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Cite as: [2014] EWHC 1447 (Ch)

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		Neutral Citation Number: [2014] EWHC 1447 (Ch)
		Case No: HC14D00343/344

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

The Rolls Building
Fetter Lane
London EC4A 1NL

6 March 2014

B e f o r e :

HIS HONOUR JUDGE WAKSMAN
(Sitting As A Judge Of The High Court)
____________________

	CREDIT SUISSE TRUST	Claimant
	- and -
	INTESA SAN PAULO SPA	Defendant
	and
	BANCA MONTE DEI PASCHE DI SIENA	Defendant

____________________

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____________________

MR RICHARD WALFORD (instructed by Eversheds) appeared on behalf of the Claimant
No representation available on behalf of the Defendant
____________________

HTML VERSION OF JUDGMENT
____________________

HHJ WAKSMAN QC:

I have before me brought by way of Part 8 proceedings two applications for Norwich Pharmacal relief in two separate but connected actions. The first is brought by the Claimant (who is common to both actions), Credit Suisse Trust Ltd, against an Italian bank called Banca Monte Dei Pasche Di Siena SPA ("BMP") and a second bank called Intesa San Paulo SPA ("Intesa").

The applications arise in this way. The Trust of which Credit Suisse is a permanent trustee some years ago employed the services of a Mr Nemni as its fiduciary agent. It discovered that in clear breach of his fiduciary duties Mr Nemni had been arranging the affairs and the monies of the Trust in such a way as to siphon off substantial sums for his own benefit. Proceedings were brought against him in Guernsey and that resulted in a judgment against him for breach of fiduciary duty and, as the judgments make clear, that was a dishonest breach of fiduciary duty.

Just to give a flavour of the activities undertaken by Mr Nemni in breach of that duty – and here I am reading from the affidavits in support of the applications to be found in the BMP bundle at divider 5 – he caused the Trust to pay nearly one million Euros for accountancy work by Mr Badaracho which had, in fact, only cost 540,000 Euros. Mr Nemni he took for himself the balance of 458,000 Euros, as well as causing a further 112,000 Euros worth of expenditure after he had been told that that such work should stop. And there are a variety of other similar defalcations cited in the judgment of the Guernsey court. The upshot was that by that judgment Mr Nemni was ordered to pay a total sum of 3,288,518.76 Euros, as can be seen in the order which is contained in divider 7.

Perhaps unsurprisingly, a worldwide freezing order was then granted by the Guernsey court to attempt to assist in the enforcement of that and that froze his assets worldwide in the total sum of 4.5 million Euros. That of course was in general terms, but it included in particular certain properties and assets in Italy among other places.

There was also a costs liability which was ascertained in the amount of £468,000.

In seeking to enforce that judgment steps were taken to discover the identity and location of any relevant bank accounts and so, for example, an application was made which was heard by Henderson J on 12 June 2013 for Norwich Pharmacal relief along the same lines as that sought here, but in relation to Amex; it being known that Amex would usually be paid through direct debits and Mr Nemni was a customer of Amex; Credit Suisse knew that because he made a number of expense claims by reference to expenditure on his Amex card. Amex complied with that order and by a letter of 4 July of last year identified a number of different bank accounts from which they been paid on or behalf of Mr Nemni. They included the two Italian banks with which I am concerned and hence the present application.

This, of course, is an application brought in the English court. The judgment is a Guernsey judgment, but I am quite satisfied that this application falls within the definition of interim relief as set out in section 25 of the CJJA 1982 in aid of the Guernsey proceedings and the Guernsey judgment, so there is no difficulty about jurisdiction here and, indeed, no jurisdictional point has been taken by either Defendant.

Both Defendants have London branches. Both Defendants have filed acknowledgements of service indicating that they do not intend to contest these proceedings. So far so good, but both Defendants in their own way have raised this point: the activity undertaken in relation to these banks by Mr Nemni is said to have occurred in Italy and not in England and that raises the question as to whether any information can be released by the Italian bank, albeit a Defendant to this application, because that bank and that activity is governed by Italian law and in particular Italian law regarding banking confidentiality. Having said all of that, as I have indicated neither bank has sought to contest these proceedings.

