Between IGCF SPV 21 Ltd Respondent v (1) AL Jomaih Power Ltd (2) Denham Investment Ltd Appellants

• Jurisdiction: Cayman Islands
• Judge: Sir Richard Field, JA,Sir Anthony Smellie, JA,John Martin
• Judgment Date: 10 January 2025
• Docket Number: CICA (Civ) No. 0025 of 2023
• Court: Court of Appeal (Cayman Islands)

Between

IGCF SPV 21 Limited

Respondent

and

(1) AL Jomaih Power Limited

(2) Denham Investment Ltd

Appellants

Neutral Citation Number: [2025] CICA (Civ) 001

Before:

The Hon John Martin KC, JA

The Hon Sir Richard Field, JA

The Hon Sir Anthony Smellie, JA

CICA (Civ) No. 0025 of 2023

(Formerly FSD 269 of 2023 (NSJ))

IN THE CAYMAN ISLANDS COURT OF APPEAL

ON APPEAL FROM THE GRAND COURT OF THE CAYMAN ISLANDS

Parties' Representation

Stephen Rubin KC instructed by Laura Hatfield and Jonathan Stroud of Bedell Cristin Cayman Partnership for the Defendants/Proposed Appellants

Graham Chapman KC instructed by Conal Keane and Niall Dodd of Dillon Eustace Cayman for the Respondent

Sir Richard Field, JA

Introduction

1 The Court has before it two applications made by the Appellants (hereinafter individually called: “AJPL” and “DIL”) which it has determined on the papers.

2 The first is for leave to appeal to the Privy Council (“the JCPC”) this Court's order dated 10 October 2024 (“the CICA Order”) dismissing the Appellants' appeal from the Order of Segal J dated 16 August 2023 (the “Grand Court Order”) 1 restraining the Appellants from pursuing proceedings against the Respondent (“SPV 21”) in Pakistan in breach of an exclusive jurisdiction clause in favour of Cayman and/or England contained in clause 25.2 of a Shareholders Agreement dated 15 October 2008 made between the Appellants and the Respondent (“SPV 21”) that was subsequently amended (“the SHA”).

3 The second application is for a stay of paragraphs 1 – 4 of the Grand Court Order pending: (a) an appeal or an application for leave to appeal to the JCPC from the CICA Order; and/or (b) an application by the Appellants to the Grand Court for an order in similar terms to an order made ex parte by the High Court of Sindh, Pakistan dated 21 October 2022 (the “Pakistan Order”).

4 The factual background to these proceedings is related in some detail in paragraphs 7 – 44 of Smellie JA's judgment dated 2 July 2024 (“the Judgment”) with which the other members were in agreement. Suffice it to say for present purposes that SPV 21, AJPL and DIL are shareholders in KES Power Ltd (“KESP”), a Cayman Islands company which holds 66.4% of the O Class shares in K-Electric Limited (“KEL”), a publicly listed company incorporated in Pakistan which supplies electricity within a 6500 square Kms area including the city of Karachi. The parties' holdings of shares in KESP are: SPV 21 — 53.8 %; ALJP — 27.7%; and DIL — 18.5%.

5 KESP acquired its 66.4% holding of O Class shares in KEL in 2005 under a Share Purchase Agreement (“the SPA 2005”) made between KESP and two Pakistan private limited liability companies (the buyers) on the one hand, and on the other hand, the Government of Pakistan (the seller). The SPA 2005 is governed by Pakistan law and contains an exclusive jurisdiction clause in favour of Pakistan.

6 The relationship between SPV 21, ALPL and DIL as shareholders in KESP is governed by the SHA to which KESP is also a party. Clause 25.2 reads:

“ Any dispute arising out of or in connection with this agreement, including any question regarding its existence, validity or termination, shall be settled by the English courts or the Grand Court of the Cayman Islands and those courts alone shall have exclusive jurisdiction to settle any such dispute.”

7 SPV 21 was incorporated by members of the ABRAAJ group for the purpose of acquiring shares in KESP. Originally, the sole voting share (“the Golden Share”) in SPV 21 was held by Abraaj Investment Management Limited (“AIML); the other shares are held by a Cayman Islands Limited Partnership, the Infrastructure and Growth Capital Fund LP (“the Fund”), which is managed by IGCF General Partner Limited (“the GP”). Prior to August 2022, the shareholders of the GP were AIML (as to 75.5%) and Ithmaar Holdings BSC (“Ithmaar”) (as to 24.5%).

8 On 3 August 2022, acting by its joint liquidators, AIML agreed to transfer the Golden Share to Sage Venture Group Limited (“SVGL”). Permission for the joint liquidators to enter into this agreement was granted by the Grand Court on 14 October 2022. SVGL is a BVI company which is ultimately owned and controlled by Mr. Shaheryar Chishty (“Mr. Chishty”). SVGL also acquired control of the GP and, either by itself, or through a connected company, it also acquired certain limited partnership interests in the Fund.

