Simmons ends seven-year fight for Masri debt
16 November 2011 | By Katy Dowell
6 November 2013
12 February 2014
6 November 2013
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27 June 2014
After securing a judgment in favour of a client many litigators are left with the daunting prospect of enforcing the decision.
Simmons & Simmons was left with that daunting task in 2009 after the House of Lords ruled in favour of its client Munib Masri in his worldwide dispute with Middle East group Consolidated Contractors.
According to Mr Justice Burton the case history gives a definitive guide on multi-jurisdiction enforcement.
“What might be called the Masri jurisprudence could, by reference to hearing in courts in this jurisdiction alone, almost fill an entire textbook, and indeed has given rise to a number of significant legal decisions of interest to the legal profession,” he remarked in a ruling on jurisdiction in July this year.
This week the case finally settled with agreement being reached on enforcements in all jurisdictions. The length and scale of the litigation, however, serves as a stark warning of the practical difficulties involved in enforcing judgment debts in multiple jurisdictions.
The dispute was originally over a $100m (£63.4m) contractual interest in revenues from an oilfield in Yemen. In 2006 the High Court gave judgment in favour of Masri, awarding a 10 per cent share of the defendants’ revenues from the oilfield. The defendants, who had no assets or personnel within the jurisdiction of the English courts, had not paid the judgment sum and Masri sought to enforce against their worldwide assets.
The defendants argued that the English court held no jurisdiction and the case went to the HoL, which ruled that it did and ordered the defendants to pay up.
According to a source close to the case, what happened next was the emergence of an anti-enforcement strategy which forced Simmons to find innovative methods of thwarting their opponents in courts around the globe.
To give an insight into the enormity of the task it is interesting to note that the debtors were at various times represented by Herbert Smith, Dewey & LeBoeuf, Olswang and SC Andrew. Other lawyers acting for the defendants included Allen & Overy, Freshfields Bruckhaus Deringer, Linklaters and Jones Day. In addition more than 20 silks can claim to have acted on the matter.
In England alone, the case has involved more than 100 court days, resulting in 30 court judgments from at least 12 commercial court judges, 21 Lord Justices and seven Law Lords.
The Court of Appeal’s April 2008 judgment in Masri (No.2) is the leading authority on receivership orders. The claimant lawyers developed this aspect of the case further when they went after debtors based in Greece, using it in conjunction with a parallel asset preservation order to secure injunctive relief order in the English courts which would bind an overseas party.
There were also court proceedings in Greece to impose the debt as a personal liability against the owners of the debtor companies which were treated as a de facto commercial partnership under Greek law despite being incorporated in Lebanon.
Meanwhile, contempt of court proceedings were upheld against the defendant companies by Mr Justice Clarke back in May (5 May 2011).
It has taken seven years to get to enforce the court order, as well as some innovative thinking and balls of steel.
Simmons managing associate Andrew Bartlett, who led the claimant team, said: “The co-ordination and management of vigorously disputed proceedings in so many jurisdictions alongside numerous concurrent proceedings in the English court has been a highly challenging task which has required us to build and manage an integrated team with numerous counsel and foreign law firms. Nothing about the case has been conventional or straightforward.”