UKPC 20
Privy Council Appeal No 0016 of 2012
Cukurova Finance International Ltd and others (Appellants) v Alfa Telecom Turkey Ltd ("Alfa") (Respondent)
From the Court of Appeal of the British Virgin Islands
JUDGMENT DELIVERED BY
23 May 2012
Heard on 8 May 2012
Kenneth Maclean QC
(Instructed by White & Case LLP)
Stephen Smith QC
Robert Levy QC
(Instructed by Hogan Lovells International Ltd)
"42. Cukurova contends that despite Alfa's offered undertakings, Cukurova's interests are not protected as Alfa is still free to take other actions such as removing the Cukurova appointed directors from the Board of [CTH] which would destroy Cukurova's director or shareholder influence over the management of Turkcell. Alfa would still be able to cause Turkcell and its subsidiaries to dispose of assets other than shares.
43. …. Having weighed and considered the balance of convenience and the competing rights of the parties, it appears that there is a risk that if a stay of paragraphs (7C), (7D) and 8 of the reliefs granted to Alfa [that is, paragraphs requiring CHAS and CFI to take all steps within their power to secure the cancellation of the registration of the charged shares in their names and their registration instead in Alfa's name] is not granted, Cukurova's appeal will prove abortive if the Cukurova appellants succeed...
44. I would exercise my discretion and grant a stay of those paragraphs. [CHAS and CFI] have also demonstrated that the undertakings offered by Alfa are inadequate to ensure that Alfa will not deal with the charged shares while the appeal is pending in a manner that will prejudice the interests of Cukurova while the appeal is pending. In the event that this occurs I have no doubt that damages would in fact not be an adequate remedy."
However, Edwards JA went on to note that, were CHAS and CFI to succeed, they would be "bound to pay over to Alfa a sum as previously tendered by them in May 2007", and without further reasoning she attached to the continuation of the injunctive relief a condition of payment into court of that sum, US$1,446,824,709.42.
"restrained, whether acting by its directors, officers, servants, agents or otherwise howsoever from:
(a) exercising or purporting to exercise any of the rights attaching to or derived from the Charged Shares;
(b) causing or permitting or assisting [CTH] to dispose of charge or otherwise deal with its shareholding in [THAS];
(c) causing or permitting or assisting [THAS] to dispose of, charge or otherwise deal with its shareholding in [TIHAS];
(d) causing or permitting or supporting any change to the composition of the board of directors of [CTH], [THAS] or [TIHAS] without the written consent of [CFI];
(e) causing or permitting or supporting any change in the memorandum and/or articles of association of [CTH], the articles of association of [THAS] or the articles of association of [TIHAS], without the written consent of [CFI];
(f) causing or permitting or supporting any change in the authorised share capital of [CTH], [THAS] or [TIHAS] (or the issue of any shares or securities convertible or exchangeable into shares or the right to subscribe for shares in [CTH] or [THAS] or [TIHAS] without the written consent of [CFI];
(g) causing or permitting or assisting [TIHAS] to dispose of, charge or otherwise deal with its shareholding in any of its subsidiaries, without the written consent of [CFI]; and
(h) causing or permitting or assisting (a) [CTH] or [TIHAS], (b) the respective boards of directors or shareholders or shareholders' meetings of such companies or (c) [Alfa's] nominees or representatives on the boards of directors or at shareholders' meetings of such companies, to take any action or make any decision in respect of any of the matters specified in Schedule 1 to the shareholders' agreement dated 20 September, 2005 between [Alfa], [CFI] and [CTH] without the unanimous prior approval, confirmation or endorsement of either the board of directors of CTH or a general meeting of the shareholders of [CTH]."
"(d) cause [TIHAS] to dispose of or otherwise deal in its stake in any company or with any other assets outside the ordinary course of business;
(e) cause or permit any change in the memorandum and/or articles of association of CTH, or the articles or association of THAS;
(f) cause or permit any change in the authorised share capital of CTH, THAS or [TIHAS] (or the issue of any shares or securities convertible or exchangeable into shares or the right to subscribe for shares in CTH or THAS or [TIHAS]".