Apex Global Management Ltd & Anor v FI Call Ltd & Ors

A petition under section 994 of the Companies Act 2006 requires proof that the complaint concerns the company’s affairs, causes prejudice to the petitioner as a member, and is unfair. Unfairness is assessed judicially by reference to agreed terms and equitable constraints; a breakdown in trust and confidence alone is insufficient. Section 994 and the just and equitable winding-up jurisdiction are parallel, not coterminous, remedies. The court’s powers under section 996 are broad, but winding-up should ordinarily proceed under the specific winding-up provisions. The court should decide only facts necessary to determine the pleaded relief, not allegations advanced merely for personal vindication.

The proceedings arose from a failed joint venture conducted through Fi Call Limited. The parties brought cross-petitions under sections 994 to 996 of the Companies Act 2006, alleging misconduct, misuse of company funds and unfairly prejudicial conduct.

After repeated procedural defaults, the Apex parties were debarred from defending Global Torch’s counterclaim. The remaining issues concerned Global Torch’s claim for a just and equitable winding-up, an account of monies allegedly misappropriated, rectification of the share register, Prince Abdulaziz’s application concerning a default judgment, and Apex’s attempt to revive its struck-out petition.

The central questions were whether the statutory and winding-up remedies were established, what monetary relief could properly be granted, and which disputed matters required adjudication.

1. Disposition. Global Torch established the need for a winding-up on the just and equitable ground. Fi Call Limited was no longer a viable business, its goodwill had been destroyed, and the relationship between the joint venturers had irretrievably broken down. The share register was to be rectified to reflect the exercise of the relevant share option.
2. Section 994 requires proof of company conduct or an act or omission of the company, prejudice to the petitioner in its capacity as a member, and unfairness. Shareholder conduct between themselves is outside the section unless it translates into conduct of the company’s affairs. Prejudice need not be financial. Unfairness must be assessed judicially by reference to agreed terms and equitable constraints arising from the relationship.
3. A breakdown in trust and confidence is not, by itself, enough for section 994 relief. It must result from a breach of legal right or equitable constraint affecting the company’s affairs. The court’s powers under section 996 are broad and may include reimbursement to the company or equitable compensation, but winding-up should ordinarily be pursued under the specific winding-up jurisdiction.
4. The section 994 and just and equitable jurisdictions run in parallel. A winding-up is a remedy of last resort. The court must consider alternative remedies, whether the petitioner has sufficient interest, and whether seeking liquidation is unreasonable or collateral. Global Torch had sufficient interest because recovery claims supplied a tangible benefit.
5. The court refused to permit Global Torch to amend its counterclaim to seek Apex’s share of the Al Masoud monies. Global Torch had no proprietary or personal right to those monies and could not act as Prince Abdulaziz’s proxy. The issue did not itself concern an act or omission of Fi Call Limited or the conduct of its affairs.
6. The serious accounting deficiencies, unexplained transactions and irregular management of Fi Call Limited constituted unfairly prejudicial conduct and supported the winding-up. Apex and Mr Almhairat were ordered to account for US$6.7m, alternatively pay damages, with interest, and to repay Fi Call Limited US$100,000 plus interest.
7. The Al Masoud issue was not finally determined. Because the evidence was incomplete and one-sided, the monies held by solicitors were to remain so held. A further hearing was directed after the liquidator had gathered records, with the Set Aside application to be heard concurrently or consecutively. The allegations of threats, bribery and money laundering were not adjudicated because they were unnecessary to the relief granted.

First-instance decision. The judgment records earlier interlocutory appeals in the same proceedings, including decisions reported at [2013] EWCA Civ 819 and [2014] EWCA Civ 1106, together with an appeal to the Supreme Court. No appeal from this judgment is stated.