“6. By way of background, the First Applicant (“Mr Salinas”) is one of the wealthiest individuals in Mexico with a net worth of several billion US dollars. He is the founder and chairman of Grupo Salinas, a conglomerate with interests in many different businesses in Mexico (including financial services, retail, media, telecommunications and the internet). The Second Applicant (“RBS”) is a Mexican company beneficially owned and controlled by Mr Salinas. 7. The companies within Grupo Salinas include another Mexican company called Grupo Elektra SAB De CV (“Elektra”), which is listed on the Mexican stock exchange. Elektra operates a large and well-known chain of retail stores (which sell consumer goods and also provide various financial services) in Mexico and Central and South America. Mr Salinas is the direct or indirect beneficial owner or controller of approximately 67,544,413 shares in Elektra, representing 30.47% of Elektra’s share capital (disregarding the impact of the fraudulent scheme referred to below).”
“I address below the various allegations. Taking each sub-paragraph in turn: (1) Subparagraph (a): the SEC filed a civil complaint against Mr Salinas in January 2005. The case ended in a settlement in which Mr Salinas neither admitted nor denied the allegations of the SEC complaint. The bar on serving as a director expired in 2011. (2) Subparagraphs (b): a fine was imposed in 2015 of MSN 672,9000 (or approximately US$ 34,000 ). (3) Subparagraphs (c): a fine was imposed in 2017 of MSN 2,260,000 (or approximately US$ 113,000 ). (4) Subparagraph (d): TV Azteca is appealing against the order. The proceedings are ongoing. (5) Subparagraph (e): Grupo Elektra and companies associated with Mr Salinas are involved in a dispute with the Mexican Tax Administration Service which commenced in February 2023. The dispute is ongoing. (6) Subparagraph (f): the application of fines given by the Mexican National Banking and Securities Commission was successfully challenged by Banco Azteca, and therefore no fines were ultimately due or payable. (7) Subparagraph (g): the Bankruptcy Court in the Southern District of NY dismissed the bondholders’ petition in November of 2023. (8) Subparagraphs (h) and (j): Banco Azteca was not, and is not, on the verge of bankruptcy. Indeed, it is in a healthy financial position as evidenced by its latest results summarised in the Grupo Elektra Q2 Report [EGSS4/11-20 at 14 and 15]. (9) Subparagraph (i): Mr Salinas disputes the seizure of a golf course located in Oaxaca which he believes is an arbitrary occupation motivated by political concerns and is unrelated to any tax liability. He is challenging this seizure in the Mexican courts. (10) Subparagraph (k): these proceedings are ongoing. (11) Subparagraph (l): I do not accept the accuracy of this article regarding Mr Salinas’s wealth as explained elsewhere in my evidence. Forbes indicates Mr Salinas and his family’s net worth to be US$9.9 billion as of4 September 2024 . [EGSS4/23-24].” (1) Subparagraph (a): the SEC filed a civil complaint against Mr Salinas in January 2005. The case ended in a settlement in which Mr Salinas neither admitted nor denied the allegations of the SEC complaint. The bar on serving as a director expired in 2011. (2) Subparagraphs (b): a fine was imposed in 2015 of MSN 672,9000 (or approximately US$ 34,000 ). (3) Subparagraphs (c): a fine was imposed in 2017 of MSN 2,260,000 (or approximately US$ 113,000 ). (4) Subparagraph (d): TV Azteca is appealing against the order. The proceedings are ongoing. (5) Subparagraph (e): Grupo Elektra and companies associated with Mr Salinas are involved in a dispute with the Mexican Tax Administration Service which commenced in February 2023. The dispute is ongoing. (6) Subparagraph (f): the application of fines given by the Mexican National Banking and Securities Commission was successfully challenged by Banco Azteca, and therefore no fines were ultimately due or payable. (7) Subparagraph (g): the Bankruptcy Court in the Southern District of NY dismissed the bondholders’ petition in November of 2023. (8) Subparagraphs (h) and (j): Banco Azteca was not, and is not, on the verge of bankruptcy. Indeed, it is in a healthy financial position as evidenced by its latest results summarised in the Grupo Elektra Q2 Report [EGSS4/11-20 at 14 and 15]. (9) Subparagraph (i): Mr Salinas disputes the seizure of a golf course located in Oaxaca which he believes is an arbitrary occupation motivated by political concerns and is unrelated to any tax liability. He is challenging this seizure in the Mexican courts. (10) Subparagraph (k): these proceedings are ongoing. (11) Subparagraph (l): I do not accept the accuracy of this article regarding Mr Salinas’s wealth as explained elsewhere in my evidence. Forbes indicates Mr Salinas and his family’s net worth to be US$9.9 billion as of4 September 2024 . [EGSS4/23-24].”
