Case No. CL-2019-000290

84.EIGL made no effort to quantify the amount of compensation which it claimed it could recover through a petition for unfair prejudice. However, its argument involved the assertion that it would have been able to pay less for 20% of Heritage if it had been aware of the Disputed Payments. 85.In my judgment, EIGL has not established a serious issue as to this part of its case either. 86.First, it is important to note that the prejudice complained of, far from being loss said to flow from the unfair management of the company represented by the Disputed Payments, is a loss said to have resulted from EIGL’s inability to utilise the fact that the Disputed Payments had occurred for its own benefit when negotiating the price payable for the remaining 20% of Heritage. In short, far from being prejudice caused by the mismanagement of Heritage which the Disputed Payments represent, it is loss which could only have been avoided if that mismanagement had occurred, but EIGL had then been able to use it for its own advantage. EIGL did not offer any explanation of how it could overcome this threshold obstacle to its causation case. 87.Second, I agree with Lord Grabiner QC’s submission that, on the evidence, it is clear that EIGL was appraised of the matters now relied upon as constituting the unfairly prejudicial mismanagement before the price for the 20% was agreed, and therefore had the opportunity to use those matters to what it saw as its best advantage in the negotiations, and did so by carving them out of the releases and settlements in clause 8 and (as I have found) clause 7 of the SpA. 88.The material filed with the Court establishes the following matters beyond argument: i)In 2016, KPMG, Heritage’s auditors, reported to the board of directors raising issues as to the payments made to the Nigerian recipients and the payment to MENA Danismanlik Ltd. ii)EIGL was provided with a draft report by Alvarez on 21 November 2017 which addressed the issues arising in relation to the Nigerian payments and Mr Buckingham’s expenses in detail. EIGL did not place a copy of the report in evidence but did produce the appendices to that report because they were unchanged when Alvarez’s final report was produced in February 2018. iii)Alvarez produced a further version of its report on 26 February 2018 which, in addition to the Nigerian and Turkish payments and Mr Buckingham’s expenses, referred to issues concerning Mr Buckingham’s use of the company jet. That report referred to the fact that as Alvarez’s work progressed, it “reported [its findings] to EIGL informally and issued interim notes on progress”. iv)It is apparent from the appendices to that report that the investigation had involved requests for documents, a detailed discussion at a meeting of 19 December 2017 and what was described as a “wrap up meeting” with Mr Atherton on 9 January 2018. The agenda for discussion at that meeting included the Nigerian and Turkish payments, Mr Buckingham’s personal expenses and use of the company jet. v)Mr Mackie in his witness statement for EIGL confirmed that it had a copy of the Alvarez report in draft when negotiating the SpA and stated that this document was prepared for the purpose of contemplated litigation. It is also Mr Mackie’s evidence that EIGL’s concerns were not resolved by the interview of Mr Atherton. 89.In these circumstances, it is legitimate to ask why EIGL claims it was deprived of the opportunity to leverage claims arising out of the Disputed Payments when the SpA was concluded, yet is able to do so now. Ultimately, all that EIGL has pointed to is the fact that when, on and after 21 November 2018 (a month before the final payment was due), it wrote to Mr Buckingham and others raising questions about the Disputed Payments, it was not satisfied with the responses. That, of course, was equally the position (on its own evidence) with regard to the information provided prior to the conclusion of the SpA. The reality is that EIGL is unable to point to any additional information it has now, when it is threatening to bring an unfair prejudice petition in Jersey, which was not available to it prior to the conclusion of the SpA, when it claims it was prejudiced by its inability to utilise the Disputed Payments to reduce the price payable. 90.Third, to have suffered any compensable loss, EIGL would need to show an arguable case that it would have been able to use the Disputed Payments to reduce the price for the 20% by an amount greater than the value of the claims which it is still open to Heritage to assert in respect of the Disputed Payments now. However, EIGL made no attempt to explain how or why this might be the case. When I asked Mr Morpuss QC what EIGL’s case was as to the amount by which it would have been able to use the Disputed Payments to reduce the price, he suggested that the amount of the Disputed Payments was an obvious reference point. However, that would have left EIGL no better off than it is now. Indeed, as an 80% shareholder at the time of the Disputed Payments, the fact that it will now enjoy 100% of the benefit of any recovery appears to leave it better off than if those claims had been pursued before the SpA. 91.EIGL’s witness evidence was noticeably thin on the issue of how, and by how much, the purchase price would have been reduced. Mr Mackie of Macfarlanes LLP gave evidence that the price paid for the 20% did not take into account the impact of the Disputed Payments, and that “it is also my understanding and belief had the Defendant been aware of the true position, it would have paid a lesser sum for the shares held by the Claimant”. However, Mr Mackie did not identify the source for this statement, which amounts to little more than bare assertion.