Case No. CL-2019-000290

[2011] 1 Lloyd’s Rep 517 at [43(vi)], namely to ask whether these are “cross-claims … so closely connected with [the plaintiff’s] demand that it would be manifestly unjust to allow him to enforce payment without taking into account the cross-claim”. 93.In this case, the unfairly prejudicial conduct relied upon occurred between 2014 and 2017, and the matters which are said to have made that conduct wrongful are legal duties owed to Heritage. Those matters do not seem to be sufficiently closely connected to Albion’s claim that it would be manifestly unjust to allow the claimant to enforce payment without taking the crossclaim into account. Does the fact that EIGL might be able to rely upon that conduct as a basis for seeking discretionary relief in its favour change the outcome? If EIGL had been able to formulate an arguable unfair prejudice claim premised on the fact that it had paid too much for the 20% shares, I would have found that the requisite connection was established. However, I have rejected EIGL’s contention that it has an arguable entitlement to unfair prejudice relief formulated on that basis. Mr Morpuss QC did not advance an alternative basis for contending that the degree of connection was made out. A mere claim by EIGL to enforce, by way of an unfair prejudice position, the breach of fiduciary duty claims open to Heritage would not have satisfied the Geldof test. 94.Lord Grabiner QC also relied upon the fact that the two claims were subject to different forum agreements – the claim under the SpA (as I have held) being subject to the Jurisdiction Agreement, and the unfair prejudice petition subject to ICC arbitration under the Shareholders Agreement. I do not need to decide whether the unfair prejudice claim does fall within the Shareholders Agreement, and I have not heard any argument on this issue. I would note, however, that the fact that two claims cannot, as independent claims, be brought in the same forum does not of itself determine that they lack the requisite connection to give rise to an equitable set-off: Aectra Refining & Marketing Inc v Exmar NV [1994] 1 WLR 1634, 1649 where Hoffmann LJ noted that “in the case of transaction set-off, the authorities are in favour of allowing the set-off to be pleaded, notwithstanding its submission to arbitration or a different jurisdiction”. Conclusion 95. While I have addressed the various issues raised by EIGL’s proposed set-off separately, in the final analysis they are all different manifestations of the same fundamental point. Heritage (for the benefit of EIGL as its 100% shareholder) had a perfectly conventional legal claim for any loss caused by the Disputed Payments. That was the claim which EIGL’s solicitors, Macfarlanes LLP, originally referred to when responding to Albion’s demand for payment of the outstanding balance. However, to overcome the difficulties that a claim by Heritage is incapable of providing a defence to Albion’s claim against EIGL for the balance of the purchase price, EIGL sought to re-package that claim in a form which would allow it, rather than Heritage, to assert it. Ingenious as Mr Morpuss QC’s submissions were, I have concluded that that attempt is fundamentally flawed, and does not disclose an arguable defence to Albion’s claim. Stay 96. The proposed unfair prejudice petition in Jersey was the only ground relied upon before me as a reason to stay Albion’s claim. In circumstances in which I have concluded that EIGL’s claim does not have a realistic prospect of success, it would not be appropriate to grant a stay of these proceedings pending the determination of that claim. I would in any event have been reluctant to order a stay, having concluded that EIGL has no arguable defence to Albion’s claim, in circumstances in which it took no steps to raise the Disputed Payments after the SpA was signed until one month before the final instalment was due, and even now has not commenced proceedings in Jersey or elsewhere to pursue those claims. Conclusion 97.For these reasons: i)EIGL’s application for a stay under s.9 of the Arbitration Act 1996 is refused. ii)EIGL’s application for a stay of these proceedings under the Court’s inherent jurisdiction is refused. iii)Albion’s application for summary judgment on its claim for the balance of the purchase price and interest is allowed. 98.I will hear the parties on any consequential matters.