“(1) the SPA is not an authentic and concluded agreement binding on all three Parties to it; (2) the agreement to arbitrate contained within the SPA is accordingly not valid; (3) therefore the Tribunal has no substantive jurisdiction over the Parties; and (4) the Tribunal retains jurisdiction over the Parties solely for the purpose of awarding costs incurred in connection with these arbitration proceedings.”
“The Judge has refused the current spate of correspondence in this long running matter, in which the hearing of 27-29 February was fixed as long ago as21 April 2023 . Given the imminence of the hearing, the time it would take to determine what on any view is a substantial paper application, and the fact that a party whose claim is struck out on paper has a right to a short oral hearing before the Judge in any event, I am not persuaded that it would be a proportionate use of the court’s time to proceed with a request for summary dismissal on paper when this application was not made until18 January 2024 , just over one month and one week before the hearing. This is particularly the case when the AOS was filed on28 August 2020 , and the relevant section of the Commercial Court Guide published on3 February 2022 . However, it seems to me that it should be open to the Defendants to rely upon the matters raised in support of the strike out application including delay at the hearing, it being for the hearing Judge to determine if they wish to hear that as a preliminary point...”
“O8.6 The Court has power under rule 3.3(4) and/or rule 23.8(c) to dismiss any claim without a hearing. It is astute to do so in the case of challenges to awards under section 67 or 68 of the Act where the nature of the challenge or the evidence filed in support of it leads the Court to consider that the claim has no real prospect of success. If a respondent to such a challenge considers that the case is one in which the Court should dismiss the claim on that basis: (a) the respondent should file a respondent’s notice to that effect, together with a skeleton argument (not exceeding 15 pages) and any evidence relied upon, within 21 days of service of the proceedings on it; (b) the applicant may file a skeleton and/or evidence in reply within 7 days of service of the respondent’s notice. O.8.7 Where the Court makes an order dismissing a section 67 or section 68 claim without a hearing pursuant to O8.6, whether of its own motion or upon a respondent’s notice inviting it to do so, the applicant will have the right to apply to the Court to set aside the order and to seek directions for the hearing of the application. If such application is made and dismissed after a hearing the Court may consider whether it is appropriate to award costs on an indemnity basis.”
“68.— Challenging the award: serious irregularity. (1) A party to arbitral proceedings may (upon notice to the other parties and to the Tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the Tribunal, the proceedings or the award. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3). (2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant— (a) failure by the Tribunal to comply with section 33 (general duty of Tribunal); … (3) If there is shown to be serious irregularity affecting the Tribunal, the proceedings or the award, the court may— (a) remit the award to the Tribunal, in whole or in part, for reconsideration, (b) set the award aside in whole or in part, or (c) declare the award to be of no effect, in whole or in part. The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the Tribunal for reconsideration.”
“33. — General duty of the Tribunal. (1) The Tribunal shall— (a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and (b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined. (2) The Tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.”
“26. An arbitral Tribunal’s decision as to the existence of its own jurisdiction cannot therefore bind a party who has not submitted the question of arbitrability to the Tribunal. This leaves for consideration the nature of the exercise which a court should undertake where there has been no such submission and the court is asked to enforce an award. Domestically, there is no doubt that, whether or not a party’s challenge to the jurisdiction has been raised, argued and decided before the arbitrator, a party who has not submitted to the arbitrator’s jurisdiction is entitled to a full judicial determination on evidence of an issue of jurisdiction before the English court, on an application made in time for that purpose unders.67 of the Arbitration Act 1996 … 30. …The Tribunal’s own view of its jurisdiction has no legal or evidential value, when the issue is whether the Tribunal had any legitimate authority in relation to the Government at all. This is so however full was the evidence before it and however carefully deliberated was its conclusion. It is also so whatever the composition of the Tribunal – a comment made in view of Dallah’s repeated (but no more attractive for that) submission that weight should be given to the Tribunal’s “eminence”, “high standing and great experience” … This is not to say that a court seised of an issue under Article V(1)(a) and s.103(2)(b) will not examine, both carefully and with interest, the reasoning and conclusion of an arbitral Tribunal which has undertaken a similar examination. Courts welcome useful assistance. The correct position is well-summarised by the following paragraph which I quote from the Government’s written case: “233. Unders.103(2)(b) of the 1996 Act / Art V.1(a) NYC, when the issue is initial consent to arbitration, the Court must determine for itself whether or not the objecting party actually consented. The objecting party has the burden of proof, which it may seek to discharge as it sees fit. In making its determination, the Court may have regard to the reasoning and findings of the alleged arbitral Tribunal, if they are helpful, but it is neither bound nor restricted by them.””
