Saad Investments Company Ltd (in Caymanian Liquidation) v Greenway Special Opportunities Fund Ltd and Credit Agricole (Suisse) SA

JurisdictionBermuda
Judgment Date07 December 2010
Date07 December 2010
Docket NumberCommercial Jurisdiction 2010 No. 180
CourtSupreme Court (Bermuda)

In The Supreme Court of Bermuda

Commercial Jurisdiction 2010 No. 180

BETWEEN:
Saad Investments Company Limited (in Caymanian liquidation)
Plaintiff
and
Greenway Special Opportunities Fund Ltd
Credit Agricole (Suisse) SA
Defendants

Mr K Taylor for the Applicant/2nd Defendant

Mr N Turner for the Plaintiff/Respondent

The following cases were referred to in the judgment:

Donoghue v ArmcoUNK [2002] 1 All ER 749

The EleftheriaELR [1970] P 94

Abstract:

Setting aside service of writ - Enforcement of exclusive jurisdiction clause - Insolvency

RULING of Kawaley, J

Introductory

1. CAS, a Swiss bank based in Geneva, applies by Summons dated August 25, 2010 for the following relief in an action also commenced against the Fund, a Bermudian company, namely an Order that:

"1.The Plaintiff's Concurrent Specially Indorsed Writ issued by this Honourable Court on 11 June 2010 be set aside as against the Second Defendant on the basis that the Plaintiff and the Second Defendant agreed in writing that the Courts of Switzerland have jurisdiction to adjudicate upon any disputes between them or, in the alternative, that Switzerland is the convenient forum in any event;

2. The Order of this Honourable Court for injunctive relief dated 8 June 2010 be set aside as against the Second Defendant..."

2. On June 8, 2010, I granted leave to serve SICL out of the jurisdiction pursuant to Order 11 rule 1(1) (b) (an injunction was sought) and (c) (CAS was a necessary and proper party). I also made an Order in the following substantive terms:

"1. The appointment by Order dated the 18th day of September, 2009 by the Grand Court of the Cayman Islands of Hugh Dickson, Stephen John Akers and Mark Byers as Joint Official Liquidators of Saad Investments Company Limited is recognised by this Court;

[2.] That an Injunction be granted, restraining the First Defendant, until trial in this action or further order, whether by itself, its servants or agents, or otherwise howsoever, from making payments or distributions (in cash or

otherwise) in relation to the Shares held in the Second Defendant's name, as nominee for the Plaintiff, to any party other than the Liquidator of the Plaintiff; and

3.Against the Second Defendant, Credit Agricole (Suisse) SA:

That an Injunction be granted, restraining the Second Defendant, until trial in this action or further order, whether by itself, its servants or agents, or otherwise howsoever, from making payments or distributions (in cash or otherwise) in relation to the Shares held in its name as Nominee for the Plaintiff, to any party other than the Liquidator of the Plaintiff..."

3. CAS did not pursue its application to discharge the injunction, which Mr. Taylor characterized as relief merely incidental to setting aside service. Mr. Turner contended that the inclusion of this prayer in the Summons, combined with the failure of CAS to enter a conditional appearance (or any appearance at all) was sufficient to justify dismissing the application on the grounds that CAS had submitted to the jurisdiction of the Court. This came very close to a submission because the injunction does not automatically fall away if SICL is required to pursue its claim in Switzerland. On balance I find that this limited step of formally seeking, in the Summons challenging jurisdiction, but not actively pursuing substantive relief did not constitute a submission to the jurisdiction, and reject SICL's attempt to dismiss the application on these grounds alone.

4. Mr. Potts, for the 1st Defendant, made a brief cameo appearance; he departed having made a submission he invited the Court to consider without ruling on in his client's favour. This was to the effect that the claim against the Fund was liable to be struck-out as premature, a factor which the Court was invited to have regard to in considering the CAS application. In practical terms, this intervention was either an attempt to provide indirect assistance to the 2nd Defendant or to take the 1st Defendant's threatened strike-out application on a trial run. While I heard Mr. Potts over Mr. Turner's objections, I see no justification for considering the merits of the case against the 1st Defendant in the context of an application which does not challenge the validity of the grant of leave to serve out on those grounds. This is doubtless because jurisdiction may be founded under Order 11 rule 1(1) (c), assuming the necessary and proper party requirement is met, even if the claim against the locally resident party ultimately fails1.

5. CAS, understandably, did not challenge the validity of the service abroad order either on the ground that the action did not seek injunctive relief (within Order 11 rule 1(1)(b)) or on the ground that CAS was not a necessary and proper party (within Order 11 rule 1 (1)(c)). Rather, as it emerged in the course of argument, CAS primarily sought to enforce an exclusive jurisdiction clause (the "ECJ") and only secondarily contended that Switzerland was a more appropriate forum. The application therefore required the Court to have regard to the essential characteristics of the Plaintiff's claims against the 2nd Defendant for the purposes of determining (a) whether they were caught by the ECJ, and (b) whether Switzerland was a more appropriate forum for adjudicating the claims.

6. The primary relief sought by SICL as against CAS by its Amended Specially Indorsed Writ of Summons is orders as follows:

"a. That an Injunction be granted, restraining the Second Defendant, until trial in this action or further order, whether by itself, its servants or agents, or otherwise howsoever, from making payments or distributions (in cash or otherwise) in relation to the Shares held in its name as Nominee for the Plaintiff, to any party other than the Liquidators.

Nothing contained in this order shall prevent the Second Defendant from making payments at the request of the Swiss Bankruptcy Office of funds physically in Switzerland, in the event that such a Trustee is appointed.

b. That the Second Defendant transfer to the Plaintiff, the Shares which it holds as nominee for the Plaintiff."

7. The dispute arises in this way. It is common ground that CAS is the registered owner of shares in the Fund ("the Shares") and that some redemption payments were remitted by the Fund to CAS in Switzerland prior to June 8, 2010 and that other

payments are currently due to be paid to the registered owner of the Shares but are effectively frozen by the June 8 injunction. SICL contends that CAS is wrongfully refusing to comply with its obligations as a trustee; CAS contends that it has a valid security interest over the monies held by the Fund which extinguishes any beneficial interest SICL would otherwise have had in the monies payable in respect of the Shares. It relies on a 1998 Pledge Agreement (containing the ECJ) and a debt said to be owed by SICL to an affiliate of CAS, which was assigned to CAS after the June 8, 2010 injunction was obtained. SICL denies the existence of the security interest in question and suggests that CAS may hold the Shares for SICL's benefit under some other as undisclosed nominee agreement.

8. The pivotal insolvency dimension apart, the present application might have appeared to be a simple case where the real dispute between the parties was governed by Swiss law...

To continue reading

Request your trial
1 cases
  • Re Sea Containers Ltd ((in Liquidation))
    • Bermuda
    • Supreme Court (Bermuda)
    • 10 May 2012
    ...21 Saad Investments Company Limited (in Caymanian Liquidation) v Greenway Special Opportunities Fund Ltd and Credit Agricole SuisseBDLR [2010] Bda LR 83 Abstract: Appropriate forum - Liquidators to seek assistance from overseas courts JUDGMENT of Kawaley CJ Background 1. On October 16, 2006......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT