Case No: 2010 FOLIO 260
Neutral Citation Number: [2012] EWHC 2053 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 20/07/2012

Before:

MR JUSTICE CHRISTOPHER CLARKE
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Between:

	DEMCO INVESTMENT AND COMMERCIAL S.A.
	Claimant	
	- and -		
	
(1) INTERAMERICAN LIFE ASSURANCE (INTERNATIONAL) LIMITED
(2) EUROPOLITAN INVESTMENT CORPORATION
(3) GENERALI DEUTSCHLAND HOLDING AG
(4) BORIS SACKVILLE
(5) SIDNEY PAINE
(6) STEWART COHEN
(7) TRYGG-HANSA ÖMSESIDIG LIVFÖRSÄKRING AKTIEBOLAG
(8) GAMLA LIVFÖRSÄKRINGAKTIEBOLAGET SEB TRYGG LIV

Defendants	

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Paul Fallon (instructed by City Law) for the Claimant
Ian Gatt QC (instructed by Herbert Smith) for the 3rd Defendant
Mr Boris Sackville representing himself (4th Defendant)
Mr Sidney Paine representing himself (5th Defendant)
Paul Fallon (instructed by City Law) for the (6th Defendant)
David Edwards QC (instructed by Norton Rose) for the 7th and 8th Defendants

Hearing dates: 24th and 25th April 2012

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Judgment
MR JUSTICE CHRISTOPHER CLARKE: 
1.	This is a claim by the third defendant – Generali Deutschland Holding AG (“GDH”) - for contribution from the other parties in respect of sums which it has paid out in respect of claims for breaches of warranties contained in an agreement for the sale of shares in an English insurer - Interlife Assurance Company Limited (“Interlife”). It is nearly the end of a long story, which includes an arbitration, not yet completed, which has lasted for well over a decade. In order to understand the issues it is necessary to cover a fair amount of the background.
The sale
2.	The sale was effected by a Purchase Agreement of 21 April 1993 (“the Purchase Agreement”) together with a Deed of Indemnity (“the Deed”). The purchaser was a Swedish bank now named SEB Tryg Liv Holding Aktiebolag (“SEB”). At the time of the Purchase Agreement Interlife was in poor financial shape.
3.	Immediately prior to the sale the shareholdings in Interlife were as follows:
Name	Shares	Percentage 
(to 2 decimal places)	
Demco	250,741	9.62%	
Interamerican	799,475	30.68%	
Europolitan	653,105	25.07%	
Old Aachener Re	329,719	12.65%	
Mr Sackville	97,816	3.75%	
Mr Paine	77,114	2.96%	
Mr Cohen	9,511	0.37%	
Trygg-Hansa	388,062	14.89%	
TOTAL	2.605,543	100%	
4.	Demco Investment and Commercial S.A. (“Demco”) is a Greek insurance company owned by Mr Dimitris Contominas (“Mr Contominas”). Interamerican Life Assurance (International) Limited (“Interamerican”), a company incorporated in Bermuda, has been a subsidiary of Demco since 6 February 2001, when its previous primary shareholder, Europolitan Holdings Limited, sold the totality of its shares to Demco.  Europolitan Investment Corporation (“Europolitan”) is a company incorporated in Luxembourg and its shareholder is Mr Contominas. Old Aachener Re was a company, whose successor is GDH. Mr Sackville was the Managing Director of Interlife. Mr Paine was its Finance Director. Mr Cohen had no role, other than as a minor investor, in Interlife. Trygg-Hansa Ömsesidig Livförsäkring Aktiebolag (“Trygg-Hansa”) was a Swedish mutual insurance corporation (now in liquidation) which subsequently became a subsidiary of SEB. Its assets and liabilities now vest in Gamla Livförsäkringaktiebolaget Seb Trygg Liv (“Gamla”), which was a transferee of all but a small part of Trygg Hansa’s business pursuant to a restructuring in 1997.
5.	Pursuant to the Purchase Agreement SEB agreed to buy all the shares in Interlife for the Purchase Price which was made up of a “Fixed Price” of £ 1 million and the “Additional Price I” and the “Additional Price II”.
6.	Of the Fixed Price, £ 700,000 was paid at completion, and the remainder was paid into an escrow account to be paid 14 months later, subject to any adjustments pursuant to Articles 3.03 and 10.05 of the Purchase Agreement. In the event, part of the Fixed Price (the part in the escrow account) was never paid by SEB to the sellers, and the Additional Prices I and II were not paid either. The Additional Prices were eventually quantified at £ 2,270,321 and £ 500,000 respectively. In total, therefore, the Purchase Price was £ 3,770,321, but only £ 700,000 was actually paid by SEB.
7.	There were other key provisions of the Purchase Agreement:
a)	various representations and warranties were given by the Sellers (as defined in the Purchase Agreement) in Article 7;
b)	Article 10.03(b) contained the following limitation of liability provision:
"The liability of each Seller shall be limited to the higher of an amount equal to (A) one-third (1/3) of the Purchase Price and (B) the product of the Purchase Price multiplied by a fraction, the numerator of which shall be the number of Shares sold by the Seller and the denominator shall be the total number of all Shares sold hereunder; provided, however, that with respect to each Seller who is not a corporate entity, the liability shall be limited as provided in paragraph (B) hereof.

For the purposes of this paragraph 10.03(b), the Purchase Price shall include the Additional Price I and the Additional Price II to the extent any amount with respect thereto shall have been paid, become payable or been deposited to the First Account at the time of the discharge by the Seller of any claim hereunder."
c)	Article 10.04 narrowed the scope of the limitation provision as follows: 
"The provisions of Section 10.03 hereof shall not apply and the breaching party shall be fully liable with regard to any Claim arising from fraud, wilful misconduct or gross negligence by the breaching party, or by the Company as regards the Sellers' liability".
d)	Article 10.05 stated that:
"The Sellers shall, subject to the limitation provided for in Section 10.03(b) hereof, have joint and several liability with regard to any
Claim by the Buyer under this Agreement …"
8.	The Deed contained the following provisions:
a)	Article 2.01:
"From and after the Closing, the Sellers shall fully indemnify, defend and hold the Buyer harmless against any demands, claims, actions, liabilities, assessments, losses, damages, fines, penalties, costs and expenses … (hereinafter referred to as "Losses") that the Buyer or the Company … may incur or suffer at any time resulting from or otherwise related to" a variety of matters.
b)	Articles 3.03(b), 3.04 and 3.05 were materially identical to Articles 10.03(b), 10.04 and 10.05 of the Purchase Agreement.
9.	The effect of these provisions was that the Sellers were jointly and severally liable for all breaches of the representations and warranties under the Purchase Agreement and all Losses under the Deed. Liabilities arising from gross negligence (i.e. those covered by Article 10.04 of the Purchase Agreement and 3.04 of the Deed) by Interlife were uncapped. "Non-gross negligence" liabilities were subject to the following caps:
Name	Liability Cap (£)	Comment	
Demco	1,256,773	One-third of Purchase Price	
Interamerican	1,256,773	One-third of Purchase Price	
Europolitan	1,256,773	One-third of Purchase Price	
Old Aachener Re	1,256,773	One-third of Purchase Price	
Mr Sackville	141,543	3.75% of Purchase Price	
Mr Paine	111,586	2.96% of Purchase Price	
Mr Cohen	13,762	0.37% of Purchase Price	
Trygg-Hansa	1,256,773	One-third of Purchase Price	
	6,550,756		
10.	Interlife was guilty of pensions mis-selling in the 1990s, and incurred very substantial liabilities to policyholders. The full nature and extent of these liabilities came to light after the acquisition of Interlife by SEB.
The Arbitration
11.	In November 1998, arbitration proceedings were commenced in the names of the Sellers (except Trygg-Hansa, which had by that time become a subsidiary in the SEB Group) against SEB for the unpaid portion of the Purchase Price (the "Arbitration"). SEB then brought a counterclaim against the Sellers (excluding Trygg-Hansa) in relation to pensions mis-selling liabilities. As of 26 September 2001, SEB estimated that Interlife had paid some £ 34 million in compensation, and £ 10 million as the cost of its review exercise.
12.	When the Arbitration was commenced, Old Aachener Re, despite being named as a party, no longer existed. It had been liquidated in June 1997, and its obligations under the Purchase Agreement and the Deed passed to GDH. GDH was not a named party to the Arbitration, and did not find out about it until 2002. GDH later sought to argue in the High Court that it was neither party to, nor bound by, the Arbitration. That was ultimately unsuccessful and in 2005 it was held to be a party to the Arbitration alongside the other Sellers (except Trygg-Hansa).
13.	In May 2005, conscious of the increasing costs, GDH sought to settle the Arbitration, and offered to settle with SEB for £ 2 million (representing its 12.65% liability share). On 7 September 2005 Slaughter & May, SEB’s solicitors, responded to say that SEB was "not prepared to settle with [GDH] or any other Claimant alone”, and also stated that the overall amount sought (inclusive of costs at that stage) was £ 26.3 million (which, if all parties had paid in proportion to their shareholdings, would have represented a liability of approximately £ 3.3 million for GDH).
14.	On 10 October 2005 the Sellers other than Trygg-Hansa and GDH proposed a settlement for a global sum of £ 1.5 million (including GDH's share). This was a wholly unrealistic position.
2006
15.	A mediation took place in March 2006. By this stage the amount sought by SEB had increased (on account of interest and costs) to £ 27.4 million. At that stage, SEB offered to reduce its claim by 14.89% to reflect Trygg-Hansa's share in Interlife, on the basis that "Trygg-Hansa is a wholly owned subsidiary of [SEB]”. SEB subsequently resiled from that position.
16.	On 2 October 2006, an "Agreement in Principle" was reached in the Arbitration, which recorded the following:
a)	the total compensation paid by Interlife to a total of 2,888 investors was £ 29,898,350.32; and
b)	of sales of policies by Interlife to compensated investors, 43.115% arose from gross negligence, 15.84% arose from other mis-sales (which would be subject to the liability caps), and the remaining 41.045% were not mis-sales at all.
The extent of the liability for which the Sellers might be responsible had therefore been ascertained, and the only issues remaining in the arbitration related to causation and quantum.
2007
17.	In March 2007 GDH made further attempts to negotiate a settlement, in view of the escalating interest and costs by offering 12.65% of a total figure of £ 15.1 million on the basis that the other claimants in the arbitration participated in the settlement. On 5 June 2007 SEB responded with a £ 27.8 million global settlement offer.
18.	After further attempts at multilateral and bilateral negotiations, on 14 December 2007, GDH put forward an offer to all parties (including Trygg-Hansa and Gamla) of £ 21 million in settlement of all claims and counterclaims, including interest up to 14 December 2007 but excluding costs (which could be determined by the Tribunal if not agreed). The offer made clear that GDH would pay a sum commensurate with its 12.65% liability.
19.	Slaughter and May invited responses from the other Sellers. City Law (acting for all the Sellers except GDH and Trygg-Hansa) responded by rejecting an earlier offer by SEB to settle for £ 29,750,000, but did not respond to GDH's offer. On 13 March 2008 Herbert Smith put City Law (then acting for all the other Sellers who were parties to the arbitration) on notice that GDH would take such steps as it considered necessary, including bilateral settlement discussions, to protect its interests and prevent it from being liable for further costs and accruing interest.
2008
20.	On 9 May 2008 GDH repeated its offer on an open basis to all parties, copied to the Tribunal, with the modification that interest from 14 December 2007 should be decided by the Tribunal if not agreed and that the parties should agree costs, failing which they would be decided by the Tribunal. SEB responded on 4 July 2008 on an open basis, agreeing with the terms of GDH's offer, save that:
a)	Trygg-Hansa and Gamla would not participate – either a 14.89% discount could be given to reflect their liability, or no discount would be given and the parties would be free to pursue them for a contribution; and
b)	SEB was not prepared to accept a bilateral settlement in which GDH only paid its 12.65% share. SEB insisted that GDH should pay its maximum liability.
On 21 July 2008 Herbert Smith chased City Law for, but did not receive, a response.
21.	It was always clear from an early stage that if SEB succeeded in the Arbitration (as was highly likely) it would in all probability seek to enforce any Award against GDH as a priority, leaving GDH to seek contribution from the other sellers. GDH was and is a reputable European financial institution with a deep pocket. In those circumstances GDH considered that even a bilateral settlement in which it paid its maximum liability (including sums for which the other Sellers were also responsible), would result in a better outcome than proceeding with the Arbitration. If no settlement was reached, interest and costs would continue to increase at an alarming rate and were likely to exceed any savings that further successful arguments in the Arbitration might produce.
The GDH Settlement
22.	On 23 February 2009 Herbert Smith wrote to City Law again expressing concern at the lack of response and proposing face-to-face settlement negotiations. They recorded the terms offered by GDH and SEB and gave notice of GDH’s intention to advance settlement discussions with SEB even if all or some of the other parties were not interested. On 12 March 2009 City Law said that the proposals were unacceptable. On 3 April 2009 Mannheimer Swartling, Trygg-Hansa/Gamla’s lawyers, expressed the view that it would not be meaningful for them to participate in any meeting at this stage. On 14 April 2009 Herbert Smith wrote to City Law and Mannheimer Swartling to say that GDH remained committed to advancing settlement discussions with SEB, although none of the parties was willing to attend a meeting at that stage.
23.	GDH sought to progress matters with SEB, and requested details of Slaughter & May's legal costs. These were provided on 10 March 2010, and amounted to some 
£ 10.5 million. GDH's costs clerk analysed this information and recommended an initial offer for costs of £ 6.5 million, "ranging up to £7.5 million for negotiation purposes". GDH made an initial offer of £ 6 million, but this was rejected by SEB, who counter-offered £ 8.19 million for costs.
24.	Whilst costs were being negotiated, GDH continued to seek a multilateral settlement. On 18 June 2010 Slaughter & May, at Herbert Smith’s request, confirmed that SEB would be willing to accept a gross payment of £ 21 m plus interest from 14 December 2007 and costs of £ 8 m and attached their letter of 4 July 2008.
25.	These efforts did not bear fruit. On 4 October 2010 Herbert Smith wrote to City Law (for Demco), Eversheds (then acting for Mr Sackville and Mr Paine), DLA Piper (acting for Interamerican and Europolitan) and Norton Rose (acting for Trygg-Hansa/Gamla) asking for confirmation that the other parties would contribute at least their respective share (to be calculated on the basis of the Sellers’ shareholding in Interlife) to a settlement of £ 21 million plus interest and costs.
26.	Eventually, on 18 November 2010, GDH entered into a bilateral settlement (“the GDH Settlement”) with SEB based on:
a)	a total liability figure (including interest to 14 December 2007) of £ 21 million;
b)	further interest to 18 November 2010; and
c)	a costs figure of £ 8 million.
27.	The amount payable by GDH to SEB under the GDH Settlement was calculated as follows:
a)	The agreed £ 21 million figure as of 14 December 2007 was to be broken down into (i) liability for gross negligence and (ii) liability for other mis-sales in accordance with the Agreement in Principle, i.e. in the ratio 43.115 : 15.84. That ratio means that the percentage of total liability attributable to gross negligence sales was 73.13% and to other sales was 26.87%;
b)	The gross negligence liability (which was uncapped) was therefore 
£ 15,357,730, and the liability for other mis-sales (which was subject to the liability caps) was £ 5,642,270;
c)	The above figures were deemed to be inclusive of 40% interest up to 14 December 2007, such that the principal amounts in each case were 
£ 10,969,809 (gross negligence sales) and £ 4,030,193 (other mis-sales);
d)	In respect of the latter figure, GDH's principal liability was capped at 
£ 1,256,773 (one-third of the Purchase Price). Adding 40% interest to bring this figure up to December 2007 values gave a figure of 
£ 1,759,482;
e)	Taking the above figure together with the gross negligence liability gave a total sum payable by GDH (as of 14 December 2007) of 
£ 17,117,212 (being £ 15,357,730 plus £ 1,759,482);
f)	It was agreed that interest from 14 December 2007 to 19 November 2010 would be calculated at 1% over the Bank of England Base rate, and this amounted to £ 1,515,348. The total settlement sum paid by GDH excluding costs was therefore £ 18,632,560 (being £ 17,117,212 plus £ 1,515,348);
g)	GDH's joint and several liability in respect of SEB's legal and other costs (including Arbitration costs) was agreed at £ 8 million; and
h)	In total, therefore, GDH paid a sum of £ 26,632,560 to SEB on 19 November 2010.
28.	GDH paid this sum but no other party had paid anything towards the Sellers’ liability to SEB or (at the time of the trial) by way of contribution to that which GDH had paid. GDH had, therefore, at the time of the trial, borne the parties' entire liability for gross negligence and SEB's costs under the terms of the settlement, and its own capped liability for other mis-sales.
29.	If the other parties had participated in the GDH Settlement, there would have been no change to the aggregate liability on account of gross negligence or costs (since the amount GDH paid was the full agreed amounts of these liabilities). The total liability for other mis-sales would have gone up from £ 1,759,482 to £ 5,642,270, being the total of the principal plus interest to 14 December 2007, i.e. a difference of only 
£ 3,882,788 as of that date, which would have worked out at some £ 4.2 million as of November 2010. 
The current action
30.	In November 2009, before the settlement with SEB, Demco commenced these proceedings for declaratory relief as to its entitlement to contribution in respect of any liability it might incur towards SEB. GDH has a Part 20 claim in these proceedings, seeking contributions to the GDH Settlement. Various other parties have also made Part 20 claims for declaratory relief. Since it is only GDH which has paid it is, although the third defendant, in effect the claimant.
Subsequent developments in the Arbitration
31.	Having settled its dispute with SEB in November 2010, GDH left the Arbitration. SEB continued to pursue the other parties for its claims in full.
32.	On 15 July 2011 a Joint Submission to the Tribunal was agreed between SEB, Demco and Mr Cohen (although Mr Cohen's current position in relation to that Joint Submission is unclear). The Joint Submission, which is, in effect, a form of settlement between the parties thereto, records the agreement between those parties, inter alia, that:
a)	the further liability to SEB in respect of gross negligence, after giving credit for the GDH Settlement, would be £ 2,807,233.26 plus interest of £ 2,340,701 (Joint Submission ¶7(a)); 
b)	the further potential liability to SEB in respect of other mis-sales after taking into account the payment by GDH was £ 3,805,296.25 (that sum being the potential total liability of the claimants in the arbitration subject to a cap for each individual claimant) plus interest of 
£ 1,996,345.77 (Joint Submission ¶7(b)); and
c)	the further liability to SEB in respect of costs was to be assessed by the Tribunal if not agreed (Joint Submission ¶¶16-17).
33.	On 28 March 2012 the arbitrators released their 7th Interim Award (“the Award”). At the time of the hearing it remained unsigned because, as I was told,  one of the parties had not paid the Stockholm Institute under whose auspices the Tribunal sits. The Award reflects the approach of the Joint Submission.
The Award
34.	The Award is very complex. It is convenient to take the calculations of principal. The starting point is the total paid in compensation by Interlife to investors namely 
£ 29,898,350.32: see para 16 (a) above. The Tribunal reduced that by a quantum deduction of 6.379% (the details of which do not need to be examined) producing a total amount of compensation of £ 27,991,134.55. The Tribunal then applied to that figure the agreed percentages for gross negligence (43.115%) and ordinary mis-selling cases (15.84%) and derived the following figures:
Gross negligence sales	£ 12,068,377.66	73.13%	
Ordinary mis-selling	£ 4,433,795.71	26.87%	
Total	£ 16,502,173.37	100.00%	
Total recoverable loss		Principal amounts
35.	There is then added a figure of £ 4,270,689.14 for expenses, producing a total recoverable loss of £ 20,772,862.51. There is then a deduction for a tax saving producing a recoverable loss of £ 18,839,111.51.
