Top ten cases of 2013

The credit crunch, human rights and bribery and corruption – Lawyer 2B picks the bust-ups to follow this year

CREDIT CRUNCH

Harbinger Capital Partners v (1) Andrew Caldwell (as the Independent Valuer of Northern Rock plc); (2) HM Treasury

January, judgment awaited, CoA

For the appellant Harbinger

South Square’s Mark Phillips QC and Blackstone Chambers’ Monica Carss-Frisk QC, instructed by Brown Rudnick partners Louise Verrill and

Neill Shrimpton

For the respondent Independent Valuer

Brick Court Chambers’ Mark Howard QC, Martin Chamberlain and Jonathan Dawid, instructed by Mayer Brown partner Stuart Pickford

Northern Rock shareholders lost a significant sum when the bank was nationalised in February 2008, at the height of the sub-prime mortgages crisis in the US.

Hedge fund Harbinger Capital Partners is challenging a decision by Andrew Caldwell, the Independent Valuer of the bank, not to award compensation to those shareholders in the Court of Appeal (CoA).

This high-profile case is being followed closely by about 16,000 shareholders who lost out as when the bank was nationalised. They were denied compensation at the first instance hearing last October.

Caldwell was appointed Independent Valuer to the Northern Rock Compensation Scheme Order in 2008. He was tasked with deciding how much compensation should be paid to shareholders. He concluded there should be none. Some 440 shareholders appealed to the Upper Tribunal, but the valuation was upheld.

Harbinger has taken the case against the ruling to the CoA. It is challenging Caldwell’s interpretation of the valuation assumptions. If successful, the case could pave the way for compensation claims worth billions.

PRIVATE CLIENT

Manmohan Varma v Mr Lakshimi Mittal

March, 10 days, Commercial Court

For the claimant Varma

Robert Griffiths QC of 4-5 Gray’s Inn leading Anthony Dearing of the same set, instructed by RPC partner Tim Brown

For the defendant Mittal

3 Verulam Buildings’ Paul Lowenstein QC leading Serle Court’s David Drake instructed by Peters & Peters partner Jonathan Tickner

This multmillion-pound claim is being pursued against Britain’s richest man Lakshimi Mittal, chair and CEO of ArcelorMittal.

Rice importer Manmohan Varma is bringing the suit against Mittal, paving the way for the big private client fight of 2013. This case promises to give an insight into the wealthy elite of Anglo-Indian society.

Steel tycoon Mittal is represented by 3 Verulam buildings’ Paul Lownestein QC, who is being asked to defend allegations that he reneged on a multimillion-dollar agreement to pay fees to Varma for helping secure an oil deal with a former Nigerian president.

Varma says the promise of commissions was made to him orally and not written down while the pair were in Mittal’s private jet.

Mittal denies the contract was ever made. He states even if there were an agreement Varma would not be entitled to any commission because he had not played any causative role in brokering the deal.

The deal in question involved a joint venture (JV) between a Mittal company, an Indian state oil company and the Nigerian state in which the JV acquired two Nigerian oil blocks in return for a $6bn investment in Nigerian infrastructure. In the end the oil fields both proved unproductive.

As with Boris Berezovksy and his $5bn claim against Roman Abramovich, Varma’s solicitor team from Reynolds Porter Chamberlain (RPC) have agreed to act on a conditional fee arrangement.

The trial on issues of liability will be heard in the Commercial Court in March and issues of quantum will be tried subsequently, if at all.

Big money, big names

Peters & Peters partner Jonathan Tickner is the lawyer Mittal turned to after former associate Varma instructed lawyers to launch the case against him. Peters & Peters may be a small litigation boutique in London, but it punches well above its weight when it comes to clients.

Tickner previously represented the former Liverpool FC owners Tom Hicks and George Gillett in their battle with RBS for the club. That case has now gone to Clyde & Co.

Nevertheless, the firm maintains an A-list of litigation clients including the former Italian prime minister Silvio Berlusconi, the Department of Health and Dr Erastus Akingbola, former chief executive of one of Nigeria’s largest banks, Intercontinental.

