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Aritsan H Ltd v BDW Trading Ltd & Ors

Ch D, 31 March 2010, Kitchin J

Court: High Court
Date of Judgment: 31.03.10
Jennifer Haywood

A dispute arose between two property developers specialising in urban regeneration projects as to construction of the agreement governing their joint venture LLPs. The defendant LLP member had claimed that it was entitled to act without the consent of the claimant member in causing the LLP to enter into contracts where the claimant had, in its view, acted in breach of its fiduciary duty, and had acted without consent in entering into a contract with a public body to its own advantage. The defendant LLP member further claimed that it could choose whether to procure financing from elsewhere or advance funding to the LLP itself.

At a trial that took place 2 weeks after issue of the claim (following an application for a speedy trial) Kitchin J determined that, as a matter of construction, the only acts which the partnership board representatives of one member could carry out without the consent of the other member were limited to those provided for by the LLP agreement (essentially the bringing of a claim against, or defence of a claim by, the other member). He further found that the defendant was obliged to use all reasonable endeavours in procuring external funding before advancing funding itself to the LLP. Kitchin J granted an interim injunction restraining the defendant from acting without consent of the claimant, pending determination of the remaining issues and ordered the defendant to provide an account of relevant information.

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