Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV v Societe Bengaz SA & Anor

INTRODUCTION

On 8 March 2024, I heard an application by the Claimant (“FMO”) for permission to apply for summary judgment against the First Defendant (“Bengaz”), in the absence of any Acknowledgement of Service or Defence; and for summary judgment. At the end of the hearing, I granted both applications and indicated that written reasons would follow. This judgment sets out my reasons for granting both applications.

The applications were supported by the 5^th and 6^th affidavits of Mr Ardil Jabbar Salem, a partner in FMO’s solicitors, Hogan Lovells International LLP. Bengaz did not file any evidence in response. The Second Defendant (“WAGPCO”) served, in response to the applications, the 2^nd affidavit of Mr Odey Simon Adamade, WAGPCO’s General Counsel.

FMO’s claims arise from a Credit Agreement, under which as at the date of the hearing Bengaz owed approximately US$56 million to FMO (including interest), and associated security documentation. As explained below, Bengaz is a shareholder in WAGPCO, and in that capacity has received and continues to receive substantial sums from WAGPCO over which FMO claims proprietary and other rights.

For the reasons set out below, I concluded that FMO’s claims succeeded in full, and gave summary judgment accordingly together with ancillary relief.

FACTS

FMO is a company incorporated in the Netherlands and majority-owned by the government of the Netherlands. It operates as a bank and lends funds with a view to promoting economic development in emerging markets.

Bengaz is a company incorporated in Benin which operates as a special purpose vehicle for the purpose of holding investments in WAGPCO.

WAGPCO is a company incorporated in Bermuda. It owns and operates the West African Gas Pipeline which supplies gas from Nigeria to certain other West African countries pursuant inter alia to a West African Gas Pipeline Project Agreement dated 22 May 2003 between WAGPCO and the governments of Benin, Ghana, Nigeria and Togo.

The rights of WAGPCO’s shareholders are (so far as material) regulated by:

Since 2005, pursuant to a transaction reflected in the fourth amendment to the Shareholders Agreement and the first amendment to the Escrow Agreement, Bengaz has been a 2% shareholder in WAGPCO and a creditor of WAGPCO in respect of substantial shareholder loans.

Bengaz’s acquisition of its shareholding and other rights in respect of WAGPCO was financed by lending from FMO, as I explain below.

The shareholders of WAGPCO, including Bengaz, have from time to time become entitled, and continue to become entitled, to payments from WAGPCO pursuant to their various rights as shareholders, as creditors in respect of shareholder loans, and as parties to the Shareholders Agreement and the Escrow Agreement (together “Shareholder Payments”, further defined at § 83.ii) below). Clause 9.1 of Amendment No. 1 to the Shareholders Agreement obliges WAGPCO to make payments due to its shareholders into such bank accounts as they shall from time to time specify in writing. As set out in § 56 below, FMO has, by its Particulars of Claim, exercised that right on Bengaz’s behalf, acting as Bengaz’s receiver pursuant to powers set out in the Security Agreements referred to below.

FMO and Bengaz entered into a Term Facility Agreement originally dated 11 August 2005 to govern the lending provided by FMO to Bengaz, subsequently amended and restated on four occasions by Supplemental Agreements dated 11 August 2006, 22 January 2007, 26 November 2007 and 2 April 2009 (together “the Credit Agreement”).

Clause 2(a) of the Credit Agreement provides that:

“Subject to the terms of this Agreement, FMO makes available to the Borrower [Bengaz]: (a) a term facility in an amount of $24,459,710...”

This term facility is defined as “Facility A” in clause 1.1, which sets out the definitions used in the Credit Agreement.

By clause 2(b), FMO made available to Bengaz a further term facility, defined as “Facility B”. That facility is not the subject of the present claim, though FMO reserves the right to pursue further claims in respect of Facility B (by way of amendment or in separate proceedings).

The Availability Period of Facility A is defined as “the period from and including the date of this Agreement to and including: (a) in the case of Facility A, October 15, 2010...”.

Footnote 1 to clause 2(a) adds that, for the avoidance of doubt, on the last day of the Availability Period, the aggregate of all Capitalised Interest Amounts (defined as “the amount of accrued interest determined at the Fixed Rate and capitalised pursuant to Subclause 8.3 (Payment of Interest)”) shall not exceed US$6,777,085, making the total Facility A provided equal to an amount not exceeding US$31,236,795.

Clause 3(a)(i) requires the Borrower to apply all amounts borrowed under Facility A for the purpose of financing the Borrower’s investment in WAGPCO.

Clause 6.1 requires that “The Borrower shall repay the Facility A Loans in full on the Termination Date”, defined as “in respect of Facility A, 15 April, 2020”.

Clause 8 includes the following provisions as to interest:

Clause 12.2 (“Other indemnities”) states:

“The Borrower shall, within 5 Business Days of demand, indemnify FMO against any cost, loss or liability incurred by FMO as a result of: (a) the occurrence of any Event of Default; [or] (b) a failure by the Borrower to pay any amount due under any Finance Document on its due date...”

Under clause 14.3 (“Enforcement costs”):

“The Borrower shall, within 5 Business Days of demand, pay to FMO the amount of all costs and expenses (including legal fees and any travel expenses) incurred by FMO in connection with the enforcement of, or the preservation of any rights under, any Finance Document.”

“Finance Document” is defined as “this Agreement, the Supplemental Agreement, the Accounts Agreement, any Security Document, an Option Agreement, or any other document designated as such by FMO and the Borrower”.

The Events of Default provided for in clause 19 include:

Clause 23.5 (“No set-off by the Borrower”) provides that “All payments to be made by the Borrower under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim”.

Pursuant to clause 26.2 (“Certificates and Determinations”):

“Any certification or determination by FMO of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.”

and under clause 26.3 (“Day count convention”):

“Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or otherwise, depending on what FMO determines is market practice.”

Clause 30 provides that the Credit Agreement is governed by English law, and clauses 31 and 32 contain the following dispute resolution provisions:

“31.

ARBITRATION

31.1

Arbitration

Subject to Subclause 31.4 (Option), any Dispute shall be referred to and finally resolved by arbitration under the Arbitration Rules (the Rules) of the London Court of International Arbitration.

31.2

Procedure for arbitration

...

31.3

Recourse to courts

Save as provided in Subclause 31.4 (Option),the parties exclude the jurisdiction of the courts under Sections 45 and 69 of the Arbitration Act 1996.

31.4

Option

Before an arbitrator has been appointed to determine a Dispute, each of FMO and the Borrower may by notice in writing to all other parties to this Agreement require that all Disputes or a specific Dispute be heard by a court of law. If FMO or the Borrower gives such notice, the Dispute to which such notice refers shall be determined in accordance with Clause 32 (Enforcement).

32.

ENFORCEMENT

32.1

Jurisdiction

(a)

The courts of England have exclusive jurisdiction to settle any Dispute.

(b)

The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

(c)

This Subclause is for the benefit of FMO only. As a result, FMO shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, FMO may take concurrent proceedings in any number of jurisdictions.

32.2

Service of process

Without prejudice to any other mode of service allowed under any relevant law, the Borrower:

(a)

irrevocably appoints David Doble Solicitors of 6-7 Bedford Row, London WC1R 4BS as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(b)

agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.

32.3

Waiver of immunity

The Borrower irrevocably and unconditionally:

(a)

agrees not to claim any immunity from proceedings brought by FMO against the Borrower in relation to a Finance Document and to ensure that no such claim is made on its behalf;

(b)

consents generally to the giving of any relief or the issue of any process in connection with those proceedings; and

(c)

waives all rights of immunity in respect of it or its assets.”

Bengaz provided various forms of security to FMO in respect of its borrowing under the Credit Agreement. These include two consecutive security agreements in substantially similar terms dated 11 August 2005 and 2 April 2009 (together “the Security Agreements”). Under these agreements, Bengaz charged in favour of FMO all of its rights in respect of the Shareholders Agreement and the Escrow Agreement, and undertook to get in and realise various forms of assets and income (including income from WAGPCO) in the ordinary course of its business; and to hold the proceeds on trust for FMO, subject to payment into a “Receipts Account” (subsequently varied, in relation to payments from WAGPCO, to payment into a separate Proceeds Account: see below).

The Security Agreements include these provisions:

The security package also included documents relating to the Proceeds Account. By a Bank Account Charge and an Accounts Agreement, both dated 19 June 2009, Bengaz entered into obligations to ensure that all income received from WAGPCO was paid into a separate bank account with Standard Chartered Bank with Account Number 01 02 2555336 50 (“the Proceeds Account”) over which it gave security; and the obligation within clause 5.5(b) of the Security Agreements to procure payment into the “Receipts Account” was thereby varied insofar as it related to payments from WAGPCO. The Proceeds Account was opened on 28 May 2009.

Under the Bank Account Charge dated 19 June 2009 (“the Bank Account Charge”) Bengaz (as “Chargor”) granted FMO (as “Lender”) a first fixed charge over all of its rights in the credit balance from time to time on the Proceeds Account, including all interest accrued on that balance. It includes these provisions:

By an agreement dated 19 June 2009 between FMO (as “Lender”), Bengaz (as “Borrower”), and Standard Chartered Bank (defined as the “Account Bank”) (“the Accounts Agreement”), Bengaz agreed inter alia to ensure that all income received by it from WAGPCO was paid into the Proceeds Account. The Accounts Agreement includes these provisions:

Bengaz drew down a total of US$25,210,694.18 under Facility A. Interest accrued on the sums withdrawn, and interest was capitalised up to the end of the Availability Period (15 October 2010) pursuant to § 8.3(b) of the Credit Agreement.

The details of the drawdowns, interest, interest capitalisations and repayments are set out in Schedule A to Mr Salem’s 5^th affidavit. The position in outline is as follows. The first drawdown was on 27 October 2006 in the sum of US$16,421,238.70. Further drawdowns were made in 2007 and 2009, and on 19 February 2007 the sum of US$1,015,772.72 was credited to the account, having been transferred to a different facility provided by FMO. By 15 October 2010, the total debt due to FMO was US$31,058,023.46, comprising US$25,210,694.18 total drawdowns (net of the February 2007 credit mentioned above) and US$5,847,329.28 of capitalised interest.

Over the ensuing 13½ years, interest has continued to accrue on the debt of US$31,058,023.46, at the contractual rate of 6% per annum. The only payments Bengaz has ever made were US$127,826.62 paid on 25 August 2011 and US$297,212.40 paid on 17 September 2012. FMO applied those payments against interest (as it was entitled to do pursuant to § 23.4 of the Credit Agreement).

