Apex Global Management Ltd & Anor v Global Torch Ltd

The Court of Appeal dismissed an appeal against the refusal to grant a stay of execution of the trial judge's judgment ordering the appellants to account to the respondent for $6.7 million under the true share purchase agreement (SPA). The court applied civil procedure rules on jurisdiction challenges (CPR Part 11) and the principles in Denton regarding relief from sanctions to conclude the appellants' challenge was too late. It also held that the appellants had been debarred from defending the proceedings and therefore lacked locus to seek a stay, had submitted to the jurisdiction of the English courts (or waived reliance on the jurisdiction clause) by their conduct, and that other factors (including dishonest and unconscionable conduct, the impracticality and pointlessness of re‑litigation in Saudi Arabia, and absence of any real prospect of defence) justified refusing a stay.

Background and nature of the application. The respondent obtained judgment in the High Court on 11 November 2015 awarding it $6.7 million in respect of sums received on sale of shares under a share purchase agreement (the Al Shehri claim). The appellants applied for a stay of execution on the ground that the respondent's version of the SPA contained an exclusive jurisdiction clause in favour of the Saudi courts. The judge refused the stay on 30 November 2015 and the appellants appealed.

Procedural posture. The appeal was from the Companies Court (Hildyard J). Relevant background facts included: two consolidated s.994 Companies Act 2006 petitions; the appellants' repeated non‑compliance with adjournment conditions; an unless order, striking out and debarment for failure to comply; and the judge's finding that the respondent's version of the SPA was genuine, giving rise to the Al Shehri claim.

Issues framed by the court. The Court of Appeal considered (i) whether the appellants' application to stay was out of time and should be dealt with under CPR Part 11 and the Denton principles; (ii) whether the judge applied the correct approach to exclusive jurisdiction agreements and whether the clause applied to the Al Shehri claim; and (iii) whether other factors (lack of standing after debarring, submission to jurisdiction/waiver, misconduct, impracticality and pointlessness of litigating in Saudi Arabia) justified refusal of a stay.

Reasoning and disposition. The court held that the application was brought too late. Failure to apply promptly under CPR Part 11 meant the appellants had to seek relief from sanctions, governed by Denton; no adequate explanation for delay was shown and the judge was entitled to refuse relief. The court further held that the appellants, having been struck out and debarred, lacked locus in the circumstances to seek a stay; that their prior conduct amounted to submission to the English jurisdiction or waiver of the clause; and that the appellant's dishonesty and unconscionable conduct, absence of any realistic defence, and lack of assurance they would submit to Saudi jurisdiction made a stay unjust and impractical. Although the court accepted in theory the Al Shehri claim fell within the wording of the jurisdiction clause, the combination of procedural and discretionary factors justified refusal of a stay. The appeal was dismissed.

Appeal dismissed. The Court of Appeal held the stay application was made too late and should have been brought promptly under CPR Part 11 (or sought relief from sanctions under Denton); the appellants had been struck out and debarred and thereby lacked locus to seek a stay in the circumstances; their conduct amounted to submission to the English courts or waiver of the jurisdiction clause; and additional discretionary factors (dishonesty/unconscionability, impracticality and pointlessness of re‑litigation in Saudi Arabia, absence of any real defence) made it just to refuse a stay notwithstanding that the Al Shehri claim fell within the wording of the exclusive jurisdiction clause.

Appeal from the High Court of Justice, Chancery Division, Companies Court (Hildyard J). Principal judgment underlying the stay application reported at [2015] EWHC 3269 (Ch) (11 November 2015); stay application refused by Hildyard J on 30 November 2015; appeal heard in the Court of Appeal resulting in this judgment [2017] EWCA Civ 315 (28 April 2017).