England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JUSTICE DAVID STEEL)

		Royal Courts of Justice The Strand London
		Wednesday 26 June 2002

Wednesday 26 June 2002

1. THE LORD CHIEF JUSTICE: I will ask Lord Justice Waller to give the first judgment.
2. LORD JUSTICE WALLER: The point which arises on this appeal is not unimportant in the context of freezing orders (Mareva injunctions as they used be called). A worldwide freezing order has been made against the first and fourth defendants by Moore-Bick J in the Commercial Court in aid of proceedings which had been taken against the defendants in the United States. As part of the order made the defendants were ordered to provide information, confirmed at a later date by sworn affidavits, of all their assets worldwide to the solicitors for the claimants.
3. The defendants are, however, making an application in the Commercial Court to have the worldwide order set aside. They say that they have a strong case for setting aside the orders. The question is whether (although they do not seek a suspension of the freezing order itself in the meanwhile) there should be a suspension or stay of the requirement to provide information and to provide the sworn affidavits to the solicitors for the claimants. David Steel J refused the first defendant a stay on the grounds that, prima facie, or in principle, disclosure orders were part and parcel of the freezing order jurisdiction and on the basis that the circumstances relied on by the first defendant did not take the case out of the norm.
4. The fourth defendant applied to Toulson J for a stay in her case. Toulson J refused a stay in consequence of the refusal by David Steel J. Both judges refused permission to appeal, but Rix LJ granted permission and ordered expedition. He also ordered that in the meanwhile the defendants should prepare letters and deliver the same to their own solicitors pending this appeal. That has been done, although they have not prepared letters; they have prepared schedules. He also ordered that there should be affidavits sworn and delivered to the defendants' solicitors. That has not been done, but those representing the defendants have indicated that they would be prepared to do that. These are the appeals from both judgments.
5. I should spell out the chronology and certain of the facts in a little more detail. On 28 January 2002, the claimants, Motorola and Nokia, commenced proceedings against all four defendants in the United States District Court Southern District. The four defendants are members of the same family: the first defendant, his father, his brother, and the fourth defendant, his sister. They were shareholders in a company named "Telsim". The allegation, in broad terms, is that the defendants induced Motorola to lend very substantial sums of money to Telsim with the intention that those sums should never be repaid. The main point relied on in support of the allegation of fraud is that it is alleged that in relation to the loan certain shares were pledged as security. It is said that as part of the fraud the value of the shares was diluted, reducing the shares pledged from 66% to 22%. The claim is in excess of US $2 billion.
6. The claimants sought injunctive relief in the United States. That was limited to assets in the United States by virtue of Supreme Court authority in 1999. There is no jurisdiction to grant worldwide relief so far as the United States court is concerned.
7. The first action in the courts of this country was by Motorola alone against the first defendant alone. The first defendant is neither a citizen nor a resident on the United Kingdom. However, he has a house in London and certain assets in the United Kingdom including, as I understand it, the contents of the house and a motor car.
8. On 30 January 2002 (within a short time of the United States proceedings starting), Motorola applied for a freezing order in relation to the first defendant's assets within the jurisdiction of the English court, that is to say a domestic freezing order. The application was made in support of the United State action relying on section 25 of the Civil Jurisdiction and Judgments Act 1982 and CPR Part 25.4. The application came on ex parte before Cresswell J. We have a transcript of that hearing. It was made clear as a result of an interchange between Cresswell J and Mr Cran QC, who represented Motorola on that occasion and has represented them in this court, that the release being sought was limited to the United Kingdom, but a reservation was made equally clear that it was possible that Motorola might apply to the English court for worldwide relief.
9. Cresswell J made an order. It included an order to disclose at once assets in England and a requirement to confirm that information by affidavit within 14 days. That disclosure was complied with, although the first defendant did apply to set aside that order on the grounds of non-disclosure.
10. On the first return date in relation to that application (15 February 2002) the order was continued, and the return date on which the application to set the order aside would be argued was initially set as 26 April 2002. But the matter was adjourned while certain proceedings were taking place in the United States action. The matter was ultimately adjourned until 17 July 2002, which is the date on which the application with which this court is concerned is due to be heard.
11. In the United States there was a six-day hearing with witnesses called to consider whether the United States freezing orders should be continued and whether other orders should be made. The defendants could have given evidence in those proceedings, but chose not to do so. That resulted in the decision in favour of Nokia and Motorola. The judge delivered a written judgment on 21 May 2002 resoundingly in favour of Nokia and Motorola, the first paragraph of which reads:

"When business deals go sour, both sides are apt to cry 'fraud' and courts know better than to take such claims at face value. But here we have the unusual case where every preliminary indication is that the defendants, behind a facade of legitimacy, engaged in repeated acts of fraud and chicanery, and thereby perpetrated, and continue to perpetrate, a rather massive swindle."

