HIRCO & otr v HIRANANDANI & otr

HIRCO & otr v HIRANANDANI & otr
Case Reference - Division Code	ORD
Case Reference - Year	2013
Case Reference - Number	4
Court	HIGH COURT OF JUSTICE OF THE ISLE OF MAN
Division	CIVIL - ORDINARY PROCEDURE
Judgment Date	09 July 2015
The Judgment of	His Honour The Deemster Doyle, First Deemster and Clerk of the Rolls
Party One	Hirco Plc
Advocate Party One	Lindsey Bermingham (Cains)
Party Two	Hirco Holdings Limited
Advocate Party Two	Lindsey Bermingham (Cains)
Party Three	Niranjan Hiranandani
Advocate Party Three	Charles Coleman (Gough Law)
Party Four	Priya Hiranandani-Vandrevala
Advocate Party Four	Jonathan Wild (Callin Wild)
Judgment	Introduction 1. On 21 February 2014 I delivered a judgment in these proceedings in which I concluded that the Isle of Man was clearly the appropriate forum for the trial of the dispute. I refused to grant a case management stay pending the determination of an arbitration in Singapore. At paragraph 121 of my judgment I stated: "… Although it is entirely a matter for the arbitrators in Singapore I would hope they would see the good sense in staying the Singapore arbitration until the issues between all the parties have been finally determined in the Isle of Man. It is plainly undesirable in justice to have the Singapore arbitration proceeding in parallel with these legal proceedings in the Isle of Man." 2. At paragraph 122 of my judgment I referred to the letters before claim being issued as long ago as December 2012. I stated: "… These proceedings in the Isle of Man involving as they do serious allegations must now be progressed with expedition." 3. At paragraph 123 of my judgment I stated that the parties should not engage in any more unnecessary time and cost wasting interlocutory skirmishes. 4. At paragraph 124 of my judgment I stated that the parties must focus now on the main issues in dispute and devote their energy and resources to an expedited judicial determination of their dispute in the Isle of Man. 5. Despite those comments made on 21 February 2014 the parties appear to have been content, until recently, to let the proceedings in the Isle of Man go to sleep and have focused their significant energy and resources, not on an expedited judicial determination of their dispute in the Isle of Man, but on an arbitration in Singapore between just two parties to the Isle of Man proceedings, namely the Second Claimant and the First Defendant. It would appear that amongst themselves the parties have, in effect, imposed the equivalent of a case management stay of the Manx proceedings pending the determination of the arbitration in Singapore. 6. It is fair to record that prior to the prolonged inactivity in these Manx proceedings there was an appeal. The First Defendant appealed against the judgment delivered on 21 February 2014 and various stays were granted. On 20 October 2014 this court made an order by consent that a first instance directions hearing scheduled for 10am on 21 October 2014 be vacated with: "… the hearing to be re-scheduled administratively upon notification from the Claimants that the stay of proceedings ordered by the Staff of Government Division on 20 October 2014 has been lifted." 7. Despite the recent flurry of activity in these proceedings there has been no application to re-schedule the directions hearing. 8. It was not until 15 June 2015 that the court received formal notification from the Claimants that the stay of proceedings ordered by the Staff of Government Division on 20 October 2014 had been lifted. Such notification was contained in a letter dated 11 June 2015 from Cains (the advocates who act for the Claimants) to my clerk, with a copy to Mr Coleman at Gough Law (who act for the First Defendant) and Mr Wild at Callin Wild (who act for the Second Defendant). Cains indicated that the stay had been lifted by order of the Staff of Government Division on 7 January 2015. Cains apologised "for failing to update His Honour in relation to the above at an earlier stage." Summary of recent activity 9. As I say, for very many months the parties (including the Claimants) appear to have been content to let the Isle of Man proceedings fall asleep. They have now woken up with renewed energy. I endeavour to provide a brief summary of the recent activity in the Manx proceedings by referring to the following: (1) the Second Defendant's application dated 20 April 2015 (the "Second Defendant's Security Application") for an order for security for costs against the Claimants in the sum of £8,920,000.00 to be provided in two tranches - £3.92 million within 28 days and a further £5 million on the date ordered for disclosure; (2) the First Defendant's application dated 7 May 2015 (the "First Defendant's Security Application") for an order for security for costs against