Craig Orr QC and Oliver Butler, instructed by Travers Smith, acted for Pathfinder Minerals plc (“Pathfinder”) in proceedings arising out of the attempted misappropriation of its mining rights over heavy mineral sands deposits in Mozambique by one of its former directors, General Jacinto Veloso, and two of its shareholders, Mr Diogo Cavaco and J.V. Consultores Internacionais Limited.
The primary issues in the case concerned the validity and effect of four agreements (all of which were expressly or impliedly governed by English law) pursuant to which Pathfinder had acquired 99.99% of the shares in Companhia Miniera de Naburi SA (“CMDN”), a Mozambique company which owned the mining rights over the heavy mineral sands deposits, from General Veloso and Mr Cavaco.
The proceedings were brought in England pursuant to jurisdiction clauses in three of the agreements. They had a colourful history, culminating in the Defendants’ Defence being struck out for their flagrant breach of various court orders, including an anti-anti-suit injunction granted by Hamblen J prohibiting the Defendants from pursuing proceedings in Mozambique designed to restrain Pathfinder from pursuing its action in England.
Since Pathfinder was seeking declaratory and injunctive relief from the English court, it was required to prove its claim despite the Defendants’ Defence having been struck out. Following a final hearing at which the defences and evidence previously relied upon by the Defendants were closely examined, Field J gave judgment for Pathfinder on its claims.
One of the main points in controversy was whether an agreement concluded in February 2006 provided for the purchase and sale of 70% of the shares in CMDN or merely the grant of an option over such shares. Field J held that the agreement only conferred an option over the shares. However, since the parties had all proceeded on the assumption that the agreement provided for the purchase and sale of the shares, the Defendants were estopped from denying that the agreement had that effect: they were bound by their conventional treatment of the meaning of the agreement. Field J applied the reasoning of Mance LJ in Baird Textile Holdings Ltd v Marks & Spencer Plc to find that an estoppel “may enlarge the effect of an agreement, by binding parties to an interpretation which would not otherwise be correct”.
Field J held that the Defendants’ absence did not preclude the grant of declaratory relief, which would serve a useful purpose in declaring the parties’ rights under the agreements.
Full text of the approved Judgment is available here