Allied Arab Bank Ltd v. Taj E1 Arefin Hjjar and Others
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1. This is an application by the Plaintiff Allied Arab Bank Ltd. pursuant to its summons dated 30 May 1987. The summons invokes the inherent jurisdiction of the Court. In terms, the application is deceptively simple. It seeks to extend the scope of an order made on 13 February 1987 by Mr. Justice Mortimer, regarding the use of documents by the Plaintiff in what has been described as parallel proceedings in England. The documents are identified in the summons as "all documents obtained in consequ
Cited by 8 cases
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HCCL000009B/1987
IN THE SUPREME COURT OF HONG KONG HIGH COURT COMMERCIAL LIST ________________ BETWEEN :
Coram: Deputy Judge Litton Q.C. in Chambers Date of Hearing: 15th & 16th June 1987 Date of Delivery of Decision: 17th June, 1987 __________ DECISION __________ 1. This is an application by the Plaintiff Allied Arab Bank Ltd. pursuant to its summons dated 30 May 1987. The summons invokes the inherent jurisdiction of the Court. In terms, the application is deceptively simple. It seeks to extend the scope of an order made on 13 February 1987 by Mr. Justice Mortimer, regarding the use of documents by the Plaintiff in what has been described as parallel proceedings in England. The documents are identified in the summons as "all documents obtained in consequence of orders made in this action". The application is supported by an affidavit of Mr. Stokes, solicitor for the Plaintiff, the relevant paragraphs of which are 13 to 17. 2. Paragraph 14 says as follows : "The English proceedings have now reached a stage at which it is appropriate and necessary for the constitution of the actions to be changed. Both actions are brought on almost identical grounds, and so it is appropriate that they should be consolidated. For the reasons explained above, an application is to made to join Barclays to the consolidated English action as Plaintiffs." 3. What is apparently invoked in the application is the power of the Court to, as it were, fine tune an existing Order - that of the 13 February 1987 - so as to adjust the Hong Kong Order to the realities of the situation in England as far as the English litigation is concerned. The problem arises in this way. In the Order of the 13 February 1987, the use by the Plaintiffs of the documents is in these terms : "for the purpose of action no. 1987 A no. 114 in the High Court of Justice in England as presently constituted". And likewise, for the purposes of the Plaintiffs' action against Mrs. Fails Hajjar, as then constituted. If additional parties are to be added to the English proceedings, both as Plaintiffs and as Defendants, then plainly the Order of 13 February 1987 would cease have effect, the constitution of the English actions having in the meanwhile been changed. 4. The reasons for adding new Plaintiffs and new Defendants, are explained in Mr. Stokes' affidavit. As regards the new Defendants, he has put before the Court a considerable body of evidence to the effect that it is necessary and desirable that Mr. Shukri, the former Managing Director and Chief Executive of the bank, should be joined. He also deposes in paragraph 15 of his affidavit to the fact that "certain companies controlled by him" should also be added to the action as Defendants. As far as additional Plaintiffs are concerned, this arises because the debts which constitute one of the two main causes of action in the English proceedings have been assigned to Barclays Bank Plc, and a gentleman called Sheikh Adham. This apparently took place in December of 1984. My first reaction to the application was, "Why ever not?" I was inclined at first to regard it as a purely procedural and technical matter. If Mr. Justice Mortimer intended by his Order of 13 February 1987 that the prosecution of the Plaintiffs' case in England should be facilitated by the use of documents obtained by orders made in this Court, why should obstacles be now put in the Plaintiff's pray, for purely technical reasons, when the English actions are to be differently constituted? 5. However, after hearing Mr. Lindsay Q.C. counsel. for the 3rd to the 7th Defendants, it has become clear to me that the matter is by no means so simple, and that possibly fundamental questions covering the use of documents obtained by the execution of interlocutory orders, such use being outside the jurisdiction of the Court, are involved. 6. The documents covered by the Order are "all documents obtained in consequence of orders made in this action". To find out what are "documents obtained in consequence of orders made in this action" it is necessary for me to look more closely at the history of this matter. And briefly, it is as follows:
By paragraph (3) of the ex parte order, two chartered accountants were appointed as receivers of the Defendants; the apparent intention of which, as far as I can judge, was to reinforce the Mareva Injunction, the receivers being appointed to assist in the location of assets, and to make the Mareva Injunction effective. Paragraph (4) of the ex parte order then requires the Defendants to give information to the receivers concerning "the nature of all the assets and effects" of these Defendants, and goes on to require the Defendants to permit the receivers not only to inspect documents and papers, and take copies, but also requires the Defendants to deliver over to the receivers all such documents and papers. Now, it seems to me inconceivable that in making that ex parte order, Mr. Justice Sears ever intended that the Plaintiffs be given a procedural advantage in the litigation as regards discovery : the apparent purpose of the receivers' appointment being to assist in the execution of the Mareva injunction.
