High Court Addresses Authority of Provisional Administrator in Craft Development Case

Introduction

In the case of Craft Development SCI v Actis LLP & Ors [2024] EWHC 484 (KB), the core legal question addressed by the High Court of Justice revolved around the authority of Mr. Ngoua Elembe Hiob to act on behalf of Craft Development SCI, a Cameroonian company, as its provisional administrator in proceedings against Actis LLP and five other entities within the same group. The case explores critical legal notions such as the enforcement of foreign judgments, the role and appointment of provisional administrators under OHADA (Organization for the Harmonization of Business Law in Africa) law, and procedural aspects of Cameroon law—particularly regarding the issuance and effect of court judgments.

Key Facts

The dispute stemmed from a conflict between the majority and minority shareholders of Craft, leading the minority shareholder, Mr. Valère, to seek the appointment of a provisional administrator to pursue actions against the majority shareholder, Mr. Kamdem, and the present action in the UK. The Cameroonian courts at first instance and on appeal upheld the appointment of Mr. Hiob, this appointment being challenged in the UK on the grounds that the Cameroonian judgments had not been executed per Cameroon law; thus, Mr. Hiob lacked the authority to act for Craft.

Legal Principals

The critical legal principle under scrutiny was the enforceability of Cameroonian judgments according to Cameroon law, specifically the necessity of the “executory formula” or “grosse,” which signifies the judgment can be enforced through state coercion.

Under Cameroon law, a judgment must generally be served in an enforceable form—a “grosse” complete with an executory formula—before imposing “substantive legal” obligations. However, the distinction between judgments that are “capable of enforcement” and those conferring status, such as the appointment of a provisional administrator, formed a significant part of the legal debate.

The principle of “double degree of jurisdiction,” inherent in Cameroon’s judicial system and signifying a party’s right to have their case fully reheard before being subjected to adverse legal consequences, played a vital role in the deliberations. This principle affects the temporal point at which legal obligations stemming from judgments take effect.

Additionally, OHADA law, which harmonizes business laws across Africa—including Cameroon—provided the backdrop against which the applicability and interpretation of Cameroon’s statutory provisions were examined. It was pertinent whether the OHADA law on commercial companies mandated an inter partes process for the extension of a provisional administrator’s mandate, which would summon shareholders to participate in the decision-making process.

Outcomes

The Court ultimately dismissed the application to strike out the claim, holding that the Cameroonian judgments did indeed confer authority upon Mr. Hiob as provisional administrator, even without the service of a “grosse.” The Court placed considerable weight on the actions and recent extensions granted by the Cameroonian courts, the rejection of a stay by the Cameroon Supreme Court, and the administrative acts following the judgments, as opposed to strictly applying the necessity of a “grosse” for enforceability under Cameroon law.

Conclusion

The Craft Development case illustrates the complexities involved in interpreting foreign law in UK proceedings, particularly where the appointment of corporate officers and their subsequent authority are concerned. The case underscores the importance of understanding the nuances of foreign procedural law, the applicability of international legal frameworks such as OHADA, and judgments’ enforceability—facilitating clear and effective cross-border legal transactions and litigation. The High Court’s analysis and application provide insight into how UK courts may approach disputes involving foreign legal systems, emphasizing substance over form and according deference to the actions of foreign courts in their interpretation and application of their domestic law.