A further significant victory for MWP in the English Court of Appeal against Mr T. I. Sinclair and J. F. Emmott

Coming shortly after its landmark appeal victory against the judgment of Teare J in the Max share action (announced here on 13 January 2017), MWP is delighted to announce a further significant victory in the same court and against the same principle respondent, Mr Thomas Ian Sinclair.

On 7 February 2017 the English Court of Appeal handed down its judgment in Michael Wilson & Partners, Limited v Thomas Ian Sinclair [2017] EWCA Civ 55 Civ in which the court overturned the judgment of Whipple J in the English High Court of 7 October 2015. In that case Whipple J dismissed an appeal by MWP against an order granting Mr Sinclair a stay of execution of an earlier order recognising various Bahamian money judgments in favour of MWP against Mr Sinclair, and also their attendant costs. 

The stay orders departed from the ordinary principle in complex litigation that parties “pay as they go”. That was on the basis that the Bahamian judgments should only be executed dependent on the outcome of other aspects of the wider litigation between the parties. The Whipple appeal therefore considered whether the judge had a discretion to stay execution under the broad provisions of CPR 3.1(2)(f), in conjunction with part 40.8A (as Whipple J found), or whether any discretion to stay properly arises under CPR 83.7, applying the “special circumstances” test contained in CPR 87.3(4)(a) (as MWP argued on appeal).

McCombe and Briggs LLJ in the Court of Appeal agreed with MWP that Whipple J had been wrong to purport to exercise a discretion under CPR 3.1(2) (f) and had also been wrong to find in the alternative that there were “special circumstances” under CPR 83.7 rendering it inexpedient to enforce the Bahamian judgments. The Court of Appeal noted, however, that Whipple J had made her findings in the absence of important information provided to the Court of Appeal (namely that MWP had discharged various costs orders against it) and also before the important Teare J appeal judgment in the Max share action. 

In coming to its decision the Court also placed significant weight on the reasoning of the New Zealand Court of Appeal (reported here on 5 August 2016); especially in relation to Mr Sinclair’s argument that a stay of execution should be afforded to him on the basis of his likely future recovery of damages from MWP, and of costs from his business and litigation partner Mr John Forster Emmott. The court noted that:

“There were significant hurdles in the way to such recovery: first, TIS’s standing to make claims in the enquiry (a point left open in the relevant order; secondly, the fact (pointed out in the skeleton argument before the judge) that provision was made for an exception to the freezing order allowing sale of the shares in question on 5 days’ prior notice; and thirdly, the likelihood or otherwise of the Bahamian costs being recoverable as part of the damages flowing under the cross-undertaking….”

The court also quoted favourably the finding of the New Zealand Court of Appeal that:

 “[35]… The Bahamian orders are, we repeat, final, binding and conclusive between the parties, relating solely to litigation in that forum. The costs awards were made there without any substantive adjudication upon the merits of the Max shares dispute. They were made because Mr Sinclair abused the process of the Bahamian courts to invoke a jurisdiction which did not exist. That conclusion and Mr Sinclair’s liability for the costs awarded in the Bahamas are now beyond challenge.”

Currently, Mr Sinclair and his company Sokol are in breach of judgments and costs orders made in favour of MWP by all of the Bahamas Supreme Court, Bahamas Court of Appeal, Judicial Committee of the Privy Council, the Commercial Court and QBD in England, as well as the New Zealand High Court and Court of Appeal, as a result of which Mr Sinclair’s NZ$4m house in Wellington, New Zealand is in the process of being sold to pay MWP’s unpaid judgment debts. 

As in the successful Teare J appeal, MWP was represented by Charles Samek QC and Adam Solomon of Littleton Chambers, to whom it wishes to extend its warmest gratitude once more for a job well done. 

About MWP:

MWP is a full service law firm with offices in both Almaty and Baku covering Azerbaijan, Kazakhstan, the Central Asian Region and the Caucasus. MWP was established in Almaty in July 1998 and in Baku in 2003. Today it is recognised as one of the leaders in the Central Asian and Caucasus Region, combining years of collective experience throughout the CIS.

Before founding MWP, Mr Wilson was the founding partner of the major international law firm, Baker & McKenzie throughout this Region, establishing offices for that firm from scratch in Almaty, Tashkent, Bishkek, Astana and Baku, which were the most successful group of new offices ever established anywhere in the world in the long history of Baker & McKenzie.

However, in order to better meet the needs of multinational and local clients for premier quality legal advice, know-how and innovative work product, MWP was established as a fully independent international law firm, operating through offices in Almaty and Baku, focused upon the Central Asian and Caucasus Region, and which works together with and cooperates with many of the world’s leading firms.

For more information, please contact Assel Kulisheva at Assel.Kulisheva@mwp.kz or visit our websites at www.mwp.kz and www.mwp.az.