Companies - directions hearing prior to final hearing scheduled for 1st June 2015.
Before : |
T. J. Le Cocq, Esq., Deputy Bailiff, sitting alone. |
|||
Between |
Gas Plus Khalakan Limited |
Plaintiff |
|
|
And |
New Age Alzarooni 2 Limited |
Defendant |
|
|
And |
Range Energy Resouorces Inc. |
Third Party |
|
|
Advocate J. D. Garrood for the Plaintiff.
Advocate J. M. Mann for the Defendant.
Advocate M. H. Temple for the Third Party.
judgment
the deputy bailiff:
1. The application before me is for directions to bring this matter, which has been listed as a cause de brièvieté, to a final hearing that is currently scheduled for the 1st June, 2015, for three days. There is a subsidiary point as to the precise form of the order for directions that I gave in this matter on 24th April. It is not necessary to set out either the background to this matter or the detail of the claim at any great length. I gratefully adopt the characterisation of both of these aspects in the judgement of the Master of 22nd April, 2015 (Gas Plus Khalakan Ltd-v-New Age and Range Energy Resources [2015] JRC 078).
2. This claim was started by means of an Order of Justice containing interim injunction signed by the then Deputy Bailiff on 12th January, 2015. The background to the matters contained in the Order of Justice is a dispute relating to the development of oil reserves in the Khalakan block in the Kurdistan region of Iraq.
3. The plaintiff is a Jersey company. 50% of its shares are held by the defendant New Age Alzarooni 2 Ltd ("NAAZ2"). The other 50% are all held by a company known as New Age (African Global Energy) Ltd ("New Age African").
4. The defendant is also a Jersey company. 49.9% of the shares of the defendant are held by the third party, Range Energy Resources Inc ("Range"). 50.1% of the share capital of the defendant is held by a company known as Black Gold Khalakan Ltd ("Black Gold"). Black Gold is a wholly owned subsidiary of New Age African.
5. The plaintiff is the assignee of a production sharing contract dated 11th June, 2009, ("the PSC") with the Kurdistan Regional Government of Iraq ("the KRG"). On 10th June, 2009, a shareholders' agreement was entered into between the plaintiff and its shareholders including the defendant.
6. On 17th November, 2009, a shareholders agreement was entered into in respect of the defendant by the defendant, Range and Black Gold.
7. 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 the 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. That application was unsuccessful.
8. 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 the disclosure would breach the plaintiff shareholders' agreement or would be a breach of the rights of the KRG as owners of the confidential information under the PSC.
9. 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 PSC or the plaintiff shareholders' agreement.
10. When the then Deputy Bailiff granted the interim injunctions on 12th January, 2015, he ordered that a copy of the Order of Justice be provided to the third party and to Black Gold within 24 hours of service on the defendant. As a consequence of being notified of the proceedings Range sought successfully to be joined as the third party.
11. It is not necessary to go into much more of the background. Suffice to say that the plaintiff issued an application for summary judgement and that the third party issued a summons to strike that application out. Those matters came before the Master on the 15th April, 2015, and for the reasons set out in his judgement to which I have already referred the Master declined to deal with either of those applications and adjourned them to be dealt with at the trial of this matter listed, as I have said, for three days from 1st June, 2015.
12. Because I am scheduled to be dealing with this matter at the final hearing an application for directions came before me on 24th April and, at that time, I gave certain preliminary directions including a direction requiring the third party to file its pleading by close of business on 27th April, 2015. I made other directions that I shall refer to below but deferred the larger part of the directions to 1st May, 2015, by which time we would know how the third party pleaded its case.
13. As I mentioned above, there has been some uncertainty as to the precise form of the order that I made on 24th April, 2015. I now clarify. On 24th April I ordered firstly, that there would be a further directions hearing on 1st May; secondly, that the third party should file its answer by 27th April; thirdly, that the plaintiff should have leave to file and serve a reply to the third parties pleading by 5th May and, lastly, that the court file in relation to all evidence filed in the ICC arbitral proceedings should be sealed until further order. I also directed that the costs of that application would be in the cause and that there should be liberty to apply. As it happened I have varied the third direction at the current hearing.