Gross negligence liability
36.	The joint and several liability of Demco and Mr Cohen for the gross negligence cases thus becomes £ 18,839,111.51 x 73.13% = £ 13,777,042.25. That is reduced by the 
£ 10,969,809 paid by GDH to produce a figure for gross negligence liabilities of           £ 2,807,233.25. That is the maximum by way of principal that SEB can recover in respect of gross negligence liabilities.
37.	The effect of the Award is, therefore, that it has been determined that the principal figure for gross negligence liabilities is over £ 2.8 million more than the £ 10,969,809 figure for principal which formed the basis of the November 2010 settlement.
38.	As a result the joint and several liability of Demco and Mr Cohen for gross negligence cases is taken to be £ 2,807,233.25 less  a set off of 73.13% of those claimants’ respective shares  of the unpaid Price and Additional Prices.
39.	In respect of Interamerican, Europolitan, Mr Sackville and Mr Paine, there is an added complication. In their case the Tribunal has given a further credit for an avoided loss of £ 350,000 making the recoverable loss in their case £ 18,489,111.51. The details are set out at paras 212 - 234 of the Award. This was not allowed in respect of Demco and Mr Cohen because it had been agreed between them and SEB prior to the Award that no such deduction should be made.
40.	As a result the joint and several liability of those claimants  for gross negligence cases is taken to be £ 2,551,278.25  less 73.13% of those claimants’ respective shares  of the unpaid Price and Additional Prices.
Non gross negligence liability
41.	As to ordinary mis-selling the Award takes, in the case of Demco and Mr Cohen, the total loss recoverable figure of £ 18,839.111.51 x 26.87%  = £ 5,062,069.26 . That is to be reduced by £ 1,256,773 paid by GDH to reach £ 3,805,296.26.  The figure of     £ 5,062,069.26 is, itself, higher than the comparable figure under the November 2010 settlement of £ 4,030,193. Liability for ordinary mis-sales is subject to a cap and accordingly the liability of Demco, for example, is the cap figure of £ 1,256,773,6 (1/3rd of purchase price) less 26.87% of the unpaid Price and Additional Price. That liability to SEB would have been the same under the GDH Settlement. But the total sum recoverable by SEB has increased (and thus the amount that the Sellers need to contribute towards).
42.	In the case of Interamerican, Europolitan, Mr Sackville and Mr Paine a similar exercise has been carried out but using a total loss recoverable figure of                      £ 18,489,111.51.
Interest
43.	Interest has to be added to all these principal amounts by a complicated calculation set out in para 280 of the Award.
The Consent Order
44.	Very shortly before the trial the parties other than Mr Sackville and Mr Paine reached an agreement which is reflected in a Consent Order. The Consent Order is subject to a number of matters, including the resolution by the Court of whether Mr Cohen owed any liability to any other party at all in relation to the subject matter of the action and, if so, the extent.
45.	By that order Demco and Gamla agreed to pay GDH by 8 May 2012 such sums (including interest) as would have the effect that those three will have shared in the payment of the total amount that GDH has had to pay SEB under the GDH Settlement together with interest (that amount being £ 27,203,883.14 as at 23 April 2012, the date of the Order) in the ratio of their respective shareholdings which is 25.889035 (Demco); 34.043522 (GDH); and 40.067443 (Trygg-Hansa/Gamla) –  “the agreed ratio”. They have then agreed that all liabilities of the Sellers pursuant to the Purchase Agreement and the Deed are to be borne by each Seller or its legal successor in proportion to the number of shares in Interlife sold by that Seller subject to the liability caps for each Seller, and that to the extent that any Seller is not liable or unable to meet its proportionate share of any liability arising under the Deeds the unsatisfied liability is to be reapportioned between the other Sellers on the same basis.
46.	To give effect to this, GDH, Demco and Gamla are to be treated as “Core Parties”. Under the Consent Order they have judgment against Interamerican and Europolitan for that proportion of the £ 27,203,883.14 which represents the percentage shareholding of the latter two companies in Interlife. Any sum paid or recovered under the judgment is to be shared between the Core Parties in the agreed ratio. The Order has provision for the making of further recovery from Europolitan to the extent that the Core Parties fail to recover from Interamerican and vice versa; and for the sharing of those recoveries between the Core Parties in the ratio of their shareholding in Interlife. It also has provisions for GDH to recover a contribution from Demco and Gamla in the event that Gamla or Demco fails to comply with their undertaking.
47.	The question of who should pay GDH's costs was agreed to be held over for trial [Consent Order ¶8(d)].
48.	Gamla paid the sum due pursuant to its undertaking on 8 May.  Demco made no payment. As envisaged by the Consent Order GDH entered judgment against Demco on 10 May 2012. 
The issues
49.	The issues remaining to be dealt with may be summarised as follows:
i)	In what proportions should the Sellers contribute to the GDH settlement?
ii)	Should GDH, having entered into the GDH Settlement, now be liable to any of the other parties in respect of any liability they have to SEB?
iii)	Which interpretation of the liability cap provisions in the Deeds in respect of the non gross negligence liabilities is correct: the one contended for by GDH (i.e. the liability cap is to be calculated by reference to the entire Purchase Price, not merely the element actually paid) or that contended for by Messrs Sackville and Paine (the liability cap applicable to each of them is 3.75% and 2.96% respectively of £ 700,000, being the part of the Purchase Price actually paid to the Sellers by SEB)?
iv)	Should there be any reduction in the contributions to be made by Messrs Sackville and Paine on account of their apparently limited means, and if so, should that be determined by the Court at this stage, or held over to the enforcement stage?
v)	Did Mr Sackville have actual or apparent authority to sign the Purchase Agreement and the Deed on Mr Cohen's behalf?
vi)	If not, does Mr Sackville's conduct amount to a forgery within the meaning of section 1 of the Forgery and Counterfeiting Act 1981? If so, does that render the Purchase Agreement and the Deed incapable of ratification and preclude any estoppel? Have those agreements been ratified and is there any estoppel?
Amounts sought from Messrs Sackville, Paine and Cohen
50.	The total value of the GDH Settlement, taking into account interest up to 23 April 2012, is £ 27,203,883.14. The contributions of the corporate parties have been set out in the Consent Order. The agreed contributions by Demco and Gamla have been calculated on the assumption that no other party makes any contribution; this has been done to bring these parties on to an equal footing with GDH, as the "Core Parties". Thus the total sum is shared as follows
Demco	25.889035%	£ 7,042,822.83	
GDH	34.043520%	£ 9,261,159.40	
Gamla	40.067433%	£ 10,899,897.65	
(Rounding)	0.000012%	$ 3.26	
Totals	100.000000%	£ 27,203,883.14	
GDH submissions
51.	GDH submits that any recovery from any of the other parties should thereafter be shared between the Core Parties in proportion to their respective shareholdings, in like manner as the sharing arrangement made in the Consent Order as regards recoveries from Interamerican and Europolitan (who, on the current evidence, are unlikely to be able to pay their full shares).
52.	As against Mr Sackville, GDH seeks a contribution of 3.75% commensurate with his shareholding. This works out at £ 1,021,274.66 as of 23 April 2012. As against Mr Paine GDH seeks a contribution of 2.96% on the same basis which amounts to           £ 805,129.77. Both of them are unlikely to be able to pay the amount in full and whatever sum they do pay should be shared between the Core Parties in proportion to their respective shareholdings.
53.	As against Mr Cohen, who does not plead any inability to pay, he should join the Core Parties. Firstly, the entire £ 27,203,883.14 sum should be re-allocated as between Demco, GDH, Gamla and Mr Cohen in proportion to their respective shareholdings, such that Mr Cohen has to contribute some 0.97% of the total sum, or £ 264,547.45, as of 23 April 2012. That sum should (provided Demco and Gamla comply with their undertakings in the Consent Order) be divided between Demco, GDH and Gamla in proportion to their respective shareholdings, i.e. in the agreed ratio. Thereafter, as Mr Cohen would then be a fully paid-up Core Party, he would be entitled to a share of any recovery from any of the other parties (Interamerican, Europolitan, Mr Sackville and Mr Paine), together with Demco, GDH and Gamla. Such further recoveries should, GDH submits, be shared between Demco, GDH, Mr Cohen and Gamla in the following proportions:
Demco: 25.637274. GDH : 33.712461. Cohen : 0.972462: Gamla:  39.677802.
Contribution - The Law
54.	The Civil Liability (Contribution) Act 1978 provides:
“1(1)	"Subject to the following provisions of this section, any person
liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise)
…
1 (3)	A person shall be liable to make contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, unless he ceased to be liable by virtue of the expiry of a period of limitation or prescription which extinguished the right on which the claim against him in respect of the damage was based.
1(4)	A person who has made or agreed to make any payment in
bona fide settlement or compromise of any claim made against him in respect of any damage … shall be entitled to recover a contribution in accordance with this section …
2(1)	…the amount of the contribution [under section 1] recoverable from any person shall be such as may be found by the court to be just and equitable having regard to that person's responsibility for the damage in question
2 (3)	Where the amount of the damages which have or might have been awarded in respect of the damage in question in any action brought in England and Wales by or on behalf of the person who suffered it against the person from whom the contribution is sought was or would have been subject to—
(a) any limit imposed …… by any agreement made before the damage occurred;
	…
the person from whom the contribution is sought shall not by virtue of any contribution awarded under section 1 above be required to pay in respect of the damage a greater amount than the amount of those damages as so limited or reduced."
