Jersey Unreported Judgments

[2004]JRC038

royal court

(Samedi Division)

26^th February 2004

Application by Plaintiffs for leave to use documents obtained from Parties Cited in relation to enforcement of Arbitration Awards against Defendant.

Advocate N.J. Rive for the Plaintiffs.

The Defendant did not appear and was not represented.

Advocate J.P. Speck for the Parties Citied.

judgment

the deputy bailiff:

1.        This is an application by the Plaintiffs for leave, if this is necessary, to use certain documents obtained by them following a review of the files maintained by the First and Second Parties Cited in relation to the Defendant. 

2.        The background can be shortly stated.  On 28^th April, 2000, an arbitration tribunal in London made an award in the Plaintiffs' favour against the Defendant in the sum of approximately US $ 5.9 million, with interest at 1^st July, 2003, the total due now exceeds US $ 8 million.

3.        The Plaintiffs have instituted proceedings in Jersey to enforce the award because the Defendant is a company incorporated in Jersey.  Various orders for disclosure have been made but so far the Defendant has for the most part not complied with these orders; so much so, that on the 16^th February, 2004, the Court found the Defendant to be in contempt of Court for not complying with certain of these orders.

4.        As part of the process of seeking to obtain information about the Defendant's assets for the purposes of enforcing its award the Plaintiffs on 9^th October, 2003, issued a summons seeking an order that the Parties Cited should inter alia provide the Plaintiffs with copies of all communications with all persons who acted as directors of the Defendant at any time between 1997 and the present date relating to the assets and accounting records of the Defendant.

5.        The Parties Cited had provided various administrative services to the Defendant over the years.  Rather than insist upon the Plaintiffs obtaining such an order the Parties Cited agreed by letter from their advocates to make voluntary disclosure.  The Plaintiffs were permitted to inspect the correspondence files of the Parties Cited and have taken copies of various documents.  It is said by the Plaintiffs that these show that first, the Defendant's business was actually managed, not from Jersey, but from Vienna and Moscow by employees of Creditanstalt Investment Bank (which was the parent of the Defendant) or other parts of the Bank Austria Creditanstalt Group; and secondly that this management was carried out under broad powers of attorney whereby any one of the attorneys would have been able to operate the company solely with the result that the Parties Cited had little or no knowledge of the Defendant's business activities or the true state of its finances.

6.        The Plaintiffs now wish to use the documents voluntarily disclosed in three possible classes of action:

(i)        Any action to enforce the arbitral award against the Defendant anywhere in the world.

(ii)       Any proceedings relating to the enforcement of the arbitral award anywhere in the world against Creditanstalt Investment Bank AG or any other associated or subsidiary company of the Bank Austria Creditanstalt Group.

(iii)      Any other proceedings anywhere in the world against the Defendant, Creditanstalt Investment Bank AG, or any other associated or subsidiary company of the Bank Austria Creditanstalt Group.

7.        The Plaintiff contends that, in fact, the leave of the Court is not necessary because these documents were not disclosed pursuant to an order of the Court but were disclosed voluntarily.  The position, Miss Rive argues, is conveniently set out in Matthews and Malek on Disclosure para 13.12 where it is said:

"The undertaking does not apply to documents voluntarily disclosed, such as affidavits and exhibits put in voluntarily and not by any order of the court in opposition to an application for asset freezing (Mareva) relief, or in support of a strike out application.  This is consistent with the rationale of the implied undertaking. In relation to documents voluntarily disclosed, the court has not invaded the privacy of the party; it is the party himself who has destroyed the privacy of the documents.  Nor does the undertaking apply to documents or information which belong to the claimant who recovers them as a result of the execution of a "search and seize" (Anton Piller) order."

8.        Mr Speck concedes that the documents in question were disclosed voluntarily and whilst not consenting to any order does not submit that the principles which we have just described do not apply to the circumstances of this case.  In the circumstances the Court finds that there is no need for the Plaintiffs to seek the leave of the Court for use of the material in question because it was disclosed voluntarily. 

9.        We emphasize, however, that this only applies to documents which were disclosed voluntarily as we have described.  Other documents were supplied by the Parties Cited in either August or September, 2003, pursuant to earlier orders of the Court and these, of course, are subject to the implied undertaking and therefore may not be used without the leave of the Court.

10.      There is no summons before us at present in relation to those documents, i.e. those produced pursuant to an order of the Court, but Miss Rive has indicated that she will very shortly be bringing such an application.  It may be of assistance to the parties if we say that, in view of the fact that the Defendant has refused to assist in meeting its responsibilities under the arbitration award and in view of the fact that, despite being a member of the Bank Austria Creditanstalt Group, it has given every impression of trying to make it as difficult as possible for the Plaintiffs to recover the amount due to them, the Court is in no doubt that it should assist by granting leave for such documents to be used by the Plaintiffs in endeavouring to recover the sums due to them pursuant to the arbitration award. 

11.      The Court would, therefore, have been minded to grant leave for the first two categories of proceedings that we have described earlier.  However, we would not have been minded to grant leave for the third category, which relates to any proceedings by the Plaintiffs against any member of the Bank Austria group in relation to any matter; in other words where there might well be no connection with the arbitral award.  We are not saying that we would not give leave but we would have to consider that on a case by case basis as and when the Plaintiffs needed or wished to use the documents for some unrelated litigation.

Authorities.

In re Esteem Settlement [2002] JLR 53.

Matthews and Malek on Disclosure (Second Edition of Discovery) (2001 Ed'n): Chapter 13.