“The restructuring of the Manager’s sole shareholder after the Management Agreement had been terminated and this Arbitration started by the Owner suggests that Maquay Investments, which does not appear in any way related to the international five-star hospitality industry or involved in the operation of hotels of such category, was created for the sole purpose of receiving the shares of the Manager’s sole shareholder before being renamed and placed in voluntary liquidation and, as a result, avoid any possible liabilities under the Management Agreement.”
“As to the second element of alter ego liability, Plaintiff asserts that Starman strategically sold Woodman’s parent entity in order to prevent Plaintiff from recovering any award issued by the arbitrators (D.I 1 ¶ 117). Plaintiff supports this argument with allegations that Maquay was only incorporated six weeks before the sale took place, there were shared connections between Maquay and Starman, and the sale occurred shortly after the arbitration was initiated. (Id. ¶¶ 59, 63-65). While Defendant attempts to argue that this theory cannot be used to pierce the corporate veil (D.I. 16 at 17-18), I disagree. These facts, accepted as true, support Plaintiff’s claim that Starman’s acts were strategic and intended to leave Woodman unable to pay any award. [citation omitted] Acts intended to leave a debtor judgment proof are sufficient to show fraud and injustice. Thus, I find fraud and injustice adequately pled.”
“The approach that the court is directed to take by the authorities, as in Akciné, is to consider whether any protections can be put in place so that the requesting court can receive the witnesses’ evidence, and the witnesses can be sufficiently protected against the oppression, namely the risk of evidence which might incriminate them being made available to the Moroccan Criminal Investigation.”
“I consider that the approach of Gloster J., in Akciné, is an equally appropriate approach in this case. The court is not obliged to refuse orders unless every conceivable risk of oppression is eliminated. The court’s duty is to balance the interests of the requesting court and those of the witness: The State of Minnesota at 176 per Lord Woolf MR and First American at 1165-6 per Sir Richard Scott VC. In my view, the risk of oppression, which cannot be averted in this case by the reliance on privileges that would be recognised in the Delaware court (unlike the position in MicroTechnologies), can be alleviated to a sensible and acceptable degree by the combination of the Protective Order and the protections offered by CGHA. Further CGHA have agreed to give an undertaking to this court to comply with the Protective Order, which can be included in the order.”
“Where an application is made to the High Court, the Court of Session or the High Court of Justice in Northern Ireland for an order for evidence to be obtained in the part of the United Kingdom in which it exercises jurisdiction, and the court is satisfied- (a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal (“the requesting court”) exercising jurisdiction in any other part of the United Kingdom or in a country or territory outside the United Kingdom; and (b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated, the High Court, Court of Session or High Court of Justice in Northern Ireland, as the case may be, shall have the powers conferred on it by the following provisions of this Act.”
“(1) Subject to the provisions of this section, the High Court, the Court of Session and the High Court of Justice in Northern Ireland shall each have power, on any such application as is mentioned in section 1 above, by order to make such provision for obtaining evidence in the part of the United Kingdom in which it exercises jurisdiction as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made; and any such order may require a person specified therein to take such steps as the court may consider appropriate for that purpose. (2) Without prejudice to the generality of subsection (1) above but subject to the provisions of this section, an order under this section may, in particular, make provision- (a) for the examination of witnesses, either orally or in writing; […] (3) An order under this section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purposes of civil proceedings in the court making the order (whether or not proceedings of the same description as those to which the application for the order relates); but this subsection shall not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath where this is asked for by the requesting court. […].”
