Koninklijke KPN N.v v. KPN B.v
| Jurisdiction | St Vincent and the Grenadines |
| Judge | Byer, J. |
| Judgment Date | 11 November 2020 |
| Judgment citation (vLex) | [2020] ECSC J1111-2 |
| Docket Number | SVGHCV2017/0169 |
| Court | High Court (Saint Vincent) |
| Date | 11 November 2020 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
SVGHCV2017/0169
In the Matter of: The International Business Companies (Amendment and Consolidation) Act Cap 149 of the 2009 Revised Edition of the Laws of Saint Vincent and the Grenadines
and
In the Matter of the Companies Act Chapter 143
and
In the Matter of the Bankruptcy & Insolvency Act Chapter 136
and
In the Matter if the Arbitration (New York) Convention Awards and Agreements Act Chapter 119
and
In the Matter of Genesis Investment Funds Limited (In Liquidation)
and
and
Mr. Stanley John Q.C. with Ms. Keisal Peters for the Applicants
Mr. Duane Daniel for the Defendants
By Fixed Date Claim Form filed on 24 November 2017 the claimants filed a claim against the first defendant, which was incorporated as an International Business Company (IBC) in accordance with the International Business Companies Act 1996 on 12 May 2005 with Registration No 12168 IBC 2005 and its Liquidator the second defendant, pursuant to Section 125 (5) of the Bankruptcy and Insolvency Act and/or Section 453 of the Companies Act and Section 165 (1) of the International Business Companies (Amendment and Consolidation) Act Chapter 149 (“the IBC Act”) for the following reliefs:-
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1) That the claim of debt received on 24 November 2017 by the second defendant on behalf of the claimants be and is hereby allowed as proved for or that the second defendant be ordered to make a determination that the said claims are proved for or disallowed.
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2) That the value of the claimants' said claim representing this debt as at 30 September 2017 shall be the sum of USD$4,906,414.86 plus interest at the rate of three percent (3%) per annum until the date of full payment.
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3) That the second defendant Mr. Gunter Bauer be removed from office as the Liquidator of the first defendant Genesis Investment Funds Limited (In Liquidation) and that [Mr. Peter Alexander, Chartered Accountants of Sergeant-Jack Drive, Arnos Vale, St. Vincent and the Grenadines or Stanley DeFreitas Chartered Accountant of Suite 200, Griffith Corporate Centre, Beachmont, Kingstown St. Vincent and the Grenadines or Mark McDonald and David Holukoff, Grant Thornton (British Virgin Islands) Limited] be appointed under Section 165 of the IBC Act to be the liquidator of the first defendant.
In coming to this point the claimants averred that their entitlement had arisen from a claim that the second claimant had against another Dutch entity called 6G Mobile B.V. (“6GM”). This arose from 6GM's failure to meet its contractual obligations towards the second claimant.
As security for the fulfillment of its obligations towards the second claimant, 6GM and the second claimant on the 18 November 2010 entered into what purported to be an escrow agreement providing for the deposit by 6GM of 35,552 of its Class A non-voting participating preference shares in the capital of the first defendant.
The claimant's alleged, that the first defendant confirmed via a written statement dated 5 November 2010 that it was holding a total number of 187,769 of these Class A non-voting participating preference shares in the capital of the first defendant which were to be transferred from 6GM to the second claimant.
Following 6GM's failure to meet its obligations under the escrow agreement the shares were then transferred from 6GM to the second claimant.
Consequent upon 6GM's continued failure to fulfill its obligations under its agreement with the second claimant, it transferred a further 37,246 Class A non-voting participating preference shares in the capital of the first defendant, this time to the first claimant.
The claimants therefore together alleged that they had acquired a total number of 72,798 Class A non-voting participating preference shares in the capital of the first defendant from 6GM.
On 16 March 2011, the claimants submitted a redemption request of USD 1,935,806 (35,552 shares) to the first defendant, followed by a second redemption request of USD 2,028,045 (37,246 shares) in April 2011.
The defendants having failed to adhere to the redemption requests, the claimants announced to the first defendant on 28 January 2013 that they would initiate arbitration proceedings in order to enforce their rights.
In response to this, the first defendant in two letters dated 31 January 2013 and 19 February 2013 respectively, claimed to have cancelled the claimants' shares and to have suspended the redemption. This allegation was brought to the attention of the claimants' Dutch lawyers several months later on 15 June 2013.
