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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Arcelormittal USA LLC v Essar Steel Ltd [2019] EWHC 724 (Comm) (25 March 2019) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2019/724.html Cite as: [2019] EWHC 724 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
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ARCELORMITTAL USA LLC
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Claimant/ |
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- and -
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ESSAR STEEL LIMITED |
Defendant/ |
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- and - |
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(1) ESSAR CAPITAL SERVICES (UK) LIMITED (2) MR PRASHANT RUIA (3) MR SUSHIL BAID |
Respondents |
AND IN THE MATTER OF A PART 8 CLAIM
Between :
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ARCELORMITTAL USA LLC
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Claimant |
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- and -
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(1) MR PRASHANT RUIA (2) MR JOSEPH SEIFERT (3) MR NICHOLAS HARROLD (4) MR ANDREW WRIGHT (5) MR NIGEL BELL (6) MR SUSHIL BAID (7) ESSAR CAPITAL SERVICES (UK) LIMITED |
Defendants |
____________________
Daniel Toledano QC & Scott Ralston (instructed by RPC LLP) for Essar Steel
Paul Stanley QC (instructed by CMS) for Essar Capital Services (UK)
Paul McGrath QC & Ruth Den Besten (instructed by Stephenson Harwood LLP) for Prashant Ruia and Sushil Baid
James Bailey (instructed by Lipman Karas LLP) for Joseph Seifert and Nicholas Harrold
Mark Beeley (of Orrick, Herrington & Sutcliffe (UK) LLP) for Andrew Wright
Gregory Denton-Cox (instructed by Thomas Cooper LLP) for Nigel Bell
Hugh Norbury QC (instructed by DWF LLP) for Essar Oil (UK) Limited, non-party
Hearing dates: 5th, 6th, 7th March 2019.
____________________
Crown Copyright ©
MR JUSTICE JACOBS:
A: Introduction
"33 The first issue is whether Vijay was correct that the court has no jurisdiction to grant a worldwide freezing order under s. 37 Senior courts Act against a foreigner, where service out is under CPR 62.18(8) based on the enforcement of an arbitration award pursuant to s. 101 Arbitration Act and where the seat of the arbitration was not in England and Wales.
34 As I have said, Vijay contended that the court had no jurisdiction to grant a worldwide freezing order because no claim for such an order had been included in EEEL's Arbitration Claim Form. That Claim Form sought only leave to enforce the award in the same manner as a judgment or order to the same effect pursuant to s. 101(2) Arbitration Act 1996, the entry of judgment in terms of the award pursuant to s.101(3) Arbitration Act 1996 , and costs. Service out of the jurisdiction was effected without permission under CPR 62.18(8). Vijay also contended that the Arbitration Claim Form could not have included a claim for a worldwide freezing order and if it had it could not have been served out of the jurisdiction under CPR 62.18(8), or indeed on any other basis.
35 I considered that Mr. Pilling QC for EEEL was correct to submit that a claim for ancillary relief such as a freezing order did not need to be included in an Arbitration Claim Form seeking recognition and enforcement of an award pursuant to s. 101 Arbitration Act 1996 in order for the court to have jurisdiction to make such an order.
36 Indeed, there appeared to me to be an anomaly in this part of Vijay's case. Vijay accepted that this court could, in the present case, make a domestic freezing order. But it was not clear how that could be the case and yet the court have no power to make a worldwide freezing order on the basis that it had not been claimed in the Arbitration Claim Form. There is no claim for a domestic freezing order in the Arbitration Claim Form in this case any more than there is a claim for a worldwide freezing order. And if the question is whether a claim form, notionally amended to include the relevant claim could properly have been served out in the first place (see NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at [77] per Lord Phillips of Worth Matravers) it was not clear as to why the answer would be different had the claim been for a domestic as opposed to a worldwide freezing order. In this regard it is to be noted that Mr. Lewis QC for Vijay was inclined to accept that on the present state of the authorities the difference could not be accounted for by the existence of the jurisdictional gateway in 6BPD 3.1(2), because that head of jurisdiction relates to injunctions which are part of the substantive relief claimed; and that in this regard the position recognised under RSC Order 11 in Mercedes Benz A.G. v Leiduck [1996] 1 AC 284 continues to apply to CPR 6BPD 3.1(2), see Cool Carriers A.B v HSBC Bank USA [2001] 2 Lloyd's Rep 22 .
