Ali Ganjaei (in his capacity as attorney in fact of Seapack Investment Ltd) v Sable Trust Ltd

CourtEastern Caribbean Supreme Court
Docket NumberCLAIM NO. BVIHC (COM) 2020/0182
JudgeJack, J
Judgment Date15 Feb 2021
JurisdictionCaribbean States
Neutral Citation[2021] ECSC J0215-1
[2021] ECSC J0215-1

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(COMMERCIAL DIVISION)

CLAIM NO. BVIHC (COM) 2020/0182

In the Matter of the Business Companies Act 2004

Between:
(1) Ali Ganjaei (In his capacity as attorney in fact of Seapack Investment Ltd)
(2) Seapack Investment Ltd
Claimants
and
(1) Sable Trust Ltd
(2) Jose G Gonzalez
(3) Michael Kelleher
(4) Najib Ziazi
Defendants
Appearances:

Mr. David Chivers QC, with him Mr. Jonathan Addo, Mr. Christopher Pease and Ms Kimberley Crabbe-Adams of Harneys Westwood & Riegels for the Claimants

Mr. Michael Faye QC of Agon Litigation for the First Defendant

Mr. Malcolm Arthurs and Mr. Jamie James of Martin Kenney & Co for the Third and Fourth Defendnats

The Second Defendant did not appear

1

Jack, J [Ag.]: This is a skirmish in what I suspect is a much larger dispute between two sides of the Hinduja family. The claimant side is in the camp of Mr. Srichand P Hinduja (“SPH”); the defendant side is in that of Mr. Ajay Hinduja. The immediate battlefield is three apartments in Trump Tower on 5 th Avenue in New York. These are held by an American company, Seapack Holdings Inc (“Seapack US”). Seapack US is held one hundred percent by the Second Claimant (“Seapack BVI”). The current case concerns the control of Seapack BVI.

Background
2

It is common ground that Seapack BVI was incorporated in this jurisdiction in 2011. Until the events to which I shall come, the registered agent has been MMG Trust (BVI) Corp (“MMG”). The first apartment was purchased in 2011; the other two in 2014. They are the main homes and New York residences of various members of the Hinduja family. The management of the apartments through Seapack US and Seapack BVI was under the de facto control of the SPH family office, Hinduja Advisory (Switzerland) SA (“HAS”). The first claimant (“Mr. Ganjaei”) is, or at least was, a de jure director of Seapack US.

3

The ultimate beneficial ownership of Seapack BVI is unclear. For various regulatory and KYC purposes Mr. Prakash P Hinduja (“PPH”), a resident of Monaco, has been named as the UBO of the company. The claimants assert that in fact PPH held his UBO on bare trust for SPH. Mr. Arthurs submitted that this is the key factual issue in the current case, however, he adduced no evidence to show that PPH had better title to be UBO than SPH. Such submissions as were made on this issue were really en passant. The parties' cases show that there are serious doubts as to who is and was the UBO. No one asked me to resolve this issue, even on a good arguable case basis.

4

That approach is understandable. There would be potentially difficult issues of law, if PPH was a mere front man for SHP and if his ostensible UBO was being advanced in order to sidestep compliance with KYC requirements, whether of Monégasque or of some other law. The UK Supreme Court in Mirza v Patel, 1 in a six-three split, held that deciding whether illegality barred a claimant from asserting

a right required a multi-factorial approach. The majority refused to follow the House of Lords decision in Tinsley v Milligan, 2 which held that the question was to be determined as a matter of how the cause of action was pleaded. If a claimant needed to plead the illegal matters to found his cause of action, then he lost; if he did not, he won (subject of course to proving his pleaded case). The difficulty for this Court is that there are at least three Privy Council decisions which support the Tinsley v Milligan approach: Petherpermal Chetty v Muniandi Servai, 3 Singh v Ali 4 and Palianiappa Chettiar v Arunasalam Chettiar. 5 It is unclear whether this Court is bound to follow those Privy Council decisions or treat them as impliedly overruled by the UK Supreme Court decision. The difficulty is compounded because the Privy Council cases were not even cited in Mirza
5

Instead of taking any points on illegality, the parties argued the matter solely on the basis of issues of company law. This was an appropriate course, because the issues as to the validity of the appointment of directors are matters for company law, not trust law. If shareholders (i.e. the holders of legal title to the relevant shares) appoint a director, the fact that the shareholders might be acting in breach of trust does not vitiate the appointment: Inland Revenue Commissioners v J Bibby & Sons Ltd. 6 Thus whether SPH or PPH is the UBO of Seapack BVI is irrelevant to the validity of the alleged acts of appointment and dismissal of directors.

6

I turn first to the facts.