Meanwhile, Lowenstein is a heavyweight in commercial, financial and business litigation. The Lawyer first noted Lowenstein as being sought-after in 1998 when he was still a member of Littleton Chambers.

Litigators says he is fastidious in his case management, as well as being tenacious and incisive. Mittal is not the first big-money private client case for Lowenstein – he was also involved in an element of Boris Berezovsky’s London court battles.

TRADEMARK INFRINGEMENT

(1) Interflora, Inc (2) Interflora British Unit v (1) Marks and Spencer plc (2) Flowers Direct Online Ltd

April, 7 days, Chancery Division

For the claimant Interflora

11 South Square’s Michael Silverleaf QC leading Simon Malynicz, instructed by Pinsent Masons partner Iain Connor

For the defendant M&S

One Essex Court’s Geoffrey Hobbs QC and Emma Himsworth QC, instructed by Osborne Clarke partner Theo Savvides

Flowers

This case has already been to the European Court of Justice (ECJ) but it has been left to the High Court to decide in 2013 whether Marks & Spencer (M&S) infringed Interflora’s trademark in this long-running dispute.

The outcome will have ramifications for retailers who use the world’s most-popular search engine, Google, to help promote their products.

The row erupted in 2008 after M&S bought several of the florist’s trademark keywords and phrases in Google AdWords. This meant searching ‘Interflora’ on Google would trigger the display of a link advertising M&S’s flower delivery service.

The text in the link made no reference to Interflora, although it was a supplier used by the retailer.

The florist claimed this impeded its search engine optimisation (SEO) results. The ECJ said each case would need to be decided on its own merit.

It is the first case of this type to reach trial in the UK and will provide an opportunity for the court to apply the ‘reasonably well-informed and reasonably observant internet user test’ proposed by the ECJ.

Osborne Clarke has instructed One Essex Court’s Geoffrey Hobbs QC and Emma Himsworth QC for M&S. They will go up against 11 South Square’s Michael Silverleaf QC, instructed by Pinsent Masons.

The CoA has refused Interflora permission to rely on evidence of witnesses who were identified by a survey which, it was argued, provided evidence relevant to the test.

The outcome will affect the way competitors can engage in keyword advertising on search engines.

TAX, JUDICIAL REVIEW

R (UK Uncut Legal Action Ltd) v HMRC

May, 1 day, Administrative Court   

For the applicant UK Uncut

Devereux Chambers’ Ingrid Simler QC leading Blackstone Chambers’ Ben Jaffey, instructed by Leigh Day & Co partner Richard Stein

For the respondent HMRC

Blackstone Chambers’ James Eadie QC and Gemma White, instructed by the Treasury Solicitor

The relationship between HM Revenue & Customs (HMRC) and Goldman Sachs will be examined in May when a judicial review (JR) will look at whether a £10m deal between the two was illegal.

This JR challenge is being brought by tax-avoidance campaign group UK Uncut, which has instructed Devereux Chambers’ Ingrid Simler QC to lead.

UK Uncut claims HMRC breached its public law duties after it agreed a £10m settlement with Goldman over national insurance (NI) contributions and interest obligations. The relationship between the two, UK Uncut claims, was too close.

The deal in question was signed behind closed doors in 2010 following a meeting about the NI contributions. At the end of the meeting the parties had “shaken hands” on an agreement that meant the bank would pay the outstanding sum, but no interest.

HMRC accepted that there were some errors in agreeing the deal, but still it was ratified by the tax authority.

In December 2011 a report of the Public Accounts Committee criticised the way HMRC had come to such agreements with Goldman Sachs and other major corporates.

A National Audit Office (NAO) report subsequently said the settlements had been reasonable.

UK Uncut, however, maintains that HMRC acted unlawfully and permission to apply for JR was granted on that basis.

