Mark Skelton v ABRAAJ Investment Management Ltd

• Jurisdiction: Cayman Islands
• Judge: Robin McMillan
• Judgment Date: 14 October 2019
• Court: Grand Court (Cayman Islands)
• Docket Number: Cause No.: FSD 107 of 2019 (RMJ)

In the Matter of Abraaj Investment Management Limited (In Provisional Liquidation and Official Liquidation from 11 September 2019)

And in the Matter of a Director's Services Deed Between ABRAAJ

Investment Management Limited, Mark Skelton and Others

Between:

Mark Skelton

Plaintiff

and

ABRAAJ Investment Management Limited

(In Provisional Liquidation and Official Liquidation from 11 September 2019)

Defendant

Before:

The Hon. Justice Robin McMillan

Cause No.: FSD 107 of 2019 (RMJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

HEADNOTE

The applicable principles of contractual interpretation — The need to protect confidential information belonging to third parties — The law of contract and the law of agency distinguished.

Appearances:

Mr. Richard Morgan Q.C instructed by Ms. Cherry Bridges of Ritch & Conolly for Mr. Mark Skelton, Director of IGCF General Partner Limited

Mr. Guy Manning and Mr. Hamid Khanbhai of Campbells for ABRAAJ Investment Management Limited (In Provisional Official Liquidation as at the date of the hearing and in Official Liquidation as at 11 September 2019)

IN OPEN COURT

Introduction

1 This matter arises from an Originating Summons dated 17 June 2019.

2 The Application is brought by Mr. Mark Skelton (“the Plaintiff”) (“the Conflict Director”) of IGCF General Partner Limited (“IGCF GP”) which is the General Partner of The Infrastructure and Growth Capital Fund L.P (“IGCF”, “the Fund”). The Application is brought against ABRAAJ Investment Management Limited (“AIML”) (“the Defendant”). At the time of the hearing of this matter AIML was in provisional liquidation. As result of an unrelated Order of the Court made on 11 September 2019, AIML is now in Official Liquidation.

3 As described by the Plaintiff at paragraph 19 of his Skeleton Argument dated 8 August 2019, the Plaintiff seeks production from AIML of IGCF GP's and the Fund's documents and information concerning what can be conveniently described as AIML's ultimate management of both of these entities.

4 The Plaintiff asserts that the relief sought turns on the construction of a Director Services Deed (“the DSD”) which the Plaintiff as Director of IGCF GP had entered into with AIML, dated 17 September 2018.

5 Under Clause 17.8 of the DSD the Deed is governed by and shall be construed in accordance with the laws of the Cayman Islands and the parties submit to the exclusive jurisdiction of the Courts of the Cayman Islands.

6 The Originating Summons seeks the following relief:

“By this Summons, which is issued on the application of Mark Skelton of Duff & Phelps Limited, The Shard, 32 London Bridge Street, London SE1 9SG, United Kingdom, the Plaintiff claims against the Defendant Orders (i) that the Defendant do within fourteen (14) days produce to the Plaintiff for inspection and copying all documents held by the Defendant, whether in physical or electronic form, containing any information relating to the property, business or affairs of IGCF General Partner Limited and/or the Infrastructure and Growth Capital Fund L.P. in the period since 1 January 2006 and (ii) all such other orders, directors or relief as may be necessary or appropriate to make such Orders effective or (ii) such further or other Orders as may seem just or appropriate on the grounds that the Plaintiff is entitled to the same pursuant to the terms of a Director Services Deed executed by, amongst others, the Plaintiff and the Defendant in September 2018.”

7 In reply the Defendant has filed the following Notice dated 30 July 2019:

“Notice Under O.28 r. 3(3)

Pursuant to GCR Order 28 rule 3(3), the Defendant hereby gives notice that, on the hearing of the Originating Summons dated 17 June 2019 filed by the Plaintiff, the Defendant will seek declarations and orders that:

• 1. the Plaintiff is not entitled pursuant to clause 4 of the Director Services Deed dated 17 September 2018 (the “DSD”) (or otherwise) to receive information from the Defendant in respect of which the Defendant owes a duty of confidence to any third party other than IGCF General Partner Limited (the “IGCF GP”) and the Infrastructure and Growth Capital Fund L.P. (“IGCF”) (“Confidential Information”);

• 2. in complying with its obligations to provide information to the Plaintiff under clause 4 of the DSD, the Defendant (acting by its provisional or if applicable official liquidators) is entitled to search for and review documents in its possession concerning the business, assets and affairs of the IGCF GP and IGCF, to redact any Confidential Information from such documents prior to providing copies of them to the Plaintiff, and to obtain legal advice in that regard (the “Review and Redaction Process”);