By 13 December 2023, the day before FMO’s application notice was issued, the total interest accrued since 15 October 2010, net of the two payments mentioned above, was US$24,457,614.12. The total debt owed by Bengaz to FMO under Facility A was therefore the US$31,058,023.46 debt (principal and capitalised interest) as at 15 October 2010 plus US$24,457,614.12 interest accrued since that date up to 13 December 2023, making a total of US$55,515,637.58. By the date of the hearing before me on 8 March 2024, that figure had risen to US$55,960,802.58, comprising US$31,058,023.46 principal and capitalised interest as at 15 October 2010 plus US$24,902,779.12 interest accrued from 15 October 2010 to 8 March 2024. The figure of US$55,960,802.58 was certified by FMO on 1 March 2024 pursuant to § 26.2 of the Credit Agreement, and also verified in Mr Salem’s 6^th affidavit. I gave summary judgment in that amount on 8 March 2024.

Under §§ 12.2 and 14.3 of the Credit Agreement, FMO is also entitled to payment (within 5 Business Days of demand) of other costs, liabilities, and/or expenses incurred by FMO in connection with any Event of Default (§ 12.2) or enforcement or preservation of its rights under any Finance Document (including the Credit Agreement) (§ 14.3). The non-repayment of Facility A was an Event of Default (§ 19.1). FMO on 6 September 2023, 6 December 2023 and 16 February 2024 made demands under §§ 12.2 and 14.3 amounting in total to US$1,649,750.85. FMO is entitled, subject to assessment, to recover those sums in addition to the principal and interest referred to above.

Mr Salem states in his evidence, which I accept, that Bengaz has recognised and acknowledged that it is in default of its obligations on many occasions, including in specific exchanges to which he refers. Mr Salem explains that these exchanges occurred at a time when FMO had indicated its willingness to restructure Bengaz’s indebtedness on mutually agreeable terms, but no restructuring was ultimately finalised. The exchanges he cites (attaching copies) are as follows.

In the meantime, funds received by or due to Bengaz from WAGPCO have not been paid into the Proceeds Account, as should have occurred pursuant to the Security Agreements, the Bank Account Charge and the Accounts Agreement.

First, between 2012 and 2016, seven payments totalling US$4,169,756.55 (“the Missing Payments”) were paid by WAGPCO into bank accounts in Benin, acting on instructions of Bengaz, and despite being notified during that period of the Accounts Agreement. Bengaz has not disclosed where these payments went. These sums were as follows:

Secondly, in the context of a shareholder dispute within Bengaz being litigated in the courts of Benin, WAGPCO has segregated sums due to Bengaz (“the Segregated Funds”) in an account in London, held (like the Proceeds Account) at Standard Chartered Bank (“the Segregated Account”). The total sum held in that account was around US$26 million, a figure which increases as further sums fall due from WAGPCO to Bengaz.

On 4 July 2023, FMO issued a without notice application for interim contractual and proprietary injunctions against the Defendants, along with a worldwide freezing order against Bengaz.

This application was heard on 5 July 2023 by Bright J, who made the orders sought (“the 5 July Order”), including an order that Bengaz provide by 11 July 2023 information about payments it had received from WAGPCO and disclosure of its assets.

On 6 July 2023, FMO issued the present proceedings.

Also on 6 July 2023, FMO sent the 5 July Order to Bengaz and connected individuals, and to WAGPCO. The Bengaz recipients included both: (i) Mr Monnou who is currently recognised by the Benin courts and by WAGPCO as Chairman of the Board of Bengaz, and whose company, Coryve Investments, asserts a 70% shareholding in Bengaz, and (ii) representatives of other shareholders who oppose him (“the Foundation Shareholders”).

By a letter dated 7 July 2023, FMO gave Bengaz notice under § 31.4 of the Credit Agreement, exercising its right to rely on § 32 of the Credit Agreement, conferring exclusive jurisdiction on this court. The letter was sent to Bengaz by registered post to the four addresses of Bengaz referred to in Mr Salem’s 5^th affidavit (quoted, in relevant part, in § 48 below), at each of which it was signed for as having been received on 11 July 2023, as well as by email to various addresses associated with Bengaz.

On 6 and 18 July 2023, Mr Sossa of CDI, one of the Foundation Shareholders, wrote to confirm CDI’s agreement with the 5 July Order. On 20 July 2023, Mr Sossa wrote to FMO’s solicitors on behalf of (and copying) representatives of the Foundation Shareholders, attaching a joint statement on their behalf, stating that “FMO’s claim against Bengaz is certain, liquid and payable, and it must be the priority of the directors of the company Bengaz” and “all the actions initiated by our clients… are aimed at making Bengaz repay its debt to FMO”.

FMO served the proceedings on the Defendants. In § 32.2 of the Credit Agreement (quoted earlier), without prejudice to any other mode of service allowed under any relevant law, Bengaz irrevocably appointed David Doble Solicitors of 6-7 Bedford Row, London WC1R 4BS as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document, and agreed that failure by a process agent to notify Bengaz of the process would not invalidate the proceedings concerned. In addition (though this point is not necessary in order to validate the service effected), David Doble Solicitors wrote to Bengaz on 31 March 2009 on the subject of fees, referring to its appointment as agent and to its understanding that that appointment would last for 20 years (apparently reflecting the anticipated long duration of the credit arrangements).

On 12 July 2023, FMO’s solicitors sent the claim form, by way of service, by first class post to David Doble Solicitors at that address, and at three other addresses which information in the public domain indicated were practising addresses of the firm (Berkeley Square House, Berkeley Square, London W1J 6BD; 25 Southampton Buildings, London WC2A 1AL; and Floor 6, International House, 4 Maddox Street, London W1S 1QP). The packages sent to the Berkeley Square and Southampton Buildings addresses were subsequently returned undelivered. FMO’s solicitors’ courier team was told, when attempting to serve hard copy bundles for the 21 July 2023 hearing referred to below at the Berkeley Square address, that the firm was now operating at the Maddox Street address. Mr Doble emailed FMO’s solicitors on 17 July 2023, giving the Maddox Street address in his email signature, stating that his firm’s appointment as agent for service of process expired some years ago. However, the firm’s appointment in the Credit Agreement was irrevocable. FMO’s service of the proceedings on David Doble Solicitors, at the address stated in the Credit Agreement and at the Maddox Street address, constituted valid service of the proceedings on Bengaz.

