GLAS SAS (London Branch) v European Topsoho SarL & Ors [2024] EWHC 83 (Comm) (26 January 2024)

Facts · 事实

HTML VERSION OF APPROVED JUDGMENT ____________________ Crown Copyright © This judgment was handed down remotely at 10:00am on 26/01/2024 by circulation to the parties' representatives by e-mail and by release to the National Archives. ............................. Mr Justice Bright: On 17 November 2023, there was a hearing in this matter to deal with the application of the Claimant ("GLAS") for summary judgment against the Defendants. GLAS's application notice had been issued on 29 August 2023, and the hearing date had been fixed on 6 September 2023, with an estimate of 2.5 hours. It was not possible to deal with the Claimant's application, because: (1) On 13 November 2023, the Third Defendant ("Ms Qiu") issued an application seeking an extension of time to file and serve a Defence. Ms Qiu had not previously taken any part in the action, save that she had filed an acknowledgment of service on 3 January 2022. (2) On 16 November 2023, the Second Defendant ("Dynamic") issued an application seeking an extension of time to file and serve an acknowledgment of service indicating that it intended to challenge the jurisdiction of the Court. Dynamic had not previously taken any part in the action whatsoever. I made directions intended to enable all the outstanding applications to be dealt with on an expedited basis, on 18 January 2024, with an estimate of 1 day. This judgment follows the hearing which duly took place on 18 January 2024, when I heard oral submissions on the various applications from Ms Sue Prevezer KC and Mr Alex Barden on behalf of the Claimant, from Ms Leonora Sagan on behalf of the First Defendant ("ETS"), from Mr Niall McCulloch on behalf of Dynamic and from Mr Hugo Page KC on behalf of Ms Qiu. I am very grateful to all of them for their assistance. The parties, and other relevant entities/individuals GLAS is a corporate trustee, providing trustee and loan administration services. It is incorporated in France, but also has an office in London, which is the emanation involved in this case and in the underlying business. ETS is a company incorporated in Luxembourg. It is indirectly owned by Shandong Ruyi Technology Group Co. Ltd. ("Shandong Ruyi"), which is incorporated in the PRC and owns interests in a number of group companies, mainly in the textile/clothing industry. ETS was incorporated for the purpose of holding a majority stake in SMCP S.A. ("SMCP"), a company incorporated in France that carries on business in the fashion industry. By 2018, it held a 53% stake in SMCP. On 28 February 2023, ETS was declared bankrupt in insolvency proceedings in Luxembourg, and a Curator was appointed, Ms Val�rie Kop�ra. Prior to February 2023, the person running ETS (in effect its CEO) appears to have been Ms Qiu. She signed the statements of truth that supported ETS's statements of case, as "Manager". In more formal terms and under ETS's constitution, its "A" managers included Mr Kelvin Ho (until 9 September 2021) and, until the appointment of the Curator, Ms Qiu and Mr Tan Huang. Its "B" managers included Mr Hans de Zwart and Mr Joost Mees (from incorporation until September/October 2021) and Mr Giovanni Incardona (until October 2021). Ms Qiu is the daughter of Mr Yafu Qiu, who has at all material times been the Chair of Shandong Ruyi. She is resident in Jining, in Shandong Province in the PRC. This is where Shandong Ruyi has its headquarters. I do not know what, if any, role she has in other companies with the Shandong Ruyi group, in addition to ETS. Wuhu Ruyi Xinbo Investment Partnership (Limited Partnership) ("Xinbo") is a PRC limited partnership in which the principal interests are of Shandong Ruyi and China Cinda Asset Management Co., Ltd ("Cinda"), a Chinese financial institution. Cinda is a major creditor of Shandong Ruyi and/or of companies within the group. Xinbo appears to have its headquarters in Wuhu, in the PRC. Dynamic is a company incorporated in the BVI. (1) It was founded by Ms Qiu in April 2017. Until 30 July 2021, it was owned by Ms Qiu, who was also its sole director. (2) On that date, its ownership was transferred to a Precious Pearl Candy Holding Ltd ("Precious Pearl"), another BVI company which was itself owned by Ms Qiu and which owned Dynamic subject to a trust for Ms Qiu's children, administered by Intertrust (Singapore) Ltd ("Intertrust"). On the same date, Ms Qiu was replaced as director by Grandall International Holding Ltd ("Grandall"), a BVI company which acted via two professional service providers in Singapore who appear to be associated with Intertrust, Ms Kanchana Boopalan and Mr Yongtao Song. (3) In about March 2022, the trust arrangement ended. On 16 March 2022, a further BVI company owned by Ms Qiu, Dynamic Day Enterprises Ltd ("Dynamic Day") was appointed as director of Precious Pearl. On 12 April 2022, Dynamic Day was appointed as sole director of Dynamic, replacing Grandall. (4) On 5 May 2023, Precious Pearl transferred its shareholding in Dynamic to a subsidiary of Xinbo. Xinbo appears to have had ultimate control over Dynamic since that date, with the result that Dynamic's evidence in support of its application was provided by Ms Zhang Yu, the Deputy General Manager of Xinbo. The sole director remains Ms Qiu's company, Dynamic Day. Ms Zhang's evidence suggests that, until 5 May 2023, Dynamic was, in practice, effectively managed by Ms Qiu. Ms Qiu does not accept this, but it is not clear who the person in charge of Dynamic was, prior to 5 May 2023, if not Ms Qiu. It seems unlikely that Grandall (i.e., Ms Boopalan and Mr Song) had significant practical involvement in any decisions. The Trust Deed and the Bonds On 21 September 2018 and pursuant to documentation including a Trust Deed of that date, ETS issued �250,000,000 of Secured Exchange Bonds ("the Bonds") bearing a coupon of 4% per annum, due September 2021. They were secured by the pledge of some of the ETS's shares in SMCP. The original Trustee under the Trust Deed