On 17 September 2013 the claimants filed a request for arbitration against the first defendant and Mr. Martin Wiebecke was appointed as sole arbitrator (“Arbitrator”) sitting in London, England.
The Arbitrator found that he had jurisdiction and rejected all arguments raised on behalf of the defendants and made an award in favour of the claimants.
The arbitral award dated 9 January 2015, which the Arbitrator rendered in favour of the claimants, ordered the first defendant to meet its obligations toward the claimants under the Genesis Technology Fund Offering Memorandum dated 1 December 2006 by:-
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(i) Executing the claimants' redemption requests at net asset value, plus interest at 3% per annum.
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(ii) In the alternative, the first Defendant was ordered to pay to the claimants USD 3,963,851.10 as damages, EUR 39,056.58 as legal and other costs and EUR 89,146.63 for the fees and expenses of the Arbitrator.
On 31 December 2013, during the above described arbitration proceedings against the first defendant, the first defendant and its sub funds went into voluntary liquidation pursuant to Section 167(4) of the IBC Act.
The Plan of Dissolution dated 16 December 2013 filed with the Financial Services Authority (“Plan of Dissolution”) to voluntarily wind-up the first defendant and which is required under Section 167(2) of the IBC Act was to be authorised by a resolution of members, (the holders of the outstanding shares of a class or series of shares entitled to vote on the Plan of Dissolution as provided for by the By-Laws Section 7.1 and Section 24.7), however it was stated in the Minutes of the Board of Directors (a copy of which was also filed), as having been authorised by a sole shareholder. It expressly stated that the estimated time required to wind up and dissolve the first defendant was eighteen (18) months from 30 December 2013 and that “… the company is, and will continue to be able to discharge or pay or provide for the payment of all claims, debts, liabilities and obligations in full…”.
Notwithstanding the undertaking, the voluntary winding-up was still subsisting as at the date the proceedings were instituted.
On 1 September 2017 the claimants served a statutory demand (“Statutory Demand”) on the first defendant at its Registered Office situate at Trust House, 112 Bonadie Street, Kingstown, St Vincent and the Grenadines.
The first defendant acknowledged receipt of the Statutory Demand via a letter dated 21 September 2017 from its then solicitors Delany Law by which it asserted, inter alia, that (i) following the redemption requests by the claimants there were no transfers made by the first defendant, (ii) the first defendant initiated criminal proceedings in 2016 against an alleged fraudulent share swap, resulting in those shares being declared void as of January/February 2013, and (iii) the first defendant asked that there be an abandonment of the Statutory Demand with immediate effect until the facts in dispute are settled.
Subsequently, the claimants sought to prove the debt by causing a Claim of Debt and Proof of Debt supported by affidavit, each dated 20 September 2017, to be served on the second defendant on 2 October 2017 via courier mail.
Upon the matter coming up before this court as presently constituted for case management, the court became aware of a notice of application 1 filed on behalf of the defendant seeking directions for the trial of a preliminary issue that the question of the recognition and/or enforceability of the Arbitral award made on the 9 th January 2015..
The defendants in their application made it clear that all of the reliefs claimed by the claimants hinged on the question as to whether the arbitral award could have been enforced/recognized in the jurisdiction and sought the court's determination as to whether the award could be enforced, that prayer having not been pleaded and in any event whether the award was capable of enforcement the defendants having by their pleadings raised grounds against the said enforcement.
The determination of these issues was dealt with on submissions and this court issued its determination by way of written decision on the 24 th January 2019 in which this court found that the claimants had not in fact pleaded the enforcement of the arbitral award and that they were given leave to file an application to amend their Fixed Date Claim Form to do so, and in light of this the questions of whether the award should be enforced in any event was determined to be premature.
As a direct result of the judgment of this court, the claimants filed a notice of application 2 to amend their Fixed Date Claim Form to plead specifically the relief to enforce the arbitral award.
By that amendment, the claimant sought the following reliefs:
1. That the arbitral award dated 9 January 2015 which was awarded by Mr. Martin Wiebecke who was validly appointed as sole arbitrator (“the Arbitrator”) sitting in London, England rendered in favour of the claimants (“the Final Award”), be enforced against the defendants and recognized as binding for...
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