the Claimants in the sum of £1.05 million up to and including the stage of exchange of witness statements. I refer to the Second Defendant's Security Application and the First Defendant's Security Application together as the "Security Applications"; (3) on 15 May 2015 I made an order in respect of the Security Applications and imposed a relatively tight timetable: - the Claimants were given until 4pm on 29 May 2015 to file any evidence in opposition; - the First and Second Defendants to file any evidence in reply by 4pm on 19 June 2015; - the First and Second Defendants to file an agreed duly paginated bundle by 4pm on 26 June 2015; - the First and Second Defendants to file concise skeleton arguments and any necessary authorities by 4pm on 26 June 2015; - the Claimants to file concise skeleton arguments and any necessary authorities by 4pm on 10 July 2015 and the two applications were listed for hearing at 10am on 29 July 2015 with 1 day allocated; (4) on 29 June 2015 the First Defendant filed an application notice dated 26 June 2015 (the "First Defendant's Exclusion of Evidence Application") in which an order was sought "for the withdrawal of the copy of" the written opening submission of the Second Claimant in the Singapore arbitration which was exhibited by the Claimants in response to the applications seeking security for costs at exhibit TJH4 at page 62. The First Defendant says that such document is confidential to the Singapore arbitration and that it has been exhibited in breach of his rights of confidentiality; (5) the First Defendant's Exclusion of Evidence Application sought to exclude reference to evidence filed in relation to the Security Applications and had to be dealt with before the determination of the Security Applications. In an endeavour to accommodate this, by email dated 29 June 2015 my clerk notified counsel that I was "minded to issue" certain directions in respect of the First Defendant's Exclusion of Evidence Application, namely: (i) the First Defendant to file and serve concise skeleton argument and authorities and paginated bundle by 4pm on 7 July 2015; (ii) the Claimants and Second Defendant to file and serve concise skeleton arguments and authorities by 4pm on 14 July 2015; (iii) the application be heard at 10am on Wednesday 22 July 2015 with a maximum of 2 hours allocated I should record that by email dated 1 July 2015 Mr Wild indicated that the Second Defendant has no comment on the proposed directions and by email dated 2 July 2015 Mrs Bermingham indicated that: "The Claimants have no comments on the proposed directions." I do not recall seeing any communication from the First Defendant in respect of the proposed directions. By letter dated 7 July 2015 Mr Coleman of Gough Law filed the First Defendant's skeleton argument together with paginated bundle (and made a reference to also using the core bundle filed in respect of the hearing of the Security Applications). I stress, as the email made clear, these were directions I was on 29 June 2015 "minded to issue". I have not yet made directions in respect of the First Defendant's Exclusion of Evidence Application. It has not yet been listed for hearing. (6) by application dated 30 June 2015 (the "Claimants' Adjournment Application") the Claimants applied for an order vacating the hearing date of 29 July 2015 and allocating 2 days after 7 September 2015, and if a vacation was granted then extending time for the filing of their concise skeleton argument and any necessary authorities. The Claimants' Adjournment Application was listed for hearing at 10am today, 9 July 2015, with a maximum of 1 hour allocated; (7) on 7 July 2015 the court received an application dated 3 July 2015 from the Claimants (the "Claimants' Variation Application") seeking an order that paragraph 5 of the order made on 15 May 2015 be varied such that the date for filing and service of the Claimants' concise skeleton argument and any necessary authorities is 17 July 2015 and that the Defendants pay the costs of the application; (8) by application notice of the Second Defendant dated 3 July 2015 (the "Second Defendant's Specific Disclosure Application") the Second Defendant seeks an order that: "… the Second Claimant and the First Defendant give specific disclosure in these proceedings of the documentation disclosed and/or produced in an arbitration between the parties in Singapore." A hearing is requested with a time expectation of 3 hours. I think that time estimate may be a little unrealistic without the full co-operation of the parties and their counsel. Assistance from the parties and counsel 10. I remind counsel and the parties that in my judgment of 21 February 2014 at paragraph 122 I stressed that the parties and their legal representatives are duty-bound to assist the court in achieving the overriding objective of dealing with cases justly (Rule 1.2(4) of the Rules of the High Court of Justice 2009) and that advocates have an overriding duty to the court to ensure, in the public interest, that the proper and efficient administration of justice is achieved (Rule 19(1) of the Advocates Practice Rules 2001). A culture of helpful co-operation rather than unnecessary confrontation should guide counsel and the parties post the 2009 Rules. Position of the Claimants 11. I refer now to the position of the Claimants. 