order as he or she thinks fit, or may adjourn the summons or any question arising therefrom to the Court for its decision and, pending the final determination of the summons, may make an interim order upon such terms as he or she thinks just."
35. In this case because the Royal Court will have to consider an application for an injunction in any event because of the right of either party to ask the Royal Court to consider any such summary judgment application afresh, and because the parties had agreed a process to determine their dispute, I considered this was an appropriate case to refer the summary judgment application to the Royal Court, such application to be heard at the trial fixed for 1st to 3rd June, 2015. How the application will be determined at trial is a matter for the presiding judge. I wish to add that the decision to refer matters back to the Royal Court arises by reference to the unusual circumstances of the present case and should not be taken to depart from the general rule that applications for summary judgment, other than where injunctions are sought, should be made to the Judicial Greffier/Master of the Royal Court.
36. In respect of the costs of the hearing before me, in relation to the plaintiff's summons, the order I made was defendant's and third party's costs in the cause. This was because I felt that the plaintiff should not recover whatever the outcome of its claim, its costs of the application before me, because I had found against it in respect of my jurisdiction to grant injunctions and because I concluded that the Royal Court was the correct forum to hear the plaintiff's application for summary judgment. As far as the defendant and the third party were concerned, I ordered the defendant's and third party's costs in the cause which means that they will recover their costs of the hearing before me, if they ultimately prevail at trial. I felt this best reflected the justice of their position.
37. In relation to the third party's summons to strike out the plaintiff's summons the order I made was costs in the cause of the summons because the arguments before me were principally about the plaintiff's application rather than the third party's summons.
Authorities
Arbitration Act 1996.
Vautier v Manning [2013] JRC 244A.
Royal Court Rules 2004.
Showlag v Mansour [1991] JLR Note 10c.
Showlag v Mansour [1991] JLR 367.
The Supreme Court Practice 1999 Edition ("the White Book").