European Investor vs. Hospitality MENA (Middle East and North Africa) Company
Claim Type – Minority Oppression Remedy
Jurisdiction – MENA

CHALLENGE

Following consecutive strategy views, majority shareholders took oppressive measures to dilute shares of a European investor. Direct negotiations led to an escalating situation whereby they were excluded from strategic decisions related to different businesses in the MENA region with alleged values exceeding USD 100 million.

Prior to consulting Practiclaim professionals, multiple legal representatives sought restraining orders in several jurisdictions to temporarily freeze company assets, no tangible outcome had been obtained despite all the costs associated with it. In fact, the counterparties knew the legal, factual and resource limits of the Claimholder. No litigation funder assisted given the limited prospects of the case and the uncertain monetary value. Internal management and operational staff could not be fully dedicated to managing the claim. In sum, the minority position had become untenable.

PRACTICLAIM SOLUTION

The Claimholder submitted the case to Practiclaim in order to maximize chances of obtaining the right settlement.

The claim manager devised a high-risk approach in this case. Her comprehensive support covered all aspects of the claim from day one; from issuing strategic Pre-Assessment notes to carrying out claim management work without pre-engagement fees. Practiclaim appointed one of its preferred litigation service providers to initiate the Claim at a heavily discounted rate. All stakeholders had full visibility ahead of time, for no initial cost.

An initial dispute with the LCIA arbitration panel led to an agreement on interim measures. A criminal and audit case in a critical jurisdiction also demonstrated unfair prejudicial conduct and mismanagement by the defendants. This had put additional restraints on management decisions.

EFFECT

A dispute war triggered by the majority, was turned into a targeted claim made in favour of the Claimholder, leading the counterparties to change their aversive positions.

A seven-figure settlement exceeded expectations for minimal cost, a substantial part of the fees was almost fully deferred until the claim manager had structured the escrow funds and released them.

Therefore, the claimholder had the opportunity to exit at a substantial value for relatively low cost, despite its limited ability to influence the direction of the company or fetter the near-unlimited powers of the majority shareholders.

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