12. Cains endeavoured to assist by their letter of 7 July 2015 where the following points, amongst others, were made: (1) the number of applications that have arisen out of the Security Applications and the directions for each such application have become convoluted and unwieldy; (2) the delays in bringing the First Defendant's Exclusion of Evidence Application and the Second Defendant's Specific Disclosure Application (such applications having been threatened on 2 June 2015 and 28 May 2015 respectively, both described as urgent, but not making those applications until 26 June 2015 and 3 July 2015 respectively) have created a situation where it is uncertain as to what evidence can be put before the court for the purposes of the Security Applications; (3) the Second Claimant will shortly need to make an application to the Tribunal in the Singapore arbitration for permission to refer to certain other matters for the purposes of defending the Security Applications. However, should the Second Defendant's Specific Disclosure Application succeed, there would be no need for it to do so; (4) the Second Defendant's proposed direction that the Claimants file a skeleton argument on 24 July 2015, the same day as the Claimants are due to file 250 pages of closing submissions in the Singapore arbitration, is plainly unworkable. 13. Cains suggested that the First Defendant's Exclusion of Evidence Application and the Second Defendant's Specific Disclosure Application could be dealt with on 29 July 2015 and the Security Applications could be dealt with on the first convenient date following the summer vacation. 14. The Claimants' Adjournment Application was supported by a 14 paragraph witness statement of Neil David Kitchener QC ("Mr Kitchener") dated 30 June 2015 and a 20 paragraph 11 page statement from Timothy James House ("Mr House") dated 30 June 2015. 15. Mr Kitchener makes the following points: (1) there is no way he can make himself available to appear on 29 July 2015 in view of his commitments to what he describes as "a highly complex arbitration in London"; (2) his senior junior, Mr Elliott, could surrender a longstanding and important personal commitment on 29 July but between now and 24 July (2 working days before 29 July) he is committed to preparing written closing submissions for the Singapore arbitration which Mr Kitchener describes as "a major enterprise"; (3) the other juniors in the Hirco team are likewise engaged; (4) Mr Kitchener is available from 7 September to 25 September, 7 October 2015 to end of October, 2 November to 27 November and between 7 December to 16 December. Mr Elliott is available on dates Mr Kitchener is not. 16. Mr House makes the following points, amongst others, in his witness statement: (1) there have been material changes of circumstances since the Security Applications were originally listed including: (a) the written closing submissions (limited to 250 pages) in the Singapore arbitration are to be served by Friday 24 July 2015 (two working days before the present hearing date in the Isle of Man). Further submissions have to be prepared and filed by 7 August 2015; (b) the First Defendant's application to exclude much of the Claimants' evidence in answer to the Security Applications was made on 26 June 2015, 37 days after the evidence was served, without any explanation for the delay; (c) the Second Defendant's threatened application for disclosure of all the documents in the Singapore arbitration; (d) the likely need for the Second Claimant to apply to the arbitration tribunal to deploy in the Isle of Man further arbitration material so as to ensure that the Security Applications are dealt with on a properly informed basis; (e) problems with the availability of counsel; (2) in light of these material changes of circumstance and for other reasons the hearing should be adjourned to the earliest convenient date after 7 September 2015 with 2 days allowed. The other reasons include: (a) the present listing causes severe prejudice to the First and Second Claimants in their ability to respond properly to the applications and places the Second Claimant under a serious disadvantage in the Singapore arbitration in connection with the preparation of written closings; (b) there is no pressing need for the applications to be heard on any particular date, nor any prejudice suffered by the Defendants from a deferral of the hearing date. By the end of the year there could be an award and as a result the First Defendant might owe the Second Defendant many hundreds of millions of pounds, rendering the application for security pointless. The First and Second Claimants have made clear that they are content that in the meantime the Defendants should not incur any costs in connection with the Isle of Man proceedings; (c) there is now insufficient time (1 day) for the court to deal with all the current and potential further applications on 29 July 2015 properly. 