Norwich Pharmacal Orders: High Court refuses to grant NPO relief where foreign law was unlikely to recognise the order (England & Wales)

Key Takeaways

1. Ensure Enforceability: Before seeking a Norwich Pharmacal order (“NPO”) against a foreign respondent, ensure (if granted) it would be enforceable in their jurisdiction. The absence of an applicable enforcement treaty or precedent of recognition by local courts will likely undermine any such application. Applicants should first take local legal advice and consider alternatives such as action in the local jurisdiction or a Letter of Request under the Evidence (Proceedings In Other Jurisdictions) Act 1975
2. Anticipate Local Law Risks: English Courts are unlikely to grant NPOs that expose foreign respondents to liability under their local laws. Applicants should evaluate and address such risks pre-emptively in any NPO application
3. Prioritise Evidence Quality: Successful NPO applications require sufficient evidence showing the respondent’s involvement in the alleged wrongdoing. In this case, insufficient evidence connecting two of the three respondents led to the Court dismissing those particular applications. Applicants should ensure their case against each target respondent is specific and avoid conflating separate entities within a corporate group, even where one entity is strongly implicated in the alleged wrongdoing. Applicants should also bear in mind the risk of adverse costs, the quantum of which can quickly multiply if, as in this case, respondents in the same corporate group instruct separate legal teams

Facts of the Case

The claimants (“the Cs”) alleged that the defendants participated in two unlawful means conspiracies, causing Cs significant loss. One defendant, Mr Kuzokov, was alleged to have received a $20 million bribe in exchange for his involvement (the “Alleged Bribe”).

Cs further alleged that three financial services companies – a Liechtenstein entity (“LIECHTCO”), a DIFC entity (“DIFCCO”), and a UK entity (“UKCO”) (together, the “Rs”) – were mixed-up in facilitating the Alleged Bribe. Cs relied on email evidence that a representative of LIECHTCO made an enquiry to another financial institution to set up an account to receive the Alleged Bribe (the “Enquiry”).

Cs applied for NPOs against the Rs, seeking information and documents about the Alleged Bribe and the Enquiry. The Rs resisted, arguing that they were not mixed-up in the wrongdoing. LIECHTCO also contended that compliance with the NPO would breach Liechtenstein criminal and data protection laws. Cs suggested that LIECHTCO might resolve any such difficulties through local proceedings.

The Decision

The Court dismissed the NPO applications for the following reasons.

As regards LIECHTCO, the Court found (i) a good arguable case of legally recognised wrongdoing involving the Alleged Bribe, (ii) sufficient evidence that LIECHTCO was mixed-up in the wrongdoing so as to have facilitated it through the Enquiry, and (iii) it could not rule out the possibility that LIECHTCO possessed relevant information or documents, as it had not explained what searches it had conducted to identify documents in its possession.

However, the Court declined to grant the NPO, as enforceability concerns meant it was not in the overall interests of justice to make the order. Specifically:

• There was no applicable enforcement treaty between the UK and Liechtenstein;
• Expert evidence strongly suggested that compliance with the NPO would contravene Liechtenstein law, exposing LIECHTCO to criminal liability; and
• Cs’ suggestion that LIECHTCO could resolve legal difficulties through local proceedings was speculative, unsupported by case law showing recognition of an NPO by the Liechtenstein courts, and would place an undue burden on LIECHTCO. This approach, or making a conditional order, was inconsistent with the purpose of NPOs, which is to provide swift, effective remedies—not contingent or speculative outcomes dependent on foreign litigation.

As regards DIFCCO and UKCO, (i) there was insufficient evidence that they were mixed-up in the alleged wrongdoing (and positive evidence to the contrary), and (ii) there was no serious issue to be tried as regards DIFCCO, which did not exist at the time of the Enquiry and was structurally and operationally independent from other entities within the Rs’ group.