Port Kaiser Oil Terminal S.A. v Rusal Alpart Jamaica (A Partnership)

• Jurisdiction: Jamaica
• Judge: Batts J
• Judgment Date: 07 April 2016
• Neutral Citation: [2016] JMCC Comm 10
• Docket Number: CLAIM NO. 2015CD00021
• Court: Supreme Court (Jamaica)
• Date: 07 April 2016

[2016]JMCC Comm 10

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE COMMERCIAL DIVISION

CLAIM NO. 2015CD00021

Between

Port Kaiser Oil Terminal S.A.

Claimant

and

Rusal Alpart Jamaica (A Partnership)

Defendant

Nigel Jones , Dr. Velma Brown , Kashima Moore and April Grapine-Gayle instructed by Caribbean Legal Suite for Claimant

Michael Hylton Q.C. and Anna Gracie instructed by Rattray Patterson Rattray for the Defendant

Injunction — Mareva — Ex Parte Application — Whether full disclosure — Inter Partes Hearing — Undertaking as to damages — Whether evidence of urgency and imminent dissipation satisfactory — Whether Notice of Application ought to have been served — Costs — Whether Full Indemnity basis appropriate.

IN CHAMBERS

COR: Batts J,

1 On the 7 ^th April, 2016 I made the Orders noted at paragraph 31 below. I promised at that time to put my reasons in writing. This judgment fulfils that promise.

2 This is the inter partes hearing consequent on the grant ex parte of a freezing order on the 21 ^st March, 2016. The Defendant has applied to discharge that order. The Claimant has also filed a renewed application for a freezing order which relies substantially on the same evidence filed in support of the original application.

3 The Claimant relies on:

• (a) An affidavit of urgency by Manuel Sanmiguel dated 24 ^th February, 2016 and filed on the 1 ^st March, 2016.

• (b) An affidavit of Manuel Sanmiguel dated 24 ^th February, 2016 and filed on the 1 ^st March, 2016.

• (c) The second affidavit of Manuel Sanmiguel dated 5 ^th April 216 and filed on the 5 ^th April, 2016.

• (d) The affidavit of Velma Brown dated 18 ^th March 2016 and filed on the 18 ^th March, 2016.

• (e) The affidavit of Kashina K. Moore dated 21 ^st March 2016 and filed on the 21 ^st March, 2016.

• (f) The second Affidavit of Kashina K. Moore dated 4 ^th April 2016 and filed on the 5 ^th April, 2016.

• (g) The third Affidavit of Kashina K. Moore dated 4 ^th April 2016 and filed on the 4 ^th April,2016

4 The Defendant relies on;

• (a) The first Affidavit of Michalene Lattore dated 30 ^th March 2016 and filed on the 30 ^th March 2016.

• (b) The second Affidavit of Michalene Lattore dated 30 ^th March 2016 and filed on the 30 ^th March 2016.

• (c) The second Affidavit of Bevan Shirley dated 5 ^th April, 2016 and filed on the 5 ^th April 2016.

5 The Claimant and the Defendant each filed written submissions and a bundle of authorities pursuant to directions given by the court on the 31 ^st March 2016. The time for oral submissions was in consequence shortened. I am indeed grateful to Counsel for their assistance. The fact that in this judgment I do not repeat the detailed evidence or the respective submissions has more to do with my desire to be concise and is no reflection on relevance or quality.

6 The Claim was filed on the 24 ^th February 2015 for:

• (a) A declaration that the Claimant is not obliged to pay rent until the storage tanks and the Port Area are fully operational as per the terms of the lease agreement;

• (b) An order directing that the Defendant removes forthwith its Petroleum products from the storage tanks which are the subject matter of the lease agreement;

• (c) Damages for breach of contract;

• (d) Interest; and

• (e) Costs.

That Claim was expanded by an Amended Claim and Amended Particulars of Claim filed on the 16 ^th February 2016. In its amended form the Claim reads:

1

A Declaration that the contract has been unlawfully terminated by the Defendant; 2. Damages for breach of contract in relation to loss of profits in excess of US$398,594,827.00; 3. Alternatively damages for breach of contract in relation to expenses incurred in excess of US$1,240,434.28; 4. Interest; and 5. Costs.

7 A Defence and Counterclaim was filed on the 10 ^th March 2015 and this was amended on 29 ^th March 2016. More will be said in this regard, suffice it to say, that although there had been a close of pleadings since the 10 ^th March 2015 neither mediation nor case management orders have been made in the matter.