37 Thus I consider that the court has jurisdiction to grant a worldwide freezing order, and has a discretion as to whether or not to do so. That exercise of discretion, however, must take into account, as a highly significant matter, the circumstances in which the English court is being asked to act."
B: The WFO and the risk of dissipation
"(a) The claimant must demonstrate a real risk that a judgment against the defendant may not be satisfied as a result of unjustified dealing with a defendant's assets. (b) That risk can only be demonstrated with solid evidence; mere inference or generalised assertion is not sufficient. (c) It is not enough to rely solely on allegations that a defendant has been dishonest; rather it is necessary to scrutinise the evidence to see whether the dishonesty in question does justify a conclusion that assets are likely to be dissipated. (d) The relevant inquiry is whether there is a current risk of dissipation; past events may be evidentially relevant, but only if they serve to demonstrate a current risk of dissipation of the assets now held. (e) The nature, location and liquidity of the defendant's assets are important considerations. (f) Whether or to what extent the assets are already secured or incapable of being dealt with is also relevant. (g) So too is the defendant's behaviour in response to the claim or anticipated claim."
The companies and individuals
The Ontario judgment
"[82] The entire Port Transaction and the GIP secured loan to Portco would not have been necessary had Essar Global lived up to its obligations under the Restructuring Support Agreement it made with Algoma and the accompanying Equity Commitment Letter dated July 24, 2014 pledging a cash investment of $250 to $300 million. However, it is quite clear from the evidence that, despite its obligations to Algoma under these agreements, Essar Global had no intention of living up to its promises. Essar Global acted in bad faith in this regard.
[83] On March 28, 2014, the Ruias made it clear to Mr. Saraf of Essar Services India Ltd in Mumbai that they did not have $ 250 million for an equity investment in Algoma, that they did not want to tell any banks or investors that they would put in $ 250 million of equity and that they could only put in $ 120 million but would just take it out to reduce liabilities of Algoma owed to Essar companies".
"[88] It was Essar Global's decision not to fund Algoma according to the terms of the Equity Commitment Letter that made it necessary to carry out the Port Transaction. The Port Transaction was the result of the structure required by GIP to support the loan of $150 million to Portco that was advanced to Algoma net of costs. That reduced the amount of cash equity previously promised by Essar Global to be advanced to Algoma. In the amended RSA, $150 million of historical debt owed by Algoma to Essar Global was converted into preferred equity for Essar Global. That however was not cash as had been agreed to be advanced by Essar Global to Algoma in the Equity Commitment Letter. Moreover, the $150 million debt had been at the bottom of the capital structure of Algoma and its value was certainly questionable, making the conversion of debt to equity also of questionable value. On cross-examination, Mr. Seifert chose not to "speculate" on what he would pay for the $150 million debt and said the value was something in the eye of the beholder. This is confirmatory of the fact that the loans and equity conversion was of questionable value and certainly less than the cash infusion that Essar Global had previously agreed to put into Algoma and later reneged on.
[89] In my view, Essar Global's failure to inject cash equity into Algoma as agreed was the root cause of the Port Transaction and the resulting long-term effect on Algoma and its stakeholders of the transfer of control over the Port facilities from Algoma to Portco/Essar Global. The cash equity injection agreed to by Essar Global was a contractual alternative and clearly more beneficial to Algoma. That root cause was an exercise in bad faith. Had an independent committee of the board of directors of Algoma been struck, it may have been that steps may have been taken to hold Essar Global to its bargain rather than simply look to third party financing from GIP under the structure of the Port Transaction. The failure of the board of Algoma to look to some other way to effect a Recapitalization was in itself an indication of a lack of regard for the interests of stakeholders of Algoma."
"[122] Algoma's Board held meetings on October 30 and November 1, 2014. It is quite clear from the meeting minutes that it was Mr. Seifert who was leading the Recapitalization effort. At the November 1 meeting, Mr. Schrock of Weil, Gotschal & Manges advised that unsecured noteholders would not react well to proposed changes to the Port Transaction and would likely push for a higher infusion of cash/equity from Essar Global, as promised in the Equity Commitment Letter. The advisors said that the board should insist that Algoma press all parties to fully satisfy their commitments and this could include a letter to Essar Global setting forth its obligations regarding the equity commitments. That advice was not followed.
