THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

SAINT CHRISTOPHER AND NEVIS

SKBHCVAP2020/0015

BETWEEN:

[1] AMERICA 2030 CAPITAL LIMITED

[2] MARK SIMON BENTLEY (aka VAL SKLAROV)

Applicants

and

[1] SUNPOWER BUSINESS GROUP PTE LTD

[2] TOURNAN TRADING PTE LTD

Respondents

SKBHCVAP2020/0016

BETWEEN:

AMERICA 2030 CAPITAL LIMITED

Applicant

and

[1] SUNPOWER BUSINESS GROUP PTE LTD

[2] TOURNAN TRADING PTE LTD

[3] GUO HONG XIN

[4] MA MING

Respondents

Before
:

The Hon. Dame Janice M. Pereira, DBE Chief Justice

The Hon. Mde. Gertel Thom Justice of Appeal

The Hon. Mr. Gerard St. C. Farara Justice of Appeal [Ag.]

Appearances:

Ms. M. Angela Cozier for the Applicants

Mr. Nicholas Peacock, QC, with him, Ms. Elizabeth Harper and Ms. Michelle
Slack instructed by Ms. Martha Ramthahal for the Respondents

______________________________

2020: October 26, 30.

______________________________

Application to discharge order of single judge of Court of Appeal –
Order of single judge dismissing applications for leave to appeal
having been filed out of time – Applications for extension of time –
Principles guiding grant of extension of time – Approach of appellate
court to exercise of case management discretion of lower court judge

ORAL JUDGMENT

[1] PEREIRA CJ: There are in essence three applications
before the Court for determination, arising out of the two matters
intituled as appeals numbered SKBHCVAP2020/0015 and SKBHCVAP2020/0016. The
applications raise similar issues arising out of similar applications made
in the claims below. The claims in the court below are claims numbered NEVHCVAP2019/023 and NEVHCVAP2019/0141. Claim
NEVHCVAP2019/023 has been commonly referred to as the ‘Fixed Date claim’
(FDC) and was the claim filed first in time. Claim NEVHCVAP2019/0141
commonly called ‘the Fraud Claim’ was filed later. For convenience only,
they will be referred to as the Fixed Date Claim (FDC) and the Fraud Claim.
Central to the FDC and the Fraud Claim which involve similar or related
parties, are stock loan agreements and amendments thereto in respect of the
arbitration agreement contained therein. The applications before this Court
are for:

(a) the discharge of the orders of a single judge of this Court dismissing
applications for leave to appeal;

(b) extensions of time to seek leave to appeal; and

(c) in respect of the Fraud Claim only, an interim stay of the proceedings
below pending the determination of the proposed appeal.

[2] By way of background summary, for placing the matters in context, in
February 2019, the respondents in appeal SKBHCVAP2020/0016 namely, Sunpower Business
Group PTE Limited (“Sunpower”), Tournan Trading PTE Limited (“Tournan”),
Guo Hong Xin and Ma Ming filed the FDC in the Nevis High Court against
America 2030 Capital Limited (“America 2030”), and Ms. Karen Hill Hector,
the arbitrator purportedly appointed under the arbitration agreement in the
stock loan agreement as amended. An interim injunction was also sought
restraining the commencement of arbitration on the basis that arbitration
had not been validly commenced, as well as for the removal of Ms. Karen
Hill Hector as arbitrator on the basis of apparent bias. This application
was supported by the affidavit evidence of Guo Hong Xin, director and
beneficial owner of Sunpower, which was said to be also in support of the
FDC. It was accepted that, under the stock loan agreement as amended, the
Nevis High Court is the supervisory court for the purposes of the
arbitration clause as amended. The injunction was granted and remains in
place.

[3] Case management hearings were undertaken and some 6 issues were
eventually identified for determination at trial of the FDC, which was
listed to take place around 17^th December 2019.

[4] On 5^th December 2019, the respondents in appeal
SKBHCVAP2020/0015 namely, Sunpower and Tournan, commenced the Fraud Claim
against America 2030, Mr. Mark Simon Bentley (“Mr. Sklarov”) and the
stockholder/broker, Weiser Global Capital Markets Ltd. (formerly known as
Weiser Asset Management Ltd.) (“Weiser”) seeking, among other relief,
recission of the stock loan agreement, including the arbitration agreement
as well as for tracing orders to discover the whereabouts of the Sunpower
shares or stock which had been pledged as security under the stock loan
agreement, in circumstances where they assert no loans had in fact been
provided to the respondents despite the deposit of their stocks. They also
sought damages. The respondents considered that they were the victims of a
stock loan fraud scheme by America 2030 and its guiding mind, Mr. Sklarov,
assisted by Weiser, through the use of a web of various corporate entities.
They alleged that, by December 2019, they had uncovered evidence which they
believed showed that they had been the victims of a fraud.

