QOGT Inc v International Oil & Gas Technology Ltd
2014
COMMERCIAL COURT
United Kingdom
CORAM
- THE HON. MR JUSTICE POPPLEWELL
Areas of Law
- Contract Law
- Corporate Law
- Evidence Law
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
QOGT claimed $3.3 million for the wrongful termination of an investment management agreement with the Fund, who counterclaimed $13.5 million for breaches of duty. The dispute arose from a conflict between QOGT and co-manager QEP, resulting in the Fund invoking a material breach. The court held that the termination was valid, that there was a clear failure to provide joint management services, and dismissed QOGT's claims for damages.
Judgment
The Hon. Mr Justice Popplewell :
Introduction
In this action the Claimant claims US$3,322,577 for the wrongful termination of an investment management agreement under which it was appointed as one of two joint managers to manage the investments of a private equity fund on behalf of the Defendant. The Defendant resists the claim on the grounds that it lawfully terminated the agreement in accordance with its terms, and counterclaims approximately US$13.5 million for alleged breaches of contractual or fiduciary duty in performing the management agreement.
The Claimant (“QOGT”) is a company which was registered in Ontario, Canada, as a special purpose vehicle for the purposes of the management of the fund. It is an indirect subsidiary of Quorum Funding Corporation (“QFC”), a partnership established in 1987 to create and manage private equity funds, headquartered in Canada. Wanda Dorosz was the founder, managing partner, and chief executive officer of QFC, and has at all material times been the principal moving spirit of the group of companies directly and indirectly owned by QFC (“the Quorum group”), including QOGT.
The other investment manager was Quorum European Partners LLP (“QEP”), an English limited liability partnership established on 4 June 2004. By the time of the events in issue in these proceedings, the majority partner was David Sefton and the minority partner, Quorum Growth Funding Limited (“QGFL”), a Quorum group company incorporated in Bermuda. QEP has changed its name, first to Sefton Partners LLP and subsequently to Linton Capital LLP.
The Defendant is a company incorporated in Guernsey on 20 November 2007 for the purposes of holding a fund of private equity investments in oil and gas technology companies. It is a public company listed on the London Stock Exchange and subject to the regulatory regime applicable to such companies. I shall refer to it, as it has been referred to by the parties throughout the proceedings, as “the Fund”, whilst referring to the assets under management more generally as the fund. At all material times it had three directors, one of which was Ms Dorosz, the other two being independent non executive directors. At the relevant time the independent directors were Thomas Price and Christopher Hill.
QOGT and QEP were jointly appointed to manage the fund under an investment management and advisory agreement dated 27 December 2007 (“the IMAA”). The fund raised initial capital investment of about US$43 millio