55.	In order to claim a contribution to a settlement or compromise a claimant has to show that the settlement was a reasonable one: Biggin & Co v Permanite [1951] 2 KB 314, 321. As stated in General Feeds Inc. Panama v Slobodna Plovidba Yugoslavia [1991] 1 Lloyds Rep 688, 691:
“if and to the extent that an unreasonable settlement was entered into, the loss has been caused not by the breach but by the plaintiff's voluntary assumption of liability under the settlement … It would also be consistent with the duty to mitigate a loss to hold that if and to the extent that a plaintiff is unable to establish that the settlement on which he founds his claim has been reasonably entered into, he has to that extent failed to mitigate his loss”.
56.	In the present case all the Sellers were jointly and severally liable under the Purchase Agreement and the Deed subject, in the case of non gross negligence liability to the cap. The Sellers were, as it seems to me, liable for the same damage both in respect of gross negligence and other liabilities, even though there was a cap on the amount for which they could be held liable for the latter. “Damage” in this context means the wrong causing injury or loss: Jameson v CEGB [1998] Q.B. 323, 353 C-F. I am quite satisfied that the amount of GDH settlement was a reasonable one both in respect of gross negligence liabilities and other liabilities (where the principal of the settlement was in the amount of the cap). The contrary was not suggested.
Issue (i)	In what proportions should the Sellers contribute to the GDH settlement?
57.	This question must be asked, in the first instance, on the assumption that all of the Sellers are able to contribute in whatever proportion may be just and equitable having regard to their respective responsibility for the damage. That proportion is not dependent on ability to pay. If, however, it turns out that one or more of the contributors cannot pay the whole of their contribution it will become necessary to reallocate the irrecoverable amount amongst the others. That is not an exercise that can be performed until there has been a determination of (a) the just and equitable proportion and (b) the shortfall i.e. how much less than that proportion the defendant in question is unable to contribute.
Gross negligence liabilities
58.	So far as the gross negligence liabilities are concerned there are only two realistic candidates for the applicable proportion. The first is that the Sellers should share in proportion to their shareholdings. The second is that account should be taken of the extent to which they bore management responsibility (either directly, or indirectly because they had representative directors on the board) for the conduct which gave rise to the mis-selling. On the latter basis (a) Mr Sackville and Mr Paine would probably bear very substantial responsibility; (b) the other sellers (apart from Mr Cohen) would bear a substantial responsibility between them, since they were all represented on the board of directors, and (c) Mr Cohen would bear very little or none, since he had a very small shareholding and was not on, nor represented on, the Board.
59.	I am quite satisfied that contribution should be in proportion to shareholdings. The liability to SEB of the Sellers arises from the fact that they gave warranties under the Purchase Agreement and indemnities under the Deed. It does not arise from their management responsibility, direct or indirect, for the affairs of Interlife. The Sellers stood to obtain from the sale the proportion of the price attributable to their shareholding (as opposed to a reward based on their degree of management responsibility); and they should contribute in the same proportion for breach of the warranties and indemnities, which were (i) part of the consideration for the payment of the price and (ii) what caused them to be responsible for the damage in question.
60.	This is also the method of contribution agreed by all parties save Mr Cohen. His shareholding was very small in percentage terms but, if the appropriate method of contribution is pro rata to shareholding, there is no logical reason for a very small shareholder not to shoulder his very small percentage. The fact, as I was told, that he never received any dividend makes no difference.
61.	As it happens, allocating additional liabilities based on management responsibility would be practically meaningless; Messrs Sackville and Paine do not appear to have the means to meet even their liabilities based on shareholdings. Any amount unrecovered from them would need to be re-allocated between the parties who are able to pay, and the just and equitable basis for division between these parties (who were not involved directly in the management of Interlife) must be in proportion to their respective shareholdings.
Non gross negligence liabilities
62.	In relation to these liabilities the position is more complicated. Liability for these is capped. The cap is not in proportion to percentage shareholding. For the corporate parties it is 1/3 of the Purchase Price and their shareholdings range from 9.62% to 30.68%.  The cap is a limit on the liability of the sellers to SEB. It should not necessarily determine the just and equitable method of contribution as between the Sellers themselves. The sum of the caps is £ 6,550,756. If the amount recovered by the Sellers in respect of principal is less than that figure it seems to me that the Sellers should, as between themselves, contribute, as the order contemplates, in proportion to their shareholdings provided that no Seller ends up paying more than his cap. It would not be just and equitable, as between the Sellers, for Demco (9.62%) and Trygg-Hansa (14.89%), say, to end up paying the same amount as Interamerican (30.68%). If the amount recovered equals the aggregate of the caps there is no room for reallocation because Section 2 (3) requires that the Sellers shall not by way of contribution be required to pay more than their cap in respect of principal liability.  
Inability to pay
63.	Where a contributing party is, or may be, unable to contribute his full share of the liability, the Court should take this into account when considering how to allocate liability between the parties, and may allocate that party's unpaid liability amongst the others. As Lord Millett put it in Dubai Aluminium Co. Ltd v Salaam [2002] UKHL 48:
“A defendant who is insolvent or has no money simply passes out of the picture. The plaintiff may well not proceed against him at all, but whether he does or not the whole of the liability of meeting the judgment falls to be apportioned between the other defendants, as otherwise the deficiency arising from the insolvency is borne by whatever defendant happens to satisfy the judgment, a result which it is the purpose of the 1998 Act to avoid: see Fisher v CHT Ltd [1966] 2 QB 475. If the impact of a known insolvency can be taken into account in the assessment of contributions, it is difficult to see why the prospect of a future insolvency should not be reflected in the order…”
The Consent Order gives effect to this principle by apportioning the GDH Settlement amongst the Core Parties in proportion to their shareholdings and providing for recoveries from the parties who are likely to be unable to pay to be shared in those proportions. 
Issue (ii)	Is GDH liable to make a contribution to any amounts paid by the other parties?
64.	Demco’s Amended Particulars of Claim seek a declaration that, if it is found liable to SEB in respect of any claims in the Arbitration, it will be entitled to a contribution from each of the defendants, except Mr Cohen, in proportion to their respective shareholdings.
65.	GDH submits that it is not liable to make any further contribution. The effect of the other sellers not joining in the November 2010 settlement was that more has had to be paid in toto both for gross negligence and other liabilities.  In those circumstances it should not be required to make any contribution in respect of the difference (“the excess sum”) between the amount for both sets of liabilities recognised by the November 2010 settlement and the amount for such liabilities recognised in the July 2011 settlement.
66.	This is for four reasons:
a)	the excess sum is not “damage” for which GDH is responsible pursuant to sections 1 (1) and 2 (1) of the 1978 Act. The liability to pay the excess sum is not a sum for which GDH bears any responsibility and arises because of the unwillingness of the other defendants to settle;
b)	it would not be just or equitable for GDH to have to contribute. It sought to achieve a multilateral settlement. When that proved impossible it settled with SEB by paying the other parties’ share of the gross negligence liability and the maximum amount of its capped non gross negligence liability. It has been out of pocket for over £ 26 million for over 18 months and should not have to contribute any more;
c)	GDH negotiated the earlier settlement on terms that the other parties were free to join. They declined. As a result they have reached a settlement which is based on a higher figure for gross negligence and other liabilities. GDH had no causative role in that further liability; and
d)	The excess sum cannot in any way be regarded as the result of reasonable mitigation. Reasonable mitigation would have involved a constructive response to GDH’s attempt at a multilateral settlement. No evidence has been put forward which would indicate that there was any good reason not to join the earlier settlement. Failure to settle has just increased principal, interest and costs, both those payable and those incurred.
67.	I do not find point (a) convincing. The responsibility to which the Act refers is, on the facts of this case, the responsibility of the Sellers to SEB under the warranties in the Purchase Agreement and under the Deed, in respect of which their liability was joint and several, subject, in the case of non gross negligence liabilities to the caps.  It is not material that GDH settled with SEB: see section 1 (3). If the liability of four sellers against whom there are breach of warranty claims is £ 1 million and the richest of them settles for £ 500,000 (in a settlement in which they could all have joined) the damage for which they are responsible remains £ 1 million. The causative role of the richest seller in relation to the additional £ 500,000 liability consists of his giving the warranties which were broken.
68.	But it seems to me neither just nor equitable that GDH, having made all the running in promoting and paying for a settlement in which all the other parties could have joined, should now have to contribute to the excess sum, together with further interest and costs which are going to have to be paid under the Award. The effect of not settling is that SEB will have been awarded compensation in relation to over £ 2.8 million extra in respect of gross negligence liabilities and an additional sum for other liabilities. Further liabilities have arisen in respect of interest and costs. These could have been avoided if those who have now in effect settled by the joint submission and/or are the subject of the Award had joined in the earlier settlement. No sound reason for holding out has been proffered.
69.	The liability to pay more than would have been payable under the earlier settlement has in one sense been caused by continuing with the Arbitration and not entering into that settlement, in that if the other Sellers had joined in the earlier settlement they could have avoided paying as much in respect of their liabilities as they have ended up paying. They have, in my judgment, not reasonably mitigated their loss by holding out. On the contrary they have acted unreasonably in not joining in the earlier settlement.
70.	Mr Fallon submitted that the November 2010 settlement came out of the blue at a time when the parties were in dispute as to how contribution should be apportioned and when GDH was saying that it should be on the “managerial responsibility” basis upon which their contribution should be minimal (a position only abandoned in early 2011); and that the other Sellers were not invited into, but kept out of, the dialogue between Herbert Smith and Slaughter & May. In my judgment, the other Sellers were given adequate notice of the proposed settlement and invited to join in it and could readily have done so. It was not necessary for contribution as between the Sellers to have been determined in order for a settlement to be reached with SEB; and in fact the Sellers, with the exception of Mr Cohen, were prepared to contribute by reference to respective shareholdings.
