Following a judgment in favour of the Claimant, the DIFC Court of First Instance intervened to appoint an independent receiver over the shares and management of Five Dining Corporation Limited, the entity operating the Atelier de Joel Robuchon restaurant in the DIFC.
What was the specific dispute between MAD Atelier International B.V., Axel Manes, and Catherine Zhilla regarding the Five Dining Corporation assets?
The litigation concerns the enforcement of a judgment obtained by MAD Atelier International B.V. against Axel Manes on 14 October 2022. The dispute centered on the control and management of Five Dining Corporation Limited, the corporate vehicle through which the Atelier de Joel Robuchon restaurant operates within the DIFC. With the Claimant seeking to satisfy its judgment and the Defendants embroiled in competing applications regarding the disposition of shares, the court was tasked with securing the assets of the business.
The stakes involved the operational control of the restaurant and the underlying shareholding, which were subject to conflicting claims by the parties. The court ultimately determined that an independent third party was required to manage the entity to preserve its value and ensure compliance with the court’s prior orders. As part of the final disposition, the court addressed the financial obligations of the First Defendant:
The First Defendant shall pay the Claimant USD 110,000 on account of the costs ordered at paragraph 16 of this Order, by 4pm on 3 January 2023.
Further details regarding the case history and the specific nature of the underlying commercial disagreement can be found at the DIFC Courts website.
Which judge presided over the receivership application in CFI 030/2022 and when was the order issued?
The matter was heard before Justice Sir Jeremy Cooke in the DIFC Court of First Instance. Following a hearing held on 20 December 2022, the formal order appointing the receiver and manager was issued on 22 December 2022.
What were the competing legal arguments advanced by the Claimant and the Defendants regarding the management of Five Dining Corporation?
The Claimant, MAD Atelier International B.V., sought the appointment of a receiver to secure its position following the October 2022 judgment. Conversely, the First Defendant, Axel Manes, filed his own application for the appointment of a receiver, suggesting a mutual recognition that the existing management structure was no longer viable or acceptable to the parties.
The Second Defendant, Catherine Zhilla, filed a separate application seeking permission to transfer her shares in Five Dining to the First Defendant and requested to be released from a pre-existing freezing order originally granted by Justice Lord Angus Glennie. The court had to balance these competing applications, ultimately rejecting the parties' preferred management arrangements in favour of an independent appointment. The court also addressed the costs associated with these applications:
The First Defendant shall pay the Claimant’s costs of the Claimant’s Receivership Application and the First Defendant’s Receivership Application, such costs to be assessed by the Registrar if not agreed.
What was the jurisdictional and doctrinal question the court had to answer regarding the appointment of a receiver over a DIFC-registered entity?
The court was required to determine whether the circumstances of the judgment debt and the ongoing management disputes justified the extraordinary remedy of appointing a receiver and manager under the court’s inherent jurisdiction and the Rules of the DIFC Courts (RDC). The core issue was whether the court could effectively strip the existing directors and shareholders of their control to preserve the value of the DIFC Restaurant for the benefit of the parties and the satisfaction of the judgment debt.
How did Justice Sir Jeremy Cooke exercise his discretion to ensure the preservation of the business while limiting the receiver's authority?
Justice Sir Jeremy Cooke adopted a structured approach, granting the receiver, Nathan Stubing of FTI Consulting, comprehensive powers to manage the restaurant while imposing strict reporting and consultation requirements. The judge ensured that the receiver’s actions were subject to judicial oversight, particularly regarding the potential sale of assets or the closure of the business.
The court’s reasoning focused on the necessity of removing the Defendants from the day-to-day control of the entity to prevent further dissipation or mismanagement. The order specifically mandates the transition of corporate control:
The Receiver shall, as soon as reasonably practicable, take such steps as are necessary for his appointment as director of Five Dining and to procure and accept the resignation of the Second Defendant as director of Five Dining.
Furthermore, the court placed limitations on the receiver’s power to terminate operations, ensuring the business remains a going concern:
For the avoidance of doubt, the Receiver shall not without the consent of the Court close the business of Five Dining.
Which specific RDC rules and statutory provisions were applied to facilitate the receivership?
The court exercised its powers under the RDC, specifically referencing RDC 49.36, which governs the appointment of receivers. The order was framed to ensure that the receiver had sufficient authority to manage the business, including the power to initiate legal proceedings, collect income, and execute documents on behalf of Five Dining. The court also relied on its general case management powers to mandate the transfer of shares from the Second Defendant, Mr. Enzo Manes, and Mr. Santino Manes to the receiver.
How did the court balance the rights of the parties against the receiver's duty to sell the shares?
The court implemented a safeguard mechanism to protect the interests of the First Defendant during the potential sale of the business or the shares. By requiring the receiver to provide notice, the court ensured that the First Defendant remained informed and had an opportunity to object or seek court intervention if the sale terms were deemed unreasonable.
The Receiver shall give 7 Days’ Written Notice to the First Defendant prior to entering into any contract for sale of the Five Dining Shares or the sale of the business of Five Dining, unless such contract is subject to a condition precedent that it shall not become effective absent an order of the Court approving the same or the prior written consent of the First Defendant and the Claimant, not to be unreasonably withheld.
What was the final disposition of the court regarding the freezing order and the transfer of shares?
The court ordered the immediate transfer of all shares in Five Dining to the receiver. Upon the successful completion of this transfer, the court granted relief to the Second Defendant, effectively lifting the restrictive measures imposed earlier in the year.
Upon completion of the transfer of all of the shares in Five Dining to the Receiver, the Second Defendant shall be released from the freezing order made against her by Justice Lord Angus Glennie on 18 March 2022 and continued on 25 March 2022.
Additionally, the court ordered the transfer of shares from the Second Defendant and other named individuals:
The shares in Five Dining shall be transferred from the Second Defendant, Mr Enzo Manes and Mr Santino Manes to the Receiver.
How does this appointment change the landscape for corporate management disputes in the DIFC?
This order demonstrates the DIFC Court's willingness to utilize receivership as a robust tool for enforcing judgments and resolving deadlocked corporate management. By appointing an independent professional from a major consultancy firm, the court effectively removed the parties from the decision-making process, signaling that where management disputes threaten the value of a DIFC-based business, the court will prioritize asset preservation over the parties' preferred control structures. Practitioners should anticipate that in similar high-stakes commercial disputes, the court will not hesitate to impose external management to ensure that assets are not dissipated during the enforcement phase.
Where can I read the full judgment in MAD Atelier International B.V. v Axel Manes [2022] DIFC CFI 030?
The full order can be accessed via the DIFC Courts website: CFI 030/2022 Order or via the CDN mirror.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| MAD Atelier International B.V. v (1) Axel Manes (2) Catherine Zhilla | CFI 030/2022 | Primary matter |
Legislation referenced:
- Rules of the DIFC Courts (RDC), Rule 49.36