Between White Crystals Ltd Plaintiff v IGCF General Partner Ltd Defendant

• Jurisdiction: Cayman Islands
• Judgment Date: 02 April 2024
• Docket Number: Cause No: FSD 394 of 2023 (MRHCJ)
• Court: Grand Court (Cayman Islands)

Between

White Crystals Ltd

Plaintiff

and

IGCF General Partner Limited

Defendant

Cause No: FSD 394 of 2023 (MRHCJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

Appearances

Mr Ian Quirk KC along with Ms. Laura Hatfield and Mr. Jonathan Stroud of Bedell Cristin for the Plaintiff

Mr Graham Chapman KC along with Mr Conal Keane and Mr Niall Dodd of Dillon Eustace for the Defendant

Introduction

1 The Plaintiff, White Crystal Limited (“ WCL”) applied on 19 December 2023 for leave to enforce an arbitral award (“ the Award”) made by the London Court of International Arbitration (“ the Tribunal”) against IGCF General Partner Limited (“ the GP”) pursuant to section 5 of the Foreign Arbitral Awards Enforcement Act (1997 Revision) (“ the FAAEA”). The application, made ex parte without notice as permited by Grand Court Rules Order 73, was granted by this Court on 5 January 2023 on the papers.

2 The issue in the arbitration was the entitlement of WCL, a limited partner of an exempted limited liability partnership called The Infrastructure and Growth Capital Fund LP (“ the Fund”) registered in the Cayman Islands under the Exempted Limited Partnership Act (“ the Act”), to have access to the books and records of the partnership and to receive from the GP information concerning the business and affairs of the partnership.

3 As recorded in the decision of the Tribunal, the partnership was formed in 2006 and is governed by an Amended and Restated Deed of Limited Partnership dated 17 November 2006 (“ LP Deed”). WCL claimed in the arbitration that its right of access to the books and records of the Fund under a term of the LP Deed had been wrongfully denied to it by the GP (referred to by the Tribunal as the Contractual Claim). WCL also claimed that various rights to access the records of the Partnership and to receive information concerning its business and affairs, conferred on limited partners by sections 22, 29, 30 and 31 of the Act, were wrongfully denied to it by the GP (“ the Statutory Claims”).

4 In the Minute of Order granting WCL leave to enforce the Award, I noted that,

The issues were determined in WCL's favour and the Award ordered GP to specifically perform its obligations under the LP Deed, by granting WCL access to its books and records and to comply with its obligations under ss 22, 29 and 31 of the Act within 5 days. GP has since paid the costs related to the arbitration but has not complied with the orders to provide the documents and information to WCL. In the correspondence between the parties exhibited to Mr. Parry's affidavit, the jurisdiction of the Tribunal to make the award has not been challenged by the GP nor has it raised any other ground that would throw the enforceability of the award into doubt. To the contrary, GP confirms that it has created a data room containing information and documents in compliance with the award and is ready to comply with the award by giving WCL access to that data room. It has, however, refused to do so because WCL has refused to give certain “confirmations and undertakings” sought by GP in correspondence. These “confirmations and understandings” are not provided for in the Award.”

The award is a Convention award. Section 7 of the FAAEA provides that:

“7. (1) Enforcement of a Convention award shall not be refused except in the cases mentioned in subsections (2) and (3).

(2) Enforcement of a Convention award may be refused if the person against whom it is invoked proves —

(a) that a party to the arbitration agreement was (under the law applicable to him) under some incapacity;

(b) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made;

(c) that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;

(d) subject to subsection (4), that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration;

(e) that the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country where the arbitration took place; or

(f) that the award has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.

3) Enforcement of a Convention award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to enforce the award…”

In the circumstances where GP has raised no objections to the Award and it is not apparent on the face of the Award that that [ sic.] there are any grounds for refusing to enforce it, WCL is prima facie entitled to the Order it seeks.”