CREDIT CRUNCH

Madoff Securities International Ltd v (1) Stephen Ernest John Raven; (2) Leon Flax; (3) Christopher Dale; (4) Philip John Toop; (5) Malcolm Stevenson; (6) Peter Madoff; (7) Mark Madoff; (8) Andrew Madoff; (9) Sonja Kohn; (10) Erko Incorporated; and (11) Tecno Development & Research Ltd

June, 30 days, Commercial Court

For the claimant Irving H Picard

Blackstone Chambers’ Pushpinder Saini QC leading Blackstone Chambers’ Adrian Briggs Shaheed Fatima, South Square’s Ian Fletcher and Stephen Robins instructed by Taylor Wessing partners Nick Moser, David de Ferrars and Shane Gleghorn

For the defendant (1) Stephen Raven

Chancery Lane’s Nicholas Yell, instructed by EMW LLP’s Trevor Jenkin and Jodi Tierney

For the defendant (2) Leon Flax

Serle Court’s Philip Jones QC and Jonathan Adkin, instructed by Radcliffes LeBrasseur’s Nigel West and Julie Cheater

The defendants (3) Christopher Dale; (4) Philip John Toop; (5) Malcolm Stevenson; (6) Peter Madoff will all appear as litigants in person

For the defendant (7) Andrew Madoff and (8) the estate of Mark Madoff

One Essex Court’s Clare Reffin, instructed by Pitmans partner David Archer

For the defendants (9) Sonja Kohn; (10) Erko Incorporated; and (11) Tecno

4 Stone Buildings’ Jonathan Crow QC, instructed by Asserson Law partner Trevor Asserson.

The collapse of Bernard L Madoff Investment Securities (BLMIS) in Manhattan sent shockwaves through the world’s financial centres.

This mammoth Ponzi scheme had been founded and run by Bernard Madoff, a one-time chairman of Nasdaq. In December 2008 Madoff confessed to one of the biggest financial frauds in history.

In June the High Court will examine the relationship between the New York operations and UK-incorporated Madoff 
Securities International Limited (MSIL).

The directors of MSIL, including former chief executive Stephen Raven and Madoff’s son Andrew and brother Peter, face claims of more than £75m for an array of breaches of duty in connection with the fraud.

When Madoff pleaded guilty to running the Ponzi scheme in 2009 he acknowledged that the US operations had routinely sent investor money to London. This funded his family expenses or, instead, the money was sent to New York to fund the rest of the firm’s operations.

It is claimed that $600m was moved to London and $310m sent back to the US where it was falsely recorded as commissions.

Also being pursued is Sonja Kohn, an Austrian national who lived and conducted her affairs through a series of corporate vehicles. Kohn and her companies received nearly $50m from Madoff and MSIL, which were proceeds of the fraud. BLMIS made the relevant payments through MSIL. Kohn described the payments as ‘commission’ but the invoices rendered by her companies referred instead to such things as research, analysis and consulting. MSIL’s case was that the payments were illegitimate and that the invoices were shams.

In November 2011 the High Court granted the claimant a proprietary injunction against Kohn and said it was also entitled to a freezing injunction and related relief including disclosure orders against Kohn and her company.

Irving H Picard, a lawyer appointed by the New York court to represent victims of the fraud, is leading the case against the UK directors.

This case will be followed closely by litigators and the press.

IP

IPCom v HTC and IPCom v Nokia

July, 10 days, Chancery Court

For the claimant IPCom

Brick Court’s James Flynn QC leading Monckton Chambers’ Kassie Smith and Meredith Pickford, instructed by Bristows partner Myles Jelf

For the defendant HTC

8 New Square’s Stephen Morris QC to lead Monckton Chambers’ Josh Holmes and Alan Bates, instructed by SJ Berwin partner Cameron Firth

For the defendant Nokia

8 New Square’s Richard Meade QC leading Three Raymond Buildings’ Nick Yeo

For the intervenor Interdigital

Three New Square’s Richard Miller QC

Cutting-edge High Court litigation in the Patents Court in one of the key competition law issues of the moment, and this case will examine the interaction between IP and competition law.