17. The Defendants do not appear to take issue with the factual description of the directions or work now necessary in respect of the Singapore arbitration. 18. I note also the oral submissions of Mrs Bermingham on behalf of the Claimants. Mrs Bermingham emphasised the following points, amongst others: (1) the First Defendant's Exclusion of Evidence Application and the Second Defendant's Specific Disclosure Application need to be dealt with before the Security Applications in order that the court makes a decision on a fully informed basis. This is particularly important in the context of the Claimants' argument that security would stifle a genuine and very strong case; (2) the Defendants are guilty of delay and there is no pressing reason why the Security Applications have to be dealt with swiftly. 19. In her reply Mrs Bermingham stated that the Claimants' primary position was that the Security Applications should not be dealt with prior to the determination of the arbitration proceedings in Singapore. That is not the order sought in the Claimant's Adjournment Application which sought the vacation of the hearing on 29 July 2015 and that the applications be "relisted on the earliest convenient date after 7 September 2015, with two days allowed." Position of the First Defendant 20. I refer now to the position of the First Defendant. I note the letter dated 8 July 2015 from Mr Coleman at Gough Law. There is reference at paragraph 3.1 to: "As we understand it from comments made at the 15th May 2015 hearing regarding Court availability, it is unlikely to be heard until September." 21. Frankly, I do not understand that comment in respect of court availability. The problems in respect of availability discussed at the May hearing were problems which focused on counsel's lack of availability and not the availability of the court. The court has availability in July and indeed August if need be. 22. Mr Coleman makes the following points, amongst others, in his three-page letter: (1) there is no good reason why the Security Applications should not go ahead on 29 July 2015; (2) the other applications which have been made in these proceedings are not an obstacle to the fair disposal of the Security Applications; (3) the Second Defendant's Specific Disclosure Application, which relates to material for the purposes of the substantive proceedings, has not yet been listed and in any event it has no bearing on the Security Applications; (4) the First Defendant's Exclusion of Evidence application is a discrete application to exclude one document for the purposes of the Security Applications; (5) if the Claimants needed to apply to the Tribunal for permission to refer to further confidential material, such an application could, and should, already have been made; (6) there is no justification for delaying the hearing of the First Defendant's Exclusion of Evidence Application "listed on 22 July" (quote from Gough Law letter). The court simply indicated that it was "minded to" hear it on 22 July 2015 and the application has not yet been listed; (7) the Claimants' proposed revised directions for the other applications are rejected. 23. I note also the oral submissions of Mr Coleman this morning. Mr Coleman emphasised the following points, amongst others: (1) the real motivation of the Claimants is to delay the hearing of the Security Applications until after the determination of the arbitration in Singapore which could be in the first half of next year; (2) the burden is on the Claimants to persuade the court to vacate the hearing date; (3) there has been no real change of circumstances; (4) the Second Defendant's Specific Disclosure Application is defective and will fail. There is no prejudice to the Claimants in it being dealt with after the Security Applications. Position of the Second Defendant 24. I refer now to the position of the Second Defendant. 25. I note the position of the Second Defendant as outlined in the document entitled "Position Paper" dated 7 July 2015 and signed by Mr Fletcher Craine who appears on behalf of the Second Defendant today. 