The position then in relation to what information the London branches may have is slightly different between the two banks. The position of BMP as I find it is that certain information has been and can be obtained by the London branch from its Italian branches. Mr Rouse of Cray & Co who are the solicitors for BMP so far as acknowledging service and providing witness statements are concerned put in two witness statements which I have seen and which are before me giving slightly inconsistent accounts of what the bank can and cannot do here. They have been set out in a helpful table which is to be found at paragraph 14 of Mr Walford's skeleton argument. I do not propose to go through it, but it does indicate clearly to me that there is at least information which the London branch is capable of accessing from Italy and which will ensure compliance with this order for at least part of it.

I should make plain that both banks have been notified of today's hearing; neither appears, nor is represented and the role of Cray & Co has been limited after acknowledging service to the provision of the witness statements of Mr Rouse.

So far as the other bank, Intesa, is concerned; they have been somewhat less forthcoming. While acknowledging service, they have taken the point that all the activity is in Italy and they have raised the question whether a meaningful order can be made here because if the activity is in Italy and enforcement is required in Italy, then this order will have to be recognised by the Italian court. That is something which has been taken on board by the Claimant, Credit Suisse, because it says that if it does not receive sufficient information from any London branches here, then it will indeed go to Italy to have the judgment recognised there. It can do so by virtue of Article 26 of the Regulation which provides that a judgment given in a contracting State shall be recognised in the other contracting States without any special procedure being required (see paragraph 15 of the skeleton argument), and of course the Order in Council has extended the ambit of these provisions.

There are two points that concern me; the first is whether it is appropriate to grant this relief given that the activities are concerned with the branch of the Defendant bank abroad. The second is whether there is any point in granting the relief here. So far as the first is concerned, it has been said in perhaps analogous circumstances where, for example, the defendant is an English bank but is being asked to provide information in relation to a foreign branch, that the remedy is exceptional and should be granted only with care. It has been so granted particularly in cases of fraud. That is what this case is plainly about and I am quite satisfied that there is nothing in the authorities which prevents me from making an order simply because the information is contained in a branch of a bank which is abroad.

Secondly, I need to look at the utility of the orders. So far as BMP is concerned; that is clear in my judgment. The impression that I have clearly received from the information provided by both Credit Suisse and BMP itself is that it is willing to provide at least some information, but perhaps unsurprisingly it is not prepared to do so unless armed with an order of the court which is often the case where banks are concerned about confidentiality.

So far as Intesa is concerned, the position is less straightforward, but if I use BMP as an analogy it is not clear to me that it is by any means impossible for Intesa to obtain information from Italy through its London branch; it has merely drawn attention to Italian confidentiality laws and the need to have a judgment recognised by the Italian court if it is to be enforced in Italy. I consider that there is at least a realistic prospect that if the order is made against Intesa at least some steps will be taken to comply with it via the London branch. As I say, if in the case of either bank these orders do not bear fruit, the intention of the Claimant here is not to proceed against the Bank for contempt; rather, it would be to go down the next stage in the route, which is to have the Guernsey judgment and/or this Norwich Pharmacal order recognised by the Italian courts under Article 26. At that point, if there are any arguments against such recognition by reason of public interest or otherwise which the Italian courts can entertain, then those courts can deal with those arguments at that time.

So for those reasons, I will make the orders that are sought today. I have indicated that it should be made plain by paragraph 2 of the order that there is permission to either party -- that is to Credit Suisse or the relevant bank -- to apply for variation or discharge of the order. Usually that is a matter of more concern for the Defendant, but these orders do not have any time limits on them and in that respect I am following the precedent set by Henderson J and, indeed, what is often the practice in relation to these orders because, of course, the bank is not itself a wrongdoer; it is simply mixed up in wrongdoing in a Norwich Pharmacal sense. I raised a question about whether a time limit might become necessary if it is intended to seek recognition of this order in the Italian courts. I do not know the answer to that, but lest it be thought in the future that before seeking recognition in Italy there ought to be a time limit imposed that might be a reason why Credit Suisse would wish to invoke paragraph 2 to come back to the court. So, on that basis, I will make the orders as sought.