7. So much for the history of the matter. As I mentioned earlier, the present application before me invokes the inherent jurisdiction of the Court : by that, as I understand it, is meant jurisdiction reposing in the Court to control its own process, to see that there is no abuse. Now I note that I am not concerned in this application with controlling the use of documents within the jurisdiction of this Court, as to which the Court has ample power, and there is a considerable body of case law on the point, the loading authority being the case of Harman -v- The Home Office [1983] AC p. 280. But the principles enunciated in Harman -v- Home Office are not really directly in point here. I am concerned not with the use of documents inside the jurisdiction of this Court for the purposes of litigation in Hong Kong; I am concerned with the use of documents outside. 'And' as to this, no authority has in fact been cited, and counsel could only advance their arguments by analogy. 8. Now the Plaintiff says this. There is in fact precedent in this very case for the kind of order which they seek. They refer to the following :
9. Now the application dated 30 May 1987 at at first formulated extraordinarily wide. It sought leave to use the documents, notwithstanding that the constitution of the English actions be changed by "the addition and/or deletion of one or more Plaintiffs and/or Defendants and/or by consolidation with one or more other actions". But this has since been considerably refined. Last Friday Mr. Wads-worth Q.C. handed up to the Court a proposed order in which they have confined the addition of Plaintiffs to the actions as the addition of "Barclays Bank Plc and/or Sheikh Adham as Plaintiffs". 10. As regards the addition of Defendants, Mr. Wadsworth told me that the proposal was to add Mr. Shukri and two companies controlled by him : a Jersey company with the name Century, and another company called Century SA, and a gentleman called Stokes. This was further refined by Mr. Wong, junior counsel for the Plaintiff in presenting the arguments yesterday, when he confined the addition of further Defendants to three parties, namely Shukri, Century SA and Stokes. 11. The proposed order handed up by Mr. Wadsworth seeks leave to use for the purpose of the English proceedings the documents obtained in consequence of orders made in Hong Kong, notwithstanding the re-constitution of the English proceedings as I have outlined above, and then the proposed order goes on to say : "provided always that such material shall not be used otherwise than in accordance with the consent order of this court made by the Honourable Mr. Justice Mortimer on 13 February 1987". I confess to being slightly mystified by this proviso. I have searched in vain in the order of 13 February 1987 for some other restriction on use, and I have not been able to find any; other than, I suppose, the inherent jurisdiction of the Court to ensure that its process is not abused. 12. Now, the Defendants say this. The order of 13 February 1987, allowing the use of documents in the Action as then constituted was the outer limit of what they said they would not oppose. They initially did complain about the legality of both the obtaining of the documents and the use of information contained therein, and the properity of the receivers handing over the documents to the Plaintiffs' solicitors: this was of course in the context of the wider contest between the parties arising from the giving of the Mareva Injunction in the first place. However, says counsel for the Defendants, eventually what they agreed to, by the series of orders of 13 February 1987, was a "package deal". They were prepared to consent to the use by the Plaintiff bank of those documents, however their provenance, in the English proceedings "as presently constituted". That was the outer limit of what the Defendants were prepared to concede. And, they say, "as presently constituted", this meant that there was one Plaintiff only, Allied Arab Bank, and 51 Defendants. The action did not include the gentlemen named Sheikh Adham. The action did not include the former managing director of the bank, Mr. Shukri, nor any company allegedly controlled by him, and the action did not include the gentleman, Mr. Stokes, who apparently was a chief accountant employed in the UTC group. 13. These are formidable arguments. 14. It seems to me that in resolving this matter, I should look at the issue from first principles. Without burdening this judgment with the citation of copious authorities, the way I look at the matter is as follows:
15. Now, I ask myself this question. Having regard to all that has gone before in this particular litigation, is this a proper case for me to attempt a fundamental appraisal or perhaps re-appraisal of the principles of law, governing the use of documents obtained in interlocutory proceedings, and particularly the use of such documents outside the jurisdiction? Or should I approach this matter from the point of view of practical realities, and resolve the matter upon this more humdrum plane? 16. Mr. Wong rightly points out to me that I am not sitting on appeal against Mr. Justice Sears' ex parte order. And he urges this point also upon me: Whether it be right or wrong for the Court to have allowed any use of the documents obtained in the circumstances of this case, in fact, as Mr. Wong says, the Defendants have virtually consented to such use, since they put up no opposition to the second order of 13 February 1987. In these circumstances, he asked, what logical reason is there for not extending the scope of the order, so that in the light of the realities of the situation in England, the documents can continue to be used? As far as the debt claim is concerned, Mr. Wong argues, there has, on the evidence before me, in fact been an assignment. Is it not right that the assignee or assignees be joined as Plaintiffs to prosecute the debt claim? As far as the conspiracy limb of the action is concerned, as Mr. Wong rightly points out, there is considerable weight of evidence before me to suggest that Mr. Shuhri was a conspirator; at least in the early stages of the conspiracy, to obtain money and banking facilities from the Plaintiff bank by bribes. And as to the proposed Defendant Stokes, there is also evidence to link him to a conspiracy to defraud. 17. I find considerable force in Mr. Wong's submissions. On the other hand, I have to bear in mind that as far as the English proceedings are concerned, the 3rd to the 7th Defendants are not involved in any debt claim. So that, for example, in ordinary discovery under Order 24, as far as the issues between the Plaintiff bank and the Defendants D3 to D7 are concerned, there would be no "matter in question" in terms of Order 24 between the bank and these Defendants in relation to the debt claim. So, one could rhetorically ask, why should the Plaintiff have possession of documents which might advance their debt claim documents belonging to the Defendants - when in the course of that litigation in the normal event the Plaintiff would not have been entitled to discovery of such documents? 18. Now as far as the conspiracy limb of the Plaintiffs' case is concerned, D3 to D7 are not involved as alleged conspirators With Shukri or with Stokes. At least, that is not as I understand the position to be. So it is quite possible that even in relation to the conspiracy averments, ordinary discovery under Order 24 would not have required D3 to D7 to make disclosures of the documents covered by the present application Mr. Lindsay cites to me a passage in the judgment of Lord Roskill in Home Office -v- Harman at page 326 in which Lord Roskill says "I find it difficult to think of circumstances in which the Court might be willing to give such leave, that is to say, leave to use documents in favour of a stranger and against the wishes of the owner of the documents". Here, Mr. Lindsay says, is the very instance where a Plaintiff is seeking leave to use documents in favour of a stranger, such as, for example, Sheikh Adham, and against the wishes of the owner of the documents. 19. However, much of the points which have troubled me could he said to have been apparent at the time when the order of 13 February 1987 was made. Moreover, the same points would have emerged at the time when the order of 27 April 1987 was made concerning the use of the same documents in the U.S. proceedings against strangers including Flagstone Establishment. 20. Now, if I did not accede to the Plaintiffs' application here, the Plaintiffs would be put in a very awkward position. There is the present restriction on the use of documents restricting them to such use in the English actions "as presently constituted". If I did not accede to the Plaintiffs' application, it would mean either:
21. Now I see no reason in justice to put the Plaintiff bank in that position, unless the principles for which Mr. Lindsay argues were in terms very strong if not absolute. The question that troubles me in this. Is it too late in this present litigation to re-examine the matter from the point of view of principles'. I confess to having entertained the gravest misgivings as to whether it is right from the point of view of fundamental principles to give the Plaintiffs any greater latitude as to the use of the documents, having regard to the way in which the documents got into the Plaintiffs' hands in the first place. 22. Further, a number of fundamental points have occurred to me. Firstly, what is the basis of my jurisdiction? Is it some notion of comity between Courts of different jurisdictions, so that the Courts would assist each other in their respective due processes? Now this was not so argued. (2) Is the extension of the order of 13 February 1987 for the use of documents in the reconstituted English proceedings based upon the case of Norwich Pharmacal? Now I can understand that when Mr. Justice Hirst gave leave on 16 January 1987 for the documents obtained in the English proceedings to be use in Hong Kong, it might have been based upon the principles stated in the Norwich Pharmacal case, to enable the Plaintiff to vindicate its legal rights against third party wrongdoers in Hong Kong. As I understand it, the Norwich Pharmacal case is not necessarily confined to wrongs within the jurisdiction. 23. But the basis for Mr. Justice Hirst's order of 16 January has not been explained. And this is not an avenue I can explore : if the Norwich Pharmacal principle be the juridical plank upon which the application rests, then it can not really help the Plaintiff bank here because last week I ordered that the Norwich Pharmacal cause of action be struck out, and any relief based thereon be dismissed.