26. The following points, amongst others, are made in the position paper: (1) the hearing date for the Security Applications should remain, as should the existing directions; (2) the issues now raised by the Claimants are largely a repeat of the submissions made on 15 May 2015; (3) the Security Applications ought to be progressed in a timely manner and the Claimants could have made arrangements for junior counsel to attend; (4) counsel's availability is not a new issue; (5) the Claimants' attempts to portray themselves as underfunded underdogs are deeply unconvincing. They have financial backing and have a team of lawyers working on the matter. They have sufficient resources to produce a skeleton argument on 10 July 2015 and be represented at the hearing on 29 July 2015; (6) the hearing of the Security Applications does not require attendance by counsel with intimate familiarity with the dispute in the arbitration or as to the merits of the dispute generally; (7) there have been no "material changes of circumstances" since 15 May 2015; (8) the First Defendant's Exclusion of Evidence Application is a straightforward discrete issue which can be dealt with on 22 July 2015; (9) the Second Defendant's Specific Disclosure Application is entirely separate from the Security Applications. There is no need for it to be heard before the Security Applications are heard; (10) the Claimants, if they wish to avoid the hearing of the Security Applications, should simply provide the security. 27. At 09:13 this morning, 9 July 2015, Callin Wild emailed the court clerk a copy of their letter dated 8 July 2015 to Cains. It read as follows: "We write further to your letter of 7th July 2015. The Second Defendant's position remains that there is no good reason why the security applications should be adjourned or that the Exclusion Application and Disclosure Application should be heard together as the issues arising on the two applications are entirely different. The Second Defendant is eager to progress the substantive proceedings without delay and therefore considers that the security applications should be heard on 29th July 2015 and the Disclosure Application be heard on 30th July as proposed. It is particularly important that the Disclosure Application be determined as soon as possible in order to allow future directions to be set and to ensure the substantive proceedings can be progressed in a timely and efficient manner. Therefore if, contrary to the Second Defendant's position, the Deemster considers that the Security and Disclosure Applications cannot both be heard on 29th – 30th July, the Second Defendant will submit that the Disclosure Application should be heard at that hearing, with the hearing of the Security Application to be listed on the next available date thereafter (which we would anticipate would be in September). For the reasons set out in the Second Defendant's Position Paper it is considered that the Vacation Application should not be permitted as it has been previously determined and there have been not been any material changes in the circumstances. We have copied the Court so that it is aware of the Second Defendant's position prior to the hearing scheduled for 9 July." 28. I observe that the Second Defendant took no action in the Manx proceedings subsequent to the stay being lifted on 7 January 2015 until she lodged her application dated 20 April 2015 for an order requiring the Claimants to provide security for costs. Between the beginning of January and the end of April 2015 the Second Defendant did not display any eagerness apparent to the court "to progress the substantive proceedings without delay." 29. I note also the oral submissions of Mr Craine this morning. Mr Craine emphasised the following points, amongst others: (1) the Second Defendant is eager for the claim to be progressed in a timely manner and without delay; (2) the order of 15 May 2015 should be adhered to; (3) there has been no material change of circumstances; (4) the Second Defendant's Specific Disclosure Application should be heard on 30 July 2015, or on 29 July 2015 if the hearing of the Security Applications is vacated. Determination 30. I now turn to various determinations. 31. In respect of the Claimants' Adjournment Application I adjourn the Security Applications. They will not now be heard on 29 July 2015. There are a number of reasons for this. - firstly, one day now appears to be insufficient; - secondly, the additional information provided by the Claimants now reveals that there are very real difficulties with the work required in respect of the Singapore arbitration and there is some renewed force in the argument that the Claimants' legal team should not be unduly distracted or impeded from their necessary focus, at the moment, on the Singapore arbitration; - thirdly, I am satisfied in the present circumstances that there is no undue significant prejudice to the Defendants in adjourning the hearing of the Security Applications, whereas if I refused to adjourn them I am now satisfied that significant prejudice could be caused to the Claimants; - fourthly, to a certain extent the Security Applications have been overtaken by the somewhat delayed filing of the First Defendant's Exclusion of Evidence Application and the Second Defendant's Specific Disclosure Application. 