Munib Masri v Consolidated Contractors International Company SAL and Teyseer Contracting Company WLL

• Jurisdiction: Bermuda
• Judgment Date: 27 July 2010
• Date: 27 July 2010
• Docket Number: Civil Jurisdiction 2008 No. 142,Commercial Jurisdiction 2008 No. 142
• Court: Supreme Court (Bermuda)

In the Matter of the Judgments (Reciprocal Enforcement) Act 1958

And in the Matter of Judgments against Consolidated Contractors International Co SAL and Consolidated Contractors (Oil and Gas) Co SAL obtained in the High Court of England and Wales dated 15 June 2007, 5 October 2007, 11 February 2008 and 9 April 2008

BETWEEN:

MUNIB MASRI

Applicant/Judgment Creditor

v

CONSOLIDATED CONTRACTORS INTERNATIONAL COMPANY SAL

Respondent/ Debtor

TEYSEER CONTRACTING COMPANY WLL

Intervenor

Commercial Jurisdiction 2008 No. 142

In The Supreme Court of Bermuda

Abstract:

Enforcement of judgment debt - Contested receivership - Registration of UK judgment in Bermuda - Whether receiver can be appointed to collected joint debt - Site of debt

The following cases were referred to in the judgment:

Soinco SACI v NovokuznetskELR [1998] QB 406

Derby & Co v Weldon (Nos 3 and 4)ELR [1990] 1 Ch 65

SCF Finance Co Ltd v MasriWLR [1985] 1 WLR 876

C v LUNK [2001] 2 All ER Comm 446

Masri v Consolidated Contractors International SAL [2008] EWHC 2492

Beasley v RoneyELR [1891] 1 QB 509

Macdonald v The Tacquah Gold Mines CoELR (1884) 13 QBD 535

Hong Kong and Shanghai Banking Corp v Societe Eram Shipping Co LtdUNK [2003] UKHL 30

J Walls Ltd v LeggeELR [1923] 2 KB 240

R v Judge of the County Court of Lincolnshire and DixonELR (1887) 20 QBD 167

Mr J Woloniecki and Mr P Dunlop for the Intervenor

Mr A Beltrami, QC and Mr B Adamson for the Judgment Creditor

Mr D Kessaram for Qatar Shell

RULING of KAWALEY, J

Application by Intervenor to set aside ex parte appointment of receiver

Introductory

1. The walls of the legal temple are shaken but not shattered when recalcitrant judgment debtors launch a concerted attack on the judgment enforcement armoury of the courts. The challenge for courts and judgment creditors is to devise effective enforcement techniques which neither unduly prejudice innocent third parties nor undermine the moral fabric of the law. The complexity of enforcement problems is only magnified in the cross-border context which engages questions not just of local law but of private international law as well.

2. The Bermudian courts have never seemingly had to grapple with a contested receivership application such as the one presently before this Court. The present action commenced when the Judgment Creditor, a substantial Palestinian businessman, applied to register two English judgments for roughly $50 million ("the English Judgments") here under the Judgments (Reciprocal Enforcement) Act 1958. The English Judgments awarded the Judgment Creditor monies claimed by him under a 1992 Agreement relating to the Masila Oil Concession in Yemen. The Judgment

Debtor, ("CCIC"), is a company incorporated in Lebanon but has its principal office in Greece. It is said to be controlled by a Mr. Khoury, the Palestinian former business partner of the Judgment Creditor. The Order sought by Originating Summons dated June 11, 2008 was granted by me on an ex parte basis on June 13, 2008.

3. On the same date, Mark W.R. Smith of Deloitte was appointed as Interim Receiver against the Judgment Debtor "to receive all amounts due to CCIC from Qatar Shell GTL Limited (such amounts to be referred to as 'Contract Revenues')". On August 15, 2008, Qatar Shell, a Bermuda-registered company, was ordered to produce documentation relating to the Joint Venture in which CCIC was a participant. On August 26, 2008, Teyseer Contracting Company ("Teyseer"), a Qatari company, applied for leave to intervene. Upon the Receiver's undertaking to take no steps to enforce the 'Interim' Receivership Order without further leave of this Court, on August 28, 2008 Teyseer was granted leave to intervene in the proceedings and directed to supply the Receiver with a confidential affidavit in support of its application.

4. On January 22, 2009, I refused Teyseer's application for security for costs from the Plaintiff. On March 24, 2009, I gave directions for the filing of factual evidence and expert evidence on Swiss law and fixed the hearing of Teyseer's application for a two-day hearing commencing on June 10, 2009. The Judgment Creditor undertook only to use documents received from Teyseer for the purposes of the present proceedings, unless otherwise agreed. Although the application was formally an intervention summons, it was common ground that Teyseer's substantive application was to discharge the Receivership Order on the grounds that it (and not CCIC) was solely interested in the Contract Revenues.

