Koza Ltd & Anor v Akçil & Ors

Koza Ltd & Anor v Akçil & Ors

Funding the proposed ICSID arbitration does not fall within the ordinary and proper course of business, nor are there good grounds to vary the undertaking to permit it, due to serious doubts about the authenticity of the SPA, lack of demonstrated benefit to Koza Limited, and alternative funding sources. Expenditure on PR consultants is within the ordinary and proper course of business, provided it is for the company's benefit. Remuneration for Mr Ipek as CEO is permissible but only up to £250,000 per annum; the proposed higher amount is excessive and not justified on the evidence.

Parties
Claimant: Koza Limited; Claimant: Hamdi Akin Ipek; Defendant: Mustafa Akçil; Defendant: Hayrullah Dağistan; Defendant: Mahmut Hikmet Keleş; Defendant: Hamza Yanik; Defendant: Arif Yalçin; Defendant: Koza Altin İşletmeleri AS
Jurisdiction
England and Wales
Judgment Date
16 November 2017
Procedural Posture
Civil (company Law/interim Application) / Ruling on Application to Permit/declare Expenditure Under Undertaking
Outcome
Application dismissed in part, allowed in part
Legal Topics
Freezing Injunctions, Interim Undertakings, Corporate Governance, Directors' Duties, Variation of Undertakings
Company Law Civil Procedure Freezing Injunctions Interim Undertakings Corporate Governance Directors' Duties Variation of Undertakings

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Parties

Koza Limited

Claimant

Hamdi Akin Ipek

Claimant

Mustafa Akçil

Defendant

Hayrullah Dağistan

Defendant

Mahmut Hikmet Keleş

Defendant

Hamza Yanik

Defendant

Arif Yalçin

Defendant

Koza Altin İşletmeleri AS

Defendant

Procedural Posture

Civil (company Law/interim Application) / Ruling on Application to Permit/declare Expenditure Under Undertaking

Legal Issues

  1. 1 Whether proposed classes of expenditure fall within 'ordinary and proper course of business' under an undertaking given to the court
  2. 2 Whether the undertaking should be varied to permit such expenditure
  3. 3 Whether funding an ICSID arbitration, PR consultants, and CEO remuneration are proper corporate expenses

Ratio Decidendi

Funding the proposed ICSID arbitration does not fall within the ordinary and proper course of business, nor are there good grounds to vary the undertaking to permit it, due to serious doubts about the authenticity of the SPA, lack of demonstrated benefit to Koza Limited, and alternative funding sources. Expenditure on PR consultants is within the ordinary and proper course of business, provided it is for the company's benefit. Remuneration for Mr Ipek as CEO is permissible but only up to £250,000 per annum; the proposed higher amount is excessive and not justified on the evidence.

Court Disposition

Application dismissed in part, allowed in part

Orders

  • Application to permit expenditure on ICSID arbitration dismissed
  • Application to permit expenditure on PR consultants allowed, subject to compliance with the undertaking