In addition, out of an abundance of caution, FMO took steps (without prejudice to the validity of the service already effected) to serve the proceedings on Bengaz in Benin. Mr Salem in his 5^th affidavit gives the following details:

“[59](a) On 17 July 2023, a copy of the Claim Form (including accompanying documents and a response pack) was couriered to the four addresses of the First Defendant in Benin known by this firm. The addresses are set out in full in Schedule C hereto and below.

(i)

Cotonou, Avlékété district Lot No. 136-137, Rue du Dahomey 01 BP: 4690-RP. I was first informed of this address by the Claimant. I note that during the 21 July Hearing, Mr Monnou expressly confirmed the address of the First Defendant to be “136 –137 Rue de Dahomey”. The full address was also stated by Mr Monnou in an email to Hogan Lovells on 17 July 2023 to be “lot 136 - 137 Avlékété, rue du Dahomey, in Cotonou (Bénin)”.

(ii)

Place Ganhi 01 BP 1519 Cotonou, Republic of Benin. After swearing Salem 1, this address was given to me as an alternate address by Ms Smolenska-Green.

(iii)

Ilot 451 Ganhi, Cotonou, Benin. My firm identified this address from a document relating to Court proceedings in Benin I note that on 27 July 2023, Mr Sossa confirmed by email to Hogan Lovells that "the claim form was served to the BenGaz (a) by DHL (b) by a Bailiff at address below; BenGaz SA Ilot 451 Place Ganhi 01 BP 1519 Cotonou Republic".

(iv)

Place Ghani 01 BP 5136 Cotonou, Republic of Benin. My firm also identified this address from a document relating to Court proceedings in Benin.

(b)

On 19 July 2023, the Claim Form (including accompanying documents and a response pack) was served via Bailiff in Benin at the addresses set out in Schedule C hereto.

60.

Strictly without waiving privilege, I understand from the Claimant’s Benin Counsel that service in Benin can take two forms: service by bailiff and a notification (being a simple letter sent to the First Defendant) and that as such, the precautionary service of the Claim Form (by both methods specified above) on the First Defendant in Benin amounts to valid service. This derives from Article 92 of the Code of Civil, Commercial, Social, Administrative and Accounting Procedure (the “Benin Code”) which translates into English as “Legal documents from a foreign State whose notification is requested by the authorities of that State shall be notified by means of simple delivery or service through bailiff”.”

(exhibit references omitted)

I accept that evidence.

On 11 July 2023, Candey solicitors wrote to FMO’s solicitors to state that they were in the process of being instructed by Bengaz.

On 20 July 2023, WAGPCO filed and served its Acknowledgment of Service, accepting jurisdiction.

The return date hearing took place on 21 July 2023. Sean O’Sullivan KC (sitting as a Deputy Judge of the High Court) continued the freezing order, proprietary injunctions, and other relief (with some variations) (“the 21 July Order”). Mr Monnou attended the hearing on behalf of Bengaz. He sought an adjournment, which was refused, and additional time to seek English legal advice and apply to set aside or vary the injunctions, and was given until 1 September 2023 to do so. The Deputy Judge nonetheless warned and directed Mr Monnou to comply with the information requirements of the 21 July Order forthwith. WAGPCO was represented by counsel and solicitors at the hearing, and took a neutral position apart from requesting fortification of FMO’s undertaking in damages. Mr Sossa also attended the 21 July 2023 hearing but did not make representations.

On the same day as the 21 July 2023 hearing, in which he participated, Mr Monnou issued proceedings in Benin on behalf of (or purportedly on behalf of) Bengaz (“the Opposition”) claiming inter alia that the 5 July Order had not been properly served in Benin and that WAGPCO should make payment to Bengaz instead.

Bengaz did not file an Acknowledgment of Service by the deadline on 28 July 2023, or at all, despite being reminded by FMO of the deadline by a letter dated 26 July 2023.

On 1 September 2023, Candey (although not yet on the record for Bengaz) emailed the Deputy Judge’s clerk at chambers direct requesting an extension of time to set aside or vary the 21 July Order. This was rejected on the basis of its procedural irregularity, but Bengaz did not make any formal application for an extension of time.

Candey came on the record for Bengaz on 7 September 2023.

On 13 September 2023, FMO served its Particulars of Claim on WAGPCO, and on 3 October 2023 served them on Bengaz. Service on Bengaz was effected by hand-delivery to Candey, and (out of an abundance of caution) by hand-delivery to David Doble Solicitors at their Maddox Street address, and on Bengaz in Benin by registered courier to the four addresses referred to above. By § 30 of the Particulars of Claim, FMO exercised certain rights, as follows:

“In all the circumstances, the Claimant has (and exercises) each of the following contractual rights, which it is just and appropriate for the Court to (a) confirm by way of declaration, (b) enforce by way of specific performance, (c) enforce, insofar as necessary, by way of injunction and (d) enforce, insofar as necessary, by further or consequential orders:

(1)

The right, pursuant to clause 3.1 of the Accounts Agreement, to require the First Defendant to ensure that the contents of the Segregated Account and all future Shareholder Payments be paid by the Second Defendant into the Proceeds Account;

(2)

The right, pursuant to clause 9.5 of the Security Agreements, to exercise the powers which would be exercisable by a Receiver appointed over the First Defendant’s entitlement to Shareholder Payments under the Shareholder Agreement (which form part of the “Security Assets” within the terms of the Security Agreements as set out above) and thereby require the Second Defendant to pay the contents of the Segregated Account and all future Shareholder Payments into the Proceeds Account; and

(3)

The right, pursuant to clause 15 of the Security Agreements, to act as the First Defendant’s attorney and thereby require the Second Defendant to pay the contents of the Segregated Account and all future Shareholder Payments into the Proceeds Account.”

