Reasons for refusing the application to stay a worldwide disclosure order
Before : |
Sir Michael Birt, Commissioner, sitting alone |
Between |
OWH SE i.L |
Plaintiff |
And |
RTI Limited
|
Defendant |
Advocate R. S. Christie for the Plaintiff.
Advocate W. A. F. Redgrave for the Defendant.
judgment
the COMMISSIONER:
1. This is an application by the Defendant (-RTI-) for a stay of a world-wide disclosure order made against it pending its appeal to the Court of Appeal against the decision of this Court (Commissioner Birt with Jurats Christensen and Berry) dated 22 May 2025 (OWH SE i.L v RTI Ltd [2025] JRC 137) (-the Judgment-) dismissing RTI's application to set aside an order granting leave to the Plaintiff (-OWH-) to enforce an arbitration award as if it were a judgment given by the Royal Court. I announced my decision to refuse the application at the conclusion of the hearing on 12 June 2025 and what follows constitutes my reasons for that decision.
2. RTI also applies for an order that OWH should take no steps to enforce the above award pending determination of its appeal against the Judgment. However, during the course of the hearing, Advocate Redgrave confirmed that this application was only pursued if RTI was successful in obtaining a stay of the disclosure order. Accordingly, I shall say no more about it.
3. The full background is set out in the Judgment but the relevant background for present purposes can be shortly stated.
4. By an award dated 25 September 2024 (-the Award-), an arbitration tribunal (-the Tribunal-) sitting in England ordered that RTI, a company incorporated in Jersey, should pay OWH the sum of €213,770,150.26.
5. On 18 November 2024, on the basis of an Order of Justice presented by OWH, the Bailiff made an order ex parte granting OWH leave to enforce the Award as if it were a judgment of the Royal Court (-the Enforcement Order-). At the same time he granted a world-wide freezing injunction (-the Freezing Injunction-) and an order for disclosure by RTI of its world-wide assets (-the Disclosure Order-).
6. RTI applied to set aside the Enforcement Order and also to set aside the Freezing Injunction and the Disclosure Order.
7. On 27 November 2024 the Bailiff suspended the operation of the Disclosure Order pending the hearing of RTI's application to set it and the Freezing Injunction aside.
8. That application was subsequently heard by the Bailiff who later issued a judgment dated 28 May 2025 (OWH SE i.L v RTI Ltd [2025] JRC 145) (-the Bailiff's Judgment-) refusing to set aside the Freezing Injunction and lifting the suspension of the Disclosure Order. RTI was required to make the relevant disclosure by 6 June.
9. As described in the Bailiff's Judgment at [13], the main argument of RTI was that there was no or insufficient evidence of a risk of dissipation of assets by RTI. This argument was rejected by the Bailiff who held at [42] that there was a material risk of dissipation sufficient to justify the world-wide Freezing Injunction. He also held that there was no basis to refuse to grant appropriate disclosure.
10. The hearing of RTI's application to set aside the Enforcement Order took place on 24-25 February 2025 and, as already mentioned, the Court dismissed the application for the reasons set out in the Judgment. Accordingly, at present OWH is entitled to enforce the Award in Jersey as if it were a judgment of this Court.
11. The affidavit of James Wood, a solicitor with Baker and Partners, filed in support of RTI's application, confirmed that RTI intends to appeal against the Judgment. It also identified certain events which have taken place in connection with the Award since the hearing before this Court in March.
12. First, on 11 April, RTI filed an application with the Commercial Court in London under Article 68(1) of the Arbitration Act 1996 seeking an order that the Award be set aside on the grounds set out in Mr Wood's affidavit, but which I do not need to rehearse. There is an issue as to whether that application has been brought in time and, if not, whether the Commercial Court will grant an extension of time. OWH has filed an application in the Commercial Court to the effect that RTI's application should be dismissed on paper because it has no real prospect of success. These matters are before the Commercial Court.
13. Secondly, on 15 May, RTI filed an application with the London Court of International Arbitration (-LCIA-) challenging the Award on the ground of bias. According to Mr Wood's affidavit, RTI contends that the Tribunal has shown bias because, on 2 May, it rejected RTI's application to defer consideration of issues of interest and costs in connection with the Award until RTI's appeal to the Commercial Court was determined.