“cannot mean that a party must rehearse before the judge at the without notice application a detailed analysis of the range of possible inferences which the defendant may seek to draw … That is particularly so when both the existence and the relevance of the underlying facts are in dispute”
“it is inappropriate to seek to set aside a freezing order for non-disclosure where proofof non-disclosure depends on proof of facts which are themselves in issue in the action,unless the facts are truly so plain that they can be readily and summarily established,otherwise the application to set aside the freezing order is liable to become a form ofpreliminary trial in which the judge is asked to make findings (albeit provisionally)on issues which should be more properly reserved for the trial itself”
“It is unnecessary to set out the law in relation to full and frank disclosure in any great detail. The relevant principles were summarised by Carr J (as she then was) in Tugushev v Orlov & Ors[2019] EWHC 2031 (Comm) at [7]. She said: “The law is non-contentious. The following general principles can be distilled from the relevant authorities by way of summary as follows: i) The duty of an applicant for a without notice injunction is to make full and accurate disclosure of all material facts and to draw the court’s attention to significant factual, legal and procedural aspects of the case; ii) It is a high duty and of the first importance to ensure the integrity of the court’s process. It is the necessary corollary of the court being prepared to depart from the principle that it will hear both sides before reaching a decision, a basic principle of fairness. Derogation from that principle is an exceptional course adopted in cases of extreme urgency or the need for secrecy. The court must be able to rely on the party who appears alone to present the argument in a way which is not merely designed to promote its own interests but in a fair and even-handed manner, drawing attention to evidence and arguments which it can reasonably anticipate the absent party would wish to make; iii) Full disclosure must be linked with fair presentation. The judge must be able to have complete confidence in the thoroughness and objectivity of those presenting the case for the applicant. Thus, for example, it is not sufficient merely to exhibit numerous documents; iv) An applicant must make proper enquiries before making the application. He must investigate the cause of action asserted and the facts relied on before identifying and addressing any likely defences. The duty to disclose extends to matters of which the applicant would have been aware had reasonable enquiries been made. The urgency of a particular case may make it necessary for evidence to be in a less tidy or complete form than is desirable. But no amount of urgency or practical difficulty can justify a failure to identify the relevant cause of action and principal facts to be relied on; v) Material facts are those which it is material for the judge to know in dealing with the application as made. The duty requires an applicant to make the court aware of the issues likely to arise and the possible difficulties in the claim, but need not extend to a detailed analysis of every possible point which may arise. It extends to matters of intention and for example to disclosure of related proceedings in another jurisdiction; vi) Where facts are material in the broad sense, there will be degrees of relevance and a due sense of proportion must be kept. Sensible limits have to be drawn, particularly in more complex and heavy commercial cases where the opportunity to raise arguments about non-disclosure will be all the greater. The question is not whether the evidence in support could have been improved (or one to be approached with the benefit of hindsight). The primary question is whether in all the circumstances its effect was such as to mislead the court in any material respect; vii) A defendant must identify clearly the alleged failures, rather than adopt a scatter gun approach. A dispute about full and frank disclosure should not be allowed to turn into a mini-trial of the merits; viii) In general terms it is inappropriate to seek to set aside a freezing order for non-disclosure where proof of non-disclosure depends on proof of facts which are themselves in issue in the action, unless the facts are truly so plain that they can be readily and summarily established, otherwise the application to set aside the freezing order is liable to become a form of preliminary trial in which the judge is asked to make findings (albeit provisionally) on issues which should be more properly reserved for the trial itself; ix) If material non-disclosure is established, the court will be astute to ensure that a claimant who obtains injunctive relief without full disclosure is deprived of any advantage he may thereby have derived; x) Whether or not the non-disclosure was