24. Weighing the matter up the tray I have done, as to whether I should simply look at the practicalities of the litigation before me, or to re-examine the matter from first principles, I have finally come to the view that I should look at the matter from the point of view of practicalities. 25. I feel that it is not appropriate in the present state of this litigation for me to re-examine the vires of the court afresh; it would be wiser to learn it to another Court hereafter to examine the scope and propriety of an order such as that of 13 February 1987. 26. In my judgment any inroad which has been made into the confidentiality of the documents and information contained therein, which might be harmful to the Defendants, has already been made. By the order of 13 February 1987, the Plaintiff is entitled to use in the English proceedings the documents obtained. If they have used the documents, or were to use the documents hereafter, then presumably those documents would be discoverable in the litigation to all 46 other Defendants. 27. In these circumstances, it seems to me a little unrealistic for the Defendants to put forward any case based upon breach of confidentiality. 28. Weighing up the matter as best I can, and considering the practicalities of the case, I have come to the view that it would be wrong for me to refuse the application, the effect of which would be to hobble the English proceedings, and to force the Plaintiff to present its case in a way which the Plaintiff upon advice does not wish to present. I confess that I come to this conclusion with some regrets, because I do entertain considerable doubts as to whether from the point of view of principles, it is right to make the order sought. 29. Mr. Wong yesterday has confined his application still further, by defining what he means by "all documents obtained in consequence of orders made" by saying that this relates to pages 1 - 302 of a report, (or rather, by way of annexes to a report), made by the receivers in these proceedings. So the order I make is as follows :
30. Then I would add the documents referred to above, being the documents numbered pages 1 to 302 annexed to the report of the receivers. 31. As regards the proviso, whilst I have expressed doubt as to its meaning, since Mr. Lindsay in fact said that he would have pressed for its retention had I proposed to have it deleted, it is I think in the circumstances right that the proviso should be part of the order as well. Since giving judgment, Mr. Wong for the Plaintiff tells me that he had made an error as regards the name of the Societ'e Anonyme which I had been told was Century SA. He now tells me that in fact the name should be Sanctuary SA. It is obviously right that the judgment should reflect the correct name of the company allegedly controlled by Shukri. 32. Mr. Wong asked me to add a further company, and that is Sanctuary Limited. This, as I understand it is a Jersey company which had been referred to by Mr. Wadsworth when he handed up the proposed order on Friday. That being the position, and whilst the application which Mr. Wong makes at the conclusion. of the judgment simply underlines the somewhat unsatisfactory way in which the matter comes before me, it would be consistent with the judgment I have just given that the addition of the company Sanctuary Ltd. should be allowed to be made. 33. Accordingly the small (d) of the Order will then read : the addition thereto of further Defendants namely : Shukri, Sanctuary Ltd, Sanctuary SA and Stokes. 34. I will now hear the parties as to costs. 35. As to the costs of this application, I had in the course of argument already commented on the somewhat ambulatory nature of this application which seems to have shifted ground in the course of presentation and argument. And indeed it was not until after I gave judgment just now that the insertion of yet another Defendant, Sanctuary Ltd., was sought, although this was foreshadowed by what Mr. Wadsworth said last Friday. Having regard to all the circumstances, and accepting there is an element of rough justice in any order for costs which I make, the order that I make is that there should be no order as to costs on this application, including the hearing. 36. Mr. Lindsay for the Defendant firstly seeks leave to appeal, if this be necessary and secondly for a stay pending appeal. Having heard the parties on these matters the order I make is as follows:
Representation: Mr. James Wadsworth Q.C. & Mr. Ronny Wong instructed by Messrs. Richard Butler for the Plaintiff. Mr. John Lindsay Q.C. & Mr. Winston Poon instructed by Messrs. McKenna & Co. for 3rd to 7th Defendant. |
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