“96. The consistent practice of the courts in England has been that they will examine or re-examine for themselves the jurisdiction of arbitrators. This can arise in a variety of contexts, including a challenge to the Tribunal’s jurisdiction under section 67 of the 1996 Act, or in an application to stay judicial proceedings on the ground that the parties have agreed to arbitrate. Thus in Azov Shipping Co v Baltic Shipping Co[1999] 1 Lloyd’s Rep 68 Rix J decided that where there was a substantial issue of fact as to whether a party had entered into an arbitration agreement, then even if there had already been a full hearing before the arbitrator the court, on a challenge under section 67, should not be in a worse position than the arbitrator for the purpose of determining the challenge. This decision has been consistently applied at first instance (see, eg, Peterson Farms Inc v C&M Farming Ltd[2004] EWHC 121 (Comm) ,[2004] 1 Lloyd’s Rep 603 ) and is plainly right.”
“45. The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance to the parties have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a pre-condition to a concluded and legally binding agreement.”
“Before the judge much attention was paid to the Percy Trentham case, where, as Steyn LJ put it at page 26, the case for Trentham (the main contractor) was that the sub-contracts came into existence, not simply from an exchange of contracts, but partly by reason of written exchanges, partly by oral discussions and partly by performance of the transactions. In the passage from the judgment of Steyn LJ at page 27 quoted by the judge at para 66 he identified these four particular matters which he regarded as of importance. (1) English law generally adopts an objective theory of contract formation, ignoring the subjective expectations and the unexpressed mental reservations of the parties. Instead the governing criterion is the reasonable expectations of honest sensible businessmen. (2) Contracts may come into existence, not as a result of offer and acceptance, but during and as a result of performance. (3) The fact that the transaction is executed rather than executory can be very relevant. The fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no intention to enter into legal relations and difficult to submit that the contract is void for vagueness or uncertainty. Specifically, the fact that the transaction is executed makes it easier to imply a term resolving any uncertainty, or, alternatively, it may make it possible to treat a matter not finalised in negotiations as inessential. This may be so in both fully executed and partly executed transactions. (4) If a contract only comes into existence during and as a result of performance it will frequently be possible to hold that the contract impliedly and retrospectively covers precontractual performance.”
“The burden of proof lies upon the party who substantially asserts the affirmative of the issue –see Phipson, ibid. paragraph 6-06. Regard must be had to the substance of the issue not merely its grammatical form. Where an allegation forms an essential part of a party’s case, the proof of such allegation rests on him…”
“The burden of proving the existence of the contract is on the claimant, while the defendant has the onus of facts pleaded in confession and avoidance. Accordingly, it is for Mr Ganz to prove the existence of a valid agreement to arbitrate/an authentic SPA but for Petronz/Mr Goren to prove its invalidity/inauthenticity.”
“…Where a given allegation, whether affirmative or negative, forms an essential part of a party's case, the proof of such allegations rests on that party. If, when all the evidence is adduced by all parties, the party who has this burden has not discharged it, the decision must be against him.”
“So far as the persuasive burden is concerned, the burden of proof lies upon the party who substantially asserts the affirmative of the issue. Where a given allegation, whether affirmative or negative, forms an essential part of a party's case, the proof of such allegations rests on that party. If, when all the evidence is adduced by all parties, the party who has this burden has not discharged it, the decision must be against him. This is an ancient rule founded on considerations of good sense and should not be departed from without strong reasons. The service of a notice to prove documents pursuant toCPR r.32.19 does not shift the burden of proof. This rule is adopted principally because it is just that he who invokes the aid of the law should be the first to prove his case; and partly because, in the nature of things, a negative is more difficult to establish than an affirmative. The burden of proof is fixed at the beginning of the trial by the state of the pleadings, and it is settled as a question of law, remaining unchanged throughout the trial exactly where the pleadings place it, and never shifting. In deciding which party asserts the affirmative, regard must be had to the substance of the issue and not merely to its grammatical form; the latter the pleader can frequently vary at will. Moreover, a negative allegation must not be confused with the mere traverse of an affirmative one. The true meaning of the rule is that where a given allegation, whether affirmative or negative, forms an essential part of a party’s case, the proof of such allegation rests on him. An alternative test, in this connection, is to strike out of the record the particular allegation in question, the onus lying upon the party who would fail if such a course were pursued. In all but the simplest cases, the burden of the issues will be divided, each party having one or more cast upon him. However not every decision made by a judge during or in preparation for a trial is susceptible to analysis in terms of the burden and standard of proof. Many decisions in and before trials involve weighing competing factors and the judge exercising evaluative judgment.”