5 The GP subsequently made an application by summons seeking the following relief:

“(i) An order discharging the Order of the Court dated 5 January 2024 and filed on 8 January 2024 (“the Enforcement Order”).

(ii) An order prohibiting the Plaintiff from dealing with any confidential information or documentation provided to it by the GP pursuant to the Award in a manner which breaches clause 11.12 of the LP Deed or in any manner which damages the Fund, including, expressly:

(a). A prohibition on sharing the confidential information with any Affiliates (as defined in the LP Deed) unless those Affiliates are subject to equivalent confidentiality obligations to the Fund as those set out in clause 11.12 of the LP Deed.

(b). A prohibition on sharing the confidential information with any professional adviser unless that adviser firm has in place an appropriate and effective information barrier preventing the information leaking to any advisor representing the Original Shareholders or Mr Ashary or Mr Naqvi.

(iii) In the alternative, a variation of the Enforcement Order so that enforcement of the Award be on terms of the injunctive relief sought at paragraph 2 above, or alternatively that enforcement of the Award be conditional upon the provision of undertakings by the Plaintiff in the terms set out at paragraph 2 above (with the words ‘A prohibition on sharing’ replaced by the words ‘The Plaintiff undertakes that it shall not share’).”

6 I dismissed the GP's application for reasons which I promised to later give in writing. This I do now. The Submissions by the GP

7 Mr. Chapman KC submited on behalf of the GP that WCL's application in the Tribunal was not made bona fide for any proper purpose but made solely to obtain confidential information and documentation about the Fund so it can be provided to persons with interests adverse to the Fund, including persons who have sued and are presently suing diverse special purpose vehicles (“ SPVs”) belonging to the Fund, and to the founder of the Abraaj Group who is said to have defrauded the Group of investment funds of which the Fund once formed part. He asserted that there was every reason to suspect that confidential information pertaining to the Fund would, if given to WCL, be passed to third parties who would then seek to use it against the Fund in pursuit of their own interests.

8 He suggested that it was ‘eccentric’ for WCL, who had only a minor shareholding in the Fund, worth perhaps just over $200,000 to spend over a million dollars trying to obtain documents and confidential information and that the only plausible explanation is that they were being used by these other persons for their own purposes: WCL was a mere cipher, in his words.

9 He submited that WCL's refusal to give the undertakings that have been sought supported the inference he was inviting the Court to draw. If it were that WCL intended to abide by their confidentiality obligations arising under the LP Deed, then the provision of the undertakings and confirmations would be straightforward. Their refusal to do so supported the inference that they intend to breach their duty of confidentiality and misuse the information.

10 The GP's overarching submission is that it would be unjust — and therefore contrary to public policy — to require the GP to comply with the Order granting WCL leave to enforce the Award without affording it the protections sought in its application. Put another way, to permit the Award to be enforced leaving the GP to apply separately for injunctive relief would inevitably deprive the GP of the benefit of any such relief because the information would be provided under the Award and disseminated without the protections being in place. Mr. Chapman contends that to do so would not only be unjust but would effectively oust the jurisdiction of this Court to grant effective relief restraining the improper use of confidential information provided under the Award.

11 Mr. Chapman asserted that the injunctive relief is sought as part of the GP's application to set aside the Order granting leave and, if the relief sought by the GP were granted, the Order should be discharged in the circumstances where the GP has always made clear that it will comply with the “remaining” terms of the Award.

The Evidence in Support

12 The GP's stated concern arises in respect of the Fund's interest in K-Electric Limited (“ KEL”), a large electricity supplier in Pakistan. The agreed facts are that the Fund holds an interest in KEL through IGCF SPV 26 Limited (“ SPV 26”) (of which it holds 100%) which in turn holds at least 70.6% in IGCF SPV 21 Limited (“ SPV 21”). SPV 21 holds 53.8% of the shares in KES Power Limited (“ KESP”). KESP holds a 66.4% interest in KEL.

13 The other shareholders in KESP are Al Jomaih Power Limited (“ AJP”) (27.7%) and Denham...