Part of the order made by the judge on that day was that certain shares were to be deposited with the court in order to restore the security which the claimants alleged had been destroyed. In argument before him on that occasion it was said that there were difficulties in putting up the shares as security, having regard to the requirement of Turkish ownership and the possibility that if Turkish ownership fell below 50%, there was a risk of a loss of licence. Indeed expect evidence appears to have been given on that aspect. But despite that argument, the judge made the order. It is clear from the judgment that he was dismissive of that point. It seems that, in addition to such argument as may have been put to the judge on that day, certain proceedings may have been taken in Turkey by distributors seeking injunctions to prevent these shares being lodged. Mr Cran QC, on behalf of the Motorola, suggests that the same answer as was given by the judge in the United States can be given to that application, that is to say that in reality there is no basis on which the ownerships of the shares would be destroyed by putting them up as security and no basis on which there is a risk to any licence. This application in Turkey looks like a contrived application to make it more difficult for the defendants to put up the security ordered by the United States court.

12. Up until this point Motorola and Nokia had not applied for worldwide relief in the United Kingdom. Something is made of that point by Mr Strauss QC for the first defendant. However, Mr Cran submits that it is quite clear that it is only in very exceptional circumstances that worldwide relief will be given under section 25 in circumstances where the potential defendants are not resident or domiciled in the United Kingdom, and that it is only in the context of the very strong findings by the United States judge, and, in addition, the fact that there was a failure to comply with the order the judge made for the deposit of shares, which had expired on 20 May, that Motorola decided that they would make an application for worldwide relief. On 30 May 2002, without notice to the solicitors for the first defendant, Motorola applied to Moore-Bick J for worldwide relief in relation to all four defendants. This application was supported by the evidence previously relied on, but in addition by reference to the reasons given by the United States court and the fact that the shares had not been deposited.
13. We have a transcript of the hearing before Moore-Bick J. He made that worldwide order, a copy of which appears at Tab 14 of the bundle. It contained an order requiring the respondent, within ten working days of the service of the order, and to the best of his ability, to inform the applicant's solicitors of all his assets worldwide exceeding £10,000 in value whether in his own name or not and whether solely or jointly owned, giving the value, location and details of all such assets. It was further ordered that within 21 days the respondent would swear and serve on the applicant's solicitors an affidavit setting out the above information. Various undertakings were given in the now usual form, for example that the applicant, Motorola, would not without the permission of the court seek to enforce the order in any country outside England and Wales or seek an order of a similar nature, including orders conferring a charge or other security against the respondent or the respondent's assets. It also contained a term which would have allowed each of the defendants to put up security in the very substantial sum of US $200 million if they wished to be released from the freezing order.
14. Mr Strauss QC, who has appeared for the first defendant, has emphasised the unusual nature of that order. It is an order which the United States court had no jurisdiction to make but, correctly, he does not rely on that point alone since he has shown us Court of Appeal authorities which have made clear that it is not a barrier to the English court granting relief that the court which it is seeking to assist does not have jurisdiction to grant the worldwide order. In particular that is made clear in the judgment of Millett LJ in Credit Suisse Fides Trust SA v Cuoghi [1998] QB 818, 827:

"I recognise that an ancillary jurisdiction ought to be exercised with caution, and that care should be taken not to make orders which conflict with those of the court seised of the substantive proceedings. But I do not accept that interim relief should be limited to that which would be available in the court trying the substantive dispute; or that by going further we would be seeking to remedy defects in the laws of other countries. The principle which underlies article 24 is that each contracting state should be willing to assist the courts of another contracting state by providing such interim relief as would be available if its own courts were seised of the substantive proceedings: see Alltrans Inc v Interdom Holdings Ltd [1991] 4 All ER 458, 468, per Leggatt LJ. By going further than the Swiss courts would be prepared to go in relation to a defendant resident outside Switzerland, we would not be seeking to remedy any perceived deficiency in Swiss law, but rather to supplement the jurisdiction of the Swiss courts in accordance with article 24 and principles which are internationally accepted."

