Between (1) Kuwait Ports Authority (on its own behalf and on behalf of The Port Fund L.P.) (2) The Public Institution for Social Security (on its own behalf and on behalf of The Port Fund L.P.) (3) The Port Fund L.P. Plaintiffs v (1) Port Link GP Ltd ((in Receivership); in Voluntary Liquidation) (2) Mark Eric Williams (3) Wellspring Capital Group, Inc. (4) KGL Investment Company Asia (in Voluntary Liquidation) (5) Golden Shahin General Trading & Contracting Company (6) Apache Asia Ltd (A Hong Kong Company) (7) Ronald Henry Ayliffe (8) KGL Investment Company K.S.C.C. (9) Apache Asia Limitada (A Macao Company) Defendants and (1) Gordon Macrae (2) Elizabeth Mackay (in their capacity as joint receivers of Port Link GP Ltd); (1) Kuwait Ports Authority (on its own behalf and on behalf of
| Jurisdiction | Cayman Islands |
| Judge | Justice Parker |
| Judgment Date | 28 March 2024 |
| Docket Number | CAUSE NO. FSD 236 OF 2020 (RPJ) CAUSE NO. FSD 41 of 2022 |
| Court | Grand Court (Cayman Islands) |
and
The Hon. Justice Parker
CAUSE NO. FSD 236 OF 2020 (RPJ)
CAUSE NO. FSD 97 of 2021
CAUSE NO. FSD 41 of 2022
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Combined Case management conference-procedural issues-overriding objective-directions to trial-joint trial — trial date-stay-relitigation-privies-issue estoppel-election to be bound-discretion
Mr David Allison KC, Mr Derrick Dale KC, Ms Jennifer Fox and Mr Harry Clark of Ogier (Cayman) LLP for the Plaintiffs in FSD 236 of 2020 and FSD 97 of 2021
Mr Graham Chapman KC, Mr Andrew Pullinger and Ms Katie Logan of Campbells LLP for the Second, Third and Fourth Defendants in FSD 236 of 2020 and FSD 41 of 2022 (“D2–D4”)
Mr Paul Stanley KC and Ms Anna Peccarino of Travers Thorp Alberga for the Plaintiffs in FSD 41 of 2022
Mr Daniel Bayfield KC, Mr Matthew Dors and Ms Natascha Steiner-Smith of Collas Crill for the GP which is the First Defendant in FSD 236 of 2020 and FSD 41 of 2022
Mr Denis Olarou of Carey Olsen for the Sixth, Seventh and Ninth Defendant in FSD 236 of 2020 and the Fifth, Sixth and Seventh Defendant in FSD 41 of 2022 (“Apache Defendants”)
Mr Ben Hubble KC, Mr Sebastian Said, Ms Susan Fallan and Ms Shari Walton-Rankin of Appleby (Cayman) Ltd. on behalf of Walkers (a Firm) and Walkers (Dubai) Limited Liability Partnership, the First and Second Defendants in FSD 97 of 2021 (“Walkers Defendants”)
This is the decision of the Court following a combined case management conference (the “Combined CMC”) in cases FSD 236 of 2020 (“FSD 236”), FSD 97 of 2021 (“FSD 97”) and FSD 41 of 2022 (“FSD 41”). The proceedings concern the affairs of The Port Fund L.P., (“Fund” or “TPF”) which is an exempted limited partnership formed pursuant to the Exempted Limited Partnership Act (as amended), with one general partner (Port Link GP Ltd, the “GP”) and eleven limited partners (“LPs”). The Plaintiffs are all limited partners in TPF. They claim that the GP and those connected to it misappropriated substantial sums of money from the Fund.
The Plaintiffs in FSD 236 and FSD 97 (“KPA” and “PIFSS”) are represented by Ogier and by David Allison KC and Derrick Dale KC, respectively.
The Plaintiffs in FSD 41 are represented by Travers Thorp Alberga (“TTA”) and by Paul Stanley KC.
The GP (which is D1 in FSD 236 and FSD 41 but is not a party to FSD 97) is represented by Collas Crill and by Daniel Bayfield KC.
D2 to D4 in FSD 236 and FSD 41 are represented by Campbells and by Graham Chapman KC.
D6, D7 and D9 in FSD 236 and D5 to D7 in FSD 41 are represented by Carey Olsen and by Denis Olarou.
The Walkers Defendants (D1 and D2 in FSD 97) are represented by Appleby and by Ben Hubble KC.
This decision follows a two day hearing on 26 and 27 February 2024.
The first thing to record is that these are complex, high value and multi-party proceedings which have already been the subject of numerous interim decisions and appeals. No doubt considerable expense has already been incurred and therefore questions of efficiency and economy have to be viewed in that context.
However, efficient and fair case management in accordance with the Overriding Objective needs to be achieved to ensure these complex cases are fairly disposed of and tried as economically as possible. In particular there needs to be careful case management in order to avoid duplication, unfairness, unnecessary expense, delay, undue demands on Court resources, and inconsistent findings.
