Koza Ltd & Anor v Koza Altin Isletmeleri AS [2020] EWCA Civ 1018 (31 July 2020)

Koza Ltd & Anor v Koza Altin Isletmeleri AS [2020] EWCA Civ 1018 (31 July 2020)

The Court of Appeal held that the grant of the injunction was proper. The application was not an abuse of process as the issue had not been finally determined previously and the circumstances justified the application. The court had jurisdiction to grant an injunction to ensure the effectiveness of the undertaking, even where the underlying issue would not be tried, and the balance of convenience strongly favoured preserving the assets pending trial due to the serious doubts over the SPA's authenticity and the availability of alternative funding for the arbitration.

Citation
[2020] EWCA Civ 1018
Parties
Claimant/appellant: Koza Limited; Claimant/appellant: Hamdi Akin Ipek; Defendant/respondent: Koza Altin Isletmeleri AS
Jurisdiction
England and Wales
Judgment Date
31 July 2020
Procedural Posture
Civil Appeal / Appeal From High Court Injunction Decision
Outcome
Appeal dismissed; injunction upheld
Legal Topics
Interim Injunctions, Abuse of Process, Freezing Orders, Company Articles, Shareholder Rights, Jurisdiction, Funding Arbitration
Company Law Civil Procedure Equity Interim Injunctions Abuse of Process Freezing Orders Company Articles Shareholder Rights +2 more

Case Brief

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Parties

Koza Limited

Claimant/appellant

Hamdi Akin Ipek

Claimant/appellant

Koza Altin Isletmeleri AS

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court Injunction Decision

Legal Issues

  1. 1 Whether the grant of an injunction restraining Koza Ltd from funding an ICSID arbitration was proper
  2. 2 Whether the application for injunction was an abuse of process under Henderson v Henderson and Hunter v Chief Constable of the West Midlands
  3. 3 Whether an injunction can be granted to enforce an undertaking pending trial where the underlying issue will not be tried

Ratio Decidendi

The Court of Appeal held that the grant of the injunction was proper. The application was not an abuse of process as the issue had not been finally determined previously and the circumstances justified the application. The court had jurisdiction to grant an injunction to ensure the effectiveness of the undertaking, even where the underlying issue would not be tried, and the balance of convenience strongly favoured preserving the assets pending trial due to the serious doubts over the SPA's authenticity and the availability of alternative funding for the arbitration.

Court Disposition

Appeal dismissed; injunction upheld

Orders

  • Koza Ltd and Mr Ipek are restrained from using £3 million of Koza Ltd's assets to fund the ICSID arbitration.
  • Costs to be determined as per standard order.