Between 6 October 2023 and 10 November 2023, FMO and WAGPCO agreed extensions of time for WAGPCO’s Defence, to allow time for without prejudice discussions and (ultimately) the present summary judgment application to be prepared and issued, which suspended the deadline under CPR 24.4(4).

On 14 December 2023 FMO issued the present application. The application notice and papers (including the 5^th affidavit of Mr Salem, dated 14 December 2023) were served on Candey by hand, on David Doble Solicitors by hand at the Maddox Street address, and by registered courier to Bengaz at the four addresses in Benin referred to above. In addition, electronic copies were sent, for information, to email addresses associated with Bengaz.

On 6 January 2024, Mr Sossa on behalf of all the Foundation Shareholders wrote to FMO’s solicitors confirming their support for FMO’s actions.

On 5 February 2024, FMO wrote to AO Law (instructed on behalf of WAGPCO) and to Candey noting that the deadline for responsive evidence had passed.

On around 9 February 2024, a Desiré Monnou appears to have sent a letter to the court requesting an adjournment of this hearing. Desiré Monnou signed the letter as Bengaz’s “Managing Director”, and is described in the Opposition as Bengaz’s “CEO in office”. The letter was not copied to FMO’s solicitors, but was later sent by email from Bengaz to FMO’s solicitors on 16 February 2024. Desiré Monnou stated that Bengaz lacked funds to seek legal advice, wished to use the Segregated Account funds protected by the 21 July Order, and would “firmly oppose” summary judgment.

FMO’s solicitors replied, to Candey, on 21 February 2024 noting that:

On 21 February 2024, FMO’s solicitors received a notice of change (signed by Mr Monnou) stating that Candey had ceased to act for Bengaz. This appears to have been filed under the wrong claim number. A further notice of change (also signed and dated 21 February 2024) was sent to FMO’s solicitors by Candey on 6 March 2024. The notice gave the address to which documents about the claim should be sent as Lot N136-137, Rue du Dahomey, Quatier Aviekete, Cotonou, Benin (i.e. the same premises as the first of the four addresses for Bengaz referred to earlier) along with Mr Monnou’s email address.

Also on 21 February 2024, WAGPCO served the 2^nd affidavit of Mr Adamade, dated 16 February 2024, along with an application for relief from sanctions. Following correspondence, FMO consented to the application subject to the court’s approval, and an order granting relief to WAGPCO was made on 4 March 2024. FMO and WAGPCO also agreed an extension of time for FMO’s evidence in reply to WAGPCO, i.e. the 6^th affidavit of Mr Salem, which was served on 4 March 2024.

At the hearing on 8 March 2024, FMO and WAGPCO were represented by counsel. Mr Monnou participated on behalf of Bengaz, and Mr Sossa was present as an observer. Mr Monnou stated that he was appearing under protest because Bengaz had never been in a position to be properly represented by an English lawyer, and sought an adjournment. He stated that FMO and WAGPCO had been withholding all Bengaz’s funds, and that Bengaz had had no funds since 2016. Asked about the fact that Candey had been acting for Bengaz for a significant period of time, Mr Monnou said it had been a ‘nightmare’ finding funds to pay them. As to Bengaz’s funding of proceedings in Benin, Mr Monnou said he was a lawyer himself with chambers in Benin.

After giving Mr Monnou and counsel for the other parties an opportunity to make submissions, I refused to adjourn the hearing, giving oral reasons which have been separately transcribed. In summary, I concluded that an adjournment was not appropriate in circumstances where:

PERMISSION TO APPLY FOR SUMMARY JUDGMENT

FMO seeks permission to apply for summary judgment against Bengaz, permission being required because Bengaz has filed no Acknowledgement of Service.

I summarised the relevant principles in DVB Bank SE v Vega Marine Ltd [2020] EWHC 1494 (Comm):

“56.

CPR 24.4(1) provides:

“A claimant may not apply for summary judgment until the defendant against whom the application is made has filed – (a) an acknowledgement of service; or (b) a defence, unless – (i) the court gives permission; or (ii) a practice direction provides otherwise.”

57.

There is no requirement for a party to obtain permission under CPR 24.4(1) before issuing a summary judgment application: both applications can be made in the same application notice: F BN Bank (UK) Ltd v Leaf Tobacco A Michailides SA [2017] EWHC 3017 (Comm) § 17 (Andrew Baker QC); European Union v Syria [2018] EWHC 1712 (Comm) § 62 (Bryan J); and Punjab National Bank (International) Ltd v Boris Shipping Ltd [2019] EWHC 1280 (QB) § 30-32 (Christopher Hancock QC).

58.

Bryan J summarised the principles relevant to the exercise of the court’s discretion under CPR 24.4(1) in European Union v Syria:

‘(1) The purpose of the rule are to ensure that no application for summary judgment is made before a defendant has had an opportunity to participate in the proceedings and to protect a defendant who wishes to challenge the Court's jurisdiction from having to engage on the merits pending such application.

