The claimant, Ambra (A), who had been a beneficiary under the MBV Trust, disputed the price obtained by BV Securities for its 20% shareholding in Air Italy in view of certain subsequent transactions involving Meridiana and Air Italy Holdings, a company in which the third defendant and protector of the trust (G) had an interest through his investment holding company. A also threatened breach of trust proceedings against the trustees. G and the fourth and fifth defendants, his wife and son, remained beneficiaries under the trust but A’s interest had been severed under a deed of appointment made on 31 March 2011 which governed the sale of the shares from which she received 35% of the proceeds. The first and second defendants, the trustees (T) denied that they had any knowledge of the subsequent transactions or of G’s interest in Air Italy Holdings at the time of the sale. A requested T obtain a valuation of the shares pursuant to the Expert Determination Provision in the 2011 appointment by which the sale was governed; required that she be involved in settling the terms upon which the expert was instructed and, insisted that T and G should provide her with certain information and documents. T indicated that they would seek a valuation in accordance with the terms of the Expert Determination Provision. They proposed instructing the expert valuer through their Italian legal agents to determine the valuation of the 20% shareholding in Air Italy at the time of the contract of sale at the end of June 2011 and providing the expert with background information about the 20% shareholding and the sale. T took the view that initially it was for the expert to decide the basis of valuation, what factual matters he regarded as relevant to the valuation exercise and what further information (if any) he required once he had received his instructions and that the terms of engagement should be drafted accordingly. They made it clear that, while they would be responsible for instructing the expert, they would seek A and G’s views on what they proposed to include in the instructions and they would include in the background material for the expert a summary of A and G’s respective positions on the facts. They also indicated that they would draw the attention of the Meridiana transaction to the expert, but it would remain a matter for the expert to decide what was or was not relevant to the valuation exercise.
A disagreed. The expert determination provision provided that should A dispute the price obtained by T in the event of a sale of the Holding or any part thereof A would be entitled to request within three months after receiving from T written notice of the sale that T obtain at her cost and expense a market valuation of the Holding or such part by an expert to be appointed by the International Chamber of Arbitration in Milan and in the event that the market valuation so obtained was higher than the price obtained by T then T should pay to A 35% of the difference and reimburse A the reasonable costs and expenses incurred by her in obtaining such market valuation. She argued that she was entitled to instruct the expert and brought a claim seeking orders for determination by the court of seven questions (see paras 40- 56 of the judgment); and for disclosure to her of information and documents by T and G.
Held (action dismissed )
In the light of the authorities the relevant principles in relation to the court’s interference prior to the appointment of an expert pursuant to an expert determination were as follows:
- (a) The parties had agreed that the issue in question was to be determined by the expert, not the court, and it was not for the court to interfere in advance of appointment of the expert in relation to matters that were to be determined by the expert.
- (b) There were remedies available if the expert went outside his mandate or otherwise departed from what he was required to do; in general the court would not interfere at a time when the expert had not been appointed.
- (c) However, there would be circumstances where there was a defined dispute as to the mandate of the expert, normally going to the jurisdiction of the expert, which was not hypothetical, where the court might consider that it would assist the parties (and the expert) for that dispute to be resolved at the outset.
Here T had set out what they intended to do, and how they intended to proceed in relation to the appointment of the expert and there was no good reason for the court to intervene unless it considered that T were proposing to procure the required valuation from the expert, appoint, or instruct the expert on a false or incorrect basis . The expert determination provision provided that T would obtain the valuation at the expense of A, subject to payment of A’s costs in the event that the valuation exceeded the price of the sale. That reimbursement provision at the end of the provision was in terms different from the earlier part of the clause and possibly could be construed as indicating that it was A who was to obtain the valuation. However, while the wording at the end of the provision was loose, it could not displace the prior clear words that the valuation was to be obtained by T .
In some circumstances a claim for disclosure gave rise to a substantive cause of action. But in the normal case it was an interlocutory procedure necessary to ensure that there was a fair trial. Here the trial of the Part 8 proceedings had taken place so disclosure could not be required for that purpose. Nor was it necessary to order disclosure or information to determine the issues (principally of construction) which arose. A said the real purpose of the disclosure sought was to enable the expert to have access to documents for the purpose of the determination. But the expert had not been appointed, had not requested documents and it was a matter for him whether or not he required them. Moreover, the disclosure was required by A, not the expert and if ordered would be subject to a collateral undertaking in the usual way so that A would not be able to give disclosure to the expert without court approval in any event. It was also relevant that A had threatened proceedings for breach of trust. There was a not unnatural concern on the part of T and G that the documents and information would be used not for any purpose relevant to these Part 8 proceedings but to assist the making of such a claim. This concern was exacerbated by the lack of justification for this wide ranging disclosure request in the context of the Part 8 claim .
Although the various questions asked were considered, (paras 40-56 in the judgment below) no error had been shown in the approach of T, and, given the authorities it was not appropriate to grant declarations .JUDGMENT MR CHARLES HOLLANDER QC:  The first and second defendants (the trustees) are the present trustees of the MBV Trust. The current discretionary beneficiaries of the MBV Trust include Gianbenso Vimercati (Gianbenso, the third defendant), his wife Rosalinde (the fourth defendant) and his son Leonardo (the fifth defendant).  Until 15 April 2011 the …