was BNP Paribas Trust Corporation UK Limited ("BNP Trust"). GLAS took over the relevant trust duties on 24 December 2020. A dispute arose between GLAS and ETS in 2021, which was compromised on 17 June 2021. In the context of the settlement of that dispute, Ms Qiu (as "A" manager of ETS) and Mr Joost Mees (as "B" manager of ETS) certified that, other than GLAS's pledge over the Pledged Shares, there was no security over any shares held by ETS in SMCP ("the Managers' Certificate"). ETS failed to pay any sum to GLAS when the Bonds matured on 21 September 2021. On 22 September 2021 GLAS issued a Notification of Breach. On 4 October 2021 it issued a Default Notice, which ETS failed to pay. On 5 October 2021, GLAS sent a demand for payment of a Deferred Fee, payable by ETS. The Pledged Shares in SMCP Security under the Trust Deed was provided by a requirement for ETS to pledge some of its shares in SMCP, to be held in an identified security account with BNP Paribas Securities Services (London Branch) ("BNPPSS London"). On 21 September 2021, 28,028,163 shares were pledged ("the Pledged Shares"). The Pledged Shares are still held by or for GLAS. The Unpledged Shares The value of the Pledged Shares was below the total sum due under the Bonds. ETS's only substantial asset was its shareholding in SMCP. This hearing has mainly concentrated not on the Pledged Shares, but on the balance of 12,106,939 shares ("the Unpledged Shares"). Until October 2021, they were held by ETS in an account with BNP Paribas Securities Services Paris ("BNPPSS Paris"), in France. The Disposal of the Unpledged Shares The following transactions are referred to in the statements of case and evidence as "the Disposal": (1) On 27 October 2021, ETS transferred the Unpledged Shares from its own account with BNPPSS Paris to that of Dynamic. Dynamic's account with BNPPSS Paris had been opened on 18 October 2021 and the account number was communicated to Dynamic on 21 October 2021. Ms Qiu's evidence is that Dynamic's account was opened specifically for it to receive the Unpledged Shares, as transferee from ETS. (2) On 3 November 2021, Dynamic instructed BNPPSS Paris to transfer the Unpledged Shares into bearer form (from pure registered form) and to transfer the bearer shares to an account held by Dynamic with JP Morgan Chase Bank N.A. Singapore ("JPM Singapore"), where they are still held. On 4 November 2021, SMCP issued a press release announcing that ETS had disposed of the Unpledged Shares but gave no details. On 5 November 2021, GLAS obtained an order from the Paris Commercial Court against BNPPSS Paris, requiring it to provide information in relation to the transfer of the Unpledged Shares. On 12 November 2021, BNPPSS Paris disclosed to GLAS that the Unpledged Shares were now held by JPM Singapore. Pursuant to the order of the Paris Commercial Court dated 16 November 2021, BNPPSS Paris disclosed a copy of what appears to be a Share Sale Agreement dated 22 October 2021, by which ETS appears to have agreed to sell the Unpledged Shares to Dynamic for �1 (the "SSA"). BNPPSS Paris's understanding from ETS was this was the instrument by which the Disposal took place. That was for some time ETS's case. It is still the case of Dynamic and of Ms Qiu. The course of these proceedings, up to October 2022 GLAS commenced these proceedings on 15 November 2021. From the outset, GLAS's claims included claims against ETS in debt, but there were also claims against all three defendants in unlawful means conspiracy, as well as claims against ETS and Dynamo under s. 423 Insolvency Act 1986 ("the s. 423 claim"). The pleaded case has from the outset included the following elements: (1) As regards the s. 423 claim, GLAS says that the Disposal was at an undervalue and its purpose was to put the Unpledged Shares beyond the reach of GLAS. (2) As regards the unlawful means conspiracy claim, GLAS says that the Defendants acted in combination to defeat or prejudice GLAS's entitlement to recover the sums due to it, by the Disposal. On 17 November 2021, HHJ Pelling KC gave permission for service out of the jurisdiction on Dynamic. He also made worldwide freezing orders against ETS and Dynamic. Permission to serve out of the jurisdiction was not required as against ETS, because the Trust Deed was subject to English law and jurisdiction, but HHJ Pelling KC made an order for substituted service (which has not been challenged). As against Ms Qiu, permission to serve out of the jurisdiction was not required because she could be and was served in England. ETS acknowledged service within time and has participated fully in the proceedings. Dynamic did not acknowledge service and did not comply with the freezing order. It has taken no part in the proceedings until very recently. Ms Qiu filed an acknowledgment of service on 3 January 2022 (a few days out of time) but thereafter took no part in the proceedings until very recently, in her role as Third Defendant. However, in her role as Manager of ETS, she participated by making witness statements and signing statements of truth on behalf of ETS. Initially, ETS denied that GLAS had been validly appointed under the Trust Deed (even notwithstanding that this had been agreed by the compromise of 17 June 2021), and so denied the validity of the notices and demands served by GLAS and further denied GLAS's claim in debt and GLAS's rights in and entitlement to the Pledged Shares. It also denied GLAS's other claims, notably the s. 423 claim and the unlawful means conspiracy claim. The defence to those claims was, throughout, to the effect that the Disposal was a genuine, arm's length transaction, conducted for proper reasons rather than merely to put the Unpledged Shares beyond the reach of GLAS or to defeat or prejudice GLAS's entitlement to recover the sums due to it. However, the detailed explanation given for the Disposal evolved over time, with additional materials being produced and relied on by ETS, and considered and responded to by GLAS. On 27

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