(2)

Generally, permission should be granted only where the Court is satisfied that the claim has been validly served and that the Court has jurisdiction to hear it. Once those conditions are met there is generally no reason why the Court should prevent a claimant with a legitimate claim from seeking summary judgment.

(3)

The fact that a summary judgment may be more readily enforced in other jurisdictions than a default judgment is a proper reason for seeking permission under CPR 24.4(1).’ (§ 61)

I would add, in relation to (3), that it would in my view be sufficient that the claimant has a reasonable belief that a summary judgment may be more readily enforced than a default judgment. There is no justification for the court subjecting any such belief to minute examination, when the permission the claimant is seeking is in reality no more than the opportunity to obtain a reasoned judgment on the merits of its claim.”

Mr Salem states in his 5^th affidavit:

“66.

Strictly without waiving privilege, the Claimant has given careful thought as to whether it would be most appropriate to seek default judgment or summary judgment in the circumstances. The Claimant seeks an order for summary judgment (rather than default judgment) in the following circumstances.

(a)

The nature of the relief sought in the Summary Judgment Application includes declaratory and injunctive relief. It also necessitates the Second Defendant to be a respondent to the Applications in circumstances where it is the holder of the Segregated Account and has control over the Shareholder Payments. The Second Defendant has filed an Acknowledgment of Service in these proceedings and its defence deadline has been extended by agreement. Default judgment is therefore not an appropriate or adequate remedy.

(b)

As set out above, the First Defendant is a company incorporated in Benin the Second Defendant is a company incorporated in Bermuda. It may therefore be necessary to enforce any judgment obtained overseas (including in Benin or Bermuda), given that the Defendants are incorporated in other jurisdictions, the cross-border nature of the claims, and the fact that there have been and/or are proceedings before the courts of Benin and Togo ...

(c)

As already noted, the First Defendant has failed to give any asset disclosure, and therefore it is important for the Claimant (having little knowledge of where assets of the First Defendant it may wish to enforce against are located) to ensure it has the best possible chance of enforcing a judgment of the English Court in other jurisdictions.”

In these circumstances it was appropriate to grant permission, and I did so at the hearing on 8 March 2024.

SUMMARY JUDGMENT

Under CPR 24.3, the court may give summary judgment “against a claimant or defendant on the whole of the claim or on an issue if — (a) it considers that the party has no real prospect of succeeding on the claim, defence or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial”.

In The LCD Appeals (Iiyama (UK) Ltd and others v Samsung Electronics Co Ltd and others) [2018] EWCA Civ 220, the Court of Appeal approved the following considerations applicable to summary judgment applications, taken from passages in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and Swain v Hillman [2001] 1 All ER 91 at 94. I state them below in a form applicable equally to applications by claimants and applications by defendants:

If an applicant for summary judgment adduces credible evidence in support of the application, the respondent then comes under an evidential burden to prove some real prospect of success or other reason for having a trial: Sainsbury’s v Condek [2014] EWHC 2016 (TCC) § 13.

A respondent to a summary judgment application who claims that further evidence will be available at trial must serve evidence substantiating that claim: Korea National Insurance Corp v Allianz [2007] 2 CLC 748 (CA):

“It is incumbent on a party responding to an application for summary judgment to put forward sufficient evidence to satisfy the court that it has a real prospect of succeeding at trial. If it wishes to rely on the likelihood that further evidence will be available at that stage, it must substantiate that assertion by describing, at least in general terms, the nature of the evidence, its source and its relevance to the issues before the court. The court may then be able to see that there is some substance in the point and that the party in question is not simply playing for time in the hope that something will turn up. It is not sufficient, therefore, for a party simply to say that further evidence will or may be available, especially when that evidence is, or can be expected to be, already within its possession, as is the case here. …” (§ 14 per Moore-Bick LJ)

I have set out in section (B) above the facts and evidence on which FMO bases its application for summary judgment for the sum of US$55,960,802.58.

Although, as noted above, Bengaz has engaged to a degree with these proceedings, and has given general expressions of opposition to FMO’s claim, it has neither filed a Defence, nor set out substantive grounds of defence, nor filed any evidence in opposition to FMO’s claims and summary judgment application.

WAGPCO has stated that it does not oppose the summary judgment application and takes a neutral stance. However, it submitted that if the application were granted, then the court should order FMO to indemnify it in respect of any losses that may be caused to it by the court’s order. I consider that point in section (C)(6) below.

I am satisfied, on the evidence provided, that FMO is entitled to the sum sought, that there is no real prospect of Bengaz succeeding in any defence to the claim, and that there is no other compelling reason why the case should be disposed of at a trial. FMO is therefore entitled to summary judgment for US$55,960,802.58 against Bengaz.

The power to grant declarations is part of the general jurisdiction of the High Court, and is now derived from section 19 of the Senior Courts Act 1981.

CPR 40.20 provides that:

“The court may make binding declarations whether or not any other remedy is claimed.”

In deciding whether to exercise its discretion, a court invited to make a declaration must consider whether in all the circumstances it is appropriate, taking into account justice to the parties, whether the declaration would serve a useful purpose, and whether there are any other special reasons why the court should or should not grant the declaration (Financial Services Authority v Rourke [2002] CP Rep 14 (Neuberger J, 19.10.01)).

FMO seeks summary judgment on its claim for a declaration that all payments from WAGPCO to Bengaz must be made into the Proceeds Account, based on § 3.1 of the Accounts Agreement: “The Borrower must ensure that all income received by the Borrower from the Company is paid directly into the Proceeds Account”, which, as noted earlier, is defined as account no. 01 02 2555336 50 at Standard Chartered Bank, London.

