Athene Holding Ltd v Siddiqui and Ors

• Jurisdiction: Bermuda
• Judgment Date: 14 January 2019
• Docket Number: Civil Jurisdiction 2018 No 149
• Date: 14 January 2019
• Court: Supreme Court (Bermuda)

[2019] Bda LR 3

In The Supreme Court of Bermuda

Civil Jurisdiction 2018 No 149

Between:

Athene Holding Ltd

Plaintiff

and

Imran Siddiqui

Stephen Cernich

Caldera Holdings Ltd

Defendants

Mr K Taylor and Mr B McCosker for the Plaintiff

Mr A Potts QC for the Defendants

The following cases were referred to in the judgment:

AK Investment CJSC v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804

Standard Bank PLC v Just Group LLC et al [2014] EWHC 2687

Recovery Partners v Rukhadze & Ors [2018] EWHC 2918

Ocular Sciences Ltd et al v Aspect Vision Care [1997] RPC 289

Canada Trust Co v Stolzenberg (No 2) [1998] 1 WLR 547

Rosler v Hilbery [1925] 1 Ch 250

Watson & Sons v Daily Record (Glasgow) Ltd [1907] 1 KB 853

Nilon Limited v Royal Westminster Investments SA [2015] UKPC 2

VTB Capital plc v Nutritek International Corp [2013] UKSC 5

Base Metal Trading v Shamurin [2005] 1 WLR 1157

Banco Atlantico v BBME [1990] 2 Lloyd's Rep 504

Globalink Telecommunications Ltd v Wilmbury [2003] 1 BCLC 154

Peiris v Daniels [2015] Bda LR 16

In re First Virginia Reinsurance Ltd [2003] Bda LR 47

Antec International Ltd v Biosafety USA Inc [2006] EWHC 47

Roussel-Uclaf v Searle [1978] 1 Lloyd's Re 225

Mayor and Commonality and Citizens of the City of London [2008] EWCA 1283

The Hagen [1908] P 189

Broadsino Finance Co Ltd v Brilliance China Automotive Holdings Ltd and ors [2005] Bda LR 12

Prest v Petrodel Resources Ltd [2013] UKSC 34

Gilford Motor Co Ltd v Horne [1933] Ch 935

Gencor ACP Ltd v Dalby [2000] 2 BCLC 734

Fordingbridge International Agencies Ltd v American Centennial Insurance Co [1987] Bda LR 1

National Iranian Oil Co v Ashland Overseas Trading Ltd [1988] Bda LR 13

Livingston Properties Equities Inc v JSC MCC Eurochem BVIHCMAP2016/0042-0046

Service outside the jurisidiction — Good arguable case — Serious issue to be tried — Forum non conveniens — Exclusive jurisdiction clause — Parallel related arbitration and court proceedings in foreign jurisdiction — Full and frank disclosure — Leave to appeal against discretionary ruling

RULING of Hargun CJ

A Introduction

1. There are three applications before the Court.

2. The first application is made on behalf of Mr Imran Siddiqui and Mr Stephen Cernich, the First and Second Defendants, in this action. The application is made by Summons dated 29 June 2018, for orders that the Concurrent Writ be set aside, as against them, and/or the ex parte Order dated 17 May 2018 granting leave to the Plaintiff to serve the First and Second Defendants outside of the jurisdiction be set aside, pursuant to RSC Order 12, rule 8.

3. The second application is made by Caldera Holdings Ltd. (“Caldera”), the Third Defendant, by paragraph 3 of its Summons dated 17 May 2018, for an order that the Writ and the Statement of Claim be struck out pursuant to RSC Order 18, rule 19 and under the Court's inherent jurisdiction.

4. The third application is made by Caldera, by its Notice of Motion for Leave to Appeal dated 12 July 2018, for leave to appeal against the Ruling of Mr Justice Hellman dated 28 June 2018.

B Procedural Background

5. These proceedings were commenced by Athene Holding Ltd. (“Athene”), the Plaintiff, by Specially Indorsed Writ of Summons (“the Writ”) filed on 3 May 2018. By that Writ, Athene sought injunctive relief and damages from the Defendants for their breaches of various duties owed to the Plaintiff. The Writ alleged that Mr Siddiqui and Mr Cernich have unlawfully, in breach of their fiduciary duties and/or their duty of confidence and/or duties under contract owed to Athene, used the Plaintiff's trade secrets and other protected confidential and proprietary information for the benefit of the Third Defendant and for themselves, and to the detriment of the Plaintiff.

6. Caldera is an exempt company incorporated in Bermuda under the Companies Act 1981. Caldera was served with the Writ on 8 May 2018.

7. Following the service of the Writ on the Third Defendant the Plaintiff sought and obtained on an ex parte basis leave to serve the First and Second Defendants out of the jurisdiction.