Issue (iii)	What is the proper interpretation of the liability cap provisions in respect of non gross negligence liabilities?
71.	Mr Sackville and Mr Paine claim that their liabilities in respect of non gross negligence liabilities are limited to £ 26,279.05 and £ 20,717.27 respectively. These figures are arrived by multiplying their respective shareholding percentages (3.75% and 2.96%) by the portion of the Purchase Price that was actually paid by SEB 
(£ 700,000).
72.	In my judgment this interpretation of the Purchase Agreement is wrong. Article 1.02 makes clear that the Purchase Price includes the £ 1,000,000 Fixed Price (of which     £ 700,000 was to be, and was, paid on Closing and £ 300,000 was to be deposited to the First Account on Closing and paid to the Second Account 14 months later) together with Additional Prices I and II. Article 10.03(b) of the Purchase Agreement provides that:
"For the purposes of this paragraph 10.3 (b) the Purchase Price shall include the Additional Price I and the Additional Price II to the extent any amount with respect thereto shall have been paid, become payable or been deposited to the First Account at the time of the discharge by the Seller of any Claim hereunder".
73.	Additional Prices I and II became payable, in the case of the Additional Price I within 60 days following the Inland Revenue’s tax assessment for Interlife for each Relevant Year (namely, 1993, 1994, 1995, 1996 and 1997) and, in the case of Additional Price II, by no later than 6 months after the end of each Relevant Year: see Articles 2.06(a) and 2.07 of the Purchase Agreement.  All the elements of the Purchase Price, if paid, payable or deposited are to be taken into account for the purposes of calculating the liability caps for Mr Sackville and Mr Paine.
74.	The parties cannot have intended that, if the Buyer had a counterclaim which fell to be set off by way of reduction of the Purchase Price (as Article 10.05 provides), then that would mean that the amount due from the Sellers in respect of non gross negligence liabilities would reduce the cap so that, eventually, the fraction used to determine the cap would not be applied to any portion of Purchase Price other than the £ 700,000. If that were so the cap would reduce as the liabilities increased – a bizarre result. The     £ 300,000 of the Price and the Additional Prices became payable; and they have in effect been paid by being used as a set off against the amounts due for breach of warranty.
75.	Mr Sackville and Mr Paine accept that the liability caps do not apply to gross negligence liabilities (paragraph 7.4 of their Amended Defence). The Sellers' liability to SEB for costs also falls outside the liability cap provisions, as it is not a contractual liability. So also, as it seems to me, does interest.
76.	Mr Sackville and Mr Paine contend that they are unable to pay the amounts claimed The latest information they have provided suggests that Mr Sackville has total assets of approximately £ 600,000 and Mr Paine has total assets of about £ 650,000.
Issue (iv)	Should there be any reduction in the contributions to be made by Messrs Sackville and Paine on account of their apparently limited means and, if so, should that be determined by the Court at this stage or held over to the enforcement stage?
77.	As I have already indicated the amount of contribution falls to be determined in the first instance according to responsibility for the damage in question. The amount that should be contributed in the light of that responsibility is not affected by an inability, whether partial or total, to do so. If a contributor does not have the means to contribute it will be necessary to reallocate his share amongst those who do. For that purpose it is necessary to know the extent of the shortfall. In many cases, e.g., where the contributor is a corporation, that will be determined by what is recovered in proceedings against the company or in a liquidation. The contributors presently under consideration are private individuals and the amount that can be recovered from them is (a) uncertain and (b) in part dependent on the extent to which the other contributors seek to pursue them, having regard to what may be difficulties in recovery and what they may think is the pointlessness of spending much money in the recovery of comparatively little sums.
78.	Save by agreement of all those affected I do not think that the court can determine what is to be taken as their contribution, at any rate if that involves exercising some discretion as to whether they should be left with some portion of their assets even though they might be recoverable. 
Issue (v)  	Did Mr Sackville have actual or apparent authority to sign the Deeds on Mr Cohen’s behalf?
79.	The Purchase Agreement and the Deed were purportedly signed on behalf of Mr Cohen by Mr Sackville as his 'attorney in fact'.
80.	Mr Cohen's initial defence to GDH's claim (in his original Defence and in his Amended Defence served on 15 April 2011) was that he neither admitted nor denied the various statements made by GDH that he was a party to the Purchase Agreement and the Deed as a Seller and that the Sellers were jointly and severally liable thereunder. He merely pleaded that at all material times, he was "a private individual with a miniscule shareholding in Interlife" and that he "had no involvement at all in the management of Interlife". He therefore pleaded that "it is neither just nor equitable having regard to Mr Cohen's not having had any responsibility for the damage in question that Mr Cohen should be ordered to make a contribution".
81.	However, in his witness statement dated 12 October 2011, Mr Cohen said that it was only in August 2011 that he "discovered that Sackville had signed the Share Purchase Agreement and Deed of Indemnity with SEB on my behalf as an 'attorney in fact'", that Mr Sackville had acted without his "knowledge or consent" and that he had "never entered into the Agreement at all". On 13 February 2012 Mr Cohen's solicitors, City Law, served a draft amendment to his statement of case in which he contended that Mr Sackville signed the Purchase Agreement and the Deed purportedly on his behalf "without Mr Cohen's authority and expressly against his instructions", and that each such signature "amounted to a Forgery by [Mr Sackville] within the meaning of Section 1 of the Forgery and Counterfeiting Act 1981".
82.	Mr Cohen then pleaded that on that basis, "each Deed is a Nullity as against Mr Cohen both as between him and the other Sellers and between him and SEB".
Mr Sackville’s evidence
83.	Mr Sackville gave evidence. His written evidence was that he had been told by Mr Alec Merrifield (who was acting as a representative of Mr Contominas, of whom he was a close friend and associate, and is now deceased) in the presence of the Sellers' solicitor, Mr Ian Yonge of Manches, on the day when the Purchase Agreement and Deed were signed, that Mr Cohen had authorised Mr Sackville to sign on his behalf. Mr Merrifield told him that this authority had been granted against the provision by Mr Contominas of an indemnity to protect Mr Cohen from any liability arising from the transaction. There was no conversation in which Mr Cohen instructed Mr Sackville not to sign the Deeds on Mr Cohen's behalf. On the contrary Mr Sackville says he relied in good faith upon what he was told by Mr Merrifield in the presence of Mr Yonge, and that the various lawyers involved at the time were content that his signature on Mr Cohen's behalf was valid.
84.	In his oral evidence he said that he had been told of Mr Cohen’s authorisation of himself by Mr Yonge and that he was sure that both of them had confirmed the position. Mr Merrifield himself signed on behalf of Interamerican, Europolitan and Aachener Re.
85.	Mr Sackville presented, just before the hearing, a statement of 20 April 2012 from Mr Yonge. He did not, however, call him, because, so he told me, he did not think it was necessary to take up what might be three days of his time when he had a written statement. It would have been better if he had called him; but I do not propose to disregard the statement because he did not.
86.	In his statement Mr Yonge says that he was instructed to act for the Sellers of Interlife among whom were Boris Sackville and Stewart Cohen. For some reason that he could no longer recall Mr Cohen could not be at the signing. “He was however to my knowledge fully aware of the proposed sale and that his agreement and thus signature would be required on the share sale agreement, stock transfer form and other documentation”. Mr Yonge says that it was agreed that Mr Sackville would sign these documents on Mr Cohen’s behalf. His recollection was that a formal power of attorney was prepared by, or at least agreed with, the Swedish lawyers in advance of completion. He did not recall how Mr Cohen’s signature was obtained but recalled that this was one of the documents handed over at completion.
87.	I am satisfied that the likelihood is that Mr Cohen expressly authorised Mr Sackville to sign on his behalf, and did so against an indemnity against any liability to the buyers from Mr Contominas on behalf of Demco. Mr Sackville was told by either Mr Merrifield or Mr Yonge or, probably, both that Mr Cohen had authorised him to sign the documents on Mr Cohen’s behalf and what he was told was true.
88.	I am left in doubt as to whether a power of attorney was executed by Mr Cohen, of which the original or a copy was handed over to the representatives of the purchasers. That would be a normal thing to do but the only evidence of it is from Mr Yonge’s written statement; and, such evidence does not fit well with the evidence of Mr Sackville, since, if a power of attorney signed by Mr Cohen was produced it would hardly have been necessary for Mr Merrifield or Mr Yonge to tell him that Mr Cohen had authorised him to sign and I would expect Mr Sackville to have recalled it.
89.	I have reached the conclusion in para 87 for a number of reasons. Firstly Mr Sackville was plainly a witness of truth, who would have been and was concerned to know that he was authorised to sign the Share Agreement and the Deed each of which describes him as “attorney in fact”.
90.	Secondly, I can see no reason why Mr Merrifield or Mr Yonge should have told Mr Sackville that Mr Cohen had authorised Mr Sackville to sign if he had not. It seems to me unlikely that either of them would tell a deliberate lie or be mistaken as to the position.
91.	Thirdly, Mr Cohen’s conduct after the execution of the Purchase Agreement is only consistent with a recognition that it had been validly entered into on his behalf. From 1993 onwards Mr Cohen:
a)	relinquished his shares (which had been with the Bank of Scotland) and received a part of the Purchase Price;
b)	claimed in his income tax return in respect of his loss on the sale of his shares;
c)	cannot have received any documentation indicating that he was subject to any form of compulsory purchase of his shares on a restructuring or the like;
d)	at Mr Sackville’s request advanced a claim in the Arbitration for a part of the unpaid Purchase Price, which claim was (as he knew)  based upon the Purchase Agreement, although he did not see that agreement until 2011;
e)	relied upon an indemnity from Demco, which presumes a liability against which to be indemnified; and
f)	participated in the Arbitration (resisting SEB’s counterclaim) and in the current action with no mention of the forgery allegation or that the Purchase Agreement and Deed had been entered into without his authority until very recently.