“As regards the contention of the plaintiff that the transactions between himself, Auto-Finance, Ltd. and the defendants were a “sham”, it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done ordocuments executed by the parties to the “sham” which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. One thing I think, however, is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co. v. Maclure ((1882) 21 Ch D 309 ) ; Stoneleigh Finance, Ltd. v. Phillips ([1965] 1 All ER 513 ,[1965] 2 QB 537 ) , that for acts or documents to be a “sham”, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating.”
“96. The consistent practice of the courts in England has been that they will examine or re-examine for themselves the jurisdiction of arbitrators.”
“I wouldn't call it a fake document. The document is genuine. I signed it (inaudible) signed it. And it's not a fake document. It's a document that was not intended to be performed the way it's written. Q: No. Let us put it another way. It is a sham document. No it's not. Q: But it's not intended to be performed the way it is written. Correct. … Q: This document was dressed up for the authorities in the UAE, was it not? You know my (inaudible) [English] is not so great. You can find many names to it. It's synonyms. I don't know what to say. Sham. I don't know what to tell you. I said exactly what it was. Whatever name is the name. This was the reason it was done; in order to give Petropas the ability to transfer the money out.”
“Just by comparing the two signatures by eye, it is very obvious they are different and that the signature on exhibit A must therefore be a manual signature (it being common ground that the signature at the end of the SPA was Mr Goren's electronic signature).”
“Absolutely not. Part payment by whom? A company cannot buy shares.”
“The auditors of ICICI have asked us for following information. Item 4, I was thinking of seeing if the deal does not go through if we have a business plan to develop the site ourselves.”
“Regarding the property I need to know the following: 1. Is the Indian company holds the entire land. (sic) pl send me the Memorandum and Articles and certificates of incorporation of the Indian company… 2. The shares of the Indian company is held by Cyprus company as per your mail... 3. … 4. In India foreign enterprises are prohibited to do real estate business without specific approval. What is your business plan if you want to run thru? 5. You have received$1 million from Indian company, can I have the agreement and correspondence from them.”
“…so although the US d 1 mill is a deposit on the purchase it's been “disguised” as an advance on produce. What ramifications does this have if the deal falls through?”
“…Formally there is no connection between the land holding and the US$ 1M payment. The payment is NOT an advance against the sale of land and the parties are different. In fact the 1M payment was arranged by our partner in order to help Moti who needed the funds. The deal that was on planned at [that] time is no longer proposed and now there's another possible buyer with whom we are dealing. Thus if A (not THE) deal does not go through, there will be an open debt to the payor of the 1M with no pressure to settle it. Actually this payment JUST replaced a debt to Moti of 1M with a debt to Petropas Middle East FZE.”
“The Claimant offers no explanation as to how payments dated23 June 2015 and10 July 2015 and totalling$1 million bear any resemblance to the advance supposedly due on30 June 2015 under the terms of the SPA, which is recorded as “a minimum amount in US dollars equal to one hundred and thirty million Indian Rupees”
“I have just been informed that the sale to Falcon has fallen away, however there are other buyers who have approached Rami (Rami to confirm names if possible and the new price levels 15% higher 1.2 Crore?).No. The price offered for a quick sale is still the same 420 – 430 Mil. I cannot give names as of now can only say they are respectable companies.The USD1mill advance payment will thus have to be returned and this must be factored into the banks expectation in the money flows. In addition the developers contract with Castle was terminated in order facilitate the sale of the property. We had always looked at the income stream from this agreement for the financing but we have been assured that this contract can be reestablished very quickly and this problem solved (Rami to confirm) we believe so. I would not use “assured” “very quickly” etc. tone it down a bit. Due to the lack of knowledge about the structure by MG, we were unaware of the 5% outside shareholder in Seder and thus the sales proceeds to GI3 would have be reduced by 5%. We have been assured that that this will not create an issue.” [Emphasis added]
“It should be noted, however, that the company has no obligation whatsoever to the buyer and, therefore, if in the meantime another deal will arise which the company will view as more beneficial, we can always go for it with no delays.”