14. Accordingly, it is now the case that, unlike at the time of the hearing before this Court, RTI is challenging the Award in England as the seat of the arbitration. Nevertheless, at present the Award remains in effect.
15. In order not to render the present application by RTI nugatory, on 4 June I ordered that RTI's disclosure on 6 June in compliance with the Disclosure Order could be made to the Court alone pending my decision on the present application. RTI accordingly made disclosure to the Court on 6 June.
16. I would summarise Advocate Redgrave's written submissions in support of RTI's application as follows:
(i) The test for granting a stay pending appeal is conveniently summarised by Commissioner Thompson in Hard Rock Limited v HRCKY Limited [2023] JRC 236 at [15]. A stay should be granted if an appeal would otherwise be rendered nugatory but can also be granted if there is -good reason', -common sense and a balance of advantage' or -exceptional circumstances' to deprive a successful plaintiff of the right to enforce its judgment; the mere existence of an arguable ground of appeal is not by itself such a reason.
(ii) There are arguable grounds for an appeal against the Judgment.
(iii) Success on the appeal would be rendered nugatory if there was no stay of the Disclosure Order. This was because OWH would have been provided with information that it should never have received (because, if the appeal was successful, it had no right to enforce the Award in Jersey) and that should have remained confidential. Disclosure, once given, could not be un-given and OWH could use it as it saw fit.
(iv) As to the balance of advantage, there was no prejudice to OWH. RTI had provided disclosure of its assets as at 18 November 2024, 27 November 2024 and 5 June 2025 (as required by the Disclosure Order) to the Court. There was therefore policing of the Freezing Injunction upheld by the Bailiff.
(v) Conversely, apart from the provision of information which was confidential and should not have been disclosed if the appeal was successful, there was a real risk, for the reasons set out in paras 8 and 9 of Mr Wood's affidavit, that RTI would be unfairly prejudiced if its world-wide assets were disclosed at this stage. Mr Wood's affidavit asserted that disclosure of information to OWH might expose it to a claim by VTB Russia that RTI is indebted to it, not to OWH and that VTB Russia might therefore seek to make a claim against RTI under Articles 248.1 and 248.2 of the Commercial (Arbitrazh) Procedural Code. A parallel could be drawn with the situation faced by UniCredit Bank in the case of UniCredit Bank GmbH v RusChemAlliance LLC [2025] EWCA Civ 99. The information could also be used by OWH to bring claims for enforcement against RTI in other jurisdictions.
17. I should add for the sake of completeness that, during the hearing, Advocate Christie handed up a copy of the judgment of the Court of Appeal in Camilla de Bourbon des Deux Siciles v BNP Paribas Jersey Trust Corporation Limited [2021] JCA 043 dealing with the circumstances in which a stay of an order may be granted pending appeal. The judgment says nothing which is inconsistent with the judgment in Hard Rock referred to in the preceding paragraph but, as a decision of the Court of Appeal, it may be helpful to quote certain extracts:
-15. Turning to the position in relation to civil appeals, the starting point is to recognize that an appeal does not operate as a stay. This is expressly provided in rule 15 of the Court of Appeal (Civil) Rules 1964. In order to persuade the court to order a stay, the losing party must accordingly present a sufficiently persuasive case to justify a departure from that default position.
16. Most civil judgments under which a claimant has succeeded will involve an award which confers some material benefit on him. That being the position, it is often said (and the Appellant accepts) that a successful litigant should not generally be deprived of the fruits of his victory without good reason. ...but the starting point remains that the Appellant has been ordered to make a payment; her appeal does not stay the effect of the order; and she has the burden of persuading this court to grant a stay. In short, the proposition that a successful litigant should not generally be deprived of the fruits of his victory without good reason might, with equal truth, be expressed by saying that an unsuccessful litigant should not generally be relieved of the burden of complying with a court order without good reason.
