LORD JUSTICE MILLETT: On 17 November 1994 the Plaintiff, C. S. F. T.
SA (“CSFT”) commenced civil proceedings in Switzerland against Mr C.
alleging his complicity in the misappropriation of US $21.66 million by one
of its employees, a Mr V.. Sums totalling US $70.5 million were ostensibly
deposited with CSFT at rates of what was described as “commission”
of between 40% and 50% per annum. If the commission was not paid,
repayment of the sums deposited could be demanded. It is not clear
whether the deposits or the depositors actually existed or were merely
fictitious creations of Mr V.. The money was ostensibly paid out by CSFT
at Mr V.’s direction to entities under Mr C.’s control. Subsequently, with
Mr C.’s knowledge and encouragement, Mr V. misappropriated US $21.66
million from the accounts of two customers of CSFT. In a confession Mr V.
later explained that the misappropriation was necessary to enable him to
meet a shortfall in commission payments due to the depositors.
Criminal proceedings were opened in Switzerland at CSFT’s instigation in
October 1994 in relation to both the US $70.5 million and the US $21.66
million. In the Swiss civil proceedings CSFT has made no claim against Mr
C. in relation to the US $70.5 million. CSFT believes that it has a complete
defence to any possible claim by the depositors to the return of their
money.
Mr V. is a Swiss resident. Mr C., however, lives in England and is domiciled
here within the meaning of the Civil Jurisdiction and Judgments Act 1982.
The Swiss authorities are seeking his extradition to Switzerland. On 18
November 1994 Mance J granted CSFT an ex parte world-wide Mareva
injunction against Mr C. in aid of the Swiss proceedings together with
an ancillary disclosure order relating to his assets world-wide. He also
ordered Mr C. to make available for inspection certain documents in the
possession of A. B. and C. (“ABC”), a firm of English solicitors. On 23
November 1994 he extended an earlier order made by Gatehouse J in
a separate action brought by CSFT against ABC restraining ABC from
delivering up those documents to the order of Mr C..
Mr C. subsequently applied to confine the scope of the Mareva injunction
to his assets in England and Wales. By a further application in the other
action, to which he was admitted as an intervener, he applied to set
aside a N. P. order which had been made against ABC in relation to the
documents in their possession.
On 24 March 1995 Mance J:
(1) Confirmed inter partes the world-wide Mareva injunction against Mr
C. which he had made on 18 November 1994 and the ancillary disclosure
orders relating to Mr C.’s assets world-wide, and dismissed his application
to confine the orders to assets located in England and Wales;
(2) Confirmed his order requiring Mr C. to make the documents in ABC’s
possession available for inspection by CSFT;
(3) Accepted undertakings from CSFT not without the leave of the
Court (i) to bring proceedings (other than the existing proceedings in
Switzerland) against Mr C. (ii) to use information obtained as a result
of his orders for the purpose of civil or criminal proceedings in any
jurisdiction (including Switzerland) or (iii) to enforce his orders in any
jurisdiction outside England and Wales or to seek orders of a similar
nature including orders conferring a charge or other security against Mr C.
or his assets;
(4) Ruled against Mr C.’s claim to privilege against self-incrimination by
reason of any risk of exposure to criminal proceedings in England;
(5) Ruled in favour of Mr C. as a matter of discretion by limiting his
disclosure orders to the extent that it should appear, from a further
affidavit to be sworn by Mr C., that the disclosure might expose him to the
risk of incriminating himself in the Swiss criminal proceedings.
The Judge granted CSFT leave to appeal against (5) above but refused Mr
C. leave to appeal. This Court subsequently gave Mr C. leave to appeal
against (1) and (2) above. ABC have since complied with the order in the
other proceedings by making the documents in their possession available
for inspection by CSFT, with the result that Mr C.’s appeal against (2) has
become academic and has not been pursued before us.
Accordingly, the questions which arise on this appeal and cross-appeal are
as follows:
1. Whether the preconditions which are required to justify the grant of
world-wide as opposed to purely domestic Mareva relief in aid of foreign
proceedings are satisfied.