FMO also seeks summary judgment on its claim for declarations that the following funds (“the Segregated Funds”) are held on trust for FMO:

I agree with FMO that the Segregated Funds are held on a primary trust by WAGPCO for Bengaz, under the principles set out in Re Kayford [1975] 1 WLR 279, 282, Bath and North East Somerset Council v HM Attorney General [2002] EWHC Civ 1623 (Ch), Snell’s Equity (34^th ed) § 22-013 and Lewin on Trusts (20^th ed.), vol 1, § 8-004. The evidence shows that:

Bengaz’s beneficial interest is, in turn, held on trust for FMO as a result of § 5.5(a) of the Security Agreements, quoted in § 27.v) above. Further, WAGPCO is on notice of FMO’s proprietary rights in the Segregated Funds, by reason of FMO’s letter dated 27 June 2023 and the documents it has served in the course of the proceedings.

FMO seeks a declaration that, by § 9.5 of the Security Agreements, quoted in § 27.vii) above, it is entitled to exercise on behalf of Bengaz the rights, powers and discretions that would be exercisable by a Receiver under the Security Agreements in respect of (i) Bengaz’s rights against WAGPCO to Shareholder Payments and (ii) the Segregated Funds; and, accordingly, that FMO is entitled to require WAGPCO (and WAGPCO is obliged) to pay Segregated Funds and future Shareholder Payments to FMO’s order into the Proceeds Account.

Clause 9.5 applies after the security provided for in the Security Agreements has become enforceable. Under § 7.1, that occurs if there is an Event of Default. Events of Default have clearly occurred, including, most simply, by reason of non-payment (§ 19.1 of the Credit Agreement).

The power conferred by § 9.5 of the Security Agreements applies to any Security Asset, defined as “all assets of the Chargor the subject of any security created by this Deed.” Clause 2 of the Security Agreements states that the security created by the Security Agreements “is created over present and future assets of the Chargor [Bengaz]” (§ 2.1(a)(ii)) and includes “all of its [Bengaz’s] rights in respect of [the Shareholders Agreement” (§ 2.3). Both Bengaz’s rights to the balance of the Segregated Funds and its rights against WAGPCO to future Shareholder Payments fall within the definition of “Security Asset”.

FMO has, through its Particulars of Claim, exercised these rights by requiring WAGPCO to pay the Segregated Funds and any future Shareholder Payments into the Proceeds Account.

FMO seeks an equivalent declaration pursuant to its rights as Bengaz’s attorney under § 15 of the Security Agreements, quoted in § 27.x) above. As FMO points out, by requiring payment into the Proceeds Account, FMO is merely enforcing its rights under the Security Agreements and Bengaz’s obligations under the Accounts Agreement.

As explained earlier, the Missing Payments were paid by WAGPCO into bank accounts in Benin acting on the instruction of Bengaz, but should have been paid into the Proceeds Account. FMO seeks summary judgment on its claim that the Missing Payments, or their traceable proceeds/exchange product, are held on trust for FMO by Bengaz as a result of § 5.5(a) of the Security Agreements.

I consider that each of the declarations sought, as summarised, would be just as between the parties, and would serve a useful purpose, not least given the ongoing situation in which payments from WAGPCO to Bengaz are held and will continue to fall due. The apparent contention about control over Bengaz in my view makes it all the more important for the court to provide clarity about FMO’s rights vis-à-vis both Bengaz and WAGPCO.

FMO also seeks orders for mandatory relief against both Defendants.

FMO seeks summary judgment on its claim for specific performance of Bengaz’s obligation under the Accounts Agreement, to ensure that all Shareholder Payments are paid into the Proceeds Account, by ordering Bengaz (i) to instruct WAGPCO to pay all Segregated Funds and future Shareholder Payments into the Proceeds Account, and (ii) insofar as the Missing Payments (or their proceeds) remain in the hands of Bengaz, to pay these into the Proceeds Account.

A basic criterion when considering on order for specific performance is whether damages would be an adequate remedy (Cavendish Square Holding BV v Makdessi [2015] UKSC 67; [2016] AC 1172 § 30). The question has also been framed as whether “it is just, in all the circumstances, that a plaintiff should be confined to his remedy in damages?” (Evans Marshall & Co Limited v Bertola SA [1973] 1 WLR 349, 379H).

FMO seeks specific performance on the basis that, whenever Shareholder Payments are not paid into the Proceeds Account (and a fortiori when paid away elsewhere), FMO is deprived of the benefit of its position as a secured creditor under the Security Agreements and Accounts Agreement, under which it should have immediate recourse to them via the Proceeds Account (a secured account in London). Given that the Shareholder Payments represent Bengaz’s only (or principal) revenue stream and the principal means of repayment of the outstanding debts, it is clear that a mere claim against Bengaz for damages would be an inadequate remedy. An order for specific performance is clearly appropriate.

FMO seeks injunctive relief against WAGPCO to ensure that Shareholder Payments (both the Segregated Funds and future payments) are paid into the Proceeds Account. FMO relies in this regard on the following rights, the basis of which I have already set out:

There is a real risk that, absent injunctive relief, Shareholder Payments (including the Segregated Funds) will not be paid into the Proceeds Account, in circumstances where:

As with FMO’s claims for specific performance, damages would be an inadequate remedy because FMO would be left unsecured in circumstances where it is entitled to be secured. I consider injunctive relief to be appropriate.

