Home Information Cases AB International (HK) Holdings PLC Ltd & AB (Australia) Pty Ltd v AB Clearing Corp Ltd (2015)

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AB International (HK) Holdings PLC Ltd & AB (Australia) Pty Ltd v AB Clearing Corp Ltd (2015)

Summary

An application by claimants in arbitral proceedings for urgent interim relief in the form of disclosure of profits made by the defendants in a joint venture would be refused because the claimants had not been pursuing their claim for trading profits in the arbitration but by way of separate Commercial Court proceedings.

Facts

The claimants in arbitral proceedings applied for urgent interim relief.

The first claimant (C1) was a joint venture company, indirectly owned by the second defendant (D2) and another shareholder (G). Pursuant to the joint venture, the second claimant (C2) entered trades with clients, matching those trades with transactions with the third defendant (D3). Client monies deposited with C2 by way of margin were transferred to D3 as margin for the matching trades. Any profits from the trading were made by the defendant companies, subject to an obligation to account to C1 for those profits. In support of that obligation, D1 provided a standby letter of credit in favour of C1 and G. The claimants commenced arbitration against the defendants and also brought separate proceedings in the Commercial Court claiming a sum from D1 under the standby letter of credit. In relation to the arbitral proceedings, the claimants sought, as urgent interim relief under the Arbitration Act 1996 s.44, that the defendants disclose and provide within seven days information about profits made by D2's companies from the trades, which they had not accounted for to C1.

Held

HELD: A fundamental objection to the claimants' application was that they had not been pursuing their claim for trading profits in the arbitration, as such a claim was expressly excluded from the dispute resolution processes, but by way of the Commercial Court proceedings under the standby letter of credit. In those circumstances, it was quite unclear why advance disclosure in the arbitration was necessary. Accepting that the claim for trading profits was being pursued in the Commercial Court proceedings, the claimants contended that the claim in the arbitration would be for further profits made by the defendants from dealing with those trading profits. However, by that point, their application for disclosure had strayed far from the concepts of urgency and necessity and was founded upon pure speculation: it did not come close to satisfying the requirements of s.44(3) (see paras 19-22 of judgment).

Application refused

QBD (Comm)
Phillips J
Judgment date
29 July 2015
References

LTL 31/7/2015