[5] On 6^th December 2019, a worldwide freezing order was granted
against America 2030 and Mr. Sklarov and a preservation order was granted
against Weiser, prohibiting it from disposing of or diminishing the value
of the Sunpower shares held by it or any proceeds of sale thereof.
Underpinning the freezing order, were orders for disclosure of assets and
for information relative to the stock. There has been no compliance with
these orders to date and these appear to have been simply ignored. The
respondents have not brought proceedings for contempt as they consider
doing so would be pointless as no assets of the applicants appear to be
situate in the State of Saint Kitts and Nevis.

[6] The applicants failed to file any defences to the Fraud Claim within
the time limited and default judgment was eventually entered against them.

[7] On 3^rd Feburary 2020, America 2030 issued an application to
strike out the FDC alleging in general an abuse of process. Its challenge
may be condensed as follows:

(a) various breaches of the Civil Procedure Rules 2000
(CPR), in particular, CPR 8.1 (as to form) and CPR 30 as to portions being
scandalous and irrelevant;

(b) that the FDC was barred by res judicata or issue or party estoppel on
the basis that the Singapore High Court had determined the issue of
arbitration in Nevis as between the same parties; and

(c) that the FDC failed to disclose any reasonable ground for bringing the
claim.

[8] In respect of the Fraud Claim, America 2030, Mr. Sklarov and Weiser
asserted in the main that:

(a) the claim was in breach of the CPR as it sought to re-litigate an issue
namely, jurisdiction to determine the issue of breach of contract and the
issue of arbitration such claim having been stayed by the Singapore High
Court (the res judicata/issue estoppel point); and

(b) the statement of claim was prolix, scandalous and portions thereof
irrelevant.

[9] The learned judge refused the strike out applications. In his written
reasons, he referred to the parties in the Singapore proceedings and stated
at paragraph 10 that neither Mr. Sklarov or Weiser were parties to the
Singapore proceedings. They are however parties to the Fraud Claim. The
trial judge accepted that the Singapore court was made aware of the Nevis
High Court proceedings by way of the FDC by America 2030. He also accepted
that Mr. Sklarov’s evidence before the Singapore court pointed out that no
relief was being sought there rendering the stock loan agreement null and
void. The learned judge further opined that the issues raised in the FDC
“especially as it relates to the impartiality of the arbitrator and the
process in general, were not before the court in Singapore”. The Singapore
court granted a stay of Sunpower’s claim pursuant to section 6 of the
International Arbitration Act of Singapore. No stay was granted in respect
of the claims brought by Ma Ming and Mr. Guo Hong Xin as they were not
parties to the stock loan agreement.

[10] The learned judge dealt with the attacks made on the claims under the
two broad heads of res judicata/issue estoppel, and whether the claims are
an abuse of process having regard to the stay granted in respect of
Sunpower’s claim in Singapore and finally the procedural defects in the
claims so as to determine whether the nuclear option of striking out the
claims were warranted.

[11] In relation to the issue estoppel point, the learned judge concluded
that no issue estoppel arose in that the stay order did not seek to trouble
the process in Nevis, the Singapore court being fully aware of the
proceedings which had been commenced in Nevis. As the learned judge puts it
at paragraph 38 of his reasons, “[a]ll that was done was to stay
the Singapore proceedings pending the outcome of the arbitration in Nevis”. He further opined that the Singapore court would have been aware
of the Nevis court’s supervisory jurisdiction over the arbitration and that
“the court’s desire to honour arbitration agreements are not designed to
oust [the court’s] jurisdiction over disputes, but rather…to honour
contractual arrangements entered into freely by parties”. He
further found that the stay granted in Singapore was in no way intended to
take away the jurisdiction of the Nevis court, being the supervisory court,
to consider the claims made in the FDC to ensure the integrity of the
arbitral process. He also referred to the fact that the respondents sought
removal of the arbitrator on the basis of bias and that the Nevis court was
seized with the power to do so and that the stay of the Singapore
proceedings did not take away the right to seek that specific relief. He
concluded that no issue estoppel could arise in such circumstances.

[12] As it relates to the Fraud Claim, the learned judge concluded that
although the claim does repeat in some respects the issues of breach of
contract, they are to a great extent predicated on different issues. In
essence, that the case was one alleging fraud. He found at paragraph 45 of
his reasons that “the Fraud case unlike the case in Singapore seeks to
rescind the agreement altogether rather than enforce it” on the basis of
fraud and that the respondents were relying on the court’s power contained
in sections 24(2) and (3) of the 1950 Arbitration Act of the UK which is in
force in Saint Kitts and Nevis. He concluded at paragraph 53 of his reasons
that the issues raised in the Fraud Claim were not similar to the issues in
the Singapore claim, save for the issues relating to breach of contract.
Even so, he concluded that those issues “had not been fully litigated given
the fact that the proceedings…[had been] stayed”; the
parties were not the same; and the issues had not been finally determined
in Singapore. Accordingly, he found that there was no issue estoppel or res
judicata barring the Nevis Fraud Claim. The learned judge also found for
the same reasons that there was no abuse of the court’s process in any way,
as asserted by the applicants.

