The High Court has granted an injunction against Hamdi Akin Ipek, preventing him from using funds belonging to Koza Ltd, the English subsidiary of a publicly-listed Turkish mining conglomerate. Mr Ipek wanted to use millions of Koza Ltd's funds to pay for a personal international arbitration dispute between his investment vehicle and the Republic of Turkey.
Following a two day hearing in February 2020, Mr Jeremy Cousins QC (a Deputy Judge of the High Court) ruled on Monday that Koza Ltd's funds should not be used in support of the arbitration – in particular since it appeared that the arbitration was being pursued based on a document of doubtful authenticity.
Mr Ipek had claimed he could not pay for the arbitration personally, and that without Koza Ltd's funds it could not go ahead. At the court hearing, however, Koza Altin submitted evidence showing that Mr Ipek and his family members had been "shuffling" more than $20million between them and dealing in luxury yachts. The Court heard that Mr Ipek must have access to sufficient funds of his own to pay for the arbitration. The judge stated that "Mr Ipek's position remains shrouded with an uncertainty that Mr Ipek has done nothing to dispel" and that his refusal to cooperate to enable proper scrutiny of his asset position was "extremely unimpressive and unsatisfactory."
The judgment, while heavily fact specific, also considers a number of unusual points of law including when a party can seek an injunction to enforce undertakings and whether an injunction can only be granted in circumstances where the underlying claim justified it. Specifically Mr Cousins QC held that "To refuse an otherwise justified injunction … would bring the law into disrepute, because it would be seen to be denying a necessary remedy to preserve the value of its own orders" and added that "Although no financial remedy is identified in the prayer for relief set out in Koza Altin’s Counterclaim, unless the litigation is to be a sterile exercise, the preservation of the value of the company is a proper concern for the court pending resolution of the dispute."
The ruling means that Koza Ltd’s funds are preserved pending trial.
Hugo Plowman, the Partner at Mishcon de Reya LLP representing Koza Altin, commented:
"This is an important decision and a clear message from the English Court that Mr Ipek must stop using Koza Ltd’s funds to fight his campaign against Turkey. My client is delighted with this result which follows our major win in the Supreme Court last summer."