Brunei Investment Agency and Bandone Sdn Bhd v Fidelis Nominees Ltd and Seven Others

JurisdictionJersey
CourtRoyal Court
JudgeClyde-Smith, Commr. and Jurats Allo and Morgan
Judgment Date16 September 2008
Date16 September 2008
ROYAL COURT
Clyde-Smith, Commr. and Jurats Allo and Morgan

K.J. Lawrence for the representors;

R.J. Macrae for the first, second and third respondents;

M.H.D. Taylor for the fourth, fifth, sixth and seventh respondents;

F.B. Robertson for the eighth respondent.

Cases cited:

(1) A Trust, In re, Royal Ct., February 6th, 2006, [2006] JRC 020A, unreported, referred to.

(2) Adams v. Cape Indus. PLC, [1990] Ch. 433; [1991] 1 All E.R. 929; [1990] BCLC 479; [1990] BCC 786, considered.

(3) Arab Monetary Fund v. Hashim (No. 3), [1991] 2 A.C. 114; [1991] 2 W.L.R. 729; [1991] 1 All E.R. 871; [1991] BCC 180, referred to.

(4) Att. Gen.(UK) v. Heinemann Publishers Australia Pty. Ltd. (1988), 165 CLR 30; 78 ALR 449; 62 ALJR 344, referred to.

(5) Att. Gen. (Zambia) v. Meer Care & Desai (a firm), [2007] EWHC 952 (Ch); [2007] All E.R. (D.) 97, referred to.

(6) Austria (Emp.) v. Day (1861), 3 De G.F. & J. 217; 30 L.J. Ch. 690; 45 E.R. 861, referred to.

(7) B Trust, In re, 2006 JLR 562, referred to.

(8) Ball v. King, Royal Ct., November 28th, 2006, [2006] JRC 171, unreported, referred to.

(9) Bandone Sdn Bhd v. Sol Properties Inc., Cayman Is. Grand Ct., June 5th, 2008, unreported, referred to.

(10) Castaneda v. Clydebank Engr. & Shipbuilding Co. Ltd., [1902] A.C. 524; (1902), 10 S.L.T. 237, applied.

(11) Colombia (Govt.) v. Rothschild (1826), 1 Sim. 94; 57 E.R. 514, applied.

(12) Compass Trustees Ltd. v. McBarnett, 2002 JLR 321, referred to.

(13) Esteem Settlement, In re, 2002 JLR 53, referred to.

(14) Fountain Trust, In re, 2005 JLR 359, referred to.

(15) Gotha City v. Sotheby's, The Times, October 8th, 1998, referred to.

(16) Grupo Torras S.A. v. Al-Sabah, [1999] CLC 1469, referred to.

(17) H Trust, In re, 2006 JLR 280; further proceedings, 2007 JLR 569, referred to.

(18) Hullett v. Spain (King) (1828), 2 Bli. (N.S.) 31; 4 E.R. 1041, referred to.

(19) IMK Family Trust, In re, 2008 JLR 250, dicta of Birt, Deputy Bailiff considered.

(20) Iran (Islamic Republic) v. Barakat Galleries Ltd., [2008] 1 All E.R. 1177; [2008] 3 W.L.R. 486; [2007] EWCA Civ 1374, applied.

(21) Italy (King) v. de Medici Tornaquinci (1918), 34 T.L.R. 623, referred to.

(22) Lane, Re, [1986] 1 FLR 283, considered.

(23) Lane v. Lane, 1985-86 JLR 48, considered.

(24) Mbasogo v. Logo Ltd., [2007] Q.B. 846; [2006] EWCA Civ 1370; [2007] 2 W.L.R. 1062, applied.

(25) Miller v. Gianne, 2007 CILR 18, applied.

(26) Minories Fin. Ltd. v. Ayra Holdings Ltd., 1994 JLR 149, referred to.

(27) Morguard Invs. Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; (1990), 52 BCLR 2d 160, applied.

(28) Pattni v. Ali, 2005-06 MLR 586; [2007] 2 A.C. 85; [2007] 2 W.L.R. 102; [2006] UKPC 51, applied.

(29) Pro Swing Inc. v. Elta Golf Inc., [2006] S.C.R. 612; 2006 SCC 52, applied.

(30) Sadler v. Robins (1808), 1 Camp. 253; 107 E.R. 948, not followed.

(31) Schibsby v. Westenholz (1870), L.R. 6 Q.B. 155; 40 L.J.Q.B. 73; [1861-73] All E.R. Rep. 988, considered.

(32) Showlag v. Mansour, 1994 JLR 113, referred to.

(33) Turino Consolidated Ltd. Retirement Trust, In re, 2008 JLR N [27], referred to.

(34) Two Sicilies (King) v. Willcox (1851), 1 Sim. (N.S.) 301; 61 E.R. 116, applied.

(35) United States v. McRae (1867), L.R. 3 Ch. App. 79, referred to.

(36) United States v. Wagner (1867), L.R. 2 Ch. App. 582; 36 L.J. Ch. 624, applied.

(37) Wimborne (Viscount), Ex p., 1983 J.J. 17, referred to.

