The High Court has ordered Irish company QPQ Limited to disclose the funding arrangements behind its commercial proceedings against Gerardus Henricus Michel Maria Schute, also known as Geert Schute.
The underlying case concerns QPQ’s allegation that Schute breached a 2021 shareholders’ agreement by copying its blockchain technology, known as 1DLT, and using it to develop a rival product called Wowen. Schute denies the allegations.
The latest ruling does not determine those claims. Instead, it concerns Schute’s allegation that the proceedings may have been financed by an outside party in a manner amounting to unlawful maintenance or champerty. Maintenance involves an unconnected third party funding litigation; champerty is a form of maintenance in which the funder also receives a share of the proceeds.
QPQ said its Swiss parent, QPQ AG, was the sole funder. Funding by a shareholder with a legitimate interest in a company’s litigation would not, in itself, amount to prohibited third-party funding.
Mr Justice Twomey found, however, that discovered documents provided sufficient evidence to require closer scrutiny. A May 2023 email referred to sharing 50% of litigation damages with those funding the case. Later WhatsApp messages between current and former QPQ directors stated that Paul Thompson had “funded a bit”, had people lined up to provide further funding and was later “pushing for a settlement”.
The court stressed that these materials did not establish that a criminal offence had occurred. They were sufficient, however, to raise a legitimate issue about whether QPQ AG was funding the case in its own right or acting as a conduit for third-party investors.
Twomey J held that the High Court has an inherent jurisdiction to order disclosure where necessary to protect the court process and ensure the efficient administration of justice.
QPQ must disclose the identity and address of each funder, the dates and extent of funding, any written funding agreement, and specified corporate records of QPQ AG. Disclosure is to be made both to Schute and to the High Court.