innocent is an important consideration, but not necessarily decisive. Immediate discharge (without renewal) is likely to be the court’s starting point, at least when the failure is substantial or deliberate. It has been said on more than one occasion that it will only be in exceptional circumstances in cases of deliberate non-disclosure or misrepresentation that an order would not be discharged; xi) The court will discharge the order even if the order would still have been made had the relevant matter(s) been brought to its attention at the without notice hearing. This is a penal approach and intentionally so, by way of deterrent to ensure that applicants in future abide by their duties; xii) The court nevertheless has a discretion to continue the injunction (or impose a fresh injunction) despite a failure to disclose. Although the discretion should be exercised sparingly, the overriding consideration will always be the interests of justice. Such consideration will include examination of i) the importance of the facts not disclosed to the issues before the judge ii) the need to encourage proper compliance with the duty of full and frank disclosure and to deter non-compliance iii) whether or not and to what extent the failure was culpable iv) the injustice to a claimant which may occur if an order is discharged leaving a defendant free to dissipate assets, although a strong case on the merits will never be a good excuse for a failure to disclose material facts; xiii) The interests of justice may sometimes require that a freezing order be continued and that a failure of disclosure can be marked in some other way, for example by a suitable costs order. The court thus has at its disposal a range of options in the event of non-disclosure. (See in particular Memory Corporation plc and another v Sidhu and another (No 2)[2000] 1 WLR 1443 at 1454 and 1459; Behbehani v Salem[1989] 1WLR 723 at 735 and 730; Congentra AG v Sixteen Thirteen Marine SA (The Nicholas M)[2008] EWHC 1615 (Comm) ; [2009] 1 All ER (Comm) 479 at[62]; Bank Mellat v Nikpour[1985] FSR 87 at 89 and 90; Kazakhstan Kagazy plc v Arip[2014] EWCA Civ 381 ; [2014] 1 CLC 451 at [36] and [42] to [46]; Todaysure Matthews Ltd v Marketing Ways Services Ltd[2015] EWHC 64 (Comm) at [20] and [25]; JSC BTA Bank v Khrapunov[2018] UKSC 19 ;[2018] 2 WLR 1125 at [71] and [73]; Banca Turco Romana SA v Cortuk[2018] EWHC 662 (Comm) at [45]; PJSC Commercial Bank PrivatBank v Kolomoisky and others[2018] EWHC 3308 (Ch) at [72] and [73] to [75]; National Bank Trust v Yurov[2016] EWHC 1913 (Comm) at [18] to [21]); Microsoft Mobile Oy v Sony Europe Ltd[2017] EWHC 374 (Ch) at [203].)” “The law is non-contentious. The following general principles can be distilled from the relevant authorities by way of summary as follows: i) The duty of an applicant for a without notice injunction is to make full and accurate disclosure of all material facts and to draw the court’s attention to significant factual, legal and procedural aspects of the case; ii) It is a high duty and of the first importance to ensure the integrity of the court’s process. It is the necessary corollary of the court being prepared to depart from the principle that it will hear both sides before reaching a decision, a basic principle of fairness. Derogation from that principle is an exceptional course adopted in cases of extreme urgency or the need for secrecy. The court must be able to rely on the party who appears alone to present the argument in a way which is not merely designed to promote its own interests but in a fair and even-handed manner, drawing attention to evidence and arguments which it can reasonably anticipate the absent party would wish to make; iii) Full disclosure must be linked with fair presentation. The judge must be able to have complete confidence in the thoroughness and objectivity of those presenting the case for the applicant. Thus, for example, it is not sufficient merely to exhibit numerous documents; iv) An applicant must make proper enquiries before making the application. He must investigate the cause of action asserted and the facts relied on before identifying and addressing any likely defences. The duty to disclose extends to matters of which the applicant would have been aware had reasonable enquiries been made. The urgency of a particular case may make it necessary for evidence to be in a less tidy or complete form than is desirable. But no amount of urgency or practical difficulty can justify a failure to identify the relevant cause of action and principal facts to be relied on; v) Material facts are those which it is material for the judge to know in dealing with the application as made. The duty requires an applicant to make the court aware of the issues likely to arise and the possible difficulties in the claim, but need not extend to a detailed analysis of every possible point which may arise. It extends to matters of intention and for example