17. ...para 4.8 of the Court of Appeal Practice Direction, CA 05/1,...requires any application for a stay to be supported by an affidavit setting out the circumstances relied upon and showing -whether, unless the stay were granted, the appeal, if successful, would be nugatory, or other special circumstances-. Whilst we do not consider that this provision itself purports to lay down an exhaustive test for granting a stay, it certainly reflects the fact that the onus is on the party seeking the stay to persuade the court that there are sufficiently compelling reasons to grant one.-
18. In his oral submissions, Advocate Redgrave emphasised and developed in particular the point described at para 16(iv) above, namely that there would be no prejudice to OWH if disclosure to OWH (as opposed to the Court) was suspended until the outcome of the appeal against the Judgment. This was because, as the Court could see, the schedule produced in the disclosure to the Court showed that there had been no dissipation of assets since 18 November 2024. The overall figure for current assets had decreased as at 27 November 2024 but had increased significantly as at 5 June 2025. This decrease and subsequent increase was attributable mainly to a hedging contract whose value fluctuated according to movements in the relevant currencies. The essential point, he submitted, was that the Court could be satisfied that there had been no dissipation of assets since the filing of the Order of Justice on 18 November 2024. The existence of the schedule disclosed to the Court met the concerns in the Bailiff's Judgment over the risk of dissipation. RTI would know that any dissipation of assets would, in the event of an unsuccessful appeal, be easily identified, with contempt proceedings no doubt to follow. It was highly unlikely that a Jersey company would risk such an outcome.
19. Advocate Redgrave very properly accepted that it is well established that a world-wide disclosure order which accompanies a post-judgment or post-award freezing injunction may be made on two bases. First, it enables a plaintiff to police the freezing injunction; secondly, it enables a plaintiff to identify assets in other jurisdictions against which it can seek to enforce in satisfaction of the judgment or award; see for example Apricus Investments v CIS Emerging Growth Limited [2003] JRC 151 at [16]-[20]; Africa Edge Sarl v Incat Equipment Rental Limited [2008] JRC 175 at [8]-[10]; Dresser-Rand BV v Al Rushaid Petroleum Investment Company [2021] JRC 321 at [14], [24]-[27] and [42].
20. In connection with the particular issue before me, namely whether a stay on the Disclosure Order should be granted pending an appeal, there would seem to be two relevant cases.
21. In Dalemont Ltd v Senatorov [2012] (1) JLR 168, the plaintiff brought proceedings in Jersey to enforce certain Russian judgments and obtained freezing orders and world-wide disclosure orders in support of the application. Two of the defendants applied unsuccessfully to discharge the disclosure orders or alternatively to confine them to Jersey assets. This application was refused by the Royal Court which also refused leave to appeal. The relevant defendants then applied for a stay of the disclosure orders pending application for leave to appeal from the Court of Appeal. This was the matter which came before me as Bailiff and gave rise to the judgment referred to above.
22. The Court in Dalemont referred to the judgment of the English Court of Appeal dealing with a similar issue in Motorola Credit Corporation v Uzan [2002] EWCA Civ 989. During the course of his judgment in that case, Waller LJ referred in turn to the judgment of Steyn LJ in Grupo Torras SA v Al-Sabah, 16 February 1994, unreported, and went on to say at [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.-
23. Having reviewed the judgment of the English Court of Appeal in Motorola, this Court summarised the position at [25] of Dalemont as follows:
-In my judgment, the approach adopted by the Court of Appeal in Motorola is equally applicable in Jersey. The starting point therefore is that, for so long as a freezing injunction is in force, it is normally appropriate for the accompanying disclosure order also to remain in force so as to enable the freezing order to be policed. But that does not mean that a disclosure order will invariably be maintained pending challenge to a freezing order or to the disclosure order itself. The court is still required to consider the circumstances of the particular case and decide whether the balance comes down in favour of maintaining the disclosure order or staying it pending the challenge to either the freezing order or the disclosure order.-
24. The Court went on to say at [26 (vii)]:
-I accept that prejudice will be caused to the second and fourth defendants if they have disclosed information pursuant to the disclosure orders in circumstances where those orders are subsequently discharged by the Court of Appeal. However, I consider that that prejudice is very much less than the prejudice which would be suffered by the plaintiff in not being able to police the freezing injunctions given against the first and second defendants until the outcome of the case before the Court of Appeal. Given the background to this case, it seems to me that there is a real risk that assets could be hidden or dissipated in the interim period. As was stated in the passage from the judgment of Steyn, LJ above, a Mareva injunction without a disclosure order is a relatively toothless instrument.- [emphasis added]
25. The second case where the issue before me was touched upon, although not directly in point, is the decision of Commissioner Clyde-Smith in ENRC NV v Zamin Ferrous Limited [2015] JRC 217. That was a case where the plaintiff, which was seeking to enforce an English judgment in Jersey, had obtained a world-wide freezing injunction and disclosure order. The application before Commissioner Clyde-Smith was an application by the plaintiff to widen the disclosure order. In passing, the Commissioner said this at [26]:
-In our view, the Court has a wide discretion in a post-judgment case to order further disclosure and ordinarily it is just and convenient to do so in order to effectively police the freezing order and so that the judgment creditor has all the information he needs to execute the judgment anywhere in the world; the whole for the purpose of ensuring that the judgment obtained is not rendered nugatory.-
26. Having then referred to the judgment of the English Court of Appeal in Grupo Torras (supra) the Commissioner went on to say this at [38]:
-The existence of an application for leave to appeal the judgment and for a stay does not mean that the disclosure order should be watered down in any way. A similar argument was put forward and rejected by the English Court of Appeal in Grupo Torras, a pre-judgment case where jurisdiction was being challenged.-
27. I have carefully considered the submissions on behalf of RTI but, as announced at the end of the hearing, have come to the clear conclusion that there should be no stay of the Disclosure Order pending RTI's appeal. I would summarise my reasons, which are essentially those put forward by Advocate Christie on behalf of OWH, as follows:
(i) I am prepared to proceed on the assumption, without deciding, that RTI has arguable grounds for an appeal against the Judgment.