“As you know, in the beginning of April, we agreed with your good selves that we (through one of our affiliates) will acquire from you all of the shares of your company owning the subject project for a net payment of INR 430 million (430 million Indian rupees). We committed to pay the full purchase price to your bank account in one payment to until May 20, 2015.... Unfortunately, unrelated to ourselves, at the very last moment prior to the actual transfer, our bank received from the Reserve Bank of India a requirement for documentation for a somewhat similar transaction of another client which included many additional documents.... Due to this, and as was confirmed to your Indian representative by the GM of our bank, we were forced to halt the payment and restart the process for applying for and obtaining the requested approvals and documentation. We cannot know with absolute certainty how long this process will last and we are reluctant to state a date if we are not 100% sure we can adhere to it. Therefore we are forced to ask you for your indulgence until July 15, 2015. By such time our foreign subsidiaries will have sufficient funds on their hands to enable the payment of the purchase price regardless of the RBI approval process. Naturally if the approval process will prove to be quick we will be happy to pay you before the said date…”
“Remit proceeds of the sale of the India property to [Standard Chartered] on the29th June 2015 . It was also agreed that Motiganz would share the contract for the sale agreement with [Standard Chartered] for the property in question.”
“The Arbitrator was right to find that there was no common intention between Mr Ganz and Mr Goren to show Mr Ganz's bankers a form of an agreement that had not in fact been agreed and was right, as far is it goes to the issue of common intention, to find that Mr Ganz entirely relied on Mr Goren to help him realise assets to repay his bank and that he thought a transaction had in fact been concluded.”
“The deal that was on planned at [that] time is no longer proposed and now there's another possible buyer with whom we are dealing.”
“The advance of USD1 mill will need to dealt with now.”
“Earlier this year MG reported to us that the property had been sold and we received a letter from an Indian company Falcon Logistics Ltd apologizing for the delay in making the payment of INR 430mill (USD6,5) and requesting extra time till July 2015. We are all aware of the complications in dealing with India and extra time was granted to MG???. This agreement is no longer valid. Was cancelled due to their playing games.”
“I have just been informed that the sale to Falcon has fallen away, howeverthere are other buyers who have approached Rami (Rami to confirm names if possible and the new price levels 15% higher 1.2 Crore?).No. The price offered for a quick sale is still the same 420 – 430 Mil. I cannot give names as of now can only say they are respectable companies. The USD1mill advance payment will thus have to be returned and this must be factored into the banks expectation in the money flows. In addition the developers contract with Castle was terminated in order facilitate the sale of the property. We had always looked at the income stream from this agreement for the financing but we have been assured that this contract can be reestablished very quickly and this problem solved (Rami to confirm) we believe so. I would not use “assured” “very quickly” etc. tone it down a bit. Due to the lack of knowledge about the structure by MG, we were unaware of the 5% outside shareholder in Seder and thus the sales proceeds to GI3 would have be reduced by 5%. We have been assured that that this will not create an issue.”
“RG claims that he had buyers for this land from a company called “Flacon” (sic) but for unexplained reasons it was cancelled.”
“…Especially about the authenticity of the signature of the signatory on behalf of Petronz so, in which case as I understand it, the directions that you are seeking with regard to the expert reports, the signature experts, remain relevant. AG: They remain relevant so far as the First Respondent is concerned.”
“…a point has been raised by Petronz and I appreciate that Petronz at the moment is not participating in the jurisdiction issue but the point has been made around the validity as a matter of UAE law and possibly the requirements for stamps and registrations and so on. So it is possible that expert evidence would also need to be adduced on that front as well. So without making any judgment on whether or not it would be required, possibly this could be at the same time as the signatures' experts. So other expert evidence can be adduced on other issues that the parties may want to bring up. AG: Well we, it does not seem to me that to advance Mr Ganz's claim that we need to adduce that evidence and get into that issue. That is an issue of foreign law under English law which a party wishing to raise it would have to take and prove by expert evidence and I don’t understand anybody to be doing that beyond Petronz's ascertain that it is invalid under UAE law.”
“…What I am suggesting is that the expert evidence will not be limited solely to the signature issue, AG: Handwriting. Arb: Yes handwriting experts. AG: Well I think we would be content with that although there is an uncomfortable sense in which that is putting the burden the wrong way round because the way English law will approach the matter in the absence of expert evidence. Arb: I haven’t said I would be requiring the Claimant to bring evidence of UAE law's validity of these agreements in the first place. AG: Right okay. Arb: The proposal is that there would be permission for the parties to adduce expert evidence and that expert evidence will be not limited to solely to handwriting experts but it would be open to the parties, and that would be an invitation to Petronz, should they want to, to adduce the UAE law expert evidence. There is no need for the Claimant to provide evidence in the first place, but if it is adduced, then your client would need to provide responsive expert evidence.”
“Further directions, regarding the need, procedure and timings for disclosure, expert and witness evidence will be issued following receipt of the above submissions, and further consultation with the Parties.”