Mr Cohen’s evidence
92.	Mr Cohen’s oral evidence was not very easy to follow. He said, during the course of it, that in the 1990s he learnt that an agreement had been signed on his behalf. He protested to Mr Sackville and was given to understand (it might have been by Mr Sackville) that there was an indemnity already in place from, as he thought, Demco. He was happy to proceed on that basis and wait for things to be resolved, as Mr Sackville indicated that they would. But he was told in July or August 2011 that the indemnity would no longer be honoured. It was about then that he discovered that the Purchase Agreement had been signed by Mr Sackville (without any signature of his and without his authority).
93.	I did not find this account convincing. Mr Cohen was an experienced businessman. He had been Deputy Chairman of Skandia Life. I do not find it credible that, if he had never authorised Mr Sackville to enter into the Purchase Agreement or the Deed, he would have allowed the Arbitration to proceed for many years without raising that point in the proceedings. It is much more likely, as I find, that he agreed to sell his shares against an indemnity from Demco in respect of the warranties which was offered at the time of the Purchase Agreement (and which remains in place: see para 96 below); and that it was for that reason that no contention was raised in the Arbitration that he was not in truth a party to the Purchase Agreement or the Deed. Mr Sackville was, as I find,  never told by Mr Cohen that he was not authorised. If Mr Cohen had been unwilling to sell to SEB, arrangements could have been made, as they were with another shareholder, for him to sell to Demco who would then sell on to SEB.
94.	An attendance note of 19 August 2011 records Mr Cohen attending CityLaw’s office to discuss the Arbitration and being shown “the liability figures in the Arbitration” and being given a copy of Slaughter and May’s submissions. I take that to be a reference to the Joint Submission to the Tribunal and the material that accompanied it. The note records that
“PF (Mr Fallon) explained that because of the joint and several liability and the cap in the non-gross negligence mis-sale cases, the maximum liability was approximately £ 6 million. He also explained that, under the earlier proposal, Demco would pay his share. SC understood the situation and was very relaxed. He said he was not worried about the liability in the arbitration and said, cordially that he had no choice but to agree to follow Demco’s course”.
What exactly is being referred to as “the earlier proposal” is not clear. But this note, with its record of Mr Cohen’s relaxed attitude, is consistent with his having entered into the Purchase Agreement against a Demco indemnity. If Demco did not give an indemnity when the Agreement was entered into it is difficult to see why they should give one subsequently.
95.	I do not suggest that Mr Cohen was deliberately seeking to mislead the Court. But his account of events now nearly 20 years old is not, in my judgment, reliable.
96.	Mr Fallon told me that in January 2012 City Law was asked to communicate on Demco’s behalf that the indemnity (by which he meant the indemnity for costs) was no longer available because of the economic conditions in Greece. Mr Fallon’s email to Mr Cohen of 29 January 2012 informed him that because of the economic conditions in Greece City Law’s supply of funding had virtually dried up, and was impacting on the “indemnity given to cover your costs for our appearing on your behalf at the Trial”. Mr Cohen’s evidence was that, as far as he was aware, the indemnity in relation to the underlying liability had not been withdrawn or changed.
97.	In his written statement Mr Cohen, after saying that Mr Sackville asked him to be a party to the Arbitration in order to claim the outstanding sums said to be due from SEB, and that he agreed to do so, went on to say that he was "shocked" when SEB made its counterclaim, and "never understood (until very recently) what the basis of those claims could be". He cannot have thought that the basis for claiming the outstanding prices was otherwise than under the Purchase Agreement; and, if so, it would be fairly obvious that any claims would be based on that also. Moreover in his statement Mr Cohen says that, during the negotiation phase before the sale to SEB, Mr Sackville told him "that there was provision for shareholder liability in the event that regulatory action should result in the Company having a liability over a prescribed amount", and that whilst Mr Cohen thought it would be "imprudent to proceed with the sale on that basis", Mr Sackville said there was "no choice but to go ahead". Mr Sackville disputed this conversation but, if Mr Cohen is right, he appears to have been forewarned of the basis of a potential claim under the Purchase Agreement.
98.	Mr Cohen has participated in the Arbitration and the current action with advice from various different solicitors: Manches (who acted for him between 1993 and August 1999); Sprecher Grier Halberstrom (who acted for him between August 1999 and March 2000); Portner & Jaskell (who acted for him between March 2000 and June 2003); Hextalls who acted from June 2003; and his current solicitors, City Law, from November 2007. I find it impossible to believe that throughout this time Mr Cohen was unaware that (as well as claiming, as Seller, his share of the balance of the Purchase Price, including Additional Prices I and II, under the Purchase Agreement) he was being counterclaimed against under the warranties contained in it and the indemnities under the Deed.
99.	Indeed. his own evidence indicates (a) that he was aware from the early 1990s either that an agreement had been signed on his behalf (Day 1/65 & 68/9) or, at the least, that someone had agreed to sell his shares (1/ 114-5); (b) that he was said to be bound by the agreement (1/70 and 75) and that an indemnity was already in place (1/70); (c) that he was aware that he was being claimed against in the Arbitration for breach of warranty as a party to the sale agreement (1/75 and 93); (d) that he had a pack of materials relating to the Arbitration (1/79 and 94); but (e) that he only saw the actual Purchase Agreement in around August 2011 (1/76). Until January 2012 he had an indemnity from Demco in relation to liability and costs (1/93-4), which he recalled he had had “from the very beginning … about 1994” (1/119-120).
Ratification, estoppel and forgery
100.	These conclusions mean that it is not necessary to consider (a) questions of ratification or estoppel or (b) forgery. Neither the Purchase Agreement nor the Deed is a forgery and the parties to them do not need to invoke either ratification or estoppel. But, lest I be wrong on that, I shall address these issues.
101.	Subject to the question of forgery, it seems to me clear that, if Mr Sackville did not have authority to enter into the Purchase Agreement and the Deed, Mr Cohen has, nevertheless, ratified them and is estopped from denying that Mr Sackville had authority. As a result he is liable, and cannot deny his liability, to SEB. Mr Fallon accepted that, if ratification was legally possible, then it had been established.
Ratification
102.	As to ratification the various solicitors who have acted for Mr Cohen have on his behalf commenced and continued an arbitration for the balance of the price said to be due under the Purchase Agreement and resisted a counterclaim for damages under the Purchase Agreement and pursuant to the Deed. The claim for a portion of the balance of the price necessarily proceeds on the footing that Mr Cohen is a contracting party. The resistance to the counterclaim has proceeded, not on the basis that Mr Cohen is not a Seller, but on the basis that SEB is not entitled to the damages claimed. As recently as 15 July 2011, City Law (on Mr Cohen's behalf) agreed to the Joint Submission in the Arbitration, pursuant to which the Tribunal was invited to find an overall liability to SEB of over £ 6 million for principal alone.
103.	In the light of the forgery allegations, GDH wished to understand the basis upon which Mr Cohen had admitted such a degree of liability to SEB in July 2011. Herbert Smith raised the issue in correspondence on 19 March 2012. City Law's response of 20 March 2012 asserted that, whilst Mr Cohen had apparently told his previous solicitors on several occasions that the deeds were signed without his authority, but was ignored (which I find difficult to believe), he did not tell City Law about the point  until October 2011. Mr Cohen’s evidence was that he was being fobbed off by his former solicitors and told that he had nothing to worry about because of the indemnity. But that begs the question of what he was being indemnified against.
104.	On 22 March 2012, in response to a further query from Herbert Smith of 21 March 2012, City Law responded with some disclosure on behalf of Mr Cohen. Amongst the new documents was a copy of a letter dated 2 November 2011 from City Law to the Tribunal and the other parties in the Arbitration, in which City Law appear to have raised the point for the first time, and asserted, that the Tribunal did not have jurisdiction over Mr Cohen. Having stated in their letter of 22 November 2011 that Mr Cohen would be issuing a formal application in relation to this issue, City Law then said on 22 December 2011 that Mr Cohen wished to await the outcome of the trial of the present action before making any such application. They reserved Mr Cohen’s position in relation to the jurisdiction of the Tribunal.
105.	In the Award the Tribunal said:
"This Award takes no account of the reservations which Mr Cohen has now
raised in correspondence concerning his status as a party to the Agreement and Deed of Indemnity and the Arbitration. City Law has indicated that Mr Cohen is not proposing at least not at this stage to make any formal application to the Tribunal on this matter. The matter is not before the Tribunal. The Award has been drafted on the basis of the materials which were before us." (footnote 1)
106.	Ratification may be regarded as a species of election by which the supposed principal for whom the supposed agent did not have authority (or did not have it to the extent claimed) chooses between disavowing the transaction and ratifying it. Ratification may be express or implied and will be implied wherever the conduct of the person in whose name a transaction has purportedly been entered into is such as to show that he adopts the transaction in whole or in part: Suncorp Insurance and Finance v Milano Assicurazioni SpA [1993] 2 Lloyd’s Rep 225, 234-5. It would appear - see Bowstead on Agency 2- 074 - that the ratification does not need to be communicated to the third party. It is not, however, necessary to decide this. In the present case ratification is constituted by (a) Mr Cohen’s acceptance of the price, (b) the acts to which I have referred in para 91, and (c) his failure to assert that he was not a party to the Purchase Agreement until 2 November 2011, all of which were matters which were communicated, or made apparent, to SEB. In those circumstances he must, subject to the question of forgery, be taken as having ratified the agreements.