2. Whether the Judge was right to exercise his discretion to refuse to
order Mr C. to make disclosure which tended to expose him to the risk of
incriminating himself in the Swiss criminal proceedings.
1. The World-wide Mareva Injunction
By granting a world-wide Mareva injunction in aid of substantive
proceedings abroad, the Judge combined two far-reaching jurisdictions of
recent development and with international aspects. CSFT recognises that
such an order should be made with caution. Mr C. submits that it should
not be made at all save in very exceptional circumstances and that no
such circumstances exist in the present case.
The Mareva jurisdiction was established in 1975 as an exceptional remedy
to prevent a foreign defendant from defeating any ultimate judgment by
removing his assets from the jurisdiction. It was progressively extended,
in 1979 to English defendants, in 1982 by restraining defendants from
dissipating their assets within the jurisdiction as well as removing them
from the jurisdiction, and finally in 1990 by restraining defendants from
dealing with their assets both inside and outside the jurisdiction. This
last step was taken in Babanaft Co SA v Basatne [1990] Ch. 13, in which
the Court was concerned not to make an unwarranted assumption of
extra-territorial jurisdiction. It recognised that it would be wrong to
make an order which, though purporting merely to restrain the actions
of a defendant already subject to the jurisdiction of the Court, might
be understood to impose obligations upon persons resident abroad and
not subject to its jurisdiction. This danger was avoided by including
provisions in the order which made it clear that it was not to affect
parties not subject to the jurisdiction of the Court in respect of acts
outside the jurisdiction save to the extent that the order might be
enforced by the local courts. The jurisdiction to make such orders is
now firmly established. It is exercised with caution, and a sufficient
case to justify its exercise must always be made out; but such orders
are nowadays routinely made in cases of international fraud and the
conditions necessary in order to preserve international comity and prevent
conflicts of jurisdiction have become standardised. Before 1982 the Court
could not grant interlocutory relief when the substantive proceedings
were taking place abroad: The Siskina [1979] AC 210. Section 25 of the
Civil Jurisdiction and Judgments Act 1982, however, conferred power
on the High Court to grant interim relief when substantive proceedings
were pending in a Brussels or Lugano Contracting State and the subject-
matter of the proceedings was within the scope of the Brussels or Lugano
Conventions. The jurisdiction of the High Court has recently been further
extended by The Civil Jurisdiction and Judgments Act 1982 (Interim
Relief) Order 1997 which came into force on 1 April 1997. This extends
the effect of Section 25 to non-Convention countries and to proceedings
outside the scope of the Conventions. The position has now been reached,
therefore, that the High Court has power to grant interim relief in aid of
substantive proceedings elsewhere of whatever kind and wherever taking
place.
Article 24 of the Lugano Convention provides:
"24. Application may be made to the Court of the Contracting State for
such provision, including protective measures as may be available under
the law of that State, even if, under the Convention, the Courts of another
Contracting State have jurisdiction as to the substance of the matter.”
Article 24 authorises but does not require a Contracting State to make
protective orders in support of substantive proceedings which are pending
in another Contracting State. Section 25 of 1982 Act was enacted in order
to prevent the rule established by The Siskina from preventing our Courts
from giving effect to Article 24. So far as material the Section provides:
"25.¾(1) The High Court in England and Wales or Northern Ireland shall
have power to grant interim relief where¾
(a) proceedings have been or are to be commenced in a Brussels or
Lugano Contracting State other than the United Kingdom or in a part of
the United Kingdom other than that in which the High Court in question
exercises jurisdiction; and
(b) they are or will be proceedings whose subject-matter is within the
scope of the 1968 Convention as determined by Article 1 (whether or not
the Convention has effect in relation to the proceedings).
(2) On an application for any interim relief under subsection (1) the court
may refuse to grant that relief if, in the opinion of the court, the fact that
the court has no jurisdiction apart from this section in relation to the
subject-matter of the proceedings in question makes it inexpedient for the
court to grant it.
