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A recent decision reminds parties about the need to draft dispute resolution clauses that are tailored to the parties’ agreement.

By Oliver E. Browne and Duncan Graves

The Court of Appeal recently ruled that an alternative dispute resolution (ADR) clause in a contract was unenforceable due to lack of clarity. The ruling signals to contracting parties that they should draft ADR clauses carefully, outlining the process to be followed with sufficient detail and clarity so that the clause can be enforced.

The Court of Appeal ruled that losing proprietary rights under foreign law could invalidate personal claims against third party recipients of trust assets.

By Daniel Smith and Anna James

On 27 January 2022, the UK Court of Appeal unanimously dismissed an appeal brought by Saad Investments Company Limited (SICL) and its liquidators[1]. The court refused to overturn a lower court’s decision in January 2021 to dismiss SICL’s long-running claim that Saudi National Bank (SNB, formerly, Samba Financial Group) was liable in “knowing receipt” of trust property in September 2009, namely shares in five Saudi Arabian banks. By the time of the judgment the shares had a market value in excess of £320 million.

In dismissing the appeal, the court clarified important issues relating to the relevance of equitable proprietary interests in trust assets, how those interests depend on a careful analysis of the law where the assets are located (in this case, Saudi Arabian law), and how the appellate courts should treat a trial judge’s assessment of expert evidence on foreign law.

The decision is of significant interest to anyone dealing with assets subject to English law trusts, where those assets are located outside the UK, particularly in countries with markedly different legal systems and/or where title is determined by registration.

The decision clarifies the role of the English courts and the UK executive branch in the recognition of foreign heads of state and the ability of English courts to adjudicate the lawfulness of executive and legislative acts of foreign states.

By Charles Claypoole, Isuru Devendra and Michelle Taylor

The UK Supreme Court (UKSC) recently issued its judgment in “Maduro Board” of the Central Bank of Venezuela v “Guaidó Board” of the Central Bank of Venezuela.[1] The case concerns who controls Venezuela’s gold reserves of approximately US$1.95 billion held by the Bank of England, and proceeds of a gold swap contract of approximately US$120 million held by court-appointed receivers in England: the board of the Central Bank of Venezuela (the BCV) appointed by Nicolás Maduro, who claims to be the President of Venezuela (the Maduro Board); or the BCV board appointed by Juan Guaidó, who claims to be the interim President of Venezuela following his appointment by the National Assembly of Venezuela (the Guaidó Board)?

The judgment clarifies the Court’s approach to proposed transfers under Part VII of FSMA, as well as the scope and application of s. 110(1)(b). 

On 24 November 2021, the High Court of England and Wales (the Court) sanctioned a £10.1 billion annuity book transfer from The Prudential Assurance Company Limited (PAC) to Rothesay Life Plc (Rothesay) under Part VII of the Financial Services and Markets Act 2000 (FSMA).

The Court previously declined to sanction the transfer following an initial sanction hearing in July 2019. The Court of Appeal then overturned that decision in December 2020 after an appeal by PAC and Rothesay, and the transfer was remitted to the Court for a further sanction hearing between 8-10 November 2021 before the honourable Mr Justice Trower (the Remitted Sanction Hearing). The Court’s judgment following the Remitted Sanction Hearing was handed down on 24 November 2021 (the Judgment), and provides useful guidance on certain aspects of the Part VII process.

The Court narrowly interprets dominant purpose to exempt general tax advice from legal privilege.

By Oliver E. Browne and Clare Nida

In Financial Reporting Council Ltd v Frasers Group Plc (formerly Sports Direct International Plc) [2020] EWHC 2607 (Ch), the High Court handed down the latest ruling in relation to the Financial Reporting Council’s (FRC) ongoing investigation into Grant Thornton’s audit of Sports Direct International. The Court’s previous ruling on this matter was discussed in this Latham.London blog post.

The Court narrowly interprets dominant purpose to exempt general tax advice from legal privilege.

