Muhammad Ziaullah Khan Chishti v Afiniti Ltd

• Jurisdiction: Bermuda
• Judge: Shade Subair Williams J
• Judgment Date: 19 December 2023
• Court: Supreme Court (Bermuda)
• Year: 2023
• Docket Number: COMMERCIAL JURISDICTION

Between:

Muhammad Ziaullah Khan Chishti

Plaintiff

and

Afiniti Ltd

Defendant

[2023] SC (Bda) 98 Civ.

COMMERCIAL JURISDICTION

2023 No: 162

In The Supreme Court of Bermuda

Issue Estoppel and Res Judicata — Hearsay Evidence in Civil Proceedings — Objection on Admissibility of a Foreign Private Arbitration Award — Whether the Award is admissible evidence even where there is no res judicata or issue estoppel

Counsel for the Plaintiff: Mr. Alex Potts KC of Counsel and Mr. Richard Horseman ( Wakefield Quin Limited)

Counsel for the Defendant: Mr. Adam Zellick KC of Counsel and Mr. Ben Adamson and Mr. Conor Doyle ( Conyers Dill & Pearman Limited)

RULING

RULING of Shade Subair Williams J

Shade Subair Williams J

Introduction:

1 The ultimate issue for trial in these proceedings is outlined in an Amended Originating Summons dated 25 May 2023 by which the Plaintiff seeks declaratory and injunctive relief in support of his pursuit of orders for the Defendant Company (the “Company” / the “Defendant”) to pay him an advancement of his expenses in respect of the costs of various Court proceedings including these proceedings. The Amended Originating Summons was supported by the First and Second Affidavits of the Plaintiff, Mr. Muhammad Chishti.

2 The Plaintiff's case is that the Defendant is so obliged in accordance with the terms of a Deed of Indemnity dated 1 January 2020 (“the Deed”) entered into by the parties when the Plaintiff was a high ranking officer of the Defendant.

3 There are now three interlocutory applications which are to be decided by this Court:

• (i) Firstly, I am seized of the Plaintiff's 1 September 2023 summons application for an interim mandatory injunction ordering the Company to pay the Plaintiff US$1,000,000.00 in the form of an advancement on the expenses of these trial proceedings. This application may be referred to as the ‘interim relief application.’ (This application has not yet been argued before me.)

• (ii) By way of a further summons application dated 15 September 2023, the Plaintiff objects to any and all of the references made by the Defendant to the prior findings of a sole Arbitrator in his award in a private arbitration proceeding, namely Spottiswoode v Chishti and Satmap Inc d/b/a Afiniti, Case No. 01-17-007-403 (the “Award”) in which the Plaintiff was found to have committed sexual assault. Admissibility objections were also made in respect of findings made by an Independent Counsel as to the Plaintiff's entitlement to an advancement on his legal expenses. I will refer to this application as the ‘strike-out application’.

• (iii) The third application before this Court is for a Confidentiality Order excluding members of the public and the media from access and reporting on these proceedings. This is the ‘confidentiality application.’

4 This Ruling is a determination of the strike-out application and the confidentiality application, such applications having been heard as preliminary points to the interim relief application and the substantive relief sought by the Amended Originating Summons which has not yet been heard.

5 Both of the applications heard were opposed by the Defendant and the Court received oral and written submissions from Counsel for both sides. After which, I reserved my decision to provide these written reasons.

Background:

6 The substantive issues in these proceedings will require this Court to resolve a dispute as to the proper construction of the Deed. The Plaintiff contends that the Deed entitles him to an advancement of his expenses in respect of the following US Court matters:

• (i) Chishti et al v. Spottiswoode et al., 22cv-03490-ABJ in the United States District Court for the District of Columbia

• (ii) Chishti v. Spottiswoode, 23-cv-00859-ABJ in the United States District Court for the District of Columbia

• (iii) TRG-I v. Chishti, JAMS Ref No. 5425000846 in the United States District Court for the Southern District of New York

• (iv) TRG-I v. Chishti, No. 23-cv-01760 (S.D.N.Y.), on appeal as TRG-I v. Chishti, No. 23-286 (2d. Cir.) in the United States Court of Appeals for the Second Circuit; and

• (v) Chishti v. Jameel, et al., JAMS Ref. No. 5425000957 in the United States District Court for the Southern District of New York.