(7) In this section “interim relief,” in relation to the High Court in England
and Wales or Northern Ireland, means interim relief of any kind which
that court has power to grant in proceedings relating to matters within its
jurisdiction, other than¾
(a) a warrant for the arrest of property; or
(b) provision for obtaining evidence.
The wording of Section 25(2) is inelegant and is perhaps not readily
susceptible to close textual analysis, but its meaning is tolerably plain.
On an application for interim relief under subsection (1), the Court
is not bound to grant relief, but may decline to do so if in its opinion
the fact that it is exercising an ancillary jurisdiction in support of
substantive proceedings elsewhere makes it inexpedient to grant it. It
is the ancillary or subordinate nature of the jurisdiction rather than its
source which is material, and the test is one of expediency. The structure
of subsections (1) and (2) and the way in which their scope has been
progressively widened indicate to my mind an intention on the part of
Parliament that the English Court should in principle be willing to grant
appropriate interim relief in support of substantive proceedings taking
place elsewhere, and that it should not be deterred from doing so by the
fact that its role is only an ancillary one unless the circumstances of the
particular case make the grant of such relief inexpedient. Mr C. accepts
that:
(1) CSFT has a good arguable case that Mr C. was an accomplice of Mr V.
and was implicated in the misappropriation of US $21.66 million.
(2) CSFT has made a sufficient case for the grant of a domestic Mareva
injunction against Mr C. together with an ancillary disclosure order limited
to assets located in England and Wales.
(3) The English Court has jurisdiction to grant world-wide Mareva relief in
support of the Swiss proceedings under Section 25(1) of the 1982 Act.
(4) If CSFT had chosen to bring the substantive proceedings in England
instead of in Switzerland (as it could have done, since Mr C. is domiciled
in England), then the English Courts could and almost certainly would
have granted world-wide Mareva relief.
Accordingly, the question resolves itself into this: does the fact that
the substantive proceedings are taking place in Switzerland and not in
England make it inexpedient to grant world-wide, as distinct from merely
domestic, Mareva relief? The Judge did not think so, and I agree with him.
Mr C. submits that it is primarily for the courts of the state where the
assets are located to determine whether and if so what protective
measures should be ordered. He accepts that their jurisdiction cannot be
invoked until the whereabouts of the assets is known, but he says that it
is for the court which is seised of the substantive proceedings to decide
whether and to what extent a defendant should be ordered to disclose
the whereabouts of his overseas assets. He points out that England is
neither the state where the substantive proceedings are taking place nor
the state where the assets affected by the disputed aspects of the Mareva
injunction are located. He says that the Swiss courts have no power
to order a non-resident to disclose the whereabouts of assets located
outside Switzerland, and submits that we should not, by making orders
with extraterritorial effect, seek to remedy defects in the laws of other
countries.
I cannot accept the submission that it is inappropriate to exercise
the jurisdiction conferred by Section 25 to grant a world-wide Mareva
injunction in support of proceedings pending in another country. As
Lawrence Collins QC points out in Essays in International Litigation and
the Conflict of Laws (1994), there is no reason in principle why an English
injunction should not restrain a person properly before the Court from
disposing of assets abroad. The order operates in personam. It is "not
founded upon any pretension to the exercise of judicial or administrative
rights abroad, but on the circumstance of the person to whom the order is
addressed being within the reach of the Court": see Kerr, Injunctions (6th.
Ed. 1927) p. 11.
It is, of course, the case that, statute and Convention apart, the
jurisdiction of the English Court does not depend on domicile but on
service. Proceedings may be served on persons temporarily present within
the jurisdiction, or with leave under RSC Order 11 Rule 1 on persons
outside the jurisdiction. It is a strong thing to restrain a defendant who
is not resident within the jurisdiction from disposing of assets outside the
jurisdiction. But where the defendant is domiciled within the jurisdiction
such an order cannot be regarded as exorbitant or as going beyond
what is internationally acceptable. To treat it as such merely because the
substantive proceedings are pending in another country would be contrary
to the policy which informs both Article 24 and Section 25.