The facts
7

Seapack BVI was incorporated on 8 th August 2011. The initial directors were Luis Davis, Pamela Hall and Gionela Walters (“Mr. Davis”, “Ms. Hall” and “Ms Walters”

respectively). They were employees of MMG. The shareholders were Management Nominee Services Ltd and Nominee Services Inc, which were MMG companies, controlled by MMG.)
8

The Articles of Association are in a standard form. Article 8 contains extensive provisions about shareholders' meetings. Article 8.20 provides: “Directors of the Company may attend and speak at any meeting of Shareholders…” Article 8.21 provides: “An action that may be taken by the Shareholders at a meeting may also be taken by a Resolution of Shareholders consented to in writing without the need for any notice….”

9

Article 9 deals with directors. Article 9.5 provides:

“A director may be removed from office,

  • (a) with or without cause, by Resolution of Shareholders passed at a meeting of Shareholders called for the purposes of removing the director… or by a written resolution passed by at least 75% of the Shareholders of the Company entitled to vote; or

  • (b) with cause, by Resolution of Directors passed at a meeting of directors called for the purpose of removing the director…”

10

Article 14 deals with officers and agents. Article 14.5 provides:

“The directors may, by a Resolution of Directors, appoint any person, including a person who is a director, to be an agent of the Company. Any agent of the Company shall have such powers and authority of the directors, including the power and authority to affix or witness the application of, the Seal, as are set forth in the Articles or in the Resolution of Directors appointing the agent [subject to certain irrelevant exceptions]…”

11

On 29 th August 2011 the third and fourth defendants (“Mr. Kelleher” and “Mr. Ziazi” respectively) replaced Mr. Davis, Ms. Hall and Ms. Walters as directors of Seapack BVI.

12

On 25 th October 2016, or at least purportedly on that day, minutes of a meeting of shareholders of Seapack BVI were signed by PPH as chairman. Since this is a key document, I shall reproduce it in full.

“On the 25 th of October 2016, at 9.30am notice to this meeting as to the time, place and purpose thereof having been waived by all persons entitled thereto, a Meeting of Shareholders was held at the principal office of the Corporation.

The meeting was chaired and declared open by the shareholder of the Corporation who kept the minutes thereof.

The Chairman indicated that the purpose of the meeting was to approve the resignations of [Mr. Kelleher] and [Mr. Ziazi] as Directors of the Corporation and to appoint the new Directors/Officers of the Company with joint signature: [Mr. Davis], [Ms. Hall] & Gionela Chen Walter [ sic]. After a brief discussion of the matter brought before this meeting and upon motional duly made and seconded, the following resolution was approved: RESOLVED:

That the resignations of [Mr. Kelleher] and [Mr. Ziazi] as Directors of the Corporation be and are hereby approved.

That the following new Directors/Officers of the Company with joint signature are [Mr. Davis], [Ms. Hall] & Gionela Chen Walter.

There being no further business at this Meeting, it was declared closed, and in witness thereof these Minutes have been issued, signed and sealed on the date and place first above written.

Chairman of the Meeting

[Signed] Seapack

[Signed] [PPH]”

13

It is common ground that Mr. Kelleher and Mr. Ziazi never resigned their directorships of Seapeak BVI. Rather the document of 25 th October 2016 came into existence following Mr. Kelleher's resignation and Mr. Ziazi's dismissal from HAS. They left HAS in order to work for the family office of the rival faction of the Hinduja family, Hinduja Group International (Switzerland) Ltd (“HGIL”).

14

On 11 th November 2016, Mr. Jorge Luis Reyes (“Mr. Reyes”), of Morgan & Morgan Corporation Services SA, the Geneva outpost of MMG, wrote to Mr. Jos Kat (“Mr. Kat”) of HAS to say that the directors of Seapack BVI at that time were Mr. Kelleher and Mr. Ziazi. He asked for details of the proposed new directors. Mr. Kat asked for MMG directors to be appointed. On 15 th November 2016 Mr. Reyes replied and said: “As shareholders of [Seapack BVI] we accept to appoint our nominee directors as the new board.”

15

Although without a trial and cross-examination, I cannot make a finding to this effect, the evidence to date suggests that It is very likely that the purported minutes of the meeting of shareholders were made shortly after this exchange of emails, not on 25 th October 2016 when they were purported to have been made. (The first draft of the minutes seems to have been attached to an email of Mr. Kat's of 3 rd November 2016.) The minutes do, however, appear to have been signed by 1 st December 2016. On that date MMG issued a certificate of incumbency showing Mr. Davis, Ms. Hall and Ms. Walters as the directors of Seapack BVI.

16

By letters dated 16 th July 2020 Mr. Davis, Ms. Hall and Ms. Walters purported to resign as directors of Seapack BVI.

17

On 17 th July 2020 a meeting of the board of Seapack BVI was held. The minutes record that “[p]resent at this meeting were the directors of the Corporation to wit [Mr. Davis, Ms. Hall and Ms. Walters]”. Mr. Davis, as chairman, is recorded as stating that “the purpose of the meeting was to...

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