IP licensor IPCom has instructed Brick Court’s James Flynn QC for its UK battles. It is arguing for further injunctions to restrain patent infringements by Nokia.

Given the number of patents involved in such disputes this is a case, like Apple v Samsung, that could run and run and run.

Flynn will face 20 Essex Street’s Stephen Morris QC, who is instructed for HTC, and 8 New Square’s Richard Meade QC, appearing for Nokia.

Following a number of interlocutory skirmishes in 2012 the main trial in both actions is now slated for 2013.

It is due to be the first decision of a UK court addressing the issue of the terms that must be offered for use of essential IP for mobile phones and other smart devices.

This explains why the ground-breaking case will be eagerly followed by the IT industry, including those involved in Apple, which raises the same types of competition issues.

BRIBERY AND CORRUPTION

Constantin Medien v (1) Bernie Ecclestone, (2) Stephen Mullens, (3) Bambino Holdings Ltd, (4) Gerhard Gribkowsky

October 20-25 days, Commercial Court

For the claimant Constantin Medien

Serle Court’s Philip Marshall QC, David Blayney and James Mather, instructed by Peters & Peters partner Keith Oliver.

For the first defendant (1) Bernie Ecclestone

4 Stone Buildings’ Robert Miles QC instructed alongside Richard Hill QC, instructed by Herbert Smith partner Ted Greeno

For the second defendant (2) Stephen Mullens

South Square’s Tom Smith, instructed by Hogan Lovells of counsel Neil Dooley

For the third defendant Bambino Holdings Ltd

Brick Court’s Michael Bools QC, instructed by Edwards Wildman partner Kevin Perry

For the fourth defendant (4) Gerhard Gribkowsky

Unrepresented

Car

Formula 1 (F1) chief executive Bernie Ecclestone denies claims he paid bribes to German investment banker Gerhard Gribkowsky, although he admits he did make some payments to the banker.

Gribkowsky was a Bayerische Landesbank director and chief risk officer in 2006, when it was in the process of selling its controlling stake in F1.

Former owner of F1 Constantin Medien claims that Ecclestone, his lawyer Stephen Mullens, his family trust Bambino Holdings and Gribkowsky conspired to undervalue the motor sport when it was sold to CVC Partners in 2005, in part through the payment of bribes.

It is also alleged that the payments were made so that ownership passed to a buyer supportive of Ecclestone, but at the expense of achieving a lower price than could otherwise have been achieved.

Ecclestone says he made the payments because Gribkowsky threatened to take unfounded allegations about him to the tax authorities.

The claimant is the successor owner of F1, who had a contractual entitlement to receive a percentage of the proceeds of the sale should it be sold above a set threshold.

It claims F1 was sold at half its real price, causing it to lose out on a profit-sharing agreement.

The case could take five weeks to be heard and will be followed closely on the front and back pages.

LIBOR MISSELLING

Graisley Properties Ltd & Ors v Barclays Bank plc

October, 25-30 days, Commercial Court

For the claimant Guardian Care Homes

Brick Court’s Tim Lord QC leading Outer Temple’s Farhaz Kahn, instructed by Cooke Young & Keidan partner Philip Young and consultant Len Murray

For the defendant Barclays Bank

Clifford Chance partner Ian Moulding, instructed 3 Verulam Buildings’ Adrian Beltrami QC

In October 2012 Mr Justice Flaux made history when he gave Guardian Care Homes permission to continue its Libor rate-fixing claims against Barclays. The substantive hearing is set to be heard by the judge over six weeks from October.

Litigators say the dispute will be closely followed by the banking community and, if successful, could be the next payment protections insurance (PPI) scandal.

Allowing the case to proceed to full trial in a court packed with reporters Flaux J said: “[It] seems perfectly obvious […] that the people responsible for giving those instructions [to manipulate Libor] must have known customers were being misled.”

Guardian Care Homes initially launched its £38m claim for alleged mis-selling of two interest rate swaps in 2007 and 2008. The operator of 27 care homes in the UK had bought the swaps to refinance two loans with Barclays.

