FG Hemisphere and Dem Rep Congo

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: J. A. Clyde-Smith,Jurats de Veulle,Clapham
• Judgment Date: 15 December 2009
• Neutral Citation: [2009] JRC 244B
• Date: 15 December 2009

[2009] JRC 244B

ROYAL COURT

(Samedi Division)

Before:

J. A. Clyde-Smith, Esq., Commissioner and Jurats de Veulle and Clapham.

In the Matter of Article 42 of The Arbitration (Jersey) Law 1998

FG Hemisphere Associates LLC

Representor

and

The Democratic Republic of Congo

First Respondent

L'Office des Mines D'Or de Kilo-Moto

Second Respondent

Kibali (Jersey) Limited

First Party Cited

and

Rangold Resources Limited

Second Party Cited

Advocate N. F. Journeaux for the Representor.

Advocate N. Santos Costa for the First and Second Parties Cited.

Authorities

Swiss Corporation -v- Blehnische [1923] CA 673.

Deutsche -v- Shell International [1990] 1 AC 295.

THE COMMISSIONER:

1 On Monday 14 ^th December, 2009, the Court discharged the first and second parties cited from the certain injunctions that had been imposed ex parte on 11 ^th December, 2009, for reasons which were to follow in a written judgment. At the same time the Court refused the Representor leave to appeal and its application for a stay. That evening the Representor applied to the Deputy Bailiff as a single judge of the Court of Appeal for and obtained a stay which on the 15 ^th December, 2009, the first and second parties cited applied to have lifted. This summary of the Court's reasons was prepared for the purpose of that application.

2 The Representor has acquired by way of assignment rights under arbitration awards made against the Democratic Republic of Congo which it is seeking to enforce both here and in other jurisdictions. It currently claims some US$116m with daily interest accruing.

3 The first party cited, which is a Jersey incorporated company, has a 70% interest in the Kibali gold mine operation in the Democratic Republic of Congo. The remaining 30% is owned by the Second Respondent (Okimo) which is wholly owned by the Democratic Republic of Congo and which the Representor maintains is an organ of the state. The first party cited is in turn owned by the second party cited (and another company Anglo-Gold). The second party cited is a publicly quoted company.

4 On 30 ^th November, 2009, the second party cited gave notice of an EGM for the approval of its acquisition (through the first party cited) from Okimo of a further 20% in Kibali gold mines, bringing its total ownership up to 90%. The consideration payable is US$113,600,000. The acquisition was contingent upon a number of factors including the approval of the shareholders at the EGM due to be held this Wednesday at 8.30 a.m.

5 The Representor applied to the Court ex parte on Friday 11 ^th December to injunct that contingent debt and to seek disclosure of the Share Purchase Agreement (SPA) and other documents referred to in the SPA, together with information that any of the parties cited might have about other assets of the First and Second Respondents including any bank account details. Those injunctions were granted and are set out in the two acts of Court issued that day for service upon the parties cited affected in the early evening of Friday 11 ^th December.

6 The Representor's application was premised upon the SPA (not then disclosed) creating a debt in favour of the Second Respondent upon which it could distrain. It was asserted that the parties citied were innocent parties who are not likely to collude with the First or Second Respondents.

7 The Court was concerned as to the impact of the injunctions upon the SPA and received written submissions from the Representor. Crucially it was submitted that the injunctions would not prevent the parties completing the SPA – indeed the injunctions had been carefully worded to as to ensure that the parties were able to conduct business as usual. The Court accepted those submissions for the purpose of the ex parte application.

8 The parties cited applied on Monday 15 ^th December to be discharged from the injunctions, failing which to have the undertaking in damages fortified by security. The following points arose:-

• (i) The SPA and all of the named documents sought by the Representor under the disclosure orders have in fact been available to public inspection since 30 ^th November, 2009, at La Motte Chambers and at the offices of Ashursts in London. This is made clear on page 95 of the Notice. This would appear to...