Blomqvist v Zavarco Plc

The court determined that it had jurisdiction to hear both actions brought by Mr Blomqvist under the Companies Act 2006 (notably sections 996 and 125 and the statutory scheme for member requisitions in sections 303–305). The judge held that each claim fell within the exclusive jurisdiction conferred by Article 24 of Council Regulation No. 1215/2012 because the proceedings were principally concerned with corporate governance matters: the convocation of a general meeting and the validity of entries in the company register. On the alternative basis that jurisdiction arose only under Article 4, the court refused the company’s application to stay the English proceedings under Article 34 because the statutory preconditions (in particular for the rectification claim) were not satisfied and, in any event, a stay was not necessary for the proper administration of justice.

This is a first instance judgment deciding a jurisdictional dispute in relation to two English actions brought by Mr Peter Ola Blomqvist against Zavarco plc. The claimant sought (i) a declaration under section 996 that his notice convening a general meeting under section 305 (following the directors' alleged failure to comply with a section 303 request) was valid, and (ii) an order under section 125 deleting an entry recording Open Fibre Sdn Bhd as the holder of 7 billion shares in the company register.

Background facts:

• The company is a UK public company formed in 2011 and listed on the Frankfurt Stock Exchange; Mr Blomqvist was registered as holder of 100 million shares (recorded as fully paid) and had served a requisition under section 303.
• The company commenced proceedings in Kuala Lumpur against several former directors and Mr Blomqvist alleging the relevant historic allotments were unpaid and that his requisition was invalid; the company then applied in England to stay both actions on grounds of lis alibi pendens and/or forum non conveniens relying on Article 34 of the Recast Regulation.

Issues framed by the court:

• Whether the English courts had exclusive jurisdiction under Article 24 of the Recast Regulation for either or both actions.
• If not, whether a stay of the English proceedings was justified under Article 34 because related proceedings were pending in Malaysia.
• Alternatively, whether the English court should exercise case-management powers to stay the claims.

Reasoning and outcome:

• The judge analysed Article 24 narrowly and purposively, concluding that both claims were within its ambit because they were closely connected with internal company law and corporate decision-making: the meeting-convocation claim related to governance under sections 303–305 and the rectification claim related to the validity of entries in the register (section 125).
• The court rejected the company’s argument that decisive issues were purely contractual (deriving from the Share Purchase Agreement) and therefore outside Article 24, explaining that a plea on payment under the SPA would be a preliminary or collateral matter and could not displace the Article 24 character of the claims (drawing on the logic of Berliner Verkehrsbetriebe v JP Morgan Chase Bank and related authorities).
• Even assuming jurisdiction derived from Article 4, the judge held that the cumulative conditions for a stay under Article 34 were not satisfied: the rectification claim did not involve a risk of irreconcilable judgments with the Malaysian proceedings; and for the meeting-convocation claim the requirement that a stay be necessary for the proper administration of justice (Article 34(1)(c)) was not met given the significance of the company’s seat, the public consequences for third-party shareholders and the practical difficulties of conferring determinations about internal UK company matters to a foreign court.
• The court also rejected reliance on general case-management powers to impose a stay, emphasising that the Recast Regulation precludes surrendering Article 24 jurisdiction or, subject to Article 34, part of the court’s jurisdiction to a non‑Member State forum.

Accordingly the company’s applications to stay the English proceedings were refused.

The company’s applications for a stay of both English actions were refused. The court held that it had exclusive jurisdiction under Article 24 of Council Regulation No. 1215/2012 because both claims concerned matters of internal corporate law and the validity of entries in the register; alternatively, even if jurisdiction arose only under Article 4, the cumulative preconditions of Article 34 for a stay were not satisfied and a case-management stay was inappropriate.