This claim will be the first of its kind to reach the High Court and will provide the benchmark for all future Libor mis-selling claims.

Litigation boutique Cooke Young & Keidan will take on the might of Clifford Chance when the case gets to court.

Adrian Beltrami QC of 3 Verulam Buildings has been instructed for the bank. He will face Brick Court’s Tim Lord QC, who is instructed for the claimants.

EMPLOYMENT

Continental Capital Markets SA v GFI Holdings Ltd & Ors

November 25-30 days, Commercial Court

For the claimant Conticap

Rosenblatt partner Laura Clatworthy, instructed 11KBW’s Daniel Oudkerk QC to lead 11KBW’s Amy Rogers and Essex Court Chambers’ David Craig, instructed by Clatworthy

For the defendant GFI Brokers

Blackstone Chambers’ Paul Goulding QC and Tristan Jones, instructed by Olswang partner Catherine Taylor

This ground-breaking employment claim is believed to be the first time an action has been brought in the High Court concerning employees poached in another jurisdiction.

The case, which bears some resemblance to the 2011 CoA battle between Tullett Prebon and BGC Brokers, is scheduled to run for up to six weeks from November. Swiss interdealer broker, ContiCap, has instructed 11KBW’s Daniel Oudkerk QC to lead the £20m fight.

Oudkerk also led Tullett Prebon’s case against BGC, persuading the court that BGC should pay damages after it induced 10 brokers to break their contracts with its rival.

The Conticap claim was issued after a raid orchestrated by GFI Brokers from London of 30 brokers based in Switzerland. The contracts of employment are governed by Swiss law, as is the claim itself, yet the case is being heard in London.

It is thought to be the first time an action has been brought in the High Court in relation to employees hired in another jurisdiction.

HUMAN RIGHTS

Ndiku Mutua & Ors v Foreign and Commonwealth Office (FCO)

Late 2013, Queen’s Bench Division

For the claimants Ndiku Mutua & Ors

Leigh Day & Co partners Martyn Day and Dan Leader instructed Matrix Chambers’ Richard Hermer QC and Doughty Street Chambers’ Phillippa Kaufmann QC to lead One Crown Office Row’s Henry Witcomb, Maria Roche and Doughty Street’s Alex Gask

For the defendants the FCO

One Crown Office Row’s Guy Mansfield QC leading Peter Skelton instructed by the Treasury Solicitor

For the intervener Redress

One Crown Office Row’s Lizanne Gumbel QC

This case has already had a few outings in the High Court, most recently last October. Then the Government sought to have the claims dismissed on the grounds that the claimants were out of time.

The claims were brought by four Kenyans for serious personal injuries and torture suffered while being held in detention in Kenya in the 1950s.

The latest challenge to the suit came a little more than a year after the court dismissed the FCO defence that actions could only be brought against the perpetrators of the alleged assaults or their employers at the time. In December last year, the CoA gave the FCO permission to appeal the limitation issue.

This headline-making case has already put the methods of colonial Britain under the spotlight.

Attempts to cover up the so-called ‘Hola Camp massacre’ were revealed by The Times last November.

The paper reported that colonial officials knew of the crimes but had conspired to keep them out of the public eye.

Hola was a detention camp for the most radical Mau Mau rebels, described as the “inner core of the hardcore, hostile to and contemptuous of authority”.

On March 3, 1959, a group of inmates refused to dig a ditch and were savagely beaten by African prison guards under the command of British officers. Eleven died and more than 40 were seriously injured.

Now the Mau Mau Kenyans want compensation from the British government which, it says, should be vicariously liable.

Leigh Day & Co has instructed Matrix Chambers’ Richard Hermer QC and Doughty Street Chambers’ Phillippa Kaufmann QC to lead the fight.

This is a dispute of considerable historical and legal interest, relating to the liability of the British Government for people employed by colonial governments.

If successful it could pave the way for similar claims from Kenya and other countries by those claiming to have suffered in the last days of the British Empire.