Andrew Tinkler & Anor v Stifel Nicolaus Europe Ltd & Ors

A case-management stay to await parallel proceedings should be granted only where it is in the interests of justice. Such stays are rare and require a powerful or compelling reason. The court must weigh the overlap between the proceedings, the likely duration of the external process, prejudice to each party, whether the other process will resolve the issues, and the need for an expeditious hearing.

Where a claimant seeks a stay after commencing proceedings, delay is a significant factor. An open-ended stay is inappropriate where the external investigation may take years. The court may also consider whether the underlying claim is abusive and should instead be struck out.

The claimant brought an unlawful means conspiracy claim against four active defendants concerning alleged concert-party disclosures, manipulation of voting rights and conduct surrounding an annual general meeting. The claimant subsequently applied to stay the action pending an investigation by the Takeover Panel into related alleged breaches of the Takeover Code.

The stay application was made shortly before listed strike-out applications. The claimant relied on factual and legal overlap and possible prejudice if the claim were struck out before the Panel’s investigation concluded. The defendants opposed the stay, relying on delay, the uncertain duration of the investigation and their entitlement to an expeditious determination.

The issue was whether the interests of justice justified staying the action pending the Panel’s investigation.

Application dismissed. The court refused to stay the action and proceeded to hear the defendants’ strike-out applications.

1. Applying Athena Capital Fund v Secretariat of the State for Holy See [2022] EWCA Civ 1051, the single question was whether a stay was in the interests of justice. A stay to await parallel proceedings is exceptional because the ordinary function of the court is to decide cases and access to justice is fundamental. The court therefore required a powerful reason for departing from the usual course.

2. The application was made very late. Although the claimant had needed to issue and serve the claim before limitation expired, he could have sought a stay earlier. The court was also faced with a binary choice between granting the stay and hearing the strike-out applications.

3. The court would have considered a short stay if the Panel’s decision had been imminent, but it would not grant an open-ended stay. There was no sufficient evidence that the investigation would conclude within one or two years.

4. There was no very significant overlap between the Panel’s investigation and the pleaded conspiracy claim. The Panel’s findings would not bind the court under the rule in Hollington v Hewthorn. Relevant documents obtained through the investigation could be disclosed in the action, and the court could consider likely disclosure when determining the strike-out applications.

5. The claimant was not shown to be without a remedy if the stay were refused. The Panel could award compensation for a breach of Rule 9, but that was materially different from the claimant’s pleaded complaint that the defendants had conspired to take control of the company and manipulate the AGM.

6. The court accepted the guidance in Klöckner Holdings GmbH v Klöckner Beteiligungs GmbH [2005] EWHC 1453 (Comm), apart from the principle concerning whether the other proceedings would bind the parties. A serious allegation entitled the defendants to an expeditious hearing. If the claim was abusive or a collateral attack on earlier decisions, it should be dismissed rather than stayed.

7. The decisive consideration was that the claim might be abusive and should be scrutinised through the strike-out applications. The claim was also stale and should be resolved as soon as possible.