15. Mr Strauss also took us to other authorities. He took us, for example, to a decision of the European Court in Van Uden Maritime BV (trading as Van Uden Africa Line) v Kommanditgesellschaft in Firma Deco-Line [1999] 2 WLR 1181. His supplemental skeleton argument indicates that he relies on that decision as being one which related to article 24 of the Brussels Convention. It was that article which was given effect to by section 25 of the Civil Jurisdiction Judgments Act 1992. He relies on a dictum in the judgment of that Court where they asserted:

".... that the granting of provisional or protective measures on the basis of article 24 is conditional on, inter alia, the existence of a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the contracting state of the court before which those measures are sought."

16. On the application to set aside he will be seeking to submit, first, that, even when the English authorities are followed, it is very rare that a worldwide freezing and disclosure order would be made against someone who is not a citizen of, not resident in and not domiciled in the United Kingdom. Indeed he will submit that if one follows that dictum of the European Court, one should not do so unless there is a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the contracting state where those measures are being sought.
17. Mr Cran responds by saying that the European element (which was the subject of a previous decision of the European Court) was a matter which was considered in the Court of Appeal when it considered the section 25 jurisdiction. In particular it was considered in Republic of Haiti v Duvalier [1990] 1 QB 203. That was a case in which the English court did exercise the jurisdiction under section 25, granting worldwide Mareva relief against a defendant who was neither resident, domiciled, nor a citizen of the United Kingdom, and in which any real connecting link, Mr Cran submits, was absent.
18. On 10 June 2002 the first defendant issued his application to discharge the worldwide order, and applied for a stay of the disclosure aspect. The argument to support the application for a stay of the disclosure aspect, was in essence that there would be a strong case to set aside the worldwide order by reference to the authorities to which I have referred, and that in the meanwhile it would not be right that the mandatory part of that Mareva relief, ie the order that there should be disclosure, should be enforced.
19. That was obviously an urgent application since time for compliance with the disclosure obligation was one which was already running, it being an obligation to disclose within ten days of the order being served. The application came on swiftly before David Steel J in the Commercial Court.
20. The grounds and the main points taken by Mr Strauss are neatly summarised in paragraph 9 of the written submissions made to David Steel J:

"Put shortly, D1's grounds for seeking a stay of the disclosure provisions are:

(1) Unless a stay is granted, the claimants will obtain the benefit of this part of the Order (arguably the most important part) before the merits of their application have been adjudicated upon, information once given cannot be retrieved.

(2) This would only be justifiable in circumstances in which the stay would cause the claimants extreme prejudice, exceeding the prejudice which would be caused to D1 by the refusal of the stay, but in fact no prejudice at all would be caused by a stay.

(3) The grounds on which continuation of the Order is opposed are substantial, and D1's application to discharge it has a reasonable prospect of success."

21. The first ground, that any damage would be done by the order having been complied with before the application to set aside could be heard (as Mr Strauss put it), spoke for itself. It is right that if there has to be compliance with that order, nothing at the end of the day can put that right. As has been said in argument in this court, "the genie cannot be put back in the bottle".
22. As to the second aspect, Mr Strauss stressed that Motorola had waited over a year before commencing proceedings; they had then made their application for a freezing order limited to a domestic order on 30 January; it then took until 30 May to apply for a worldwide order. He suggested that all that delay would indicate that if the defendants had not already dissipated or hidden their assets, they were unlikely to do so now; alternatively, it was such a period that if they were intent on dissipating their assets they would already have done so, and thus there was no real danger or damage to the claimants if the disclosure aspect of the freezing order was not enforced for a limited period of time; and ultimately, in any event, the application to set aside the worldwide order stood a very real prospect of success (indeed a strong prospect of success) and thus there should be a suspension.
23. The responses from Motorola were equally predictable. They said that there was a strong suspicion that there would be dissipation of the assets. They said it was important that if there was a freezing order, there was a disclosure order in place otherwise the disclosure order is toothless, and in any event the damage was not so serious if the assets of the first defendant were disclosed and were not as great as the damage to Motorola would be if they were not entitled to have their order.
24. The main thrust of the judge's reasons for not acceding to the application for a stay appear at page 5 of the transcript of the judgment:

"I cannot accede to those submissions. It is notable that it is accepted in principle that the freezing order itself should stand pending the outcome of the inter partes hearing and the requirement for disclosure is a standard and, in my judgment, important part of the order. It is prima facie inappropriate to carve the order up in a way which the Defendants seek to invite the court to do, so as to allow what might be described as the restraints to stand but the mandatory requirements for disclosure to be put on hold. In any event the submission that the passage of time since the application for a domestic order was first made in January would have allowed the Defendant, if so disposed, to dissipate or hide his assets seems to me to fortify the proposition that the Claimants may sustain irreparable harm if matters are allowed to go into limbo pending a judgment on the inter partes hearing or indeed judgment on any appeal from that hearing. Whether or not he is in fact minded to obey the existing order for disclosure, from the court's perspective it must assume that there will be a proper, full and frank response by the first Defendant and that if, given what the New York judge has concluded about the propensity of the Defendant and his colleagues, then it may well be that funds have been transferred, dissipated, hidden or otherwise rendered more difficult to trace. In my judgment the sooner the matter is put clear on paper the better."

25. The application by the first defendant was followed by an application on behalf of the fourth defendant. That was made on 14 June 2002. She also applied to discharge the worldwide injunction but applied in the meanwhile for a stay of the disclosure aspect. Her situation was different from that of the first defendant. She is resident in the United Kingdom. In large measure the basis of her application appears to be that on the merits she should not have had the injunction granted against her. Her application for a stay came before Toulson J on 17 June 2002. He dismissed it on the basis that David Steel J had refused and therefore he was going to refuse. Thus, although we are dealing with appeals from two judges, the reality is that this is an appeal from David Steel J. If the exercise of his discretion were to be overturned, then the discretion of Toulson J would likewise suffer.
26. I emphasise that we are dealing with the exercise of discretion of a judge in an area in which that judge (as all judges of the Commercial Court) has a great deal of experience. I remind myself of the well-known words of Lord Fraser in G v G [1985] 1 WLR 647, 652:

"Certainly it would not be useful to inquire whether different shades of meaning are intended to be conveyed by words such as 'blatant error' used by the resident in the present case, and words such as 'clearly wrong', 'plainly wrong' or simply 'wrong' used by other judges in other cases. All these various expressions were used in order to emphasise the point that the appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution which is different from and alternative imperfect solution which the Court of Appal might or would have adopted, but has exceeded the generous ambit within with a reasonable disagreement is possible."

27. Mr Strauss attacks the basis on which David Steel J directed himself. He suggests that David Steel J was in essence saying that in all cases where a Mareva injunction has been granted and in which a disclosure order has been made, then if pending the hearing of an application to set the whole order aside, the whole order is not suspended, there is no basis on which there should be a suspension simply of the disclosure order. In my view that is not a proper reading of David Steel J's decision. He used the words "prima facie" deliberately because he did appreciate that there might be circumstances in which a disclosure order should be suspended while the setting aside of the full freezing order was being considered. But the fact that the making of a disclosure order is a very important part of the Mareva jurisdiction is made clear in a number of authorities, the most helpful of which so far as this case is concerned is Grupo Torras SA v Sheikh Fahad Mohammed Al-Sabah (CA, 16.2.94). It so happened that that was an appeal from a decision of mine in which I had exercised a discretion in very similar circumstances to those that existed in this case. Indeed it was a case in which I sought at one stage to see whether it was not possible to have an intermediate protection so far as the claimants were concerned by ordering the affidavit or the information simply to be put into the hands of one solicitor so that it would not get into the hands of the claimants, but, having made such an order, I was persuaded that that order would not work. I had to consider whether on that basis the disclosure aspect of the order should be suspended or whether the disclosure order should simply continue. I ruled in that case that the disclosure order should continue. That decision was upheld by the Court of Appeal. There are helpful dicta of Steyn LJ when he identified the submissions of Mr Andrew Smith QC (as he then was), who appeared for the defendant, and who attacked the basis on which I had directed myself. At page 3 of the judgment he said:

"Mr Andrew Smith QC who appeared for Sheik Fahad, submits that Waller J misdirected himself in two respects. First, he submits that the judge misdirected himself as to the nature of his discretion. He says in fact that the discretion is a narrow one. He put it this way: Where the court, as in this case, can see that there is, or is likely to be, a serious challenge to its jurisdiction it should, in normal circumstances, refuse any sort of relief which cannot be undone if the court has no jurisdiction. It should only grant such relief if there are exceptional circumstances justifying it. He says the basic error made by Waller J was to require disclosure in the absence of such circumstances. I am not sure what the phrase 'exceptional circumstances' in this submission means. After all, it is already the law that a worldwide Mareva to which a disclosure Order is ancillary should only rarely be made and only if there are exceptional circumstances. Presumably, the submission means that something more is required to obtain a disclosure order if there is a challenge to jurisdiction.

