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NPO jurisdiction excluded where evidence sought in support of possible claims in foreign proceedings. High Court also confirms test for “good arguable case” and scope of NPOs

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management - Norwich Pharmacal Orders

10-05-2017

 

Ramilos Trading Limited v Buyanovsky [2016] EWHC 3175 (Comm)

Facts of the case

– the Claimant (”C”) was a BVI company which sought a NPO against a British citizen resident in the UK (“D”) in relation to various claims, only one of which could be brought in the UK

– C’s draft NPO attached a six-page schedule containing 39 questions, many of which contained sub-questions 

– amongst others matters, the following matters fell for determination: (i) whether the NPO jurisdiction in relation to foreign proceedings is excluded by the statutory regime under the Evidence (Proceedings in Other Jurisdictions) Act 1975 the (“1975 Act”); (ii) whether C had a “good arguable” case in relation to the UK proceedings; and (iii) whether the scope of the application was within that permissible under the NPO jurisdiction

The decision

– in a lengthy and detailed judgement, Flaux J found against C on all three issues Question 1: relationship between the NPO jurisdiction and the 1975 Act 

– Flaux J concluded that the court did not have jurisdiction to grant a NPO in relation to foreign civil proceedings on the basis that: 

– the 1975 Act sets out the circumstances and procedures whereby the court will assist in obtaining evidence required for foreign proceedings

– there are substantial differences between this statutory regime and the NPO jurisdiction, including the requirement under the 1975 Act for a request for evidence to be made by a foreign court (as compared to it being made by the claimant/applicant in the case of a NPO) 

– accordingly, Parliament could not have intended the common law remedy to survive the introduction of the statutory scheme Question two: test for “good arguable case” 

– Flaux J confirmed that a “good arguable case” is one which is “more than barely capable of serious argument, and yet not necessarily one which the Judge believes to have a better than 50per cent chance of success”

– on the basis that C appeared to have sufficient information already to plead a case in relation to some of its claims, Flaux J found the application to be unnecessary and commented that C should get on with its case in whichever jurisdiction it could try its claim and await the normal process of disclosure Question 3: scope of NPOs 

– Flaux J noted that while the scope of NPOs had widened beyond just information as to the identity of the wrongdoer or information about them, NPOs remain an exceptional jurisdiction with a narrow scope. The court accordingly would not permit the jurisdiction to be used for wide-ranging disclosure such as that being sought by C

Analysis and practical advice 

– this judgment may not be the last word on the issue of the relationship between the NPO jurisdiction and the 1975 Act given Coulson’s J contrary decision in Shlaimoun v Mining Technologies International Inc [2011] EWHC 3278 (QB) and the basis on which Flaux J sought to distinguish it. The latter turned on:

– the respondent in Shlaimoun at the time not contemplating proceedings in a foreign jurisdiction, (however, Coulson J also commented that he could see no reason why a NPO application “should not be made in circumstances where there is the possibility that the ultimate proceedings would be commenced in a foreign jurisdiction”)

– the Crime (International Co-operation) Act 2003 being equivalent to the 1975 Act and accordingly the Court of Appeal’s decision in R (Omar) v Secretary of State for Foreign and Commonwealth Affairs [2013] EWCA Civ 188 (that there is a prohibition on the grant of a NPO in respect of foreign criminal proceedings) being applicable

– the case is also a reminder that NPO applications must be limited to information which is truly necessary, as opposed to a “fishing expedition” to establish whether or not the claimant has a good arguable case. Necessity remains a critcal threshold condition and, if not met, the application will be dismissed

– as with AB Bank Limited v Abu Dhabi Commercial Bank PJSC [2016] EWHC 2082 (see page 6) this case highlights the need for the respondent to carefully consider the scope of, and jurisdiction for, any NPO and whether it should be challenged