8 On the 21 ^st March, 2016 upon an ex parte application, my sister the Honourable Justice Dunbar—Green restrained the Defendants for 14 days from:

‘removing or taking any steps to dispose of, transfer, withdraw, charge, diminish the value of, part with possession of or in any way howsoever deal with any of their property or assets, whether in their own name or by nominee(s) and whether held solely, jointly, beneficially and in any way whatsoever on their behalf and wherever the same may be situated within the jurisdiction, said assets and property including (but not limited to) bank accounts, investments funds, stocks and shares, real estate and personal property up to a maximum of US$ 398,594,827.00’

Paragraph 2 of the Order of the Honourable Justice Dunbar — Green restrained the Defendant for a similar 14 day period from:

‘removing or taking any steps including disposing of, transferring, withdrawing, charging, diminishing the value of, parting with possession of or in any way howsoever dealing with the proceeds of sale from property known as ALL THAT parcel of land part of Lodge situated on the south coast of Jamaica, just south of Bull Savannah in the parish of Saint Elizabeth held in any account whether in the name of any of the Defendants or their Attorneys-at-law Rattray Patterson Rattray.’

The order made provision for the usual disclosure and provided:

‘b. The Defendant may make such payments as may be necessary in respect of their reasonable legal costs in defending this action and are at liberty to expend such sum or sums for ordinary and proper company expenses as may be reasonable and any other payment with the consent of the Claimant's Attorney-at-law, in any case from a current account or any other source the identity of which has first been notified by them in writing to the Claimant's Attorneys-at-law and their written approval first obtained in relation to such disbursement. To pay the reasonable costs incurred by any party to which notice of this Order may be given in ascertaining whether any assets to which this Order applies are within their power, possession, custody or control and in complying with this order and to indemnify any such third party against any liability which may reasonably flow from such compliance.’

The Claimant gave the usual undertaking as to damages and this was also reflected in the order.

9 The Defendant's counsel has been critical of the Claimant for obtaining this order for the reasons and in the manner in which they did. The Defendant therefore seeks to have the order discharged and any application for a further such order refused.

10 The rules relating to freezing orders (popularly called Mareva Injunctions) are to be found in Part 17 of the Civil Procedure Rules 2002:

Rule 17.1 ‘(1) The Court may grant interim remedies including

(a) to (e)

(f) an order (referred to as a ‘freezing order’)—

(i) restraining a party from removing from the jurisdiction assets located there; and /or

(ii) restraining a party from dealing with any assets whether located within the jurisdiction or not;’

Rule 17.3 provides that applications for interim remedies may be made without giving notice if it appears to the Court that there are good reasons for not giving notice. These reasons must be stated as evidence in support of the application.

Rule 17.4 deals specifically with freezing and other interim orders as follows:

17.4 (4)

‘The court may grant an interim order for a period of not more than 28 days (unless any of these Rules permits a longer period) under this rule on an application made without notice if it is satisfied that —

(a) in a case of urgency, no notice is possible; or

(b) that to give notice would defeat the purpose of the application.’

For completeness and in relation to a matter to which I will return, Rule 17.10 provides:

‘On hearing any application under this Part, the court may exercise any of its case management powers under Parts 26 and 27 and may in particular give directions for an early trial of the claim or any part of the claim.’

11 A cursory reading confirms that Mr. Hylton Q.C. is correct that applications without notice are to be the exception rather than the rule. It is of cardinal importance that the Claimant demonstrates that either service of notice is not possible or that such service would defeat the purpose of the application. The authority of National Commercial Bank v Olint [2009] UKPC 16 was relied on to buttress that point.

12 The documentation filed and attached to the affidavit in support of the ex parte application does not support the bald assertion in the affidavit that:

‘26. That this application is being made without notice on the basis that if the Defendant was made known of this application it may lead to a speedy consummation of the sale agreement which would prejudice the Claimant.’ [Affidavit of Manuel Sanmiguel filed of the 1st March 2016]

Neither do they support the following assertions:

‘3. That the Defendant is currently finalizing the sale of the Alpart plant to a top Chinese Company, Jiuquan Iron and Steel (Group) Company (JISCO).

4. That the negotiation process has been going on for month (sic) now and I verily believe that the sale will soon be complete. A copy of the newspaper article dated November 5 ^th , 2015 is attached hereto and marked as MS-1.

5. That the most recent newspaper article dated February 12, 2016 shows that the Defendant and JISCO has agreed on a sale price and so I verily believe that the sale will soon be complete. A copy of the article dated February 12, 2016 is attached hereto and marked MS-2.’ [Affidavit of Urgency sworn to by Manuel Sanmiguel, filed on the 1st...