Memery Crystal acted for Mediterranean Oil & Gas Plc ("MOG") in its application for indemnity costs following its successful defence of a fraud claim brought by Leni Gas & Oil Plc ("LGO") against MOG’s subsidiary, Malta Oil Pty Ltd.
The judgment in the case was handed down on 27 March dismissing LGO's case, which was found by the judge to have "failed at every stage". On 3 April, Mr Justice Males held that LGO should pay MOG's legal costs on an indemnity basis having regard to the following:
- The aggressive pursuit to the bitter end of a case involving serious allegations of fraud and dishonesty where the case was “weak and thin”
- LGO’s courting of publicity during the legal proceedings including, in some instances, in a way that was deliberately intended to raise the public profile of the litigation
Whilst the judge made it clear that LGO was perfectly entitled to make public statements expressing confidence in its case, this was one of the matters that took the case “outside the norm” and justified LGO paying MOG’s legal costs on the higher than usual “indemnity” basis. The judge quoted from various of LGO’s public statements in his judgment, including the following:
- an RNS announcement in September 2013 which referred to legal advice that LGO had received from Mishcon de Reya that its case had “good prospects of success”
- an email sent by Mr Neil Ritson of LGO to an equity analyst about the value of LGO’s legal claim against MOG
- a statement made by Mr David Lenigas of LGO in a speech at an investor show in 2013 in the following terms:
“We don’t have lots of money in the bank. Plus I’ve got a legal case going on with Mediterranean Oil and Gas and I am going to whip them from here to kingdom come. Now that’ll start in May. [You know/And] to date that’s cost about £157,000 pounds. For me to take them through to the full High Court will cost another £250,000. But we’ll win. They were very naughty boys. What’s it worth to us? A hell of a lot”
(The video of the speech is at http://www.youtube.com/watch?v=USPPwUvX8IA.)
LGO has agreed to pay an initial sum of £600,000 with the balance still to be assessed.
The dispute dates to July 2012 when MOG acquired LGO's 10% interest in a Malta offshore exploration licence. LGO claimed it had been induced to sell "quickly" and "cheaply" by a misleading comment made by MOG during a telephone conversation.
The judge found that there had been no dishonest intention to mislead by MOG, no inducement and that MOG had no duty to disclose to LGO the confidential negotiations it had with another party.