Teyseer Contracting Company WLL v Masri

• Jurisdiction: Bermuda
• Judgment Date: 18 March 2011
• Date: 18 March 2011
• Docket Number: Civil Appeal 2010 No. 10
• Court: Court of Appeal (Bermuda)

In The Court of Appeal for Bermuda

Before: Zacca, P; Evans, JA; Baker, JA

Civil Appeal 2010 No. 10

BETWEEN:

Teyseer Contracting Co WLL

Appellant

and

Munib Masri and others

Respondents

Mr V Lyon, QC and Mr P Dunlop for the Appellant

Mr A Beltrami, QC, Mr B Adamson, Ms N Tovey, Mr D Kessaram and Mr A Martin for the Respondents

The following case was referred to in the judgment:

Soinco SACI v NovokuznetskELR [1998] QB 406

Abstract:

Appeal against refusal to set aside interim receivership order - Appointment of receiver - Jurisdiction - Sufficient interest

JUDGMENT of Baker, JA

1. The appellant Teyseer Contracting Co. WLL ("Teyseer") appeals against the Order of Kawaley J dated 22 March 2010 refusing its application to set aside an interim receivership order dated 13 June 2008, as amended on 26 March 2009. Leave to appeal was granted by the judge on 23 July 2010.

2. There are four respondents to the appeal but only the first respondent, Mr. Masri, has participated actively in the hearing before us.

Background

3. Mr. Masri is a judgment creditor. The second respondent, Consolidated Contractors International Company SAL ("CCIC"), is the judgment debtor. The amount of the judgment debt exceeds $50 million. Mr. Masri obtained the judgments in the English High Court in 2007 and 2008 and ever since has been making unsuccessful efforts to obtain satisfaction. On 6 June 2008 the judgment creditor obtained a freezing order against CCIC in respect of receivables due under various contracts. The judgments were registered in Bermuda under the Judgments (Reciprocal Enforcement) Act 1958. The Order was made on 13 June 2008, the same day as the Interim Receivership Order was made. The judgments arose out of a 1992 agreement relating to the Masila Oil Concession in Yemen. Mr. Masri is a substantial Palestinian businessman. CCIC is company incorporated in Lebanon but has its principal office in Greece. It is said to be controlled by a Mr. Khoury, the former business partner of Mr. Masri.

4. The third respondent is Qatar Shell GTL Ltd. ("Qatar Shell") a Bermuda Registered Company. The fourth respondent, Mr. Mark W R Smith of Deloittes is the interim receiver. He was appointed interim receiver against the judgment debtor CCIC "to receive all amounts due to CCIC from Qatar Shell (such amounts to be referred to as "contract revenues")". An affidavit of assets filed in the English proceedings on behalf of CCIC had disclosed the existence of contract number PL-125 with Qatar Shell covering the period 2 November 2006 to 31 December 2011.

5. It was only following the appointment of the receiver that it was discovered that the contract revenues were owned, not by CCIC alone but, on the face of the relevant contract, jointly by CCIC and Teyseer. There was a joint venture agreement ("the JVA") between CCIC and Teyseer. I shall refer to the contract with Qatar Shell and the JVA in more detail in a moment.

6. CCIC sought to challenge the registration of the judgments in Bermuda but the challenge was dismissed by Kawaley J with costs on an indemnity basis. The basis of the challenge was, principally, that the English judgments had been obtained by fraud. The judge described the challenge as:

"demonstrably part of a wider litigation strategy by (CCIC) in various parts of the world….. to frustrate the judgment creditor's legitimate efforts to obtain the fruits of his hard earned judgments."

CCIC appealed to the Court of Appeal who dismissed it as "unmeritorious". CCIC then appealed to the Privy Council. We were told that that appeal remains extant.

7. The joint venture carries on business in Qatar constructing the Pearl Gas to Liquid "GTL" project for Qatar Shell who has described it as the largest ever construction project in Qatar. Qatar Shell is part of the Royal Dutch Shell Group.

8. Teyseer sought to set aside the Receivership Order on two broad grounds. The first was that Qatar Shell owed the contract revenues to CCIC and Teyseer jointly and that joint debts could not be collected by the receiver in satisfaction of CCIC's sole debt to the judgment creditor. The second was that under the joint venture agreement between CCIC and Teyseer, which was governed by Swiss law, CCIC's rights to the contract revenues were limited to an up-front fee which it had already received. There was, therefore, no debt as a matter of law or fact on which the receivership could bite.

9. A further point that emerged only after the appointment of the receiver was that the contract with Qatar Shell contained an English governing law and exclusive jurisdiction clause ("the EJC"). Qatar Shell's main submission before the judge was...