Estoppel
107.	As to estoppel, in acting in this way Mr Cohen in effect represented to SEB that Mr Sackville had acted with his authority in signing the two agreements. SEB must have relied on such representations in its conduct of the arbitration. It will have made no attempt to investigate the accuracy of the assertion of want of authority prior to that assertion being made, or to claim against Mr Sackville on that hypothesis. It would not be fair or equitable to allow Mr Cohen now to resile from the truth of those representations. Accordingly a case of estoppel is, subject to the question of forgery, also made out.
Forgery
108.	Section 1 of the Forgery and Counterfeiting Act 1981 provides:
“A person is guilty of forgery if he makes a false instrument, with the intention that he or another shall use it to induce somebody to accept it as genuine, and by reason of so accepting it to do or not to do some act to his own or any other person’s prejudice.”
An instrument is by section 2 (1) (a) defined so as to include “any document, whether of a formal or informal character”.
109.	By section 9 (1) of the 1981 Act:
“(1)	An instrument is false for the purposes of this Part of this Act—
(a)	…
(b)	if it purports to have been made in the form in which it is made on the authority of a person who did not in fact authorise its making in that form; or
(c)	….
(d)	if it purports to have been made in the terms in which it is made on the authority of a person who did not in fact authorise its making in those terms
110.	It is said that in signing the Purchase Agreement and the Deed Mr Sackville made a false instrument because, insofar as he signed them as Mr Cohen’s attorney in fact, they purported to have been made in the form and terms in which they were made on the authority of a person who did not in fact authorise their making in that form or on those terms.  Such action is, it is said, a crime and is incapable of ratification.
111.	If this be right, it creates a new and (as I apprehend) previously unsuspected head of criminal liability of potentially wide application in commercial cases. In many cases A may, perfectly honestly, believe that he is authorised by P when in fact he is not authorised at all or not to the extent that he thinks. A may have misunderstood what P said or misinterpreted what he wrote. He may have assumed the continuation of an authority which the court later holds has in fact lapsed. The authority may have some formal defect which renders it valueless under its applicable law; or it may have been revoked by some legislative instrument of which A is unaware. P may have died without A’s knowledge. Assume that in each of these cases A signed the disputed contract as attorney in fact of P. Is A, although honest, guilty of a criminal offence?
112.	Mr Fallon submits that he is. The instrument (i.e. the contract) is false because it purports to be made in the form/terms in which it was on the authority of P (Mr Cohen) who did not in fact authorise it. A (Mr Sackville) made it, because he signed it and issued it. He did so with the intention that he should use the instrument to induce the other contracting party T (SEB) to accept it as genuine (i.e. as made on the authority of Mr Cohen) and by reason of accepting it as genuine to do something to T’s prejudice namely to make the agreement in the erroneous belief that it was so authorised.
113.	Mr Ian Gatt QC submitted that this analysis cannot be right. Parliament must have intended that A would only be guilty of an offence if he knew that he did not have P’s authority or was recklessly indifferent to whether he did or not; and not if he honestly, but erroneously, thought that he had.
114.	Whilst I see the attraction of this submission, which is consistent with the normal presumption that a crime requires mens rea as to the elements of the actus reus, I do not think it is possible, in effect, to insert “knowingly” before “makes a false instrument” in section 1 of the 1981 Act, particularly where the offence of copying a false instrument under section 2 is only committed if the copier of an instrument knows or believes it to be a false instrument. Parliament has chosen to define the mental element required for a section 1 offence and, if that is established, the crime is made out.
115.	But that is not the end of the analysis. Part of the intention which must be established is that A intended that somebody - for example, T (SEB) - should “do some act to his own or any other person’s prejudice.” In order for A to be guilty it must, in my judgment, be shown that A intended that the person in question, e.g. T, should do something which would – as A intended - be a source of prejudice to him.
116.	Thus, if A honestly believes that he has P’s authority so that T will not suffer any prejudice on account of any want of authority, A commits no offence. But if A knows that he lacks authority but intends T to think that he does, so that T will suffer the prejudice of contracting with someone who is not in fact bound, he is guilty of an offence.
Conclusion on forgery
117.	Accordingly, if I had held that Mr Sackville did not have the requisite authority, I would not have regarded the Purchase Agreement or the Deed as a forgery within the meaning of the 1981 Act because I am wholly unsatisfied that Mr Sackville intended that either SEB or Mr Cohen should suffer prejudice by accepting a false instrument as genuine. As far as he was concerned he was, as agent, entering into an agreement into which he understood that his principal, as he understood him to be, wished to enter.
118.	In those circumstances it does not seem to me that there is any bar to ratification on the footing that the Purchase Agreement or the Deed is a forgery.
Ratification, if forgery?
119.	If, contrary to my view, Mr Cohen did not authorise the Purchase Agreement or the Deed and they are to be regarded as forgeries even though Mr Sackville honestly believed that he was authorised, it is necessary to consider whether a forgery of that character has the consequence that the agreement in question cannot be ratified.
Brook v Hook
120.	In my view it does not. One rationale put forward for refusing to allow a forgery to be ratified is that a forged document is a nullity. Thus in Brook v Hook [1871] LR 6 Ex 89 Richard Jones forged the signature of Richard Hook to a joint and several promissory note of Hook and Jones in favour of Brook. During the currency of the note Hook, although saying that his signature on the note was forged, signed a memorandum, in order to prevent the prosecution of Jones, his brother-in-law, in which he said that he held himself responsible for the note. The Court of Exchequer, (Martin B - the trial judge – dissenting), held that the memorandum could not be construed as a ratification inasmuch as (a) it was, in fact an agreement by Hook to treat the note as his own in consideration that the plaintiff would forbear to prosecute Jones and thus void as founded upon an illegal consideration; and (b) the act it professed to ratify was illegal and void and incapable of ratification. There was no estoppel precluding the defendant from showing that the signature was a forgery because he had never professed that the signature was his.
121.	That approach is understandable where the forged document purports to be signed by someone who is not its signatory. But in the present case Mr Sackville did not profess to be Mr Cohen but to be acting for Mr Cohen as his attorney in fact. In Brook v Hook Kelly, CB giving the judgment of the majority, said this:
“In all cases cited for the plaintiff the act ratified was an act pretended to have been done for or under the authority of the party sought to be charged; and such would have been the case here, if Jones had pretended to have had the authority of the defendant to put his name to the note, and that he had signed the note for the defendant accordingly, and had thus induced the plaintiff to take it. In that case, although there had been no previous authority, it would have been competent to the defendant to ratify the act, and the maxim before mentioned would have applied”
122.	That is the case here. If Mr Sackville lacked authority, he nevertheless represented that he had it, and induced SEB to make the agreements. It was competent to Mr Cohen to ratify that act. I note in this connection that the authors of Bowstead 19th Ed 2-057 submit that the true reason why there can be no ratification of a forgery is that the forger who counterfeits a signature makes no profession of being an agent so that agency doctrines do not apply to him. I agree. 
123.	In principle it does not seem to me that a document which is signed by A in the honest but mistaken belief that he is authorised by P should be held to be incapable of ratification. If that were so, there would be little left of the doctrine, not least because, even if an agent does not specify himself as “attorney in fact”, the signature of a document as agent impliedly represents that the agent is in fact authorised by his principal.
124.	Even if the agent signs knowing that he lacks the authority that he claims to possess, there does not seem to me any good reason why his purported principal should be unable to ratify. The dictum of Chief Baron Kelly covers just such a case. His example contemplated that the dishonest Jones, instead of forging Hook’s signature, had “pretended” to have authority to sign on his behalf, i.e. had represented himself to have an authority which he knew he did not have.
M’Kenzie v British Linen Company
125.	In M’Kenzie v British Linen Company [1881] AC 82, a Scottish appeal to the House of Lords, the signatures of the drawers and indorsers of a bill (one of whom was M’Kenzie) had been forged. Lord Blackburn accepted that it was possible to ratify a forged signature. He said this at 99:
“But even though it was not made out that the signatures were authorized originally, it still would be enough to make M’Kenzie liable, if knowing that his name had been signed without his authority, he ratified the unauthorized act. Then the maxim “Omnis ratihabitio retrotrahitur et mandato priori equiparatur,” would apply. I wish to guard against being supposed to say that if a document with an unauthorized signature was uttered under such circumstances of intent to defraud that it amounted to the crime of forgery, it is in the power of the person whose name was forged to ratify it so as to make a defence for the forger against a criminal charge. I do not think he could. But if the person whose name was without authority used chooses to ratify the act, even though known to be a crime, he makes himself civilly responsible just as if he had originally authorized it. It is quite immaterial whether this ratification was made to the person who seeks to avail himself of it or to another.”
Greenwood v Martins Bank
126.	In Greenwood v Martins Bank [1933] AC 51 Scrutton and Greer LJJ held that the correct view of the law was that laid down in Brook v Hook and not M’Kenzie v British Linen Company (in which Brook was not cited). At the same time Scrutton LJ said that it was possible for a person to adopt a forgery e.g. by saying that he will recognize the forged signature as his own. The exact nature of such an adoption which was said to be “getting near to the defence of estoppel” is not wholly clear. Greer LJ treated it as amounting to a new contract to be responsible for the debt in question (see p 386).
Estoppel, if forgery
127.	The same case (in which a husband failed to reveal to the bank for months that his wife had forged his signature on 44 cheques) shows that it is possible for a person to be estopped from contending that a signature, e.g. to a cheque, has been forged and that, in appropriate circumstances, the breach of a duty to disclose may give rise to an estoppel - as it did in respect of the husband in that case. If an estoppel may arise where someone signs as (and thus purports to be) someone else, a fortiori it is possible for a person to be estopped from contending that a person who purported to act as his agent was not authorised.
128.	In short, if, contrary to my view, the Purchase Agreement and the Deed were forgeries under the 1981 Act, they could still be, and were, ratified and there could still be, and was, an estoppel precluding Mr Cohen from contending that Mr Sackville lacked authority. I decline to regard the 1981 Act as intended to outlaw a contract made by an agent who lacked authority on behalf of a principal even though it has been ratified by the principal or the principal was estopped from denying authority. Nor does a third party’s reliance upon the principal’s ratification or the fact that he is estopped arise ex turpi causa.
