HOTEL PORTFOLIO II UK LIMITED v ANDREW JOSEPH RUHAN

Mr Justice Foxton:

A INTRODUCTION

In the decades following the Second World War, there were many owners of grand private houses who found their financial salvation in selling them for conversion into luxury hotels. The properties which have given rise to this trial followed a reverse trajectory, the disputes arising from the very significant profit realised through transactions involving the sale of luxury hotels for their subsequent conversion to and use as private residences.

The hotels in question were the Kensington Park, Kensington Palace and Lancaster Gate hotels in London (collectively “ the Hyde Park Hotels ”):

They formed part of a portfolio of hotels which the First Claimant (“ HPII ”), then owned by the First Defendant (“ Mr Ruhan ”), acquired from Orb a.r.l. (“ Orb ”) in May 2003 for a consideration of between £42 and £47m.

The Hyde Park Hotels were on-sold by HPII pursuant to a Business Sale Agreement dated 1 March 2005 (“ the BSA ”) to a company ostensibly owned and controlled by Mr Stevens called Cambulo Comercio e Serviços Sociedade Unipessol LDA (“ Cambulo Madeira ”) for a price which, by the time of completion, was £125 million (“ the Cambulo Madeira Transaction ”).

On 4 April 2006, companies owned by Cambulo Madeira entered into a joint venture agreement with CPC Group Ltd (“ the CPC Group ”), a company owned by the Candy brothers (Mr Nicholas or Nick Candy and Mr Christian or Chris Candy), to re-develop the Kensington Park and Kensington Palace hotels (“ the Kensington Hotels ”) on a 50:50 basis.

After planning permission had been granted, on 30 August 2006 the Lancaster Gate Hotel was sold for £67.5m.

On 29 November 2007, the companies owning the Kensington Hotels were transferred to the joint venture company, Cambulo Property Holdings Ltd (“ CPHL ”).

On 22 February 2008, CPHL agreed to sell the Kensington Hotels to De Vere Estates Ltd (“ De Vere ”), a company connected to the Abu Dhabi royal family, for £320m.

HPII contends that in the acquisition of the Hyde Park Hotels from HPII, and the subsequent on-sales, Mr Stevens was acting as Mr Ruhan’s nominee, with the result being that Mr Ruhan was acting in breach of fiduciary and similar duties he owed to HPII. In addition to seeking personal and proprietary relief so far as Mr Ruhan is concerned, HPII seeks an account of profits, equitable compensation and damages from Mr Stevens, on the basis that he dishonestly assisted in breaches of fiduciary duty by Mr Ruhan and was a par