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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> NML Capital Ltd v Chapman Freeborn Holdings Ltd & Ors  EWCA Civ 589 (23 May 2013)
Cite as:  EWCA Civ 589,  1 CLC 968
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
MR JUSTICE COOKE
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE TOMLINSON
LORD JUSTICE FLOYD
| NML CAPITAL LIMITED
|- and -
|CHAPMAN FREEBORN HOLDINGS LTD
CHAPMAN FREEBORN INTERNATIONAL LIMTED
CHAPMAN FREEBORN AIRCHARTERING LIMITED
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Peter De Verneuil Smith (instructed by Taylor Wessing LLP) for the Respondent
Hearing dates : 7th May 2013
Crown Copyright ©
Lord Justice TOMLINSON :
"be the first case in which a bona fide company doing business with a judgment debtor would find itself on the receiving end of a Norwich Pharmacal order merely to assist a judgment creditor in enforcing his or her judgment."
"The appellant ("NML") is a Cayman Island Company. It is an affiliate of a New York based hedge fund of a type sometimes described as a "vulture fund". Vulture funds feed on the debts of sovereign states that are in acute financial difficulty by purchasing sovereign debt at a discount to face value and then seeking to enforce it. This appeal relates to bonds issued by the Republic of Argentina in respect of which, together with all its other debt, Argentina declared a moratorium in December 2001. Between June 2001 and September 2003 affiliates of NML purchased, at a little over half their face value, bonds with a principal value of US$ 172,153,000 ("the bonds"). On 11 May 2006, NML, as beneficial owner, obtained summary judgment on the bonds for a total, including interest, of US$ 284,184,632.30, in a Federal Court in New York. NML brought a common law action on that judgment in this jurisdiction and succeeded before Blair J in the Commercial Court. That judgment was reversed by the Court of Appeal, which held that Argentina is protected by state immunity…"
i) failed to take into account the strong public policy in enforcing judgments;
ii) wrongly took into account the commercial interests of Chapman Freeborn, which are irrelevant, alternatively attributed greater weight to these interests than either the evidence or an objective evaluation justified;
iii) wrongly placed on NML a burden to show "a clear possibility" of there being substantial funds in the relevant bank account against which it could levy execution;
iv) erred in approaching the matter on the basis that there might not be funds, or substantial funds, in the bank account; and
v) erred in approaching the matter on the basis that NML's interest was limited to identifying funds in the specific account from which Chapman Freeborn had been or would be paid.
i) the Norwich Pharmacal jurisdiction does not apply to the enforcement of judgements; alternatively
ii) Chapman Freeborn was not mixed up in any wrongdoing so as to give rise to the availability of Norwich Pharmacal relief.
"[the authorities]…seem to me to point to a very reasonable principle that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrongdoing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should cooperate in righting the wrong if he unwittingly facilitated its perpetration".
"35. Although this requirement of involvement or participation on the part of the party from whom discovery is sought is not a stringent requirement, it is still a significant requirement. It distinguishes that party from a mere onlooker or witness. The need for involvement (the reference to participation can be dispensed with because it adds nothing to the requirement of involvement) is a significant requirement because it ensures that the mere onlooker cannot be subjected to the requirement to give disclosure. Such a requirement is an intrusion on the third party to the wrongdoing and the need for involvement provides justification for this intrusion."
"The only connection with the relevant transaction was as a banker to the company and author of a letter giving information to the company at its request which was both factual and accurate."
"The third party has to have some connection with the circumstances of the wrong which enables the purpose of the wrongdoing to be furthered."
Lord Justice Floyd
Lord Justice Jackson