8. By Summons dated 17 May 2018, Caldera sought leave to enter a conditional appearance, which was granted by an order dated 22 May 2018. Following the entry of its conditional appearance Caldera sought an order, pursuant to RSC Order 12, rule 8 and/or the Court's inherent jurisdiction, setting aside, staying or striking out the writ on the grounds of forum non conveniens, or alternatively an order staying the Writ on case management grounds. By the same Summons, Caldera sought, without prejudice to its applications based upon forum non-conveniens or case management grounds, an order that the Writ be struck out and/or summarily dismissed as against Caldera pursuant to RSC Order 18, rule 19 and/or the Court's inherent jurisdiction, on the grounds that (a) the claims asserted by Athene against Caldera disclosed no reasonable cause of action; (b) the claims asserted by Athene against Caldera are frivolous; (c) the claims asserted by Athene against Caldera are embarrassing (for want of necessary particularity); and/or (d) the claims asserted by Athene against Caldera are an abuse of process of the Court.

9. By an Order dated 22 May 2018 the Court ordered that Caldera's application to strike out pursuant to RSC Order 18, rule 19 be adjourned until such time as the Court had heard and substantively determined the applications based upon forum non-conveniens and case management grounds.

10. Caldera's application for the striking out and or staying of these proceedings against Caldera based upon forum non-conveniens and case management grounds was heard on 8 June 2018. By his Ruling dated 20 June 2018, Hellman J. dismissed Caldera's applications on these grounds. At the hearing before Hellman J. the Court had the benefit of the First and Second Affidavits of James Belardi dated 10 May 2018 and 29 May 2018 filed on behalf of Athene, and the First, Second and Third affidavits of Mr Siddiqui dated 21 May, 1 June and 22 June 2018 and the First Affidavit of Mr Cernich dated 1 June 2018, filed on behalf of Caldera.

11. Following the Ruling of Hellman J., the Court gave directions by Order dated 26 July 2018 in relation to (a) the filing of evidence with respect to the First and Second Defendants' Summons dated 29 June 2018; (b) filing of additional evidence with respect to Caldera's Summons dated 17 May 2018 relating to striking out the Writ pursuant to RSC Order 18, rule 19; and (c) the hearing of Caldera's Notice of Motion for Leave to Appeal dated 12 July 2018.

C Parties

12. I gratefully adopt the description and background to the parties set out in the Ruling of Hellman J.:

Athene

13. Athene is incorporated in Bermuda as an exempt company. Since December 2016, it has been registered on the New York Stock Exchange. Mr Cernich states in his affidavit that prior to that it was a private company owned in its majority by an affiliate of a company known as Apollo Global Management LLC (“Apollo”).

14. Athene's annual filing with the US Securities and Exchange Commission (“SEC”) for the year ended 31 December 2017, on what is known as a Form 10-K, was relied upon, at the hearing before Hellman J., by counsel for both parties as a reliable source of information about the company.

15. Athene, together with its consolidated subsidiaries, is: “a leading retirement services company that issues, reinsures and acquires retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs.” It is based in Bermuda, with its US subsidiaries' headquarters located in Iowa. [Form 10-K, page 9.]

16. Athene, together with its consolidated subsidiaries, has a “strategic relationship” with Apollo, whose indirect subsidiary, Athene Asset Management LP (“AAM”), serves as Athene's investment manager. The Apollo Group (comprising Apollo and its affiliates) controls 45% of the total voting power of Athene and five of Athene's 12 directors are employees or consultants of Apollo, including its Chairman, Chief Executive Officer (“CEO”) and Chief Investment Officer, who is a dual employee of both Athene and AAM. [Form 10-K, page 10.]

17. As of 1 January 2018, Athene, together with its consolidated subsidiaries, had approximately 1,125 employees located in Bermuda and the US. It had subsidiaries licensed to carry on insurance business in all 50 States of the US and the District of Columbia. They were subject to regulation and supervision by those States. The subsidiaries were organised and domiciled in one of Delaware, Iowa or New York. [Form 10-K, page 23.]

18. As of 31 December 2017, Athene, together with its consolidated subsidiaries, employed 24 non-Bermudians in its Bermuda office (other than spouses of Bermudians, holders of permanent residents' certificates, and holders of working residents' certificates). [Form 10K, page 55.]

19. Athene is currently intended to operate in a manner which would not cause it to be treated as being engaged in a trade or business within the US or subject to US federal income taxation on its net income. [Form 10-K, page 62.]

20. Athene is a holding company with limited operations of its own. Its primary subsidiaries are insurance and reinsurance companies that own substantially all of its assets and conduct substantially all of its operations. [Form 10-K, page 68.]

21. Documents relating to Athene's 2016 share incentive plan gave Athene's address as c/o an Iowa subsidiary. [Eg Form 10-K, exhibit 10.26.2.]

22. James Belardi (“Mr Belardi”) swore affidavit evidence on behalf of Athene. He stated that he has served as the Chairman, CEO and Chief Investment Officer of Athene since 2009. In his role as CEO he is responsible for Athene's overall strategic direction and management.

23. He stated that Athene has a real and significant presence “on the ground” in Bermuda. It leases an office...