[123] I fail to see how the directors of Algoma can rely on the business judgment rule in the face of not following advice to go after Essar Global on its cash equity commitment. There was no issue about the validity of that commitment. If the Ruia interests had acquiesced to forming an independent committee of the board, or listened to the truly independent directors before they resigned in frustration, steps may have been taken differently including accepting and following Mr. Schrock's advice. What happened in the Port Transaction was an exercise in self-dealing in that Algoma's critical Port asset was transferred out of Algoma to a wholly owned subsidiary of Essar Global with a change of control provision that benefited Essar Global at a time that a future insolvency was a possibility. That would not have been necessary had Essar Global lived up to its cash injection commitment. Yet the board did not take any steps to call Essar Global on its commitment, even in the face of legal advice that it should do so."
The $ 1.3 billion reduction in capital as shown in Essar Steel's 2016 accounts
"Receivable from related parties are unsecured, non-interest bearing and receivable on demand.
Receivable from related parties includes receivable per Promissory Note (see note 6*)"
"On 29th June 2012 and 26th August 2013, a share purchase agreement was entered into between Essar Steel Asia Holdings Limited (a fellow subsidiary) and the Company by virtue of which the company has disposed 1,910,255,183 & 118,678,842 equity shares …INR 10 each of Essar Steel India Limited to Essar Steel Asia Holdings Limited at a consideration of USD 1,388,530,158 and USD 99,450,000 respectively. In this respect, Essar Steel Asia Holdings Limited had issued a Promissory Note in favour of the Company.
The Company has assigned the Promissory Note in favour of Essar Global Fund Limited (holding company) who in turn has assigned it in favour of Essar Steel Mauritius Ltd…."
Note 6 then gave details of further onward assignments.
"In 2013, the Company disposed of 2,028,934,025 equity shares held in Essar Steel India Limited (ESIL) to Essar Asia Holdings Limited (ESAHL) and, as consideration, the latter issued promissory notes for the amount of USD 1,487,980,158. Subsequently, under a future buyback arrangement, the promissory notes were assigned to Essar Global Fund Limited (EGFL), the sole shareholder of the Company, as an advance against future buyback of 1,487,980,158 equity shares at USD 1 each. This amount should have been classified under equity. Accordingly, the financial statement for the years ended 31 March 2014 and 2015 have been restated to reflect the correct accounting treatment. The Company will have to satisfy the solvency test to finalise the share buyback".
"Advance against future buy-back represents the consideration paid to the sole shareholder in 2013 towards future buy back of 1,487,980,158 equity shares at par value. Under the buyback arrangement, the Company has right for gross physical delivery of its own equity shares. The sole shareholder has no contractual obligation to refund the cash or provide another financial asset and hence, it is to be classified as equity. However, this has been wrongly classified as an asset in the previous years. Accordingly, the financial statements of 2014 and 2015 have been restated to reflect the accounting treatment."
"Moreover, the share buyback can only be completed if ESL satisfies the solvency test in section 6 of the Companies Act of Mauritius 2001".
Indian Supreme Court's 2018 judgment
Report by the Directorate of Revenue Intelligence
Conclusion in relation to risk of dissipation
C: Is it just and convenient to grant a worldwide freezing order?
"Drawing these strands together, I derive the following principles as applicable when the court is asked to grant a freezing order in support of relief which has been or is to be granted under s 101 of Arbitration Act 1996 to enforce a New York Convention arbitration award obtained abroad:
(1) The principles are the same as those applicable where the court is asked to grant freezing order relief in support of foreign proceedings in exercise of its jurisdiction under s 25 of the Civil Jurisdiction and Judgments Act 1982. The relief is treated as ancillary to the substantive rights contained in the award, which arise at the seat of the arbitration. The relief is not treated as ancillary to an English judgment which is for these purposes to be treated in the same way as a judgment of the English court determining the merits of a substantive dispute between a Claimant and a Defendant over whom it has assumed in personam jurisdiction. There is, in this context, a distinction between the two, which was emphasised by Lord Donaldson MR in the Rosseel case.