[13] On the procedural issues, the learned judge made plain that form would
not be permitted to override substance. He found that the allegation that
the FDC was not supported by affidavit was factually incorrect and
recounted the steps of the FDC through the case management processes with
the applicants filing affidavit evidence in response. He was satisfied that
the applicants were well aware of the case they were called upon to meet.
As it relates to the Fraud Claim, he found that the assertion that the
claim was unsubstantiated was without merit, having considered that it was
unnecessary to duplicate documents earlier exhibited to the affidavit filed
in the claim in support of the freezing order. He further opined that a
complaint of lack of information could be remedied by a request for
information. He accordingly concluded that none of the procedural issues
raised warranted striking out the claims.

[14] Finally, on the complaint that no reasonable basis had been shown for
bringing the claims, the learned judge concluded that the issues identified
for trial by the case management judge were substantive issues relating to
the validity of the commencement of the arbitration proceedings; the
impartiality of the arbitrator and her removal in the FDC; and substantive
allegations of fraud, and misrepresentation in respect of the Fraud Claim.
He found the statement of claim to be detailed rather than prolix given the
peculiar circumstances of the case. Accordingly, the learned judge held
that the test relating to strike out applications had not been met and
refused the strike out applications.

[15] The applicants sought to appeal the dismissal of their strike out
applications. The leave applications were filed a day out time, on 2 ^nd July 2020. The applicants must be taken to have been aware of
this given their explanation of electrical and associated internet problems
experienced by them when they sought to file on the last day limited for
making the application under the CPR. No applications to extend time were
made. A single judge of this Court, on noting that the leave applications
were filed out of time dismissed the applications for that reason on 28 ^th July 2020.

[16] The applicants then made the present rolled up applications seeking:
to discharge the order of the single judge primarily on the basis that she
had wrongly exercised her discretion in dismissing the leave applications;
an extension of time to make the leave applications and for leave; and for
a stay of proceedings in the Fraud Claim. They contend that the delay in
making the applications was not inordinate; that they had provided a good
explanation for the delay and importantly that their appeals had realistic
prospects of success.

[17] It is worth stating that the applications to discharge the single
judge’s order has itself been made out of time with no extension of time
being sought. That said, we are of the view that in any event, there is no
basis for discharging the single judge’s order. As the leave applications
were filed out of time and there being no applications to extend time, the
learned judge quite rightly dismissed the applications as being not
properly before the Court. This did not engage the exercise of a
discretion. Rather, it was simply a recognition that there was no leave
application properly before the Court.

The Application to Extend Time to Seek Leave to Appeal

[18] This brings us to a consideration of the application for extension of
time. Notwithstanding the sheer volume and multiplicity of documents this
matter has unnecessarily generated, the principles guiding the exercise of
the discretion are well settled. The Court will have regard to all the
circumstances of the case including the length of the delay; whether there
is a good explanation for it; the prejudice and whether the proposed appeal
has realistic prospects of success. It is the grant of an indulgence to a
party who is in default.

[1]

Length of Delay

[19] While the delay in making their application may not be said to be
inordinate, the applicants were seemingly aware that they were out of time
from the very day of filing their leave applications. That period is
sufficiently explained by the electrical and internet difficulties
experienced by the applicants at that time. What has not been sufficiently
explained is why the applicants failed to issue extension applications then
and there but rather waited until the leave applications were dismissed for
precisely the fact of being untimely, followed by a further period after
what must have been appreciated would have been the consequence of
untimeliness in respect of their leave applications. Rather, the applicants
seemed content to challenge their dismissal by asserting that the single
judge was in error for dismissing them even in the face of never seeking to
place material before the single judge on which she could have exercised
her discretion in putting matters right by extending time. The fact that
the Court has a power to put matters right does not equate to the Court
exercising that power in a vacuum.

Prejudice

[20] It cannot be gainsaid that the respondents now have a judgment in
their favour in respect of the Fraud Claim. Furthermore, the Court has been
told without demur that the applicants have failed to engage this claim on
the merits in the court below. It does not appear that the applicants have
taken any steps to set aside the default judgment, a step which would
require them to put forward defences to the claim on the merits even while
they seek from this Court a stay of the very proceedings in the court below
which could only be taken to be asking, in effect, for a stay of execution
of the judgment which has already been entered. They have flouted the
disclosure and asset tracing orders of the court. In such circumstances, it
cannot be said that the respondents will suffer no prejudice.

