Key Facts
- •UCONINVEST LLC (Petitioner) filed a petition under s.994 Companies Act 2006 against JYSAN HOLDING LLC and others (Respondents), alleging unfairly prejudicial conduct.
- •The Petitioner, a minority shareholder (2.3%), claimed the Respondents extracted valuable company assets at undervalue.
- •The main allegations involved contracts/loans to companies controlled by Respondent 2, excessive director remuneration, unlawful post-settlement disbursements, a wrongful asset sale for $75 million (versus an alleged $1.6 billion value), and the Petitioner being locked out of a share sale.
- •Respondents applied to set aside a freezing injunction and argued for a stay under s.9 Arbitration Act 1996 due to an arbitration agreement.
- •Multiple arbitration agreements were in play, stemming from various shareholder agreements and sale and purchase agreements.
Legal Principles
Duty of full and frank disclosure in without notice injunction applications.
Brink's Mat Ltd v Elcombe [1988] 1 WLR 1350; Tugushev v Orlov [2019] EWHC 2031 (Comm); Derma Med Ltd v Ally [2024] EWCA Civ 175
Determining whether matters are to be referred to arbitration under s.9 of the Arbitration Act 1996 (two-stage process).
Republic of Mozambique v Privinvest Shipbuilding SAL (Holding) [2023] UKSC 32
Principles of estoppel by representation and convention.
Tinkler v Revenue and Customs Commissioners [2021] UKSC 39; Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310
Court's discretion to grant a freezing injunction despite non-disclosure.
National Bank Trust v Yurov [2016] EWHC 1913 (Comm)
Outcomes
Freezing injunction set aside due to incomplete and misleading presentation of facts by the Petitioner.
Serious failure of fair presentation at the without notice hearing; undisclosed material was highly relevant to the court's assessment.
Application for a stay of proceedings under s.9 Arbitration Act 1996 refused.
Petitioner not bound by arbitration agreements in the SHA, First Deed, or Second Deed; only some aspects of the 'Wrongful Settlement' claim fell within the scope of the relevant agreements.
A new, limited freezing injunction granted against the Company.
Real risk of dissipation of assets; limited to US$8.4 million in the Bangladesh bank account to cover the arguable value of the Petitioner's claim; balances justice and deterrence.
Order for service out on Jysan not set aside.
Jysan remains a necessary and proper party to the proceedings; failures in disclosure did not affect the assessment of whether Jysan was a necessary party.