(ii) I do not accept that lifting the stay will render RTI's appeal nugatory. The appeal is against the Court's decision that the Award may be enforced as if it were a judgment in this jurisdiction. If the appeal is successful, that decision will be overturned and the Award will not be capable of enforcement as a judgment in Jersey. Far from being nugatory, the appeal will have achieved its objective. This will be so even if RTI has in the meantime provided information pursuant to the Disclosure Order.
(iii) Given my decision that the appeal would not be rendered nugatory, one is then in the territory of deciding whether there is some good reason to grant a stay; in other words, as the Court of Appeal put it in the BNP Paribas case, whether there is good reason to relieve RTI of the burden of complying with the Disclosure Order.
(iv) There is no appeal against the Bailiff's Judgment insofar as he maintained the Freezing Injunction. It will therefore remain in force. In the circumstances, RTI faces an uphill battle to persuade the Court that there should be no accompanying disclosure order to enable OWH to police the Freezing Injunction. The Bailiff clearly thought that there was no good ground to suspend the Disclosure Order and, as stated in the passage quoted at para 24 above, a freezing injunction without a disclosure order is a relatively toothless instrument.
(v) Advocate Redgrave submits that this case is different because of the disclosure to the Court. He argues that there is no need for the Disclosure Order pending appeal - and therefore no prejudice to OWH if it is suspended - because RTI has made disclosure to the Court. The Court can see that there has been no dissipation of assets since the date of the Order of Justice and this suggests that there is no likelihood of such dissipation pending the appeal.
(vi) But it is not the role of the Court to police a freezing injunction nor is the Court in a position to do so effectively. The Court cannot assess the accuracy of information provided nor is it in a position to carry out any checks or researches or look into the detail of information provided. That ability rests with a plaintiff. I do not therefore accept Advocate Redgrave's essential submission that the disclosure to the Court in this case means that there is no need for disclosure to OWH as plaintiff pending the appeal.
(vii) Furthermore, disclosure to the Court does not satisfy the second basis for the Disclosure Order, namely enabling OWH to identify assets in other jurisdictions with a view potentially to taking steps elsewhere to enforce the Award against such assets. Advocate Redgrave submitted that OWH was protected because, by reason of the disclosure to the Court, the Court could be confident that all the identified assets would still be there if RTI's appeal were in due course to be dismissed, and could be enforced against at that stage. But this would prevent OWH from taking any steps for enforcement against such assets in the meantime. The balancing operation referred to above is to be carried out against the background that, pursuant to the Award, RTI is indebted to OWH in the sum of some €213m, yet it has made no effort to pay the sum despite the fact that, until very recently, it was not even challenging the Award.
(viii) On the other side of the balancing operation, namely any prejudice to RTI, I accept that, if the appeal is successful, RTI will have disclosed information which is confidential about its assets to OWH and which it need not have disclosed in retrospect. But that is invariably the position where a disclosure order is made in support of a freezing injunction. Normally such orders are made where there is only a claim whose validity has yet to be assessed; yet a defendant has to disclose information about its assets. Here, on the other hand, not only is there the Award which has found RTI liable to OWH, but there is now the Judgment, which has rejected the application to set aside the Enforcement Order with the result that the Award can be enforced as a judgment in this jurisdiction.
