JSC INVESTMENT LTD. v. ACTIVITY VENTURER FINANCE CO. LTD.

JUDGMENT

MARFUL-SAU JA:

This appeal is taken from the judgment of the High Court (Commercial Division) dated the 8th of June, 2010. By a writ of summons filed on the 7th of October, 2008, the Plaintiff claimed the following against the Defendant:

‘’a. $180,000 being entitlements due to the Plaintiff under the Agreement.

b. Interest on the said amount due to the plaintiff from the 12th of June 2008 date of termination till date of final payment.’’

In this appeal the Plaintiff will be referred to as the Respondent while the Defendant will be known as the Appellant. The facts of the case are quite simple. The parties herein entered into a contract on the 1st November 2006, by which the Respondent was engaged to manage investment fund provided by the Appellant. Under the Fund Management Agreement which regulated the rights and obligations of the parties, the Respondent was to be paid 2.5% of the committed capital as management fee per annum. From the record of appeal the committed capital was US $10,000,000.00 and therefore the Respondent’s management fee was to be US$250,000.00 per annum. The appointment of the Respondent as the Fund Manager was terminated by the Appellant on the 12th of June 2008. The Respondent therefore claimed the amount of US$180,000.00 which by paragraph 8 of the statement of claim is made up as follows:-

i) US$62,000.00 being the Respondent’s quarterly fee for the immediate preceding quarter before the termination.

ii) US$ 118,000.00 being the balance of the Respondent’s Annual Operating Expenses from 12th June 2008 to December 2008.

It is clear from the record of appeal that Respondent based its claims on clause 14. 1.2. of the Fund Management Agreement which will be referred simply as the Agreement. The said clause provides as follows:-

‘’ The company may terminate the appointment of the Fund Manager by written notice taking immediate or subsequent effect, attaching a certified copy of a resolution of the Board deciding upon such termination, at any time. Provided always that where the company terminates with cause, it shall pay the Fund Manager a termination fee equal to the Fund Manager’s fee for the immediately preceding quarter plus another quarterly fee of equal amount for the quarter following the notice of termination. Where the company terminates without cause, it shall pay to the Fund Manager: (i) the Fund Manager’s quarterly fee for the immediate preceding quarter and (ii) balance of the Fund Manager’s Operating Ex