This dispute concerns the extent of the duties (if any) owed by solicitors who conduct funded litigation to those who provide the litigation funding.
At least for the purposes of this application, the essential background facts were not in dispute:
- 5.1 On 4 November 2000 Malicorp entered into a contract ("the Concession Contract") with the government of the Arab Republic of Egypt ("Egypt") to design and construct a new airport at Ras Sudr and thereafter to operate that airport for 41 years. On 12 August 2001, Egypt purported to cancel the Concession Contract.
- 5.2 In April 2004, Malicorp began arbitration proceedings against Egypt in the Cairo Regional Centre for International Commercial Arbitration. In due course, a three-person tribunal was constituted, consisting of an arbitrator appointed by Malicorp, an arbitrator appointed by Egypt, and a tribunal chairman. On 19 February 2006 the Judicial Administrative Court of the Egyptian Council State set aside the arbitration clause in the Concession Contract and ordered the suspension of the Arbitration. The tribunal member appointed by Egypt then resigned. The remaining tribunal members nevertheless issued an award ("the Award") dated 7 March 2006, in which (while rejecting Malicorp' claim for breach of the Concession Contract) they awarded Malicorp USD 14,773,497 by way of damages, interest, costs and expenses under Article 142 of the Egyptian Civil Code.
- 5.3 Malicorp thereafter attempted to enforce the Award in France. That attempt was unsuccessful, as were further arbitral proceedings brought by Malicorp in the International Centre for the Settlement of Investment Disputes, in which Malicorp sought to allege that the cancellation of the Concession Contract by Egypt was state expropriation.
- 5.4 In about February 2011, Malicorp then instructed Balsara & Co Ltd ("Balsara") to act for it in proceedings which Malicorp proposed to bring to enforce the Award in England. Balsara was a firm of solicitors in which Mr Karmakar had the equivalent status to a "partner", and he was the person who had primary responsibility for the Malicorp file.
- 5.5 Balsara helped Malicorp to apply for litigation funding and after the event insurance in connection with these proposed proceedings. On 5 August 2011, Balsara and Malicorp jointly submitted an "ATE Insurance and Litigation Funding Proposal Form" ("the Proposal Form") to the Funder. The Proposal Form was signed by Mr Towey, a director of Malicorp and by Mr Karmakar on behalf of Balsara.