(ix) The second aspect in which it is submitted that there would be prejudice to RTI is that summarised at para 16(v) above. However, it is hard to see how this could arise. In the UniCredit case, UniCredit had contracted with a Russian company. In the context of an anti-suit injunction, this caused some difficulty in relation to orders of the Russian court. That is not the situation here. The contract which gave rise to the dispute was between a German bank and a Jersey company. It is hard to see how the Russian court could become involved in those circumstances. Advocate Redgrave speculated that the fact that there were hedging contracts between OWH and VTB Russia which matched those entered into between OWH and RTI might enable VTB to seek to bring a claim against RTI under Russian law. However, as he very properly accepted, there is no evidence to support the existence of that risk. In the circumstances I do not consider that the point carries any weight.
(x) I have no hesitation in concluding that the prejudice which would be suffered by OWH if a stay of the Disclosure Order were granted, in (i) not being able to police the Freezing Injunction and (ii) not being able to identify and potentially take enforcement action against assets in other jurisdictions, would greatly exceed the prejudice to RTI in having to disclose information about its assets which, if the appeal against the Judgment is successful, it would not have been obliged to provide.
28. I have reached this conclusion without reference to the information set out in paragraphs 7-15 of the fourth affidavit of Ms Meike von Levetzow on behalf of OWH. These paragraphs suggest that, amongst other matters, according to a termination agreement dated 30 August 2024, RTI has terminated an agency agreement which it had with a company called Rusal Marketing, which was on its face a valuable contract from RTI's point of view. In a letter dated 19 May 2025 responding to OWH's query about this and other transactions, Baker and Partners emphasised that these were all part of structural adjustments adopted by the Rusal Group in response to the imposition of sanctions following the invasion of Ukraine.
29. Advocate Christie submitted that the transactions described in Ms von Levetzow's affidavit raised the spectre of the dissipation of assets, although he accepted that there was no direct evidence that this was the motivation. I am not in a position to make any finding about the motivation for the transactions in question and I do not draw any adverse inference against RTI in respect of them. I accept that the transactions may well have been undertaken for genuine commercial reasons and that, according to the date on the termination agreement, the termination occurred before the Freezing Injunction was obtained.
30. However, the existence of the transactions shows how it is comparatively easy for value in a large international group to be moved between different companies within the group by means of varying contractual arrangements and, for that reason alone, gives some support to the need for a disclosure order in circumstances where the Award remains unsatisfied.
31. In summary, I dismiss the application to stay the Disclosure Order as set out in the Bailiff's Judgment. I am, however, prepared to grant a short further stay in order to enable RTI, if so advised, to apply to a single judge of the Court of Appeal for a further stay pending any appeal against my decision.
32. On this basis, I ordered at the conclusion of the hearing that I would endeavour to provide this judgment in draft to the parties not later than Monday 16 June and in those circumstances granted a limited stay on the Disclosure Order until close of business on Wednesday 18 June and, if an application for leave to appeal against my decision was filed by RTI before close of business on Wednesday 18 June, a further stay until close of business on Monday 23 June in order to enable RTI to apply to a single judge. Whether any further extension is granted would be a matter entirely for the single judge.
Authorities
OWH SE i.L v RTI Ltd [2025] JRC 137.
OWH SE i.L v RTI Ltd [2025] JRC 145.
Hard Rock Limited v HRCKY Limited [2023] JRC 236.
UniCredit Bank GmbH v RusChemAlliance LLC [2025] EWCA Civ 99.
Siciles C. de Bourbon des Deux v BNP Paribas Jersey Trust Corporation Limited [2021] JCA 043.
Apricus Investments v CIS Emerging Growth Limited [2003] JRC 151.
Africa Edge Sarl v Incat Equipment Rental Limited [2008] JRC 175.
Dresser-Rand BV v Al Rushaid Petroleum Investment Company [2021] JRC 321.
Dalemont Ltd v Senatorov [2012] (1) JLR 168.
Motorola Credit Corporation v Uzan [2002] EWCA Civ 989.
Grupo Torras SA v Al-Sabah.
ENRC NV v Zamin Ferrous Limited [2015] JRC 217.