Zai Corporate Finance Ltd v AIM Disciplinary Committee of the London Stock Exchange Plc & Anor, Court of Appeal - Civil Division, August 30, 2017, [2017] EWCA Civ 1294

Issuing Organization:Civil Division
Actores:Zai Corporate Finance Ltd v AIM Disciplinary Committee of the London Stock Exchange Plc & Anor
Resolution Date:August 30, 2017
 
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Case No: C1/2017/1094

Neutral Citation Number: [2017] EWCA Civ 1294

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Mr Justice MOSTYN

[2017] EWHC 778 (Admin)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 30 August 2017

Before :

SIR JAMES MUNBY PRESIDENT OF THE FAMILY DIVISION

LORD JUSTICE LEWISON

and

LORD JUSTICE LINDBLOM

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Between :

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Mr Oliver Assersohn (instructed by Radcliffes Le Brasseur) for the Appellant

Mr Ben Jaffey QC (instructed by Latham & Watkins (London) LLP) for the Respondent

Ms Monica Carss-Frisk QC and Mr Harry Adamson (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the Interested Party

Hearing date : 27 June 2017

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JudgmentSir James Munby, President of the Family Division :

  1. This is an appeal from an order made by Mostyn J in the Administrative Court on 11 April 2017: R (ZAI Corporate Finance Ltd) v AIM Disciplinary Committee of the London Stock Exchange PLC (London Stock Exchange PLC, interested party) [2017] EWHC 778 (Admin). Permission to apply for judicial review on the points which are now before us was granted by Briggs LJ on 25 April 2017. He directed that the application should be retained in this court.

  2. The issues for decision by Mostyn J arose in the context of disciplinary proceedings before the AIM Disciplinary Committee of the London Stock Exchange PLC (``the Committee'') brought by London Stock Exchange PLC (``the Exchange'') against ZAI Corporate Finance Ltd (``ZAI''). In relation to AIM, the Alternative Investment Market, ZAI is what is known as a ``nominated adviser'' or ``nomad''. The dispute was whether, as ZAI contended, the hearing before the Committee should be in public or whether, as the Committee directed on 24 May 2016 and again, having received further representations, on 21 October 2016, the hearing should be in private.

  3. The relevant provisions on which the dispute turned are to be found in the following paragraphs of the AIM Disciplinary Procedures and Appeals Handbook - May 2014 (``the Handbook''):

    ``This handbook, which forms part of the AIM rules, sets out the procedures to be followed when ... the Exchange wishes to commence disciplinary proceedings against an AIM company or nominated adviser for a breach of the AIM rules ...

    C15.1.2 The AIM Disciplinary Committee ... shall, as a tribunal of first instance, hear and determine charges against a nominated adviser in respect of a breach of its responsibilities under the AIM rules or in respect of any allegation that the integrity and reputation of AIM has been or may be impaired as a result of its conduct or judgement ...

    C15.3 If the AIM Disciplinary Committee finds, on the balance of probabilities, that a nominated adviser has breached the AIM rules, or that the integrity and reputation of AIM has been or may be impaired as a result of its conduct or judgement it may impose one or more of the following sanctions:

    C15.3.1 fine the nominated adviser;

    C15.3.2 censure the nominated adviser;

    C15.3.3 remove the nominated adviser from the register; and/or

    C15.3.4 publish the action it has taken and the reasons for such action.

    C18.3 Other than as set out in these rules, and other than as between the parties and their advisers, all parties shall keep confidential any matters relating to any proceedings save where disclosure is permitted or required by law.

    C21.1 ... the Chairman or any member of the AIM Disciplinary Committee whom he nominates may give any directions and take any other steps he considers appropriate for the clarification of the facts and issues and generally for their just, efficient and expeditious presentation and the determination of the matters in issue. The Chairman or any member of the AIM Disciplinary Committee whom he nominates may hold one or more pre-hearing reviews for those purposes and the determination of the matters in issue ...

    C22.1 The AIM Disciplinary Committee will usually conduct hearings in private, although an AIM company or nominated adviser which is subject to proceedings has the right to ask for such hearing to be conducted in public. An AIM company or nominated adviser requiring such hearing to be conducted in public shall notify the Chairman at least five business days prior to commencement of the hearing.

    C22.8 At a hearing the AIM Disciplinary Committee may:

    ...

    C22.8.2 make any directions which may be given at a pre-hearing review, and vary any direction which has been made; and

    C22.8.3 make all such directions with regard to the conduct of and procedure at the hearing as the AIM Disciplinary Committee considers appropriate for securing a proper opportunity for the parties to present their cases and otherwise as may be just.

    C23.6 The AIM Disciplinary Committee may publish part or all of its decision or a summary of it, and the reasons for the decision. Where the sanction imposed is a private censure, the AIM Disciplinary Committee may publish its decision in part or a summary of it and the reasons for the decision without revealing the identity of the AIM company or nominated adviser sanctioned.

    C25.1 The AIM Disciplinary Committee may vary any of these procedures to adapt to the circumstances of any particular case.''

  4. On 15 April 2016, ZAI's then solicitors, Addleshaw Goddard, wrote to the Secretary of the Committee requesting an oral pre-hearing review to consider, inter alia, a ``direction that the oral hearings be in public.'' That request was not further elaborated or explained. On 29 April 2016, the Exchange's solicitors, CMS Cameron McKenna LLP, wrote to the secretary of the Committee:

    ``We do not consider ZAI's request for an oral pre-hearing review is justified.

    ... ZAI has offered no reason why a departure from Rule 22.1 of the Handbook is justified and therefore the Exchange would request ZAI to explain by way of written submission why it wishes the hearing to be in public.''

    In written directions dated 24 May 2016, the Chairperson of the Committee in accordance with Rule 21.1 made a direction that ``All oral hearings in this matter are to be held in private.''

  5. On 7 October 2016, ZAI submitted draft directions providing, inter alia, for the hearing to be in public. On 10 October 2016, CMS Cameron McKenna LLP wrote to the secretary of the Committee that the Exchange saw ``no good reason'' why the Committee should depart from its existing direction. On 18 October 2016, ZAI responded:

    ``The Exchange states that it sees no good reason why the ADC should depart from its existing direction that the hearing be in private. The good reason is that it is expressly within the rules of AIM that up to five business days before the date of the hearing a party ``has the right to ask for such hearing to be conducted in public'' by notification to the Chairman of the ADC to that...

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