14. I now turn to consider what directions are needed in order to bring this matter to a final hearing. The claim for an injunction contained in the Order of Justice is a relatively narrow one. It relies on the provisions of the PSC and the plaintiff's shareholders' agreement and whereas both of those issues are not without complexity if they stood alone there would be little difficulty in disposing of them within the period allowed for the final hearing.
15. The third party has, however, now filed its pleading and the plaintiff and defendant have had the opportunity to consider it. Essentially the case now pleaded by the third party is summarised in paragraph 39 of the third party answer as follows:-
(i) GPK is a privy of NAAZ2 and/or Black Gold in relation to the Award, such that GPK is bound by the Award and cannot, as it now attempts, seek to re-litigate the fundamental matters determined therein by means of the present proceedings; and/or
(ii) GPK is estopped from seeking to be litigated the fundamental matters determined by the tribunal by the Award, as it seeks to do by these proceedings; and/or
(iii) These proceedings amount to a collateral attack on the Award and are, therefore, an abuse of process and ought to be struck out or dismissed; and/or
(iv) These proceedings are unfairly prejudicial to Range as a shareholder in NAAZ2 pursuant to Article 141 of the Companies (Jersey) Law 1991; and/or
(v) If the court determines that it is necessary to construe the production sharing contract, the GPK shareholders agreement and the NAAZ2 shareholders agreement afresh (notwithstanding the Award), the appropriate construction of these documents is the one adopted by the tribunal.
16. There is not very much agreement between the parties as to the directions that I should make today. The plaintiff filed draft directions the effect of which would be that the dates currently fixed at the hearing of this matter would be vacated and new dates would need to be fixed. The third party filed draft directions in a much shorter form with the aim of retaining those dates.
17. Advocate Garrood, for the plaintiff, in his draft directions and in his submissions advanced the need for further and better particulars, and in effect submits that the ambit of the third party's defence being what it is, there may be the need for substantial evidence to be heard and, as a consequence, the need for lengthy cross-examination. He also raises the need for expert evidence, which he foreshadowed in the argument before me on 24th April, relating to Kurdistan law. He advances the argument that, as he is advised, the KRG is not as a matter of Kurdistan law able to consent to the provision of the information that the third party wants notwithstanding the apparent contractual position in the PSC. This, he says, is a matter that requires expert evidence. He also seeks an order for the filing of all of the evidence in the arbitration proceedings and makes the point that it will take a significant period to read the evidence which itself must impact upon whether the dates for the hearing can stand. When the matter was agreed to be a cause de brièvieté, the ambit of the arguments were conceived to be much narrower.
18. Advocate Temple, for the third-party, argued for a much simpler process and characterised the ambit of his client's answer as being much less broad than it might otherwise have appeared. He submits that the argument relating to privies is really a matter of looking at the structure and shareholding, that relating to abuse of process really relates to the complaint that the plaintiff's claim amounts to a collateral attack on the Award, the claim of issue estoppel was really a matter of argument. To the extent that issues of construction arose then, so Advocate Temple said, the relevant contracts had already been considered at length within the Award and the court should be able to benefit from that lengthy consideration. As to the unfair prejudice claim he said that the Tribunal had found the unfair prejudice already and that there was authority to establish that the conduct of the affairs of a subsidiary can amount to the conduct of the affairs of a parent. Advocate Temple conceded, however, that in the light of the point relating to the position of KRG under Kurdistan law, of which he had been hitherto unaware, some narrow expert evidence would be required. Advocate Temple handed up a copy of the final Award, which is lengthy (comprising some 168 pages) and detailed. In effect, Advocate Temple submits, his client is prejudiced by any delay because his client is required to make payments but is in effect denied the information that it needs.
19. Advocate Dann, for the defendant, explains that from his client's perspective this is primarily a dispute between the plaintiff and the third party. He would wish to have the opportunity to file evidence as necessary but otherwise was content with whatever directions may be appropriate to bring the arguments between the plaintiff and the third party to a conclusion.