Prospects of Success

[21] It is this factor on which detailed arguments on both sides were
focused. It is useful to remind ourselves that what was before the learned
judge were applications to strike out the claims. He was very much alive to
the fact that the power to strike is one of the most powerful weapons in
the court’s arsenal in managing and dealing with a case justly in the
exercise of the overriding objective. The power has been described by the
Privy Council in

Real Time Systems Limited v Renraw Investments Limited et al


[2]

as one of the court’s nuclear options and thus one to be exercised
sparingly and normally as a measure of last resort. The learned judge, from
his reasoning, was also alive to the fact that in dealing with an
application to strike out a case, he also had open to him the whole
plenitude of case management powers on which to draw rather than acceding
to this nuclear option. As the trial judge, he would have been managing the
cases and is best placed to assess the general feel of them.

[22] A party who seeks to overturn the exercise of a judge’s discretion in
such circumstances has a heavy burden to discharge in showing how the
exercise of his discretion refusing to strike out falls outside the
generous ambit of the discretion reposed in him.

[3]

For the purposes of this exercise, the applicants must show that their
proposed appeals have realistic prospects of overturning the discretion
exercised by him, and that this Court should in the exercise of its
discretion extend time for the purpose of seeking leave.

[23] The grant of leave itself requires that the proposed appeals meet the
threshold of showing realistic prospects of success warranting the Court’s
permission to appeal. The proposed appeals herein do not lie as of right
and for good reason. They are from interlocutory decisions made by the
court below in ongoing proceedings. Such appeals always have an impact on
the flow and progress of the underlying proceedings with the potential for
them to become protracted and delayed. The requirement for leave to appeal
most interlocutory decisions provides a filter for safeguarding the Court’s
process and resources by enabling the Court to weed out would-be
unmeritorious appeals.

[24] We now turn to the applicants’ arguments bearing in mind those
observations. The applicants have placed heavy reliance on the 1981
decision of the UK House of Lords (now the UK Supreme Court) ofBremer Vulkan v South India Shipping Corporation Ltd .

[4]

Counsel for the applicants contend that this case stands for the
proposition that the court has no jurisdiction to restrain arbitration
proceedings and, in essence, that the court having done so was in error
thus giving rise to a realistic prospect of success on appeal. Counsel also
repeated many of the arguments made before the trial judge as to the stay
granted in the Singapore proceedings which she says requires the
application of the principles of res judicata or issue estoppel barring the
claims. She asserts that the FDC could not seek to stay the arbitration
proceedings given the arbitration agreement and insists, in effect, that
the intent of the stay granted by the Singapore court was for the purpose
of the arbitration proceedings being carried out in Nevis with no recourse
to the High Court being possible at this stage.

[25] Having reviewed the Bremer Vulkan decision, we do not agree that it stands
for that broad proposition as advanced by counsel. To the contrary, the
court recognised the power to grant injunctions restraining an arbitration
while making clear that such a power is to be exercised only in appropriate
cases. This case is also of no assistance to the applicants because they
are not seeking to appeal against the grant of the injunction. Rather, they
seek to rely on it as a basis for striking out the claims altogether as an
abuse of process in favour of the arbitration proceedings, notwithstanding
that the respondents’ main thrust in the proceedings is to impeach the
arbitration agreements as well as the arbitral process in respect of its
commencement and the impartiality of the arbitrator. We are satisfied that
the learned judge was alive to this distinction, and the nature of the
proceedings before him based on his careful reasoning.

[26] Having reviewed the reasoning of the learned judge, we have not
discerned any basis tending to show that he may have committed some error
in principle in his assessment of the evidence and the pleaded cases before
him, or that he failed to take into account relevant matters or took into
account irrelevant matters or that there is a real prospect that his
decision may be plainly wrong in relation to those aspects or his treatment
of the procedural issues. We are accordingly not of the view that the
proposed appeals from the exercise of his discretion have any realistic
prospect of success. It would be pointless to grant an extension of time to
allow appeals with little or no hope of success to be launched in the
circumstances. Such a course would not be in keeping with furthering the
overriding objective of dealing with cases justly. The extensions of time
are accordingly refused. It follows that the applications for leave to
appeal fall away and that the application for a stay of proceedings or stay
of execution in the Fraud Claim must be dismissed.

Conclusion

[27] For the reasons given, the applications to discharge the orders of the
single judge are dismissed; the applications to extend time for seeking
leave to appeal are refused. Accordingly, the applications for leave to
appeal fall away and the application for a stay in the Fraud Claim is
dismissed.

Costs

[28] The applicants shall bear the costs of the applications to be assessed
by the court below, unless agreed by the parties in 30 days, such costs to
be no more than two-thirds of the assessed costs in the court below.

I concur.

Gertel Thom

Justice of Appeal

I concur.

Gerard St. C. Farara

Justice of Appeal [Ag.]

By the Court

Chief Registrar