32. The Claimants appear to suggest (see Cains' letter dated 7 July 2015) that both the First Defendant's Exclusion of Evidence Application and the Second Defendant's Specific Disclosure Application need to be dealt with before the hearing of the Security Applications. This point was emphasised by Mrs Bermingham this morning. The Claimants seemed to be under the false impression that the Second Defendant's Specific Disclosure Application had been listed and would be dealt with on 30 July 2015. That false impression seems simply to be based on a proposal that it be heard on 30 July 2015. There is no court order to that effect. The Claimants' fears that something may be decided on 22 July 2015 and something may be differently decided on 30 July 2015 are ill-founded. 33. I am not persuaded that the Second Defendant's Specific Disclosure Application needs to be dealt with at the same time as, or prior to, the determination of the First Defendant's Exclusion of Evidence Application. 34. It is plain however, and I think is one of the few areas of common ground, that the First Defendant's Exclusion of Evidence Application needs to be dealt with before the hearing of the Security Applications. It relates to evidence filed in respect of those applications. It appears self-evident that it should be heard first. 35. Having considered everything that has now been put before the court I very much doubt that a maximum of 2 hours would be sufficient for that hearing. I list the First Defendant's Exclusion of Evidence Application for 10am on 29 July 2015 with one full day allocated. 36. The First Defendant has already filed his skeleton argument and authorities and a supplemental paginated bundle. The other bundles filed in respect of the Security Applications can also be used at the hearing of the First Defendant's Exclusion of Evidence Application on 29 July 2015. 37. On 29 June 2015 I was minded to direct that the Claimants and Second Defendant file and serve concise skeleton arguments and authorities in respect of the First Defendant's Exclusion of Evidence Application by 4pm on 14 July 2015. Having considered subsequent developments and everything that has now been put before the court I am willing to give a little further time to the Claimants and the Second Defendant to file and serve their concise skeleton arguments and authorities. These must now be filed and served before 4pm on Friday 17 July 2015 (3 working days less than the Claimants' request but 3 working days more than I was initially minded to allow). This should also, absent any future unforeseen developments and commitments, give the court time to read into the matter before 29 July 2015, which may in turn save court hearing time. 38. In respect of the Specific Disclosure Application, the determination of that application will have to wait until after the summer unless counsel can find time in August. I will not be hearing that application on 30 July 2015. I wish to focus attention on the First Defendant's Exclusion of Evidence Application. I require counsel to file within the next 14 days, if possible on an agreed basis, if not then separately, suggested directions in respect of the Specific Disclosure Application. 39. I do not require the Claimants to file at this stage a skeleton argument in opposition to the Security Applications. That part of the order made on 15 May 2015 can be discharged. The time period for the filing of the Claimants' skeleton argument in respect of the Security Applications can be revisited after I have determined the First Defendant's Exclusion of Evidence Application and then a date for the hearing of the Security Applications (with 2 days allocated) can be set after 7 September 2015. To that extent the Claimants' Adjournment Application and the Claimants' Variation Application have been dealt with. Subject to submissions I would suggest that the costs position be dealt with by making an order that costs be costs in the case. ----------------------------------------------- www.courts.im/ HIRCO & otr v HIRANANDANI & otr 29/07/2015 For Metro Baltic Shareholders , we were approximately six months behind this case . Looks like an early 2016 payday from Barnaby & Ronan will be in order . Good luck Our legal team in the case , METRO BALTIC & OTRS v JAMES & OTRS .    And May