AC Network Holding & Ors v Polymath Ekar SPV1 & Ors [2023] ADGMCA 0002 (17 November 2023)

AC Network Holding & Ors v Polymath Ekar SPV1 & Ors [2023] ADGMCA 0002 (17 November 2023)

ADGM Courts, when applying English law under the Application of English Law Regulations 2015, must apply the English doctrine of precedent. The current binding authority is The Racing Partnership v Done Bros Ltd, which holds that knowledge of unlawfulness is not required for the tort of unlawful means conspiracy. The judge below erred in not following this authority and in requiring proof of knowledge of unlawfulness. The Drag Along Notice breached the Shareholders’ Agreement, and the Fifth Respondent is jointly and severally liable for damages.

Citation
[2023] ADGMCA 0002
Parties
First Appellant: AC Network Holding Limited; Second Appellant: AC Pool Holding Limited; Third Appellant: Khalil Mohamed Binladin; Fourth Appellant: Dalia Khalil Binladin; Fifth Appellant: Horizon Light Investments LLC; First Respondent: Polymath Ekar SPV1; Second Respondent: Polymath Ekar SPV2; Third Respondent: Vilhelm Nikolai Paus Hedberg; Fourth Respondent: Ravi Nagesh Bhusari; Fifth Respondent: Ali Hashemi; Sixth Respondent: Lux 2 Invco; Seventh Respondent: Clara Formations Limited; Eighth Respondent: Ekar Holding Limited
Jurisdiction
United Arab Emirates
Judgment Date
17 November 2023
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Shareholders’ Agreement, Drag Along Rights, Unlawful Means Conspiracy, Doctrine of Precedent, Inducing Breach of Contract
Commercial Law Tort Law Contract Law Shareholders’ Agreement Drag Along Rights Unlawful Means Conspiracy Doctrine of Precedent Inducing Breach of Contract

Case Brief

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Parties

AC Network Holding Limited

First Appellant

AC Pool Holding Limited

Second Appellant

Khalil Mohamed Binladin

Third Appellant

Dalia Khalil Binladin

Fourth Appellant

Horizon Light Investments LLC

Fifth Appellant

Polymath Ekar SPV1

First Respondent

Polymath Ekar SPV2

Second Respondent

Vilhelm Nikolai Paus Hedberg

Third Respondent

Ravi Nagesh Bhusari

Fourth Respondent

Ali Hashemi

Fifth Respondent

Lux 2 Invco

Sixth Respondent

Clara Formations Limited

Seventh Respondent

Ekar Holding Limited

Eighth Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether ADGM Courts are bound by English Court of Appeal precedent under the Application of English Law Regulations 2015
  2. 2 Whether knowledge of unlawfulness is required for the tort of unlawful means conspiracy under English law
  3. 3 Whether the Drag Along Notice breached the Shareholders’ Agreement

Ratio Decidendi

ADGM Courts, when applying English law under the Application of English Law Regulations 2015, must apply the English doctrine of precedent. The current binding authority is The Racing Partnership v Done Bros Ltd, which holds that knowledge of unlawfulness is not required for the tort of unlawful means conspiracy. The judge below erred in not following this authority and in requiring proof of knowledge of unlawfulness. The Drag Along Notice breached the Shareholders’ Agreement, and the Fifth Respondent is jointly and severally liable for damages.

Court Disposition

Appeal allowed

Orders

  • The Appeal is allowed.
  • The Fifth Respondent (Ali Hashemi) is jointly and severally liable with the First to Fourth Defendants for damages in the total sum of US$779,500, plus simple interest at 5% per annum from 27 April 2020.