....

The consequences of accepting Mr Smith's submission must be considered. If the direction to make a disclosure order is as narrow as Mr Smith says the worldwide Mareva injunction will be [a] relatively toothless procedure in the fight against rampant transnational fraud. In many such cases, despite a cogent case of fraud, the connections of transactions with different countries will enable a defendant to raise jurisdictional challenges which may take months to resolve at first instance, many months to determine in the Court of Appeal and even longer to decide in the House of Lords. And there may be a reference to the European Court. During such a lengthy delay it would be impossible to 'police' the Mareva injunction, and that is the purpose of the disclosure order.

....

Despite Mr Smith's attractive and careful arguments, I consider that the power to order a disclosure order is not limited in the way he submits. When rarely and in exceptional cases a worldwide Mareva is granted, a disclosure order will usually follow. On the other hand, I would emphasise that a disclosure should only be made for a purpose for which the power exists, namely to 'police' the Mareva injunction. But when one bears in mind the exceptional nature of the remedy of a worldwide Mareva injunction, I do not find it at all surprising that Waller J said that such disclosure orders are commonly annexed to worldwide Mareva injunctions. In my view the judge did not misdirect himself in respect of the nature of his discretion."

28. Steyn LJ also recognised that undoubtedly there would be prejudice to the Sheikh in that case if he was forced to disclose his assets and ultimately managed to set aside the proceedings for want of jurisdiction, but Steyn LJ emphasised that that was not anywhere near as much prejudice as would be suffered if the claimant was unable to police the Mareva injunction for some time. The emphasis in that case, as has been the emphasise in this case by Mr Cran, is that whereas at first sight it looks as though the court in dealing with suspending the supply of this information for only a short period of time, that is until the hearing of the summons to set aside the freezing order on 17 July, the reality is that that decision is likely to be appealed to the Court of Appeal, and indeed it may well go to the House of Lords. The reality is that if it were suspended now, it would be suspended for a very great period of time.
29. In my view, in the light of the above citation from Steyn LJ the attack that David Steel J misdirected himself is unfounded. Furthermore, I do not think that this is a case in which we should interfere with the exercise of the discretion. The factors that weigh with me are these. First, although it is an invasion of privacy to force any party to disclose assets, a freezing order in normal circumstances simply cannot be effective without that disclosure. Once one has the situation which did exist in this case, which was that on 13 June it was accepted that the freezing order should continue, then prima facie David Steel J is right in saying that a disclosure provision would be the normal provision so that that freezing order can be properly policed and be effective.
30. The second factor that weighs with me is that it may be that the defendants have an arguable case for setting aside the worldwide order, but Motorola clearly have a strong case that a fraud has been committed -- a strong case that dissipation is a serious risk. Furthermore, the defendants have done nothing to comply with the United States order to replaces the shares or their value. I for my part am quite unimpressed by the reasons for not replacing the shares. Furthermore, if the defendant wished to be free from this injunction he could have arranged for security to be given, but he has offered none. That security of course would be released if the injunction were set aside, but that simply has not happened.
31. I would dismiss the appeal from the judgment of David Steel J. It seems to me to follow that the appeal from the judgment of Toulson J should also be dismissed.
32. LORD JUSTICE SEDLEY: The application before David Steel J was heard on notice, for it was the defendant's application to modify an order obtained without notice by the claimant by staying the mandatory element requiring the disclosure of assets pending the application to discharge the entire order. David Steel J's approach was to start from the premise that the mandatory disclosure element was a normal -- indeed an essential -- part of a freezing order. Finding no sufficient reason to uncouple them, he refused the application.
33. By this means it seems to me that the burden was placed on the defendant of drawing at least the immediate sting of an order which he is still waiting to contend ought never to have been made and which in the nature of things had been made against him without notice.
34. I do not think this is a correct approach. Although the application to vary the order had come before the judge on notice, what Hoffmann J (as he then was) said about orders made without notice in Re First Express Limited [1991] BCC 782, 785 still has a material bearing:

"I am firmly of the view that it was wrong for the application to be made ex parte. It is a basic principle of justice that an order should not be made against a party without giving him an opportunity to be heard. The only exception is when two conditions are satisfied. First, that giving him such an opportunity appears likely to cause injustice to the applicant, by reason either of the delay involved or the action which it appears likely that the respondent or others would take before the order can be made. Secondly, when the court is satisfied that any damage which the respondent may suffer through having to comply with the order is compensatable under the cross-undertaking or that the risk of uncompensatable loss is clearly outweighed by the risk of injustice to the applicant if the order is not made.

