Freshfields wins court victory for RBS against Liverpool FC's former owners

The latest round of litigation focused on an attempt by Hicks and Gillett to have the High Court dismiss an anti-suit injunction granted by Mr Justice Floyd during an ownership dispute last October (18 October 2010).

Both sides reinstated the same legal teams that acted in the original dispute. Freshfields partner Patrick Swain instructed Erskine Chambers’ Richard Snowden QC to act for the bank.

Hicks and Gillett, meanwhile, were represented by Peters & Peters partner Keith Oliver, who instructed Maitland Chambers’ Paul Girolami QC.

Floyd J rejected the claimants’ attempt to have the anti-suit injunction dismissed, meaning that any future actions by the club’s former owners can only now be brought through the English courts.

In his ruling Floyd J said contracts signed between Hicks and Gillett and the bank when it financed the takeover of the club expressly stated “the courts of England are the most appropriate and convenient courts to settle disputes and accordingly no party will argue to the contrary”.

The High Court judge was critical of the attempts made by the pair to have a US court block the sale of Liverpool Football Club to New England Sports Ventures (NESV) in October.

According to the judgment, the US lawyers representing Hicks and Gillett had told a Texan court that they were victims of “an epic swindle at the hands of rogue corporate directors and their co-conspirators”.

The conspiracy, they alleged, was orchestrated by RBS and the club’s former chairman Martin Broughton with the aim of selling the club to NESV.

Floyd J’s judgment reveals that the pair failed to inform the Texan court that an application to restrain the sale of the club had already been dismissed by the High Court.

Their UK lawyer, Oliver, told the High Court judge that his clients had not intended to mislead the Texan court, but Floyd J rejected his argument.

The judge also highlighted that the claimants had told the Texan court that it needed to grant a temporary restraining order (TRO) because the London High Court was closed.

Floyd J concluded there was “a strong case” that “the former owners decided to withhold information from [their] Texan counsel and from the Texan court, and indeed fed him with incorrect information”.

He added: “I granted [the anti-suit] injunction on the basis of what appeared to me the unconscionable conduct of the former owners in seeking to undermine the English proceedings.”

In rejecting the claim, the judge concluded: “I still find it difficult to imagine what possible real connection such a claim would have with any jurisdiction in the United States.

“The disputes concern an English asset, duties owed by English directors under English law to English companies, and corporate governance arrangements governed by English law.”

Separate claims have been brought by Broughton and RBS in which both requested the court to declare that the club’s sale was conducted properly and honestly.

Late amendments to those claims have been allowed and an application to have Broughton’s claim struck out was rejected.

The case was listed as one of The Lawyer’s leading cases of the year (3 January 2011).

Counsel

Peters & Peters Keith Oliver instructed Maitland Chambers’ Paul Girolami QC to lead Rebecca Stubb of the same set for Hicks and Gillett.

Freshfields partner Patrick Swain instructed Richard Snowden QC of Erskine Chambers to lead James Potts and Ben Shaw also of Erskine Chambers for RBS.

Couchmans partner Satish Khandke instructed Serle Court’s Phillip Marshall QC for Martin Broughton, former chair of Liverpool FC.

Shearman & Sterling partner Jo Rickard instructed Erskine Chambers’ David Chivers QC to lead Philip Gillyon also of Erskine Chambers for NESV.