Conflict of laws: jurisdiction over foreign company derivative claims
The common law jurisdiction of the English courts over foreign company derivative claims has not been revoked by the Companies Act 2006. The Claimant owned 50% of the Third Defendant, a company incorporated in the BVI. It commenced English proceedings, both in its own right and in a derivative action on behalf of the Third Defendant. The claims were brought against the First Defendant, the owner of the other 50% of the Third Defendant, for breaches of, amongst other things, a shareholders’ agreement, and against the First Defendant’s representative director on the board of the BVI company, the Second Defendant, for breaches of fiduciary duty. The First and Second Defendant applied to the English court for, inter alia, an order setting aside permission to serve the English proceedings out of the jurisdiction.
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Fiduciary duty in the UKSC: bribe held on trust by agent for principal
The Respondents purchased the issued share capital of a Monegasque company which owned a leasehold interest in a Monte Carlo hotel. The Appellant acted as the Respondents’ agent in negotiating the purchase. The Appellant had also entered into an agreement with the vendor which provided for the payment to the Appellant of a €10 million fee following successful conclusion of the sale. The Respondents issued proceedings seeking recovery of the sum of €10 million.
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Disclosure of insurance: injunction as a remedy
Whether a claimant can enforce an eventual judgment may depend on the defendant having insurance. Finding out about insurance can be relevant to whether to pursue proceedings. However, the case law shows that it can be difficult to obtain disclosure about whether the defendant has effective insurance cover.
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EU sanctions on Russia: France and Germany warn
The French president, François Hollande, has suggested lifting the EU sanctions on Russia ahead of a multinational summit on the situation in Ukraine, which is due to take place on 15 January. The German Vice-Chancellor, Sigmar Gabriel has also spoken against imposing further sanctions against Russia.
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Court of Appeal applies Mitchell and Denton to appeal notice extensions
The Applicants had each failed to file a notice of appeal within the time prescribed by CPR r 52.4(2) and sought extensions of time. The Applicants argued that since applications for extensions of time were neither applications for relief from sanctions under CPR r 3.9 nor sufficiently analogous, the court’s jurisdiction was untrammelled by the Mitchell/Denton principles and the court should make whatever order it considered just. Whilst the Court of Appeal accepted that the applications were not formally applications for relief from sanctions under r 3.9, it held that applications for extensions of time for filing a notice of appeal should be approached in the same manner because the implied sanction of the loss of the right to pursue the appeal meant they were analogous. Therefore the Mitchell/Denton principles apply to such applications (paragraph 36).
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Stay of winding-up petition under s 9 Arbitration Act: Court of Appeal rules
The Appellant petitioned to wind up the Respondent. The Appellant and the Respondent were the lessor and lessee respectively under a lease of commercial property. The Appellant claimed that the Respondent owed sums due to it under the lease. The lease contained an arbitration agreement. The Respondent objected to the petition on the grounds that the debt due was disputed and the dispute had to be referred to arbitration. (It was not in issue that the disputed debt fell within the arbitration agreement.) On the application of the Respondent, the court ordered that the petition be stayed under section 9 of the Arbitration Act. The Appellant appealed.
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FII GLO (Dividend Tax and ACT): quantification judgment favours taxpayers
On 18 December 2014 the High Court (Henderson J) gave judgment on the quantification issues arising in the FII group litigation following a hearing in May and June of this year. The Judge also gave provisional views on two situations which did not arise on the test cases: first, where EU-source income was taxed in an intermediate company on its way to the UK, the relevant nominal rate was that of the intermediate company (if higher than that of the ultimate source country); secondly, while in principle a nominal rate credit was not required for income originating in a third country (even where it was paid to the UK via an EU mixer company), where the income was taxed in the EU on its way to the UK the income would attract a nominal rate credit at the rate of the intermediate company.
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Court of Appeal rejects UK attempt to re-open FII litigation arguments
The Court of Appeal in London has decided the UK tax authorities should not be allowed to change their defence in the Franked Investment Income Group Litigation on the issue of liability as that aspect of the case has already been finalised. Originally printed in International Tax Review, 16 September 2014
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Landmark judgment in Littlewoods
The taxpayer can claim a resounding victory in the third round of the long-running Littlewoods interest case in which judgment was handed down in the High Court in London on March 28 (Littlewoods Retail Limited and others v Commissioners for HMRC [2014] EWHC 868 (Ch)).
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Adviser Q&A: The High Court decision in Littlewoods
The judgment in Littlewoods Retail Ltd & Ors v HMRC [2014] EWHC 868 (Ch) was handed down on 28 March 2014 in the High Court. This substantial judgment represents a comprehensive win for the taxpayer and is relevant to the many hundreds of companies which have claims pending for the recovery of compound interest in respect of overpaid VAT (as well as certain direct tax disputes concerning EU law). Originally printed in Tax Journal, 4 April 2014.
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