Texts cited:

Dicey, Morris & Collins, The Conflict of Laws, 14th ed., vol. 1, para. 1-011, at 7; para. 5R-019, at 100-101; para. 14R-001, at 567; para. 14-003, at 567; para. 14R-018, at 574-575; para. 14-020, at 576; para. 14R-118, at 619; n.62, at 574 (2006).

Nicolle, The Origin & Development of Jersey Law: An Outline Guide, para. 15.33 (2005 ed.).

Sharpe, Injunctions & Specific Performance, 2nd ed., para. 7.480 (1992).

Conflict of Laws—recognition of foreign proceedings—enforcement of judgments and orders—foreign in personam non-monetary judgment (e.g. final and conclusive order for transfer of shares) may be recognized and enforced in Jersey—recognition and enforcement of foreign judgments no longer to be limited to judgments for debt or definite sum of money—discretion to be exercised cautiously

The first representor applied for orders for the transfer to the second representor of shares in two Jersey companies.

In 2000, the first representor ("the BIA") and the Government of Brunei Darussalam brought proceedings against the eighth respondent ("Prince Jefri") in the High Court of Brunei, alleging misappropriation of more than US$15bn. of state funds. The parties agreed a settlement under which Prince Jefri was to return to the BIA any remaining funds and all the assets he had acquired with its funds. In return, he was to be immune from liability as at the date of the agreement. Prince Jefri refused to return many assets, including shares in two Jersey companies which were held for him by nominees (together, the first to seventh respondents). In 2006, the High Court of Brunei ordered him to perform his obligations under the settlement agreement, including the transfer of the shares in the Jersey companies (the BIA nominated the second representor to receive the shares).

Prince Jefri maintained his refusal to transfer the shares and the representors brought the present proceedings to enforce the Brunei judgment, seeking orders for the transfer of the shares to the second representor. The Jersey companies and the nominees did not object to the orders sought and understood what would be required of them if the orders were made.

The representors submitted that (a) the Royal Court should recognize the Brunei court's in personam determination of the parties' rights and enforce it in Jersey without reconsidering the merits; (b) the application to enforce the Brunei judgment was not an action for the direct or indirect enforcement of foreign public law or an action founded on an act of state; and (c) the Brunei judgment was in personam, within the Brunei court's power and therefore enforceable in Jersey.

Prince Jefri opposed the application and submitted that (a) the Royal Court did not have power under its inherent jurisdiction to enforce foreign non-monetary judgments (alternatively, if it had such a power, it was confined to its supervisory jurisdiction under art. 51 of the Trusts (Jersey) Law 1984); (b) the court could not give effect to the settlement agreement or the Brunei judgment, as to do so would be directly or indirectly to enforce the public law of a foreign state; and (c) the Brunei judgment was a judgment in rem, over matters that were exclusively in the remit of the Royal Court, which the Brunei court had no power to make and it could not therefore be enforced in Jersey.

Held, making the orders sought:

(1) The judgment of the High Court of Brunei would be recognized and the Royal Court would make the orders sought to enforce it against the eighth respondent in Jersey. The Royal Court's inherent jurisdiction to recognize and enforce foreign judgments should no longer be restricted to judgments for a debt or a definite sum of money. It was in the interests of public policy that in modern times the court should have a discretion, to be exercised cautiously, to enforce foreign in personam non-monetary judgments given by courts of competent jurisdiction without reconsidering the merits. That discretion was not confined to the court's supervisory jurisdiction under art. 51 of the Trusts (Jersey) Law 1984. The Brunei judgment would be enforced in the present case because (a) the Brunei court had jurisdiction to make it and it was final and conclusive; (b) the terms of the judgment and of the orders sought in this application were clear and specific; (c) the first to seventh respondents did not object to the orders sought and knew exactly what to do under them, so it was unlikely that further judicial supervision would be required; (d) the court would not be required to give greater judicial assistance to the representors than it would to Jersey litigants; and (e) there were no grounds on which the court should refuse to exercise its discretion, on the contrary, this was a straightforward case in which the eighth respondent had refused to perform obligations he had accepted under the settlement agreement ( paras. 28-35; paras. 59-61).

(2) The first representor's application to enforce its in personam rights under the settlement agreement (as determined by the Brunei High Court) was a patrimonial claim, i.e. for the transfer of the shares, and was therefore enforceable in Jersey. The action was based on the settlement agreement which Prince Jefri had entered into voluntarily in Brunei and was governed by Brunei law, it effected a compromise of the original claim and vested beneficial title to the assets that were the subject of the agreement in the BIA. It was not an action to enforce a foreign public law or founded on an act of a foreign state, which would have been unenforceable, irrespective of the fact that the parties included the head of state of Brunei (represented by his Government and the BIA), the action concerned state assets, and the settlement agreement had compromised claims by the state of Brunei based on alleged misappropriation of state funds. A direct claim by a foreign state, government or sovereign to recover stolen property or to enforce contractual rights was justiciable in Jersey ( paras. 39-47).

(3) The Brunei judgment was a judgment in personam, not a judgment in rem, and the Brunei High Court had jurisdiction to make it. The Royal Court could therefore grant the orders sought to enforce it. A judgment in rem, in this context, would have involved a determination of the status or disposition of the property, operating against the shares themselves and valid against the whole world rather than merely between the parties. An in rem order, purporting actually to transfer or...

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