to disclosure of related proceedings in another jurisdiction; vi) Where facts are material in the broad sense, there will be degrees of relevance and a due sense of proportion must be kept. Sensible limits have to be drawn, particularly in more complex and heavy commercial cases where the opportunity to raise arguments about non-disclosure will be all the greater. The question is not whether the evidence in support could have been improved (or one to be approached with the benefit of hindsight). The primary question is whether in all the circumstances its effect was such as to mislead the court in any material respect; vii) A defendant must identify clearly the alleged failures, rather than adopt a scatter gun approach. A dispute about full and frank disclosure should not be allowed to turn into a mini-trial of the merits; viii) In general terms it is inappropriate to seek to set aside a freezing order for non-disclosure where proof of non-disclosure depends on proof of facts which are themselves in issue in the action, unless the facts are truly so plain that they can be readily and summarily established, otherwise the application to set aside the freezing order is liable to become a form of preliminary trial in which the judge is asked to make findings (albeit provisionally) on issues which should be more properly reserved for the trial itself; ix) If material non-disclosure is established, the court will be astute to ensure that a claimant who obtains injunctive relief without full disclosure is deprived of any advantage he may thereby have derived; x) Whether or not the non-disclosure was innocent is an important consideration, but not necessarily decisive. Immediate discharge (without renewal) is likely to be the court’s starting point, at least when the failure is substantial or deliberate. It has been said on more than one occasion that it will only be in exceptional circumstances in cases of deliberate non-disclosure or misrepresentation that an order would not be discharged; xi) The court will discharge the order even if the order would still have been made had the relevant matter(s) been brought to its attention at the without notice hearing. This is a penal approach and intentionally so, by way of deterrent to ensure that applicants in future abide by their duties; xii) The court nevertheless has a discretion to continue the injunction (or impose a fresh injunction) despite a failure to disclose. Although the discretion should be exercised sparingly, the overriding consideration will always be the interests of justice. Such consideration will include examination of i) the importance of the facts not disclosed to the issues before the judge ii) the need to encourage proper compliance with the duty of full and frank disclosure and to deter non-compliance iii) whether or not and to what extent the failure was culpable iv) the injustice to a claimant which may occur if an order is discharged leaving a defendant free to dissipate assets, although a strong case on the merits will never be a good excuse for a failure to disclose material facts; xiii) The interests of justice may sometimes require that a freezing order be continued and that a failure of disclosure can be marked in some other way, for example by a suitable costs order. The court thus has at its disposal a range of options in the event of non-disclosure. (See in particular Memory Corporation plc and another v Sidhu and another (No 2)[2000] 1 WLR 1443 at 1454 and 1459; Behbehani v Salem[1989] 1WLR 723 at 735 and 730; Congentra AG v Sixteen Thirteen Marine SA (The Nicholas M)[2008] EWHC 1615 (Comm) ; [2009] 1 All ER (Comm) 479 at[62]; Bank Mellat v Nikpour[1985] FSR 87 at 89 and 90; Kazakhstan Kagazy plc v Arip[2014] EWCA Civ 381 ; [2014] 1 CLC 451 at [36] and [42] to [46]; Todaysure Matthews Ltd v Marketing Ways Services Ltd[2015] EWHC 64 (Comm) at [20] and [25]; JSC BTA Bank v Khrapunov[2018] UKSC 19 ;[2018] 2 WLR 1125 at [71] and [73]; Banca Turco Romana SA v Cortuk[2018] EWHC 662 (Comm) at [45]; PJSC Commercial Bank PrivatBank v Kolomoisky and others[2018] EWHC 3308 (Ch) at [72] and [73] to [75]; National Bank Trust v Yurov[2016] EWHC 1913 (Comm) at [18] to [21]); Microsoft Mobile Oy v Sony Europe Ltd[2017] EWHC 374 (Ch) at [203].)”
“I agree in particular with what Lord Justice Coulson has said at [126] to [128] below about the way the failure to disclose issue was presented by the respondents, both in the court below and in this court. I sought in National Bank Trust v Yurov[2016] EWHC 1913 (Comm) at [14] and [15] to encourage a degree of restraint and a sense of proportion on the part of those seeking to set aside without notice orders on this ground, but it appears that the message has not got through.”
“ If nothing is said and an order is made, then the court will be proceeding on the basis that there is no reason to doubt that the person giving the cross-undertaking will be good for the damages.”