About The Spear Report, Independent Investor and Gregory Spear

Emergency Arbitration

Despite my efforts in trying to keep a door open for Gregory Spear to resume the project when/if he would be able to provide funding, he was pushing through with the arbitration case. At this point I still believed he would realize that his effort to get free work and/or financial compensation from me would be futile, so I tagged along. After my response where I told him that his contractual part, the limited liability company Tradesim AS, would become bankrupt due to lack of funds, he started a process named Emergency Arbitration. It’s an expedited process where there is need to secure swift action to avoid assets disappearing, becoming permanently damaged or similar until the real arbitration case could be completed.

During a conference call with the arbitration administrators explained that the only interest I had in filing counterclaims in the emergency arbitration would be to secure assets at Gregory Spear’s company, if at all possible. I was told that any orders coming out of the Emergency Arbitration process would not be final, that they would be temporary until the normal arbitration would be completed. For this reason I decided not to file any counterclaims in the Emergency Arbitration process. That meant that I would only defend myself against claims from Gregory Spear, and I would not be allowed to file my own claims in the Emergency Arbitration process. Normally, the costs  of arbitration is shared between the two parties. The arbitration rules states that if one party is not contributing his part, the other part has to contribute to get the case handled. Since I did not file any claims (and no potential “win” this round), I decided not to pay for arbitration, meaning Gregory Spear (supposedly broke, remember) would be funding the emergency arbitration round on his own.

At this point Gregory Spear had also started refering to me personally as respondent in the case against Tradesim AS against me, and I believe the arbitration administrators wrongly allowed this to go on without any legal foundation. Arbitration rules state that the parties to the agreement voluntarily give up their rights to have their case handled by a real court. All the documents I had signed, I had signed as an employee of Tradesim AS, and the contractual counterparty was Tradesim AS.  I had never signed any contracts giving up my legal rights personally, but still the arbitration administrators kept referring to both Tradesim AS and me personally. At this stage Gregory Spear also added another one of my companies to his Emergency Arbitration claim, my personal holding company. The gist of Gregory Spear’s claim was this:

Claimant claims that Respondent has acted as a rogue employee in illegally taking possession of assets which unequivocally belong to Claimant and has physically and digitally blocked Claimant from access to these critical assets at a time when this action threathens the existence of Claimant’s business.

The claim further asks the arbitrator to order me to prevent the dissolution of Respondent’s legal entity, that all assets are put in an eschrow account, that the arbitrator orders me personally and my companies collectively deposit $200.000 in reserve for damages, estimating Claimant losses of more than $500.000 due to Respondent’s (my) actions.

Despite the arbitrator acknowledging the fact that I specifically signed the agreement in the role of the president of Tradesim AS, he still goes on to claim:

However it is clear that Mr. Marius Kjeldahl created Tradesim AS and is its controlling shareholder. Most importantly, pursuant to the Agreement, Mr. Marius Kjeldahl bound himself to perform “consulting services” under the Agreement, which makes him party to it.

I guess being an arbitration judge only charging $500/hour doesn’t mean it is important to get all the facts correct. Facts (that I pointed out on numerous occasions) were that I personally did not own a single share in Tradesim AS. My holding company owns all the shares. The same holding company the arbitrator decides is not under the jurisdiction of the arbitrator. Based on some really weird logic, however, the arbitrator still manages to conclude, based on wrong facts quoted in the paragraph above, that I am personally under the jurisdiction of the arbitrator. That means that I could personally be liable for any awards awarded to Gregory Spear’s company. Despite my complains to this obvious fact, the arbitrator was not willing to change any ruling. Despite the arbitrator mostly rejecting most of Gregory Spear’s claims, that one fact was the most serious of all. I could be personally liable if I lose the case.

Let that be a warning to all entrepreneurs using limited liability companies for protecting personal assets. If you sign away your legal rights in your limited liability company and accept arbitration instead, some dickhead lawyer charging you $500/hour in a country where that amount is equal to two monthly salaries may decide that you are personally liable regardless. If it had not been for this mistake, Gregory Spear would probably have given up at this point. But by pulling me personally into the case, my worst case went from losing some equity to losing my car, the house we were building and any personal assets left.

Up until now I had a cavalier attitude towards this whole process, figuring losing the equity in the limited liability company would still be cheaper than hiring a lawyer to defend myself, specially considering that collection, even with a win, would be very difficult, if at all possible. Suddenly it was dead serious. International arbitration rules and conventions state that if I lost my case in the US and they found me personally liable, they could simply hand over the ruling to the norwegian government, which differently from the US government, will enforce collecting any assets I own and hand them over should I lose. At this point in time I had to get real lawyers on the case.

After some research I found the supposedly best norwegian international arbitration lawyers in Norway (according to multiple sources). After handing over $1.800 in fees, their advice was basically “don’t lose in the US”. I had posted questions about how I could fight an obviously faulty ruling in Norway (about the arbitrators jurisdiction over my personal assets when the contractual party was a limited liability company), but nobody had any advice related to this, not the probable outcomes, or even what the process would be. Don’t loose in the US was the only advice given.


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