• 3. within the meaning and subject to the terms of clause 4.4 of the DSD, the reasonable costs incurred by the Defendant's attorneys, provisional liquidators and (if applicable) official liquidators in connection with the Review and Redaction Process comprise costs incurred by the Defendant in complying with its obligations under the DSD; and

• 4. (a) within the meaning and subject to the terms of clause 4.4 of the DSD, the reasonable costs incurred by the Defendant's attorneys, provisional liquidators and (if applicable) official liquidators in connection with these proceedings comprise costs incurred by the Defendant in complying with its obligations under the DSD; or alternatively

  (b) the Plaintiff shall pay the Defendant's cost of these proceedings.”

8 In relation to paragraph 4 of the Notice, the Defendant now relies only on sub-paragraph 4 (b), IGCF not being before the Court as a party.

The Abraai Group

9 At this preliminary point it is helpful briefly to summarize the context of the Plaintiff's Application and of the Defendant's Notice.

10 The Abraaj group of companies (“Abraaj Group”) is a collection of private equity funds. Its holding company is Abraaj Holdings (“AH”), which is now in official liquidation in FSD 95 of 2018 (RMJ). The Defendant acted as investment manager to over 40 private equity funds in the Abraaj Group, with over 600 limited partners. AIML (acting now by its Joint Official Liquidators (“JOLs”) continues to act as manager to certain funds.

11 Historically, throughout its management of those funds, AIML did not clearly segregate information relating to one fund from another. This lack of segregation, for example, resulted not only in documents relating to different funds being located in the same place on a computer server, but also, to various documents containing information relating to different funds. Since their appointment, by Order of Mr Justice McMillan dated 18 June 2018, the JPLs and now the JOLs of AIML have in part been engaged in collecting and processing data relating to the many funds that AIML managed, for the purpose of investigating the financial affairs of AIML and AIML's relationship with those funds. This has included investigation of the flow of monies between AIML and the funds it managed.

12 One fund within the Abraaj Group is the fund in this matter. The Plaintiff has been appointed as a Conflict Director of IGCF GP, which is the general partner of the Fund. As we have seen, the Conflict Director's appointment was made pursuant to the DSD to which, amongst other persons, the Conflict Director and AIML were parties.

13 Under the DSD, the Conflict Director was given authority by the IGCF GP and the Fund to represent them on the Liquidation Committee of AIML and in the liquidation proceeding of AIML. In addition, the Conflict Director was given authority to pursue “Conflict Claims”. A Conflict Claim was defined in broad terms as a claim against AIML, AIML Affiliates (as defined), as well as certain other persons.

14 Under the DSD, the Conflict Director also has a contractual right to copies of information or documents available to AIML which relate to IGCF GP and/or the Fund. This Originating Summons turns solely on the contractual rights and obligations that arise in connection with the Conflict Director's right to information from AIML under the terms of the DSD. The issues that arise are questions of the legal interpretation of the DSD.

15 By way of amplification, it should be stated that the Fund was organised pursuant to a Restated Deed of Limited Partnership dated 30 September 2007 (“the LPD”). The Fund was set up in 2006 within the Abraaj Group and was meant to have its funding resources held in segregated accounts.

16 However, from a review of the available material, it also then became apparent that, prior to the appointment of the JPLs, AIML had failed to segregate either the assets of the Fund or information relating to its business or affairs, proper and complete books and records had not been maintained and assets had been appropriated by AIML and/or Abraaj Holdings (“AH”) (AIML's parent company) for their own or unrelated use within the Abraaj Group. The position adopted by the JPLs in relation to this improper intermingling was that it prevented them from permitting the Plaintiff to access any information unless and until it had been reviewed by them at the Fund's expense and all information not obviously and directly relating to the IGCF GP or the Fund had been redacted (defined by the JPLs as a “Confidentiality Review”).

17 Continuing with the general overview, it is the case that AIML has since 2006 acted as the agent of the IGCP GP in administering the Fund under the terms of an Investment Management Agreement (“the IMA”). The IMA is governed by and to be construed in accordance with the laws of England and is subject to the exclusive jurisdiction of the courts of England.

18 In addition to its general duties as an agent to produce to its principal on request all books, correspondence, emails and other electronic material under its control relating to the affairs of the Fund and the IGCP GP, the Plaintiff...