There is, I think, a tendency among applicants to think that a calculation of the balance of advantage and disadvantage in accordance with the second condition is sufficient to justify an ex parte order. In my view, this attitude should be discouraged. One does not reach any balancing of advantage and disadvantage unless the first condition has been satisfied. The principle audi alterem partem does not yield to a mere ultimate calculation. It can be displaced only by involving the overriding principle of justice which enables the court to act at once when it appears likely that otherwise injustice will be caused."

35. When an order made without notice comes back before a judge on notice and is challenged in part, a hybrid situation arises. The judge is not expected to re-enact the original without notice hearing. The reality is that both parties are now before him. But he ought not, it seems to me, to be asking himself whether, a freezing order having been made without notice, he ought now to stay its mandatory element. That approach fixes the defendant with the entire disadvantage of having been excluded, albeit for good reason, from the initial hearing. The fact, as in this case, that the defendant accepts for the present that the freezing order should remain effective and seeks to stay only the mandatory disclosure element cannot logically or fairly make his position worse in this regard. What the judge, in my view, should be asking himself is whether, now that he has both sides before him, this is a proper case for mandatory disclosure, given the imminence of an arguable challenge to the entire freezing order. That puts the burden back on the claimant, which is where it belongs. It may well require the court to give methodical consideration to the question of proportionality since, as the judge recognised, mandatory disclosure impinges on the respect owed by the court to an individual's private life. This process, I venture to think, is appropriate equally on a full application to discharge. It is not, in other words, for the defendant to displace an order made in his absence. It is for the claimant, now in the defendant's presence, to show that it ought to be continued.
36. David Steel J, in my respectful view, erred by taking the first rather than the second of the approaches which I have described. What the result should have been, had he taken what I consider to be the correct approach, is a tough question. But since Waller LJ and, as I understand it, the Lord Chief Justice both consider that David Steel J's approach was not flawed, his decision will stand. Whether I would have reached a different conclusion is of no consequence.
37. THE LORD CHIEF JUSTICE: I agree with the judgment of Waller LJ and would dismiss the appeal for the reasons which he gives. It is right, as Sedley LJ has pointed out, that in this case there was both a freezing order and a mandatory disclosure order. There will inevitably be situations where, on an application for a stay pending the outcome of an application for an order to be aside, one view may be taken with regard to the appropriateness of the freezing order remaining during the interim period, yet for a stay to be granted on the disclosure order. However, for the reasons indicated by Waller LJ in his judgment, the disclosure order, where there is a freezing order, is intimately involved in the effectiveness of the freezing order. Normally when making worldwide freezing orders it will be appropriate to make a disclosure order as well. The disclosure order gives the teeth which are critical to the freezing order.
38. In those circumstances it seems to me that it was perfectly appropriate for David Steel J to adopt the approach that he did. He concluded that prima facie this was a case where a disclosure order should be made and not stayed as it was accepted by the parties that this was a case where, pending the final decision of the court, there should be a freezing order. From that threshold David Steel J went on to consider the particular circumstances, as in my judgment he was required to do, and he came to the conclusion that there should be no departure from the prima facie position.
39. Having regard to what had occurred before the American court and the conclusions which the judge in that court had come to, it seems to me that it was not surprising that David Steel J came to the conclusion which he did. I do not consider that it can be shown in this case that he directed himself incorrectly. However, having had the benefit of hearing Mr Cran QC on behalf of the claimants, I would have come to exactly the same decision as David Steel J if this court had been required to exercise its discretion afresh.
40. When dealing with interim applications for stays a broad-brush approach has to be taken, otherwise on the application for a stay the court will be determining the very issues which are to be determined later. It seems to me that that was the approach of David Steel J. Adopting that approach, it seems to me that, although prejudice could be caused to the defendants in this case, the likelihood is that greater prejudice would be caused to the claimants if we were to interfere with the decision of David Steel J. Accordingly I would dismiss the appeal.

ORDER: (Not part of judgment)

Appeals dismissed with costs summarily assessed against both defendants: £25,000 to be paid on account within 21 days; the balance to go for detailed assessment; schedules of assets to be released.