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Commercial Disputes Weekly – Issue 12412 July 2022

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"The fact that his conduct, and guilty knowledge, is also the foundation for FTL’s liability does not confer upon Mr Cafiero any protection in his personal capacity."Kyla Shipping Co Ltd and another v Freight Trading Ltd and others

A trader who should have placed FFA trades for Kyla using FTL as a front instead concluded trades that were against Kyla’s interest, including making a profit from the trades where the agreed reward should have been limited to a US$500 per day margin. All four defendants were held to be liable to Kyla for breach of fiduciary duties of good faith, no conflict and no profit, and dishonest assistance. The trades were null and void because they were not authorised by Kyla. However, the claim was held to be time-barred under section 32(1) Limitation Act 1980. Although there had been fraud, there had been a trigger following which a degree of serious interest and reasonable diligence could have discovered the fraud much earlier than it was discovered.
Kyla Shipping Co Ltd and another v Freight Trading Ltd and others [2022] EWHC 1625 (Comm), 1 July 2022   

Property – Maintenance Obligations
The Court of Appeal rejected an appeal by a property management company against a decision that it was not entitled to maintain the structure and exterior of two listed building and charge the cost to the freehold owners. The transfers of freehold title set out the responsibilities in relation to repairs and maintenance. Taking account of the relevant context, the freehold management company had an express obligation to maintain the structure and exterior of the buildings. The property management company only had responsibilities if the freehold management company failed in its obligations.
Mostyn House Estate Management Co Ltd v Youde [2022] EWCA Civ 929, 6 July 2022

Jurisdiction – Brexit
The Commercial Court has considered the application of section 67 of the Withdrawal Agreement where proceedings were commenced in the courts of England and Belgium. The Belgian proceedings were commenced before 31 December 2020. In the English proceedings an application to serve out of the jurisdiction was successful in March 2021 but the claim form was only issued on 10 May 2021. It did not matter that the proceedings only became related proceedings when amendments to the Belgian claim to introduce new causes of action were made on 3 May 2021. The Belgian proceedings had commenced before the end of the transition period and therefore the Brussels Recast Regulation applied. The Belgian court was first seised of the proceedings and so the English court was bound by Article 29 to stay the English proceedings.
Simon v Tache and others [2022] EWHC 1674 (Comm), 1 July 2022

Arbitration – jurisdiction
A dispute arose out of a joint venture relating to a Russian coalmine. The joint venture company was Cypriot. The shareholders agreement (SHA) contained an LCIA arbitration clause and was governed by English law. NDK commenced proceedings in Cyprus seeking declaratory relief and rectification of the register of members. The tribunal made an award granting anti-suit relief. The Commercial Court rejected NDK’s appeal and dismissed the argument that claims brought under the Cypriot Articles of Association did not fall within the arbitration agreement. It held that any rational businessperson could only have intended that the arbitration agreement would apply to any disputes between the shareholders in connection with the SHA, even if formulated by reference to the Articles.
NDK Ltd v HUO Holding Ltd and another [2022] EWHC 1682 (Comm), 1 July 2022

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams:

Andrew WardRebecca Williams
Ryland AshCharles Buss
Dev DesaiRobert Fidoe
Andrew HutcheonSarah Ellington
Mike Phillips
Theresa Mohammed

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