“In The State of Minnesota v Philip Morris [1997] ILP 170 at 176, Lord Woolf MR stated that when considering whether, and if so on what terms, to give effect to a letter of request, there is a balance to be struck between the interests of the requesting court and witnesses to be examined. This was confirmed in First American Corp v Zayed[1999] 1 WLR 1154 at 1165-6 where Sir Richard Scott VC. said: “….in deciding what response to make to a letter of request, the court should bear in mind the need to protect intended witnesses from an oppressive request. There is a balance to be struck in each case between the legitimate requirements of the foreign court and the burden those requirements may place on the intended witness. I agree with Ralph Gibson LJ in In Re State of Norway’s Application[1987] 1 QB 433 433, 490 6F – G, that the balance is much the same as that which has to be struck if an application is made to set aside a subpoena….” “….in deciding what response to make to a letter of request, the court should bear in mind the need to protect intended witnesses from an oppressive request. There is a balance to be struck in each case between the legitimate requirements of the foreign court and the burden those requirements may place on the intended witness. I agree with Ralph Gibson LJ in In Re State of Norway’s Application[1987] 1 QB 433 433, 490 6F – G, that the balance is much the same as that which has to be struck if an application is made to set aside a subpoena….”
“Secondly, in a case where fraud is alleged, a letter of request is oppressive where allegations of fraud are made against the witnesses sought to be examined but where those witnesses have not been sued as defendants in respect of those allegations, and where those allegations are being held over the heads of the witness with the possibility of being made a party to a claim, whilst at the same time seeking a wide examination of the witness on the very topics that will be relevant in such an action, if brought. This was the situation in the First American case.”
“Seen from the point of view of the witness, the right may be as much needed where foreign law is involved as where it is not. The difficulty confronting the individual may be just as acute when the feared prosecution is under the law of another country. There is, however, a real problem in letting this lead to the conclusion that the privilege should apply in such a case. The privilege is rigid and absolute. The witness has an unqualified right. Where the privilege applies the witness need not answer. Unless the case falls within a statutory exception, that is the end of the matter. There is no scope for the court to exercise any discretion. It is the unqualified nature of the right, so valuable as a protection for the witness, which gives rise to the problem when a foreign law element is present. If the privilege were applicable when the risk of prosecution is under the law of another country, the privilege would have the effect of according primacy to foreign law in all cases. Another country’s decision on what conduct does or does not attract criminal or penal sanctions would rebound on the domestic court. The foreign law would override the domestic court’s ability to conduct its proceedings in accordance with its own procedures and law. If an answer would tend to expose the witness to a real risk of prosecution under a foreign law then, whatever the nature of the activity proscribed by the foreign law, the witness would have an absolute right to refuse to answer the question, however important that answer might be for the purposes of the domestic court’s proceedings.”
“[…] the source of the jurisdiction to grant interlocutory injunctions issection 37 of the Supreme Court Act 1981 . The jurisdiction is discretionary within the principles laid down in the decided cases. […] In the case of offences under the criminal law of a foreign state, there is no privilege, but I see no reason why the possibility of self-incrimination or the incrimination of others should not be a factor to be taken into account in deciding whether and, if so, in what terms a disclosure order should be made.”
“[…] the right to silence and the right not to incriminate oneself are generally recognised international standards which lie at the heart of the notion of a fair procedure under art 6. Their rationale lies, inter alia, in the protection of the accused against improper compulsion by the authorities thereby contributing to the avoidance of miscarriages of justice and to the fulfilment of the aims of art. 6 (see Murray v UK 22 EHRR 29 and Funke v France 16 EHRR 297). The right not to incriminate oneself, in particular, presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. In this sense the right is closely linked to the presumption of innocence contained inart 6(2) of the convention .”
“63. This is an appeal against the exercise of a discretion by the Senior Master. It is not a de novo rehearing of the matters placed before her. In this regard, before interfering with the Senior Master’s decision, it must be shown that she has either erred in principle in her approach or has left out of account or has taken into account some feature that she should, or should not, have considered or that her decision was wholly wrong because the court is forced to the conclusion that she had not balanced the various factors fairly in the scale: see Lord Woolf MR in Phonographic Performance Ltd v AEI Rediffusion Music Ltd[1999] 1 WLR 1507 at 1523. 64. Whilst it is the case that the Senior Master has particular jurisdiction in relation to letters of request proceedings and is highly experienced in these matters, it was common ground that this is not one of those cases where the appeal court is required to show particular deference to the decision below by reason of the lower court’s specialist expertise. 65. I approach this appeal on the basis that, first, the Senior Master’s decision was clearly one of the exercise of discretion; secondly that that discretion is to be exercised in line with certain established principles, applicable to the approach of the English courts to letters of request (including those principles which I have discussed in the previous paragraphs), and thirdly that, if it can be seen that those principles have been erroneously identified or applied, this court might interfere and exercise the discretion afresh.”
