Summary
The dispute was between three companies which were fully owned by individuals, which was why the court said that the “dispute is between three men”.
The claimant (who was based in Canada) alleged that two of the defendants, based in London and DRC, attempted to dishonestly dispose him of his shares in a Congolese company as well as to dispose their own shares without allowing him to exercise his right of pre-emption.
The first defendant, Katanga, was a Bermudian company that had its principal office in London.
The claimant sought an injunction to ensure that no shares had been transferred before he was given the opportunity to exercise his pre-emption right. Alternatively, damages were claimed. It was difficult to see when the claim form was issued, but the intended merger was announced on 6th Nov 2007; the offer of documents was issued by Katanga on December 2007.
The defendants challenged the English court’s jurisdiction. The jurisdictional challenge was dismissed. Since Katanga's central administration was in London, the judge stated that he had no discretion to stay the English proceedings. The English High Court judge held:
“23 […] Whilst it can plausibly be said that Katanga has a real connection with Canada, to my mind the connection with England is much more real. It is where the entirety of the administration takes place and it is where all known management resides – the sole executive director, the President, the Chief Executive Officer, the Senior Vice President and the Chief Financial Officer, albeit that is only two people. London must be the centre from which management instructions are given when necessary. Whilst key decisions may be made in Board meetings co-ordinated from Canada and sometimes taking place in Canada, everyone active on Katanga's behalf operates in London. I know nothing of where Katanga's earnings are remitted although it would seem likely to be Bermuda. The connection with Canada seems to me contrived rather than real. In so saying I do not suggest that there is any illegality. What I mean is that the connection with Canada is designed so as to be sufficient to establish and to maintain tax resident status, notwithstanding that so far as I know on the evidence no officer and no shareholder actually lives in Canada and only one non-executive director is resident there.” [2008] EWHC 2679 (Comm) [23].