5. On March 26, 2009, at a hearing attended by the Judgment Creditor and CCIC, the June 13, 2008 Receivership Order was amended by deleting the word "interim" from paragraph 1 and, inter alia, by requiring CCIC to provide discovery by list with copies in relation to (a) specified classes of documents, within 14 days, and (b) the Contract Revenues, within 21 days. By Summons dated April 28, 2009, Teyseer applied for further directions in respect of the June 15-16 hearing. The Judgment Creditor applied by Summons dated May 5, 2009 for a stay of the March 26, 2009 Order to "allow the Receiver to bring proceedings before the English Courts to determine the ownership of the Contract Revenues."

6. These two Summonses were both listed for hearing on May 8, 2009. In the meantime, on February 11, 2009, I had refused CCIC's application to set aside the ex parte Order of June 13, 2008 registering the English Judgments1. Before the present application can be properly understood, it is necessary to consider in more detail both (a) the terms of the Receivership Order and the basis on which it was obtained, and (b) the directions ordered for the further conduct of Teyseer's application on May 8, 2009 and the anticipated function of the effective hearing of its application to set aside.

The Receivership Order

7. The Receivership Order obtained ex parte on June 13, 2008 provided in salient part as follows:

"1. This is an order for the appointment of an interim receiver until further order made against Consolidated Contractors International Company SAL ("CCIC") on the application of the Applicant. The Judge accepted the undertakings set out in Schedule A at the end of this Order.

2. This Order was made on an ex parte basis. CCIC or any other party affected by this Order has a right to apply to the court to vary or discharge the order on at least 24 hours' notice.

3. Without prejudice to paragraph 2, this matter shall be set down for mention on 24 July 2008 at 11am before Kawaley J., or on some other date as may be agreed.

4. Subject to paragraph 7 below, Mark W.R. Smith be and hereby is appointed to receive all amounts due to CCIC from Qatar Shell GTL Limited (such amounts to be referred to as "Contract Revenues").

5. That the receiver be entitled to do the following:

(A) to open an interest bearing bank account or accounts with a bank authorised to take deposits within Bermuda for the purpose of receiving the Contract Revenues;

(B) to bring, defend, continue or compromise any proceedings or any other action in any jurisdiction as he may think fit, acting on behalf of CCIC as receiver, whether using his own name and/or the name of CCIC , in order to collect, gather in and/or recover the Contract Revenues, provided, however, that in the case of proceedings brought in a jurisdiction outside Bermuda, such right is subject to the receiver's right to bring such proceedings as receiver being (i) admitted by the Respondent to the proceedings or (ii) recognised by the Court or the legal system of the jurisdiction where the proceedings are brought before they are commenced or (iii) raised formally by the receiver as an issue in the proceedings at his first opportunity to do so.

(C) to instruct legal advisers or other professional advisers as and when he thinks fit; and

(D) to seek further directions from the Court as and when he sees fit by application in these proceedings.

6. That the receiver be entitled to charge on a monthly basis (in arrears) for the time properly given by him and his staff to the receivership at his usual professional rates.

7. That the receiver shall not without leave of the court receive more than the amount necessary to provide for the charges of the receiver and the allowed fees and costs of obtaining this order, and to collect the amount of US$53,564,905.30 (BMD$53,564,905.30) due under the Judgment of the Supreme Court of Bermuda dated 13 June 2008 in this matter (in relation to the registration of judgments of the Courts of England & Wales). The parties and the receiver have liberty to apply to the court to obtain directions as to the amount outstanding from time to time.

8. That the receiver shall pay into court for the credit of this action any sums collected within 3 working days of the receiver's receipt of cleared funds.

9. That the receiver shall submit his accounts to the Supreme Court every 4 calendar months from the date of this order, or so soon as the amount receivable by him under the clause 7 of this order has been received, whichever shall first happen, or whenever he may be called upon by the Court so to do. The receiver and any of the parties have liberty to apply to the Court for directions as to the disposition of any sums held by the receiver or standing in court.

10. The receiver is directed and granted the power to obtain in the name of CCIC details of the Contract Revenues due and payable to CCIC as at the date of the request and, where amounts are not yet payable but are likely to become payable in the future, the date on which payment is expected to become due

PROVIDED THAT if the receiver shall make a request under this paragraph which the recipient believes is unreasonable, the recipient shall notify the

receiver and shall have the right to apply to the court for directions in respect thereof before being obliged to comply.

11. The...