“These considerations carry much greater weight in relation to Mr Bailin’s submissions grouped under the rubric of oppression than to his submissions under the banner of relevance. The former raise discretionary considerations; as for the latter, points of principle may well arise, although the Senior Master in my view should be accorded an appropriate margin of appreciation as regards matters of evaluative judgment.”
“28. If CGHA’s criminal complaint had been lodged in the U.SA., Ms Purdy would have been entitled to keep silent pursuant to the Fifth Amendment. Alternatively, if it had been lodged in the UK, Ms Purdy would have been entitled to rely upon the privilege against self-incrimination … However, because CGHA filed its criminal complaint in Morocco, Ms Purdy is not able to rely on these protections. 29. “There is therefore a risk of oppression to Ms Purdy which cannot be averted”
“i) Given the nature and amount of the Bank’s claim, and the evidence relating to the manner of the alleged misappropriations by Mr Antonov, I take the view that this is quintessentially a case where a disclosure order is clearly necessary to make the freezing order effective. The reality is that, in the absence of disclosure of current assets, it will be almost impossible for the Bank to take steps to ensure that any judgment it may obtain will be enforceable…. ii) In the absence of cogent evidence to the contrary, I am entitled to assume that Lithuania, as well as Latvia and Switzerland, will honour their obligations under the Convention. iii) Notwithstanding the evidence adduced by Mr Antonov, which I have carefully considered, there is no sufficiently cogent evidence before me to suggest that, in relation to this aspect of the matter, the Lithuanian state will not honour its obligations under the Convention to ensure that Mr Antonov has a fair trial. Thus I am not prepared to assume that, in breach of his rights underArticle 6 of the Convention , a Lithuanian court would allow his answers to the disclosure order to be used in evidence against him at any criminal trial in Lithuania. Like the Court of Appeal in Rottmann v Brittain, I consider that, even if the Lithuanian Prosecutor were to obtain any of the information disclosed by Mr Antonov under the compulsory provisions of the WWFO, it is for the Lithuanian court to control such use as may be made by the Lithuanian Prosecutor in the context of the criminal proceedings, so as to ensure that Mr Antonov’s Article 6 rights are preserved. Similar conclusions apply in relation to Switzerland and Latvia because they are both Convention compliant countries. Moreover, as at present there is no evidence that there is any credible risk of Mr Antonov’s extradition to those countries. iv) Mr Antonov has not established on the evidence that the Bank should effectively be treated as equivalent to the Lithuanian Prosecutor and that the former can effectively be regarded as a conduit for passing information on to the latter. In this respect I refer to the evidence which I have summarised at paragraphs 82 – 84 below to demonstrate that the Bankruptcy Administrator acts independently of the Lithuanian government and the Lithuanian Prosecutor. v) The Bank, its employees, agents and legal advisers, which necessarily includes the Bankruptcy administrator, his staff and agents, are necessarily subject to the standard undertaking that they will not, without the permission of the court, use any of the information disclosed under compulsion by Mr Antonov pursuant to the terms of the WWFO, other than for the purposes of the current civil proceedings in England, and in particular that they will not use such information “for the purpose of any civil or criminal proceedings, either in England and Wales or in any other jurisdiction”
“In my judgment, and as an exercise of my discretion, I will only recognise any such privilege to the extent that the documents should only be disclosed to the confidentiality club. Provided they are disclosed subject to that restriction, I do not consider that any further protection is necessary, proper or proportionate as a matter of discretion. I will therefore order disclosure subject to the existing confidentiality regime”. (3) In Akciné Gloster J said, citing Cuoghi: “Even if the court concludes that there is a real risk of prejudice, that fact in itself should not necessarily excuse the defendant from providing disclosure of his assets. The Court is entitled to take into account whether measures can be put in place which will sufficiently reduce the risk of self-incrimination in practice”
“15. I can tell Mr and Mrs Eyers from many years’ experience, not just in this court but in other courts, that appeals against costs hardly ever succeed, for the reason that it is the judge who is dealing with the case to decide what is fair about costs. This court would only interfere with the appeal court if there has been an error of law, and there has been no error of law in this case.”