The effect of the cap in relation to non-gross-negligence liabilities
129.	The GDH settlement was a payment in respect of (a) the full amount of the gross negligence liabilities (as then assessed) and (b) GDH’s capped liability in respect of non-gross-negligence liabilities; (c) interest; and (d) costs. Under the Consent Order the Core Parties agreed to contribute to the settlement in the ratio 25.889035 (Demco): 34.043522 (GDH) and 40.067443 (Gamla) – “the agreed ratio”. The amount of principal for non-gross-negligence liabilities under the GDH settlement was £ 4,030,193. The cap for GDH was £ 1,256,773. If both Demco and Gamla complied with their undertakings and if Mr Cohen made a 0.97% contribution to the GDH Settlement, the effect would be that GDH would have paid £ 423,689.11(£ 1,256,773 x 33.712641%) by way of principal i.e. only a proportion of the cap. Leaving aside the position of Mr Cohen, and, even if Demco makes no payment, the contribution of Gamla of itself means that GDH will only have paid a portion of its liability cap for non-gross-negligence liabilities.
130.	In the event that, following the Award, SEB makes further recoveries in respect of non-gross-negligence liabilities from the Sellers it might turn out that some Sellers had paid less than their fair share of those liabilities. If, for instance,  SEB was only able to collect from Demco and Mr Cohen, the position would be as set out in the following table in GDH’s note sent to me after the hearing in response to a note from me:
Party	Amount paid to SEB	Shares in Interlife	Allocation by shareholding only	Allocation by shareholding and cap	
GDH	£1,256,773.00	329,719	£852,017.74	£855,699.59	
Demco	£1,256,773.00	250,741	£647,932.88	£650,732.80	
Mr Cohen	£13,762.00	9,511	£24,577.11	£13,762.00	
Gamla	Nil	388,062	£1,002,780.27	£1,007,113.61	
TOTAL	£2,527,308.00	978,033	£2,527,308.00	£2,527,308.00	

131.	The figures in the penultimate column allocate the amount paid to SEB by reference to shareholding in Interlife. The figures in the last column are a reallocation of the amounts recovered so as to redistribute the excess of Mr Cohen’s share over his cap amongst the other contributing parties.  The amounts payable or receivable would be the difference between the second and the last columns. 
132.	It is, however, presently unclear:  (i) whether Demco will honour its undertakings and the judgment against it in full or at all; (ii) what recoveries SEB will make under the final form of the Award and from whom; and (iii) to what extent Interamerican, Europolitan, Mr Sackville and Mr Paine will default on their obligations. It is possible, even if perhaps unlikely, that GDH may have to contribute to Demco.
Declaratory relief
133.	The question arises as to whether, in those circumstances, the Court can and should grant any declaratory relief. The basic principles applicable to contribution between the Sellers in respect of non-gross-negligence liabilities are (as recognised in the Consent Order):  (i) that  prima facie, the Sellers should contribute in proportion to their shareholdings up to the level of the cap; and (ii) that such contribution should be re-allocated, to the extent necessary, to take account of (a) the excess of any given contributor’s share, calculated by reference to the proportion of its shareholding, over that contributor’s cap; and (b) the inability of any contributor to pay his full share.
134.	I recognise that the Court can make a declaration in advance of any payment being made to SEB. But the range of possible answers to questions (i) - (iii) in paragraph 132 is such that it is, in my judgment, premature to make any order in respect of any contributions that may fall to be made in respect of non-gross-negligence liabilities. The same applies in respect of contributions in respect of gross negligence liabilities in excess of those provided for in the GDH Settlement. Demco seeks a declaration that it is entitled to contribution from each defendant save Mr Cohen in respect of any sums payable by it to SEB but no draft of any such order has been forthcoming.   In addition it may well be the case that the costs of the Arbitration should be shared in a proportion different to that applicable in respect of other liabilities.
Conclusion
135.	Accordingly I propose, to the extent necessary, to declare: 
i)	that  it is not just and equitable that GDH should make any further contribution to any other party in respect of any liability of such party to SEB in respect of gross negligence liabilities;
ii)	that the liability cap in respect of non-gross-negligence liabilities is to be calculated by reference to the entire Purchase Price of £ 1,000,000 + 
£ 2,270,321 + £ 500,000, making £ 3,770,321; and
iii)	that Mr Sackville had actual authority to sign the Purchase Agreement and the Deed on behalf of Mr Cohen.
136.	I say “to the extent necessary” because it may be that the parties will think it unnecessary  to have a formal declaration of that which will be apparent from this judgment. 
137.	I propose, subject to the considerations set out in para 138ff below, to make an order on the following lines viz that  :
i)	the total value of the  GDH Settlement together with interest up to the date referred to in (ii) below (“the total GDH Settlement amount”) shall be re-allocated as between Demco, GDH, Gamla and Mr Cohen in proportion to their respective shareholdings, such that Mr Cohen shall contribute  0.972462 %  of the total GDH settlement amount (“Mr Cohen’s proportion”);
ii)	Mr Cohen’s proportion of the total settlement amount shall be paid by him to GDH, Demco and Gamla (“the Core Parties”) on or by a date that I shall appoint (“the payment date”); and
iii)	Any sum paid by Mr Cohen to the Core Parties pursuant to (ii) shall be divided between the Core Parties in proportion to their respective shareholdings, i.e. in the agreed ratio. 
138.	I say “on the following lines” because the scheme contemplated by the Consent Order includes payment by Demco to GDH of £ 7,042,822.24 plus interest. An undertaking to make such payment was the basis upon which judgments were entered in favour of the Core Parties, including Demco, against Interamerican and Europolitan. Judgment  for the £ 7,042,822.24 has now been entered against Demco in favour of GDH and, to the extent that GDH cannot recover, it will be entitled to a further contribution from Gamla under clause 5 (see below).
139.	The Consent Order contemplated that Demco might not comply with its undertaking and that GDH might enter judgment against it (as, in the event, has happened). It appears, prima facie, to contemplate that Demco shall, nevertheless, be entitled, as a Core Party, to payments from Interamerican and Europolitan, although para  1 (c) provides for the possibility of a further order of the Court in relation to contribution in respect of the GDH Settlement.   It has not so far been submitted that any order, different to the one sought by GDH (see para 53 above), should be made on account of Demco’s current default, which only became apparent after the hearing.  I invite the parties and, in particular, GDH to consider the impact of Demco’s default (as to the likely continuance of which I have no information).
140.	Clause 5 of the Consent Order provides for Gamla to contribute to GDH 54.064123% of any shortfall of the amount irrecoverable (after all reasonable efforts) by GDH from Demco.  It is unclear to me how the parties to the Consent Order contemplated that any recoveries from Interamerican and Europolitan should be shared between them if Demco did not make its payment and GDH obtained, as a result, a further contribution from Gamla. 
141.	It may be that consideration of what might happen if GDH recovered such a contribution from Gamla can be postponed until any such event occurs. I would, however, invite the parties to address their minds to that question in case it is something which can and should be addressed now. The issue does not, as it seems to me, affect the position of Mr Cohen, but, again, I invite the parties to consider that point also.
142.	So far as Mr Sackville and Mr Paine are concerned there must be judgment against them in favour of the Core Parties requiring them to pay on or by the payment date the proportion of the total GDH settlement amount equivalent to the proportion of their respective shares in Interlife at the time of the Purchase Agreement. Whatever sum is recovered from them by the Core Parties shall be shared between the Core Parties in proportion to their respective shareholdings, i.e. in the agreed ratio. 
143.	Such amount is likely not to be recoverable in full. I hope that the Core Parties will be able to reach agreement with Mr Sackville and Mr Paine as to what they can and should pay.
144.	If Mr Cohen complies with the order under 137 (ii) above he shall then be treated as a Core Party within the meaning of the Consent Order of 23 April 2012;  and shall be entitled to a share of any recovery from any of the other parties (Interamerican, Europolitan, Mr Sackville and Mr Paine), together with the Core Parties.  Such further recoveries shall be shared between Demco, GDH, Mr Cohen and Gamla (“the revised Core Parties”) in the following respective proportions and the revised Core Parties shall make such payments as are necessary as between themselves to secure that result:
Demco	25.637274%	
GDH	33.712461%	
Mr Cohen	0.972462%	
Gamla	39.677802%	
145.	These proposals are not to be regarded as set in stone. I invite the parties (a) to consider (i) whether my proposed orders and declarations may give rise to any difficulty in operation or consequences that I have not foreseen or may require amendment in the light of the current failure of Demco to honour its undertaking and the judgment against it; and (b) to draw up a draft order.
146.	I propose to reserve for further consideration (i) any question as to the liability of any of the parties to the action to contribute in relation to any sums recovered by or paid to SEB under the Award  in respect of non-gross-negligence liabilities in excess of those provided for in the GDH Settlement; and (ii) any question as to the liability of any of the parties to the action other than GDH to contribute in relation to any sums recovered by or paid to SEB under the Award in respect of gross negligence liabilities.
147.	Mr David Edwards QC submitted that, if the settlement embodied in the Joint Submission, which will be reflected in the Award, was unreasonable, Trygg-Hansa/Gamla should not have to contribute to it. As to that, the unreasonableness of the Sellers other than GDH lay in not joining in the GDH Settlement, which Trygg-Hansa/Gamla was invited to do. It seems to me, therefore, (although I do not presently decide) that it cannot pray in aid its own failure to join in any settlement as a reason for not contributing in respect of the Award nor claim that its contribution should not be increased because Demco is unable to recover a contribution from GDH.
148.	I indicated at the hearing that I would deal with all questions of costs after delivery of this judgment.