FMO also seeks an ancillary order that WAGPCO notify FMO of each entitlement to a Shareholder Payment falling due for the benefit of Bengaz, which continues the order at § 12(1) of the 21 July Order (with which WAGPCO has complied). It is appropriate to make that order too.

FMO seeks an order that Bengaz give details of all Shareholder Payments it has received since April 2009, i.e. the Missing Payments. This reflects § 11(1)(a) of the 21 July Order, with which Bengaz has not complied; and is based on Bengaz’s obligation to ensure that all income received by it from WAGPCO is paid into the Proceeds Account, and FMO’s proprietary interest in those Missing Payments. I consider this relief to be appropriate.

Mr Adamade indicates in his 2^nd affidavit that WAGPCO does not oppose FMO’s application for summary judgment, and “stands ready to pay the sums held in the Segregated Account into the Proceeds Account or any other account pursuant to the order of a competent Court”.

However, Mr Adamade requests an order “directing the Claimant to indemnify and keep the Second Defendant indemnified in full and on demand from and against all or any claims (whether or not successfully compromised or settled), actions, liabilities, demands, cost, expenses or proceedings brought or established against or suffered or incurred by the Second Defendant, as a result of or in connection with the orders sought and/or granted in the Claimant’s application dated 14 December 2023.”

Mr Adamade states that that the funds sequestered in the Segregated Account have been the subject of a plethora of legal proceedings pending in multiple jurisdictions, which has restricted WAGPCO’s ability to do other than to sequester the funds. He refers to the following matters.

Mr Adamade states that WAGPCO is at risk of suffering significant injury in the event that an order is granted in respect of the sequestered funds held on behalf of Bengaz, without a complete consideration of the subsisting proceedings pending in multiple jurisdictions and/or complete indemnification of WAGPCO by FMO. He refers in particular to:

Mr Adamade adds that he is aware Bengaz currently has no access to its funds in the Segregated Account. He believes that whilst there is no risk of WAGPCO contravening the 21 July Order, WAGPCO is concerned that an order to release the funds to any party or transfer the funds to any other account is likely to entangle WAGPCO in continuous litigation costs, if the court proceeds to grant FMO’s application without the full indemnification of WAGPCO.

WAGPCO in its skeleton argument suggests that the proceedings referred to in § 105.iv) above have the most direct relevance to FMO’s present applications. It says there is a clear and obvious danger that the Beninoise court could find in Bengaz’s favour and decide that proper service was not effected. Whichever way the court decides, it says, an appeal is likely. WAGPCO will be at risk that its compliance with any order this court makes (in particular, an order to pay funds into the Proceeds Account) will place it in breach of an order made in a different jurisdiction; and will also inevitably result in WAGPCO incurring additional legal costs.

WAGPCO refers to two authorities. In Clipper Maritime Co Ltd of Monrovia v Mineralimportexport [1981] 1 WLR 126, the court granted an injunction restraining the defendant from removing a cargo from a port, on condition that the plaintiff undertook to reimburse the port authority for the loss of income and other costs incurred as a result. Robert Goff J stated that the Commercial Court was anxious that the jurisdiction to grant Mareva (now freezing) orders “should be implemented in a manner which takes account of the interests of innocent third parties” (p.1263H). In Cartier v British Telecommunications [2018] UKSC 28, the Supreme Court referred at §§ 12-13 to the ordinary rule that the respondent to a Norwich Pharmacal order is entitled to its costs of compliance, and the similar practice applied to expenses incurred by banks in complying with Bankers Trust v Shapira orders (disclosure of information to trace the proceeds of fraud), and the costs of complying with freezing orders; adding that “[o]ther innocent third parties, such as port authorities required by a freezing order to detain a vessel in port, are entitled to the same indemnity” (citing Clipper Maritime).

In response, FMO points out, in its evidence and submissions, that:

I accept FMO’s submissions on these matters. The question of whether the present proceedings were properly served is a matter for this court to determine, applying English rules of procedure and (to the extent relevant) any relevant foreign law. The rights and duties of Bengaz and WAGPCO are governed by English law, and both parties are subject to this court’s jurisdiction in relation to the present action. The indemnity sought by WAGPCO from FMO would in substance transfer to the Benin court the power to determine the outcome of these applications, despite the jurisdiction clauses in the contracts between FMO and Bengaz, because it would require FMO to indemnify WAGPCO in the event that the Benin court took a different view from this court as to the ultimate entitlement to the funds paid/payable from WAGPCO to Bengaz. Any doubt about who is entitled to control Bengaz is beside the point in circumstances where, whoever controls it, Bengaz and WAGPCO owe duties to FMO which FMO is entitled to ask the court to enforce. The cases cited by WAGPCO are distinguishable because:

For similar reasons, I do not consider WAGPCO to be entitled to an indemnity from FMO in respect of legal costs. FMO is entitled to enforce Bengaz’s and WAGPCO’s obligations without having to incur the risks and costs involved in providing an indemnity. I did, however, make orders for Bengaz to pay both FMO’s and WAGPCO’s costs of the present proceedings. Those orders were the subject of a short ruling (separately transcribed).

At the hearing on 8 March 2024, I also continued the worldwide freezing order against Bengaz, for reasons and on terms which were the subject of a further short ruling (separately transcribed). I also made certain orders dispensing with personal service provided that specified other steps were taken to bring my orders to the attention of the Defendants.

CONCLUSIONS

For the reasons set out above, I concluded that FMO should be granted permission to apply for summary judgment, and was entitled to summary judgment on its claims in debt, for mandatory relief and for disclosure.