(2) In such cases, it will rarely be appropriate to exercise jurisdiction to grant a freezing order where a Defendant has no assets here and owes no allegiance to the English court by the existence of in personam jurisdiction by domicile, or residence, or some other reason. Protective measures should normally be left to the courts where the assets are to be found or where the Defendant resides.
(3) Where there is reason to believe that the Defendant has assets within the jurisdiction, the English court will often be the appropriate court to grant protective measures by way of a domestic freezing order over such assets. That is so, whether or not the Defendant is resident or, for some other reason, is someone over whom the English court would assume in personam jurisdiction.
(4) Where the Defendant is resident within the jurisdiction or is someone over whom the court has or would assume in personam jurisdiction for some other reason, a worldwide freezing order may be granted applying the same principles as apply to the grant of such an order in aid of foreign substantive proceedings under s 25 of the Civil Jurisdiction and Judgments Act, as explained in the Cuoghi, Motorola and Banco Nacional cases.
(5) Where the Defendant is neither resident within the jurisdiction nor someone over whom the court has or would assume in personam jurisdiction for some other reason, the court will only grant a freezing order extending to foreign assets in exceptional circumstances. It is likely to be necessary for the Applicant to establish at least three things:
(a) That there is a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the English court, in the sense referred to in Van Uden.
(b) That the case is one where it is appropriate within the limits of comity for the English court to act as the international policeman in relation to assets abroad. That role will not be appropriate unless it is practical for an order to be made, and unless the order can be enforced in practice if it is disobeyed. The court will not make an order, even if within the limits of comity, if there is no effective sanction it could apply if the order were disobeyed. That may often be the case if the Defendant has no presence or assets within the jurisdiction.
(c) The court will only grant worldwide relief if it is just and expedient to do so, taking into account the discretionary factors identified at para 115 of the judgment in the Motorola case. They are:
(1) whether the making of the order will interfere with the management of the case in the primary court, eg where the order is inconsistent with an order in the primary court or overlaps with it;
(2) whether it is the policy in the primary jurisdiction not itself to make worldwide freezing/disclosure orders;
(3) whether there is a danger that the orders made will give rise to disharmony or confusion and/or risk of conflicting, inconsistent or overlapping orders in other jurisdictions, in particular the courts of the state where the person enjoined resides or where the assets affected are located;
(4) whether at the time the order is sought there is likely to be a potential conflict as to jurisdiction rendering it inappropriate and inexpedient to make a worldwide order; and
(5) whether, in a case where jurisdiction is resisted and disobedience to be expected, the court will be making an order which it cannot enforce."
D: Non-disclosure
(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends upon the importance of the fact to the issues which were to be decided by the judge upon the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty upon the applicant to make all proper inquiries and to give careful consideration to the case being presented.
(7) Finally "it is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded" : per Lord Denning MR: Bank Mellat v. Nikpour at page 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms.
"Where the whole of the facts, including that of the original non-disclosure are before (the court), it may well grant a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed": per Glidewell L.J.: Lloyds Bowmaker Ltd. v. Britannia Arrow Holdings PLC".
E: Scope of paragraph 9 of the WFO
F: The search order
a. A strong prima facie case that there is a civil cause of action. That must relate, presumably to the case on the merits in the proceedings.
b. A serious "danger to the claimant" that the order will avoid: the evidence to be preserved must be "of major, if not critical, importance".
c. Clear evidence that the respondent to the order possesses "incriminating documents or things". For "incriminating" one should probably substitute "relevant evidence", having the characteristics set out above, i.e. "relevant evidence of major, if not critical, importance".
d. A "real possibility" that that evidence will be destroyed if the relief is not given.
e. Proportionality: that the harm to the respondent will not be out of proportion to the legitimate object of the order.
"Make an order under this section for the purpose of securing, in the case of any existing or proposed proceedings in the court – (a) the preservation of evidence which is or may be relevant"
In s 7 (8), the "court" was defined as "the High Court". Mr. Stanley submitted that the evidence therefore had to be such as to be relevant or "may be" relevant to English proceedings, rather than foreign proceedings. It followed from this submission that if the WFO fell away, there were no existing or proposed proceedings in England to which the evidence was or may be relevant. This was essentially because there was no realistic case that AMUSA would be taking enforcement measures in English proceedings. Enforcement would likely take place in other jurisdictions, for example Mauritius (the place of incorporation of Essar Steel) or the Cayman Islands (where EGFL were incorporated).
