Jones J
IN THE GRAND COURT OF THE CAYMAN ISLANDS FINANCIAL SERVICES DIVISION Cause No. FSD 18 of 2012 (AJJ) The Honourable Mr. Justice Andrew J. Jones QC In Chambers, 12th February 2013 IN THE MATTER OF THE COMPANIES LAW (2012 REVISION) AND IN THE MATTER OF TRIKONA ADVISORS LIMITED BETWEEN: (1) ARC CAPITAL LLC (2) HAIDA INVESTMENTS LTD Petitioners -And- ASIA PACIFIC LIMITED Respondent Appearances: Mr. Ross McDonough and Mr. Guy Cowan of Campbells on behalf of the Petitioners Mr. Anthony Akiwumi of Stuarts Walker Hersant on behalf of the Respondent REASONS
Immediately after I pronounced the Court’s winding up order on 31st January 2013, counsel for the Petitioner sought to apply for an order for costs on the indemnity basis and counsel for the Respondent sought to apply for a stay pending an appeal to the Court of Appeal. It seemed to me that both these applications should be made by summons on notice to the other side and that they should be supported by written submissions. Both counsel were content with this approach and I therefore directed that, if the parties wished to pursue these applications, they must serve a summons and supporting written submission within seven days, my intention being that the applications would be heard consecutively on a convenient date during the course of this week. Counsel for the Respondent failed to comply with this direction and chose take a different course by applying for his client’s appeal to be heard on a expedited basis on 14/15th February (when the Court of Appeal was expected to be in session to hear an appeal which was in fact settled) or on 18/19th February, in which case there would have been no real need to apply to this Court for a stay. In the event the Court of Appeal declined to hear the appeal on an expedited basis and it is now set down for hearing on 9/10th April.
The fact that the Respondent had a potential alternative remedy is not a justification for failing to comply with the directions contained in this Court’s Order. It seems to me that Counsel for the Respondent could and should have protected his client’s position by serving his application in a timely manner, in the knowledge that it could have been withdrawn if the Court of Appeal had been willing to hear the appeal later in the week. In the event, the time limit was allowed to expire and Counsel for the Petitioner is now expected to deal with the matter on less than 24 hours’ notice. In my judgment the Respondent has failed to comply with an explicit time limit and failed to show cause why that time limit should be waived or extended. Nevertheless, I did in fact hear the application and dismissed it on the merits. I now put into writing the reasons delivered orally on 12th February.
Counsel’s written submission makes various points, but his oral argument focused entirely on the proposition that the failure to grant a stay will prevent Mr Kalra from dealing with an appeal pending before the Privy Council which will in turn result in Trikona incurring a liability of €130 million, thereby rendering the appeal nugatory. It is supported by two new affidavits sworn on 5th February by Mike Gilleran and Daniel Loblowitz. This appeal relates to part of what has been described as “the SachsenFonds litigation”, to which I referred in paragraph 12 of my Judgment. The current state of this particular aspect of the litigation is described in the two new affidavits. The limited partnerships managed by SachsenFonds have sued Trinity, Trikona, TSF and Messrs Chugh and Kalra for €127 million for misrepresentation, deceit and fraudulent concealment in respect of the first and second purchases of assets from Trinity. TSF has counterclaimed for $15 million in respect of unpaid management fees. TSF is incorporated in Mauritius. It was established to manage the assets sold to the SachsenFonds limited partnerships and is 50% owned by SachsenFonds and 50% owned by Trikona. SachsenFonds has presented a winding up petition against TSF. Trikona intervened and sought to have the petition dismissed on the basis that the issues fell within the scope of the arbitration clause contained in the shareholders agreement made between SachsenFonds and Trikona. The Supreme Court of Mauritius ruled against Trikona on the basis that the arbitration clause is unenforceable because it was made prior to the enactment of the International Arbitration Act of Mauritius. This is the point of law in respect of which Trikona has appealed to the Privy Council. Counsel for the Respondent now submits that the “failure to impose a stay, which would allow the former directors of [Trikona] to engage in the SF litigation, will make it overwhelmingly likely that [Trikona’s] Mauritius appeal will be dismissed and [Trikona] will incur a liability of €130 million”. This conclusion is obviously misconceived and there is no evidence to support it. In particular, it is not a conclusion advanced by Messrs Loblowitz and Gilloran in their respective affidavits. The appeal to the Privy Council has nothing to do with the substantive claim for €130 million. I regard counsel’s submission as nothing more than unsubstantiated rhetoric. The fact that a winding up order has been made will not prevent Trikona from pursing the appeal. If there is any merit in this appeal and if it does serve any useful purpose to pursue it, the official liquidators will be better placed than Mr Kalra to deal with the matter in the interests of Trikona and its stakeholders.
Having considered the various other points made in the written submission, upon which counsel did not elaborate in argument, I came to the conclusion that the Respondent has shown no good reason why a stay should be granted. The application is dismissed. DATED 15TH FEBRUARY 2013 The Hon. Mr. Justice Andrew J. Jones QC JUDGE OF THE GRAND COURT