BAS Capital Funding Corp & Ors v Medfinco Ltd & Ors [2003] EWHC 1798 (Ch) (25 July 2003)

BAS Capital Funding Corp & Ors v Medfinco Ltd & Ors [2003] EWHC 1798 (Ch) (25 July 2003)

The English court has jurisdiction to hear the claim under the non-exclusive jurisdiction clause in the shareholders' agreement, but the existence of parallel Maltese proceedings and the management of the company by a Board of Administration under Maltese court auspices are relevant to the exercise of discretion. The claimants have raised serious issues to be tried regarding breach and frustration of the agreement, but the balance of convenience does not justify the grant of the wide interim injunction sought, given the safeguards in place in Malta and the risk of undue interference with the company's operations.

Citation
[2003] EWHC 1798 (Ch)
Parties
Claimant: BAS Capital Funding Corporation; Claimant: Deutsche Bank AG London; Claimant: Paine Webber Capital Inc; Claimant: PW Exe LP; Claimant: PW Partners 1999 LP; Defendant: Medfinco Limited; Defendant: Abacus Holdings Limited; Defendant: Andreas W Gerdes; Defendant: HTC Inc; Defendant: iWorld Group Europe Holdings Limited
Jurisdiction
England and Wales
Judgment Date
25 July 2003
Procedural Posture
Commercial Chancery / Interim Application for Injunction and Jurisdictional Challenge
Outcome
Jurisdiction upheld; interim injunction refused
Legal Topics
Shareholders' Agreements, Jurisdiction Clauses, Interim Injunctions, Breach of Contract, Frustration of Contract, Minority Shareholder Protection, Trust Law, Corporate Governance
Commercial Law Equity and Trusts Company Law Conflict of Laws Shareholders' Agreements Jurisdiction Clauses Interim Injunctions Breach of Contract +4 more

Case Brief

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Parties

BAS Capital Funding Corporation

Claimant

Deutsche Bank AG London

Claimant

Paine Webber Capital Inc

Claimant

PW Exe LP

Claimant

PW Partners 1999 LP

Claimant

Medfinco Limited

Defendant

Abacus Holdings Limited

Defendant

Andreas W Gerdes

Defendant

HTC Inc

Defendant

iWorld Group Europe Holdings Limited

Defendant

Procedural Posture

Commercial Chancery / Interim Application for Injunction and Jurisdictional Challenge

Legal Issues

  1. 1 Whether the English court has jurisdiction under a non-exclusive jurisdiction clause in a shareholders' agreement governed by English law
  2. 2 Whether claimants are entitled to interim injunctive relief to protect company assets pending trial
  3. 3 Whether the claimants have a serious issue to be tried regarding frustration or repudiatory breach of the shareholders' agreement

Ratio Decidendi

The English court has jurisdiction to hear the claim under the non-exclusive jurisdiction clause in the shareholders' agreement, but the existence of parallel Maltese proceedings and the management of the company by a Board of Administration under Maltese court auspices are relevant to the exercise of discretion. The claimants have raised serious issues to be tried regarding breach and frustration of the agreement, but the balance of convenience does not justify the grant of the wide interim injunction sought, given the safeguards in place in Malta and the risk of undue interference with the company's operations.

Court Disposition

Jurisdiction upheld; interim injunction refused

Orders

  • The English court will not decline jurisdiction under the non-exclusive jurisdiction clause.
  • The application for an interim injunction requiring the payment of $22 million into a joint account is refused.