FSD 236 involves claims against various defendants including the GP. The case was commenced by KPA and PIFSS, initially against the GP only, on 14 October 2020. KPA and PIFSS have brought direct claims (for breaches of duty owed to them as limited partners and accessory liability related to those breaches) and/or derivative claims (on behalf of TPF) against the GP (D1), Mr Williams (D2), Wellspring (D3), KGLI Asia (D4), Golden Shahin (D5), Apache Asia (D6), Mr Ayliffe (D7), KGLI (D8) and Apache Macao (D9).
The Plaintiffs' claims in FSD 236 involve in summary:
There are also:
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a) Direct claims against the GP for various breaches of its duties owed to the Limited Partners of TPF, and claims for an account where further information is required.
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b) Direct and derivative claims against Mr Williams and Wellspring arising from Mr Williams' alleged central involvement in sham proceedings in the DIFC (the “DIFC Proceedings”) between TPF and its former Investment Manager (“EMPEML”), which were allegedly used as a pretext for the unlawful payment of USD 59 million of TPF's funds to Wellspring.
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a) derivative claims against KGLI Asia for knowing receipt of at least USD 3.3 million of TPF's monies that were paid in breach of trust and/or breach of fiduciary duty.
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b) derivative claims against Golden Shahin in relation to a payment of USD 14 million made in breach of duty out of TPF's monies.
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c) direct and derivative claims against Apache Asia, Mr Ayliffe, Apache Macao and KGLI in relation to fees in excess of USD 66 million charged by Apache Asia and/or Apache Macao, of which at least USD 14.5 million were paid to KGLI.
The GP has raised a counterclaim against KPA for an alleged overpayment of USD 13.1 million and a crossclaim against the Sixth Defendant and the Ninth Defendant for an alleged overpayment of just over USD 2 million.
D2–D4 also advance a counterclaim against the Plaintiffs contending that the case was brought as part of an unlawful means conspiracy between, inter alia, the Plaintiffs and the State of Kuwait, and a crossclaim against the GP (the “Crossclaim”) seeking (a) further payment to D3 as a result of EMPEML's alleged entitlements under the IMA and (b) indemnification of D2, D3 and D4 from the GP pursuant to various contractual agreements.
Another case, FSD 97, is brought against the GP's former legal advisors, Walkers (A Firm) (“Walkers Cayman”) and Walkers (Dubai) Limited Liability Partnership (“Walkers Dubai”) (together “Walkers”). This case concerns Walkers' role in the management of TPF's affairs as advisers to both the GP and TPF, and the former investment manager of TPF EMPEML.
KPA and PIFSS bring derivative claims (on behalf of TPF) against Walkers. Claims of breach of fiduciary duty, alternatively negligence, are brought, founded on allegations involving Walkers' advice given in light of an alleged attempted expropriation of USD 496 million in sales proceeds belonging to TPF (the “Clark Asset Proceeds”) by the State of Kuwait, which had been frozen at Noor Bank in Dubai, and the subsequent “Common Strategy” determined by TPF and EMPEML, to prevent the release of the Clark Asset Proceeds from Noor Bank to Kuwait and, instead, to secure their release to TPF.
This case is currently stayed until 21 days after final determination of the issues raised in the judgment of the Cayman Islands Court of Appeal (“CICA”) handed down on 20 January 2023 (see below) (the “CICA Judgment”). The CICA Judgment considers the test for bringing derivative claims under section 33(3) of the ELP Act. Since D2–D4 have obtained leave to appeal the CICA Judgment to the Privy Council, FSD 97 has in practice been stayed until 21 days after final determination of the appeal by the Privy Council.
Two other Limited Partners (“GRSIA and GIC”) also commenced their own proceedings: GRSIA and GIC against the GP and other defendants (“FSD 41”), and GRSIA (alone) against Walkers Dubai in FSD 383. GIC is an investment company jointly owned by the states of Kuwait, Qatar, Bahrain, Oman, Saudi Arabia and the UAE. GRSIA is a Qatari state-owned institution.
In FSD 41, they bring direct claims (for breaches of duty owed to them as partners and accessory liability relating to those breaches) and a claim for an account. These are very similar to the claims in FSD 236 for a proportion of the same loss and the defendants largely overlap.
They similarly make claims against the GP, Mr Williams, and Wellspring in respect of the DIFC Proceedings and the Wellspring Payment including similar claims to those made in FSD 236 in respect of: (i) breach of trust and/or duty and/or negligence by the GP; (ii) dishonest assistance against Mr Williams in respect of the GP's breaches; and (iii) an alleged unlawful means conspiracy among the GP, Mr Williams, Wellspring and KGLI.
In the FSD 383 proceedings, GRSIA makes substantially similar claims...
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