Claim No: CR-2024-004856 - [2025] EWHC 2304 (Ch)

ARE THERE GROUNDS FOR JUST AND EQUITABLE WINDING-UP?

I regard the core argument put forward by Koza Altin as supporting the Petition as being that set out in paragraph 69 of its Points of Claim. This is to the effect that the Company is in a position of deadlock in that Koza Altin and Mr Ipek have been and continue to be unable to agree about the conduct of the Company’s affairs, with the result that the holder of all the economic rights in the Company does not have control of it, and the person who does have control of it has no material economic interest in it, has so far spent or caused it to spend most of its money, and is antagonistic towards the economic owner.

This assertion is particularised in the following sub-paragraphs of paragraph 69. I summarise below the assertions made in the sub-paragraphs, together with what I am able to say about them on summary judgment.

Subparagraph (1) asserts that Koza Altin is unable to take any steps to exercise powers that are covered by Article 26. I agree that this is self-evidently true as a result of the Interim Regime and is overwhelmingly likely to remain so unless and until the 2016 Claim is determined.

Subparagraph (2) asserts that, if Koza Altin is successful in the 2016 Claim it will be entitled to full control and the deprivation of control that Mr Ipek has caused it to suffer since the commencement of the 2016 Claim would have been unlawful. The first part of this clearly is correct. The second part of this has not been argued before me and I make no determination about it.

Subparagraph (3) asserts that if Koza Altin is not successful in the 2016 Claim the position described in subparagraph (1) would continue. This also is clearly correct.

Subparagraph (4) asserts that Koza Altin, Mr Ipek and the Company have engaged in significant and protracted litigation in respect of the management of the Company and have been unable to agree how the resources held by the Company should be expended. This proposition, I consider, cannot seriously be disputed. It may be, and is being, disputed who is at fault in relation to individual matters over which the Koza Altin and Mr Ipek have fallen out, but it is a fact that the parties have been at loggerheads.

Further, it is clear that this dispute has at its core a fundamental issue. Koza Altin does not want to continue its exposure to the business of the Company, certainly while it remains under the stewardship of Mr Ipek. Koza Altin has attempted through the EPA to bring about a sale of the Company’s principal asset. Mr Ipek has sought to block that sale. As I discuss below, he may have had good reasons for that given the terms of the EPA, but what is clear is that instead of trying to engage with Koza Altin and to try to explain his concerns and to see if they could be overcome, for example by ensuring that the proceeds of the sale would come to Koza Ltd and/or be held on trust for it and/or that any benefit to Koza Altin would be made in a lawful way (for example as a dividend or a lawful return of capital) he has merely blocked the position. This does evidence fundamental differences between him and Koza Altin.

Subparagraph (5) asserts that the available resources of the Company have rapidly diminished since the Company was originally capitalised; the Company is not generating any income from its mining projects and its projects appear to be dormant; the Company will be unable to generate income from the Sam Alaska Project without significant further capital expenditure which is not available to the Company and there is a real prospect of the Company running out of funds before the 2016 Claim is resolved. I do not consider that there is any serious challenge to any of these facts, except that:

Subparagraph (6) asserts that Mr Ipek has refused to comply with Special Resolutions and to provide information to be given to Koza Altin under those resolutions. As a statement of fact this is not in dispute, although as I will discuss, Mr Ipek argues that he had good reasons to refuse to comply with the Special Resolutions.

Subparagraph (7) asserts that the Interim Regime is, and has been, complex to implement, is generative of disputes and places a significant resource burden on Koza Altin, Mr Ipek and the Company. I do not consider any serious argument could be advanced against this contention.

Mr Sheehan argues that the Interim Regime will come to an end when the 2016 Claim is determined (which could be done on an expedited basis) and therefore this position will not continue forever. This likely would be true if the 2016 Claim is resolved in favour of Koza Altin - no doubt Koza Altin would take the first opportunity to terminate Mr Ipek’s directorship and there would be no further such disputes. However if the 2016 Claim is resolved in Mr Ipek’s favour, then, it is fanciful to believe either that Mr Ipek will be happy to run the Company that accords with the wishes of Koza Altin or that Koza Altin will be happy to let Mr Ipek exercise the powers of a sole director as he sees fit without interference and accordingly it seems overwhelmingly likely that in these circumstances the parties will continue their frequent recourse to the court.

Subparagraph (8) asserts that the position that Mr Ipek has taken in the 2016 and 2021 Claims makes it clear that he is antagonistic towards Koza Altin. I do not think there is any doubt that Mr Ipek is antagonistic towards Koza Altin under its current management. Mr Ipek considers that he has been unfairly deprived of his interests in the Koza Altin Group for political reasons and that the current management of Koza Altin represents the government of Turkey that has brought this about. I consider that this antagonism is likely to continue at least until there is a change of the government in Turkey and a change in the management of Koza Altin.

These propositions all lead up to subparagraph (9) which asserts that the parties are therefore:

“… In a situation in which the 100% economic owner of the Company does not have control of it, and the person who does have control of it has no economic interest in it (either at all or that is more than nominal), disagrees with the 100% economic owner as to how to manage it and its resources, has so far spent or caused it to spend most of its money, is continuing to spend or cause it to spend its money, and is antagonistic towards the economic owner.”

Subparagraph (9) may be broken down into the following key propositions:

I have already discussed the matters summarised at points (v), (vi and (vii) above and consider them to be sufficiently well established be relied upon in the context of a summary judgment. However the points concerning control and economic interests are disputed and I will deal with these disputed matters individually.