Mr. Vuppuluri's documents
"In their August 1 letter, counsel for ArcelorMittal responded that they have discussed with ESML counsel the question of Essar's Mr. Vuppuluri's continuing access to his email and computer and have been assured that such access is available and unimpeded".
"I have been able to discuss matters further with Mr. Vuppuluri, having reviewed the contents of Mr. Lazar's witness statement. Mr. Vuppuluri has confirmed that his laptop was indeed returned to him by ESML and that he has continued to use the same email address since the bankruptcy. At the time the letter dated 28 March 2017 that I referred to in Baid 1 was drafted, ESL did not appreciate this to be the case. I am informed by Mr. Vuppuluri that at the time his laptop was returned to him, he assumed that it had been "wiped" and that he has not used it since its return. It has only become apparent to him that this is not in fact the case on recently checking the position.
In paragraph 11 of Lazar1, AMUSA states that in June 2017, Mr. Pauker's counsel, White & Case LLP, told AMUSA's representative that Mr. Vuppuluri still had access to emails and documents. The contents of these communications were never relayed to Essar Steel. I note that Mr. Lazar does not explain why AMUSA chose to withhold from Essar Steel the fact and content of these communications. Had the contents of these communications been relayed at the time, the position in this regard might have been clarified with Mr. Vuppuluri somewhat earlier."
The response to the search order
"hide all docs for ecsl asap as soon as you come in".
"you need to hide andres pc i think".
Other issues relating to the search order and conclusions
"Also the fact that your Lordship's preservation order can't preserve documents on line, even if we have the most obedient people in the world at Lansdowne House it doesn't stop necessarily people abroad like Mr. Baid and others being able to access clouds elsewhere and deny access by changing passwords they don't then tell people in London.
So we have a window to be able to go in and get these documents and preserve them for enforcement, which if we end up with a preservation order and serve it, that is as good as a tip-off. And it means that people like Mr. Baid and others, they are beyond the scenes.
That's really the reason why there is no effective enforcement otherwise. So in this case a preservation order won't carry the can.
…
It is a narrow window. If we can go in and if the gags work, you can't tip anybody off, you must tell us how we can get into these computers, we copy them before anyone outside can interfere. Then they are there for your Lordship and this court to decide what to do with them afterwards. And we can hear any objections."
G: The Norwich Pharmacal orders
"(a) Where the Listed Items (as defined in Schedule D) are located, whether those Listed Items are in his own custody or in the possession of someone else.
(b) The name address and contact details of any person who has the information set out in paragraphs 2 (a) above".
"… all categories of document or information evidencing or relating to:-
(a) Any direct or indirect disposal of Essar Steel Limited's assets to related parties from 1st January 2012 to the date hereof;
(b) Any disposal of Essar Steel Limited's assets at an undervalue from 1st January 2012 to the date hereof;
(c) What has become of such assets as described in 6 (a) and (b) above;
(d) The identity, location and value of Essar Steel Limited's assets as at the time the order is served;
where the asset has or at the time of the disposal had a value of more than US$ 250,000."
"Identify and provide full particulars of
(a) Any direct or indirect disposal of Essar Steel Limited's assets to related parties from 1st January 2012 to the date hereof;
(b) Any disposal of Essar Steel Limited's assets at an undervalue from 1st January 2012 to the date hereof;
(c) What has become of such assets as described in 1 (a) and (b) above;
(d) The identity, location and value of Essar Steel Limited's assets as at the time the Order is served; where the asset has or at the time of the disposal had a value of more than US$ 250,000.
(e) The name, address and contact details of any person who has the information set out in paragraphs 1 (a) – (d) of this Schedule."
"DELIVERY UP OF ARTICLES/DOCUMENTS
19. The Respondent or any Controller of Access must:
(a) Immediately hand over to the Applicant's solicitors any of the Listed Items, or procure the delivery up to the Applicant's solicitors of any of the Listed Items, which are in his possession or under his control. Any items the subject of a dispute as to whether they are Listed Items must immediately be handed over to the Supervising Solicitor for safe keeping pending resolution of the dispute or further order of the court.
(b) Immediately give the Search Party effective access to any Container that may contain Listed Items to enable it to be searched, including (without limitation) by providing all keys, items, or information that may be necessary to gain such access.