7 This stream of litigation all follows the Award against Mr. Chishti by which he was held liable in 2019 for sexual harassment and sexual assault against Ms. Tatiana Spottiswoode, a former employee of the Company's subsidiary. According to the background facts as outlined in the Defendant's written submissions, a few years later in November 2021, during the “Me Too” movement, the US House of Representatives Judiciary Committee (the “Judiciary Committee”) were examining the practice of various corporations which required employees to privately arbitrate workplace sexual misconduct rather than engage in open and public litigation.

8 It is said that during this period, former UK Prime Minister, Mr. David Cameron, was the Chairman of Afiniti's Advisory Board. As matters unfolded, this Court was informed that Ms. Spottiswoode gave sworn evidence before the Judiciary Committee on her account of the acts carried out by Mr. Chishti. This resulted in the widespread publicity of her testimony together with the Award to the extent that it formed part of the Congressional Record. The Defendant also pointed out that a moderately redacted copy of the Award continues to be accessible to the public online.

9 Days after Ms. Spottiswoode's testimony before the Judiciary Committee, Mr. Chishti's tenure as the CEO of the Company ended and the above litigation was set into motion. This consisted of legal action against Ms. Spottiswoode, the Company and also against The Resource Group International Limited (“TRG”), a shareholder of the Defendant and a company at which Mr. Chishti served as CEO and Chairman. Additionally, TRG rolled out its own course of litigation against Mr. Chishti. This litigation, which in part entails defamation suits, is now the subject of Mr. Chishti's pursuit for an advancement of his expenses in accordance with what he contends to be the proper construction of the Deed.

10 The Defendant's case is that Mr. Chishti has no proper or lawful entitlement to the pursued advancement of his expenses or any indemnity. The Company's position, as stated in Mr. Zellek's written submissions, is that “ the underlying question in this case is whether Afiniti, a company whose former CEO was found to have sexually harassed and assaulted a Company employee must thereafter fund that former CEO's legal campaign for revenge against the Company, his victim and others.”

11 Pursuant to various provisions of the Deed, an “Independent Counsel” may be called upon to determine the Plaintiff's entitlement to an advance under the Deed as a subsequent step to the Board's consideration of any such application. In this case, the Board declined to approve Mr. Chishti's requests for an advancement and on 19 September 2023 Mr. Delroy Duncan KC served as Independent Counsel and rendered a “Determination” by which he found against Mr. Chishti.

12 The Plaintiff has brought on these Court proceedings for final adjudication in the hope that the effect of the refusal by the Board and Independent Counsel will be reversed. That is the background to these Court proceedings.

The Confidentiality Application:

13 The premise for the Plaintiff's Confidentiality Application is that these proceedings unveil confidential material which ought never to have traveled beyond the doors of the private and foreign arbitration proceedings in which they were created or otherwise used.

14 Taking the precautionary approach, this Court excluded members of the public from the hearing of this application and from the hearing of the Strike-Out Application.

The Strike-Out Application:

15 On the strike-out application the Plaintiff says that the Defendant abused the process of the Court by filing additional yet inadmissible evidence on the eve of the 20 September 2023 hearing. This, Mr. Potts KC pointed out, was done without the leave of the Court.

16 Mr. Potts KC took further issue with the Defendant's written submissions, submitting that they should be amended to exclude the existing statements of fact and opinion which are non-evidentially based. He scathingly characterized those submissions as ‘scandalous’ and ‘remarkable’.

17 The Plaintiff's admissibility objections were principally motivated by the Defendant's production of the following two exhibits: (i) the 19 September 2023 Determination of Independent Counsel, Mr. Delroy Duncan KC (the “Determination”) and (ii) a redacted copy of the Award.

18 The admissibility arguments in respect of the Award mostly targeted the legal doctrines of issue estoppel and res judicata. The Defendant in this case asserts issue estoppel as a basis for admission of the Award for not only the record of the evidence which was received in the arbitration proceedings but also for the admission of the arbitrator's findings against Mr. Chishti.

Discussion

19 The Plaintiff's summons for interim relief was supported by the Third Affidavit of Mr. Chishti.

20 In the form of a Consent Order, dated 15 June 2023 and signed by Mussenden J, directions were given on the Amended Originating Summons. Mussenden J directed that the Defendant's evidence was to be filed no later than 13 July 2023 allowing for reply evidence by the Plaintiff to be filed by 10 August 2023.

21 On 18 July 2023, five days post-deadline, the Defendant filed the First Affidavit of Mr. Samuel Logan, the Chief Legal Officer of the Company. In reply, the Plaintiff filed Mr. Chishti's Fourth Affidavit which was sworn on 16 August 2023, six days after the 10 August end date. While no formal application was made by either party for an extension of time to file evidence, no issue arises out of these moderate filing delays.

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