20. Although I fully accept that this matter has been listed as a cause de brièvieté and it is important that it is brought to a conclusion as soon as is reasonably possible, in terms of the appropriate timeframes I have to be satisfied that no party will suffer an injustice as a result of bringing the matter on too quickly.
21. At this stage I propose to make directions that will so far as is possible bring this matter on for a hearing in short order. Because, however, the full nature of the claim and, more specifically, the ambit of the third party's defences, will only be apparent when the evidence has been filed it may be necessary to revisit any directions that I give.
22. I am not presently persuaded that it is possible to rely on the Award in the way that Advocate Temple urges on me. That seems to be to be begging the question of the status that the Award has within these proceedings. The plaintiff was not a party to the Award and it is for that reason that the third party has had to advance a number of different arguments in effect to make the Award binding on the plaintiff. These arguments may be broad or they may be narrow but that will only be clear once the evidence has been filed and the parties have had the opportunity to review it. I am also not persuaded, at this point, that it is necessary to make orders for the disclosure of what I understand to be the substantial evidence in the arbitral proceedings. There is no reason why Range cannot make that disclosure to the plaintiff if it believes that it would be advisable to do so and if it does then that evidence would be subject to the order that I have made sealing it. However I do not think that I should make an order requiring its disclosure at this point. It does not appear to me that that evidence will relate to the privies point but it is impossible for me to say on the basis of what I know, and the submissions that I've heard that it will be relevant or essential to any of the other points now in issue in the proceedings.
23. There was some discussion before me as to whether the dates currently set aside for the hearing of this matter can stand. The draft direction submitted on behalf of the plaintiff clearly anticipates that those dates will be vacated. The third party's position, however, is that it is important that those dates are retained. No party has made any application to me for an adjournment although advocate Temple had a skeleton argument ready to resist any such application should one be made. I have not at this point considered the question of adjournment and I intend to set out directions which will lead to the matter being dealt with on the dates currently set aside. I do not rule out, however, that it will be necessary to consider the question of adjournment either because, for a reason currently unforeseen, it is impossible to comply with the directions that I'm about to give or because it may become clear to one or more party that it is impossible to deal with the matter in the way presently anticipated. I will make myself available to consider any application for an adjournment should that be necessary.
24. With those principles in mind I make the following directions:-
(i) The plaintiff and the defendant shall file and serve any reply to the third party answer no later than close of business on Friday, 8th May, 2015;
(ii) The parties shall file and serve affidavit evidence exhibiting documents on which they rely on or before close of business on Friday, 15th May, 2015;
(iii) The parties shall agree issues of English law as may be relevant and file a schedule of agreed points on or before 15th May, 2015;
(iv) The plaintiff and the third party shall have leave to rely on a report of one expert witness on Kurdish law in respect of the construction and effect of Article 56 of the Oil and Gas Law of the Kurdistan region-Iraq Law No. (22) 2007, to be served on or before 15th May, 2015;
(v) Any party wishing to cross-examine any deponent shall on or before Wednesday 20th May, 2015, on notice to the other parties seek leave from the Court to do so in writing with their reasons and the ambit of the proposed cross-examination;
(vi) The plaintiff shall serve a draft index for the trial bundle on or before the close of business on 22nd May, 2015;
(vii) The plaintiff shall file and serve the trial bundle by close of business on 26th May, 2015;
(viii) The parties shall file and exchange skeleton arguments and authorities bundles on or before the close of business on 27th May, 2015;
(ix) There shall be a further directions hearing on the 27th May, 2015, at 9am;
(x) The costs of this hearing shall be costs in the cause; and
(xi) There shall be liberty to apply.
25. I propose, if needed, to issue further directions at the hearing on the 27th May, 2015, as to the length of time that will be available to each party to make its submissions and deal with any evidence at the hearing and to revisit again the possibility of proceeding on the 1st June.
Authorities
Gas Plus Khalakan Ltd-v-New Age and Range Energy Resources [2015] JRC 078.
Arbitration Act 1996.
Companies (Jersey) Law 1991.
Oil and Gas Law of the Kurdistan region-Iraq Law No. (22) 2007.