(c) Immediately give the Search Party effective access to any Electronic Data Storage Device that may contain Listed Items or from which Listed Items may be remotely accessed to enable it to be searched, including (without limitation) by providing all necessary passwords, keys, PIN numbers, user-names, combinations, codes and any other items or information that may be necessary to gain such access and which may be necessary to gain access remotely to other Electronic Data Storage Devices not located on the Premises whether within or outside the jurisdiction.
(d) If any Electronic Data Storage Device contains Listed Items, cause such items to be displayed so that they can be read and copied and the Respondent must provide the Applicant's Solicitors with copies of all such items contained on the device. The Supervising Solicitor may dispense with compliance with this sub-paragraph (d) in whole or in part if (s)he is of the view that such compliance is rendered unnecessary by the computer imaging provisions in paragraphs 20-24 below.
ELECTRONIC DATA IMAGING ORDER
20. The Respondent or any Controller of Access must immediately hand over to and permit the Independent Computer Specialist to make up to two electronic copies or images of any or all of the documents (whether they are Listed Items or not) accessible on or accessible remotely from an Electronic Data Storage Device.
21. If the Respondent claims that it is entitled to claim privilege against self incrimination in relation to any document or part of a document accessible on or from an Electronic Data Storage Device, and the Supervising Solicitor decides that it is so entitled, then the Supervising Solicitor shall instruct the Independent Computer Specialist to delete (or if such deletion is not possible, to redact) such incriminating material from the electronic copies taken pursuant to paragraph 20 above without reading them as soon as possible.
22. In the event that the Independent Computer Specialist is unable to complete the copying or imaging of any Electronic Data Storage Device on the Premises or accessible remotely from the Premises or the Independent Computer Specialist states to the Supervising Solicitor that for technical or other reasons it is preferable to remove such device from the Premises in order to complete the work indicated in paragraph 20 above, the Supervising Solicitor shall be permitted to allow the Independent Computer Specialist to remove such device or continue remote imaging on the basis of the undertaking provided by the Independent Computer Specialist at Schedule G and any device shall be returned to the Respondent as soon as possible after such work is completed.
23. Any copy or image taken of an Electronic Data Storage Device shall be handed over by the Independent Computer Specialist to the Supervising Solicitor who will keep it safely in his custody to the order of the court. The Independent Computer Specialist may, at the direction of the Supervising Solicitor, take such steps to re-organise the material upon the copies as may be expedient to expedite the search of their contents. The Applicant's Solicitors and the Independent Computer Specialist shall then be entitled to search for Listed Items upon such copies or images on condition that:
such search shall not take place until after the Return Date and the Respondent be given at least 2 clear working days' written notice of such search by the Applicant's Solicitors;
the search take place under the Supervising Solicitor's supervision;
the Respondent and its legal advisors shall be entitled to be present at such search; and
the Applicant's Solicitors shall be entitled to take copies of any Listed Items found, subject to the Respondent's right to prevent the Applicant's Solicitors from taking a copy of any part of a document which the Supervising Solicitor believes to be privileged.
24. All reasonable steps shall be taken by the Applicant, the Applicant's Solicitors and the Independent Computer Specialist to ensure that no damage is done to any Electronic Data Storage Device or to data contained on such device. The Applicant and its representatives may not themselves search an Electronic Data Storage Device unless they have sufficient expertise to do so without damaging the Respondent's system.
LISTED ITEMS IN THE HANDS OF PERSONS OTHER THAN THE RESPONDENT
25. If there are any Listed Items in the jurisdiction or accessible from Electronic Data Storage Devices within the jurisdiction which are in the custody of third parties who hold such items on behalf of or to the order of the Respondent or under the control of the Respondent (or in respect of which the Respondent is entitled to call for copies whether upon the payment of a fee or otherwise) or under the control of any of the companies listed in the organogram at Schedule I, the Respondent must:
(a) as soon as practicable procure the delivery up of such items or copies of such items to the Applicant's Solicitors (at the Applicant's cost);
(b) as soon as practicable procure that any third party, including without limitation suppliers of information technology services, provide all information and permissions necessary to assist the Independent Computer Specialist to make up to two electronic copies of the Listed Items; and
(c) as soon as practicable and in any event within 3 working days of service of this order supply the Applicant's Solicitors with signed letters of authority authorising and requiring any such third party to deliver up such items to the Applicant's Solicitors.
