HPOR Servicos De Consultoria Ltda v Dryships Inc & Anor [2018] EWHC 3451 (Comm) (13 December 2018)

HPOR Servicos De Consultoria Ltda v Dryships Inc & Anor [2018] EWHC 3451 (Comm) (13 December 2018)

Forfeiture of contractually agreed remuneration is appropriate where an agent commits serious breaches of fiduciary duty that go to the root of the agency relationship, including deliberate concealment of material conflicts and corruption, regardless of valuable services rendered. Account of profits does not apply...

Source-derived case information.

Citation
[2018] EWHC 3451 (Comm)
Parties
Claimant: HPOR Servicos de Consultoria Ltda; Defendant: DryShips Inc.; Defendant: Ocean Rig UDW Inc.
Jurisdiction
England and Wales
Judgment Date
13 December 2018
Procedural Posture
Appeal Under Arbitration Act 1996, S.69 / Judgment on Appeal
Outcome
Appeal allowed in part; Tribunal erred in applying account of profits but correctly ordered forfeiture of remuneration.
Legal Topics
Forfeiture of Remuneration, Breach of Fiduciary Duty, Account of Profits, Agency, Remedies for Breach of Fiduciary Duty
Commercial Law Arbitration Equity Forfeiture of Remuneration Breach of Fiduciary Duty Account of Profits Agency Remedies for Breach of Fiduciary Duty

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Summary, issues, holding and outcome

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Parties

HPOR Servicos de Consultoria Ltda

Claimant

DryShips Inc.

Defendant

Ocean Rig UDW Inc.

Defendant

Procedural Posture

Appeal Under Arbitration Act 1996, S.69 / Judgment on Appeal

Legal Issues

  1. 1 Whether an agent must forfeit contractually earned remuneration as remedy for breach of fiduciary duty
  2. 2 Whether account of profits applies to contractually agreed remuneration
  3. 3 Appropriateness of forfeiture in cases of serious breach

Ratio Decidendi

Forfeiture of contractually agreed remuneration is appropriate where an agent commits serious breaches of fiduciary duty that go to the root of the agency relationship, including deliberate concealment of material conflicts and corruption, regardless of valuable services rendered. Account of profits does not apply to contractually agreed remuneration in these circumstances.

Court Disposition

Appeal allowed in part; Tribunal erred in applying account of profits but correctly ordered forfeiture of remuneration.

Orders

  • Forfeiture of HPOR's remuneration upheld for serious breach of fiduciary duty.
  • Repayment of fees previously paid to HPOR ordered.