“The hearing of matters consequential on the main judgment was held on23 November 2020 . The Senior Master ruled that, notwithstanding the fact that it succeeded in resisting both applications to set aside the Orders on both grounds advanced, and CGHA was, therefore, wholly successful, CGHA should nonetheless pay 75% of Ms Purdy’s and 75% of Maquay’s costs, to be assessed on the standard basis, and that CGHA should make payments on accounts of those costs in the aggregate amount of£150,000 within 28 days of the judgment (“the costs order”). That is an extraordinary result, which CGHA submits cannot be justified by reference to the principles and/or to any proper approach to the exercise of the court’s discretion.”
“13. In general, however, I consider that the starting point must be that the claimant is the successful party. If the starting point were that costs, particularly on the indemnity basis, were awarded in favour of a defendant which has after all failed to obtain the discharge of the order, that could encourage disputes about failures to disclose to be litigated rather than promoting a realistic attitude on the part of defendants as to whether, despite a failure to disclose, a freezing order is nevertheless appropriate. An approach which, as it were, gives the defendant a free shot at discharging a freezing order so far as costs are concerned would not be helpful.”
“The court’s order must mark the importance of complying with the duty of full and frank disclosure and serve as a deterrent to ensure that persons who make ex parte applications realise that they must discharge that duty. That purpose can be satisfactorily achieved, in an appropriate case, by an appropriate order as to costs.”
“I acknowledge that there may be cases where, rather than making a deduction, even a very substantial deduction, from the costs to be awarded to the successful claimant which has succeeded in maintaining its injunction, it may be appropriate to make an award of costs in favour of the defendant, sometimes even an award for assessment on the indemnity basis. That was Teare J’s approach in the Konkola Copper Mines case and nothing I say should be understood as casting doubt on his order. Every exercise of discretion depends on its own circumstances.” “I acknowledge that there may be cases where, rather than making a deduction, even a very substantial deduction, from the costs to be awarded to the successful claimant which has succeeded in maintaining its injunction, it may be appropriate to make an award of costs in favour of the defendant, sometimes even an award for assessment on the indemnity basis. That was Teare J’s approach in the Konkola Copper Mines case and nothing I say should be understood as casting doubt on his order. Every exercise of discretion depends on its own circumstances.”
“…it is important to note the particular nature of an application under section 2 of the 1975 Act. In particular, such an application does not constitute ordinary contested litigation, in which a claimant seeks a remedy against a defendant in respect of a past or threatened act, alleged to be in breach of the claimant’s enforceable rights. In the case of an application under section 2 of the 1975, far from seeking to protect and/or vindicate its rights against the respondent, the applicant is seeking to persuade the Court to invoke a statutory provision compelling the respondent (who is not a party to the underlying litigation) to give evidence against its will and in circumstances where the risk of oppression to the respondent cannot be completely eliminated. In those circumstances, provided that its concerns are not frivolous, the respondent should be entitled to ventilate its concerns about the letter of request before the Court and ensure that the letter is properly scrutinised by the Court without fear of being rendered liable for the applicant’s costs, but in the expectation that (ordinarily) the applicant will bear the respondent’s costs.”