By Oliver E. Browne and Clare Nida

In Financial Reporting Council Ltd v Frasers Group Plc (formerly Sports Direct International Plc) [2020] EWHC 2607 (Ch), the High Court handed down the latest ruling in relation to the Financial Reporting Council’s (FRC) ongoing investigation into Grant Thornton’s audit of Sports Direct International. The Court’s previous ruling on this matter was discussed in this Latham.London blog post.

The Court ruled on the “dominant purpose” test and offered guidance on the status of multiparty emails, and attachments.

By Oliver Browne and Clare Nida

Two recent Court of Appeal judgments have sought to clarify, and offer practical guidance relating to, legal professional privilege.

In Civil Aviation Authority v. R (on behalf of the application of Jet2.com Ltd) [2020] EWCA Civ 35, the Court considered first whether the “dominant purpose” test still applies in order for a communication to fall within the scope of legal advice privilege. Second, in light of its consideration of this issue, the Court examined the proper approach to determining the status of communications among multiple recipients, and whether emails and attachments hold the same status.

Soon after, in Sports Direct International plc v. The Financial Reporting Council [2020] EWCA Civ 177, the Court overturned a first instance decision that the production of the client’s privileged documents to the regulator would not infringe the legal professional privilege belonging to the client.

Court ruling confirms that online sales restrictions can amount to a serious infringement of competition law.

By John D. Colahan and Anuj Ghai

On 21 January 2020, the UK’s Court of Appeal ruled that the online sales restrictions contained in Ping’s internet sales policy (ISP) constituted a restriction of competition by object. The Court of Appeal dismissed Ping’s appeal against a judgment of the Competition Appeal Tribunal (CAT) that upheld the CMA’s decision that Ping’s online sales ban constituted a restriction of competition by object under Article 101 of the TFEU and therefore under the Chapter I prohibition of the Competition Act 1998, which is itself modelled on Article 101.

The Court’s decision rested on whether the patents provided outstanding benefit to the employer’s undertaking. 

By Deborah J. Kirk and Catherine Marie Hughes

On 23 October, the UK Supreme Court (UKSC) handed down its highly anticipated ruling in Shanks v Unilever [2019] UKSC 45 — the conclusion to an extensive campaign by Professor Shanks to obtain compensation for an invention he created in 1982, during the course of his employment with Unilever. The UKSC upheld Shanks’ appeal from the lower courts and in a unanimous decision ruled that Shanks was entitled to £2 million compensation from Unilever.

Section 40 of the Patents Act 1977 (the Act) makes provision for the payment of compensation to employee inventors in certain circumstances. Namely, where the employee makes an invention for which a patent has been granted and that patent is considered to be of outstanding benefit to the employer (taking into account things such as the size and nature of the employer’s undertaking), the court may award the employee compensation in the form of a fair share of the benefit received by the employer from the patents, with the amount determined under Section 41 of the Act.

Decision clarifies the court’s limit of discretion in departing from Part 36 cost consequence rules, even if a party behaved dishonestly.

By Oliver Middleton

The Court of Appeal has overturned a decision at first instance in which a claimant accused of dishonesty was punished by way having to pay not only the usual costs for late acceptance of a Part 36 offer, but also the costs preceding the Part 36 offer. In Tuson v Murphy [2018] EWCA Civ 1461, the Court of Appeal found that the judge’s exercise of discretion had been flawed and the usual Part 36 cost consequences were bound to be applied, despite the claimant’s material non-disclosure.

Background

Tuson centred on a personal injury claim in connection with a horse riding accident suffered by the claimant at the defendant’s riding school. The defendant accepted liability, but disputed the quantum of the claim. The defendant made a Part 36 offer which was accepted by the claimant, albeit some 54 days after the expiry of the offer’s “relevant period”.

In such circumstances, the rules regarding Part 36 cost consequences require the defendant to pay the claimant’s costs up to the expiry of the “relevant period” (in this case, 8 October 2015) and the claimant to pay the defendant’s costs from the expiry of the “relevant period” to the date of acceptance (in this case, 1 December 2015). That is unless the court considers such orders to be unjust.