PROVISION OF INFORMATION
26. The Respondent and any Controller of Access must immediately give the following information to the Applicant's Solicitors (in the presence of the Supervising Solicitor so far as practicable) so far as he is aware and to the best of his knowledge and belief:
(a) where the Listed Items are located, whether situated on or off the Premises and whether within or outside the jurisdiction. Without any prejudice the generality of the foregoing, the Respondent and any Controller of Access (i) on which files, folders or other parts of the Electronic Data Storage Devices Listed Items are likely to be found and must to the best of their ability give such information as is necessary to enable Listed Items on the Electronic Data Storage Device to be located, accessed and copied; (ii) answer to the best of their information, knowledge and belief any question asked by the Supervising Solicitor or by the Independent Computer Specialist which in the opinion of the Supervising Solicitor is necessary for the efficient identifying, locating, accessing and copying of such Electronic Data Storage Devices or parts thereof which may contain Listed Items.
(b) the identity and contact details of any other person who may have the information referred to in paragraph 26(a) above and who may know of the keys, codes, pin numbers and other information referred to in paragraphs 19(b) and (c) above which are necessary to access the information in the Containers and Electronic Data Storage Devices.
Wrongful refusal to provide the information is contempt of court and may render the Respondent liable to be fined, to have his assets seized or to be imprisoned.
27. Within 7 working days after being served with this Order the Respondent must swear and serve an affidavit setting out the above information together with details of any change in circumstances between the information provided at the date of service of this Order and the date of the affidavit."
Analysis and conclusions
"all that is necessary to found jurisdiction [in such cases] is that the third party should have become mixed up in the transaction concerning which discovery is required and, of course, that the court should consider it 'just and convenient' to make an order. The court will naturally exercise with care a jurisdiction which invades the privacy of an innocent third party. But this is a matter to be taken into account in the exercise of the discretion. It does not go to the existence of the jurisdiction".
"unlikely that the jurisdiction could be engaged short of involvement in something which in itself and necessarily amounts to what Sir Thomas Bingham MR in Aiyela described as 'wilful evasion' by the judgment debtor. Non-satisfaction of a judgment debt is not wilful evasion of it."
a. There must be a wrong carried out or arguably carried out by the ultimate wrongdoer; the wrong may be a crime, tort, breach of contract, equitable wrong or contempt of court (see Orb arl v Fiddler [2016] EWHC 361 (Comm) [84] (Popplewell J.), quoted in Ramilos at [12]); the test is one of good arguable case, i.e. the same standard that applies to a freezing injunction (Ramilos at [23]);
b. There must be a need for an order to enable action to be brought against the ultimate wrongdoer or seek other legitimate redress for the wrongdoing. Necessity is not merely a matter of discretion, but a 'threshold condition'; the order is an exceptional one and it is to be exercised only where the court is satisfied that it is necessary to do so: see Ramilos at [24] and [25];
c. The person against whom the order is sought must (a) be mixed up in so as to have facilitated the wrong and (b) be able or likely to be able to provide the necessary information to enable the ultimate wrongdoer to be sued;
d. Where those conditions are satisfied the court "still has to exercise its discretion as to whether to grant the order sought, weighing relevant factors and deciding whether to order disclosure in the interests of [justice]": Ramilos at [27];
e. The jurisdiction "cannot be used for wide-ranging discovery or the gathering of evidence, but is strictly confined to necessary information": Ramilos at [46]; see also [61].
"If, indeed, the gentleman's residence had been concealed; if he was in hiding for some reason or other, and the solicitor had said, "I only know my client's residence because he has communicated it to me confidentially, as his solicitor, for the purpose of being advised by me, and he has not communicated it to the rest of the world", then the client's residence would have been a matter of professional confidence; but the mere statement by the solicitor, that he knows the residence only in consequence of his professional employment, is not sufficient."
Thus, the Ablyazov case is in my view rightly regarded in Hollander: Documentary Evidence, 13th edition, [17-21–17-24] as a case where a client's contact details had been provided confidentially in order to enable him to receive legal advice. I do not consider that this can or should be extended to all facts which become known to a lawyer in consequence of his professional employment.
H: Costs issues