9 On 18 October 2022, following the resignation of three KEL directors, SPV 21 moved to appoint two new directors, Mr. Chishty and Darin Baur, to KEL's board pursuant to clause 5.7 of the SHA. In response, the Appellants commenced proceedings in Pakistan (“the Pakistan Proceedings”) on 21 October 2022 against SPV 21 and seven additional defendants, on which date the High Court of Sindh, acting ex parte made the Pakistan Order ordering that “no change shall be effected in the present Board of Directors of [KEL]”. The seven other defendants were KESP, KEL, Alvarez & Marsal (the manager of the GP) and the following three Pakistan regulatory bodies: the Pakistan Government's Privatisation and Energy Ministries and the National Electric Power Regulatory Authority (NEPRA). (Later, the Securities & Exchange Commission of Pakistan (“SECP”), a further regulatory body, was added as an 8 ^th defendant).

10 The Appellants plead in the Pakistan Proceedings, inter alia, that “ a transfer of beneficial ownership/change in board or management control of KEL” is subject to the transfer restrictions in Articles 5.2 and 5.3 of the SPA 2005 and that SPV 21 is “ in gross violation of Section 9.4 of the [SHA] 2 in attempting to transfer the beneficial ownership/effect a change in the board or management control of [KEL] … which is not permissible under [the SHA] in order to secure board and management rights in [KEL]”. The Appellants also plead that any reorganisation of KEL requires the approval of NEPRA which had not been obtained and that the change of control of KEL pursued by SVGL is in breach of section 33 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (“the Electric Power Act”) and of Regulation 14 made under the National Electric Power Regulatory Authority Licensing (Distribution) Regulations, 2022 (“the 2022 Regulations”) which require KEL as a distribution licensee to obtain prior authorisation before selling or disposing of any assets in a manner inconsistent with its approved investment programme.

11 At first instance, SPV 21 applied in the FSD of the Grand Court for an interim order restraining the Pakistan Proceedings pro tem, and having succeeded on that application, it then sought a permanent anti-suit injunction at a subsequent trial. Justice Segal (“the Judge”) heard both applications, in each of which he delivered judgments effectively incorporating by reference the first judgment into the second (“the Main Judgment”).

12 The Judge held that the Pakistan Proceedings brought by the Appellants against SPV 21, KESP, KEL and Alvarez and Marsal were in clear breach of clause 25.2 of the SHA and that none of the “ reasons” advanced by the Appellants as to why the court should not enforce that provision by an injunction were sufficiently “ strong” or applicable to require the Court to find that SPV 21's application be refused. Accordingly, the Judge ordered the Appellants forthwith to terminate or otherwise discontinue the Pakistan Proceedings commenced against (i) SPV 21; (ii) Alvarez and Marsal; (iii) KESP; and (iv) KEL, and ordered them not to commence or pursue any proceedings in connection with any dispute or disagreement under, arising out of, or relating to the SHA. No order was made requiring discontinuation of the claims made against the four Pakistan regulatory bodies.

13 One of the reasons advanced by the Appellants why the Judge should not grant the claimed anti-suit injunction was that SPV 21 had submitted to the jurisdiction of the Pakistan Court by advancing a stay application under section 4 of the Pakistan Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act and a modification application under Order 39 rule 4 of the Pakistan Code of Civil Procedure. In rejecting this proposition, the Judge applied the test agreed on by all three parties, namely that adopted by Males LJ in SAS Institute Inc v World Programming Ltd [2020] EWCA Civ 599 at [114]: had the steps taken by SPV 21 in the foreign Pakistan proceedings gone beyond a challenge to the jurisdiction of the Pakistan court (“the SAS Institute Inc test”). The Judge found that SPV 21 had not submitted to the jurisdiction of the Pakistan Court. In his view, the steps taken by SPV 21 before the Pakistan Court had not gone beyond a challenge to that Court's jurisdiction.

14 At the hearing of the appeal to this Court, two grounds of appeal were advanced. The first ground was dismissed and is not sought to be argued on appeal before the JCPC in the Appellants' skeleton argument. The second ground was that the Judge had erred in applying the SAS Institute Inc test in finding that SPV 21 had not submitted to the jurisdiction of the Pakistan Courts when he should have followed and applied the decision of the English Court of Appeal in Henry v Geoprosco International Limited [1976] 1 QB 726 (CA) and found that SPV 21 had indeed submitted to the jurisdiction of the Pakistan Court. This decision (“ Geoprosco”) was not cited to the Judge; instead, as recorded above, it had been agreed between all three parties that the test whether there had been a submission to the jurisdiction was the SAS Institute Inc test.

15 In Geoprosco, the plaintiff, who was resident in Canada, brought proceedings in England to enforce a default judgment issued by the Supreme Court of Alberta (“the Alberta Court”) against the defendant company for damages for wrongful dismissal under a service agreement made between the parties which...