Where a defendant and his assets are located outside the jurisdiction
of the court seised of the substantive proceedings, it is in my opinion
most appropriate that protective measures should be granted by those
courts best able to make their orders effective. In relation to orders taking
direct effect against the assets, this means the courts of the state where
the assets are located; and in relation to orders in personam, including
orders for disclosure, this means the courts of the state where the person
enjoined resides.
I recognise that an ancillary jurisdiction ought to be exercised with
caution, and that care should be taken not to make orders which conflict
with those of the court seised of the substantive proceedings. But I do
not accept that interim relief should be limited to that which would be
available in the court trying the substantive dispute; or that by going
further we would be seeking to remedy defects in the laws of other
countries. The principle which underlies Article 24 is that each Contracting
State should be willing to assist the courts of another Contracting State
by providing such interim relief as would be available if its own courts
were seised of the substantive proceedings: see Alltrans Inc v Interdom
Holdings Ltd [1991] 4 All ER 458 at p. 468 per Leggatt LJ. By going
further than the Swiss Courts would be prepared to go in relation to
a defendant resident outside Switzerland, we would not be seeking to
remedy any perceived deficiency in Swiss law, but rather to supplement
the jurisdiction of the Swiss courts in accordance with Article 24 and
principles which are internationally accepted.
In other areas of law, such as cross-border insolvency, commercial
necessity has encouraged national courts to provide assistance to
each other without waiting for such co-operation to be sanctioned by
international convention. International fraud requires a similar response.
It is becoming widely accepted that comity between the courts of
different countries requires mutual respect for the territorial integrity of
each other’s jurisdiction, but that this should not inhibit a court in one
jurisdiction from rendering whatever assistance it properly can to a court
in another in respect of assets located or persons resident within the
territory of the former.
In the present case it is the disclosure order which is the most valuable
part of the relief granted by the Judge. Without it CSFT would be unable
to apply to the local courts for effective orders against assets abroad.
Mr C. makes much of the fact that the order extends to assets in
Switzerland, and submits that this is an unwarranted interference with
the jurisdiction of the court trying the substantive dispute. The short
answer to this is that the terms of the order will not allow it to be directly
enforced in Switzerland without an order of the Swiss courts. We do not
seek to force our co-operation on those who do not welcome it.
Finally, Mr C. submits that it is established by authority that the English
courts should make orders having extra-territorial effect in aid of
substantive proceedings being carried on abroad only in “very exceptional
circumstances.” For this proposition he relies on an observation of Lord
Donaldson MR in Rosseel NV v Oriental Commercial Shipping (UK) Ltd
[1990] 1 WLR 1387:
"Where this court is concerned to determine rights then it will, in an
appropriate case, and certainly should, enforce its own judgment by
exercising what would be described as a long arm jurisdiction. But, where
it is merely being asked under a convention or an Act of Parliament
to enforce in support of another jurisdiction, whether in arbitration or
litigation, it seems to me that, save in an exceptional case, it should
stop short of making orders which extend beyond its own territorial
jurisdiction.
....apart from the very exceptional case, the proper attitude of the English
courts....is to confine themselves to their own territorial area, save in
cases in which they are the court or tribunal which determines the rights
of the parties. So long as they are merely being used as enforcement
agencies they should stick to their own last."
In that case the plaintiffs were seeking to enforce a New York arbitration
award in England, and applied for a world-wide Mareva injunction pending
satisfaction of the award. No application had been made to the New York
court to enforce the award, perhaps because the relevant defendants
were resident in England, though this fact does not appear from the
report. Hirst J granted a domestic Mareva injunction, but refused world-
wide relief, holding that the New York court was the appropriate court
to grant such relief. His decision was upheld by this Court. I find the
decision surprising, given that the Court was being asked to exercise
its enforcement jurisdiction against defendants resident in England and
who were amenable to the provisions of RSC Order 48 and the inherent
jurisdiction to compel disclosure of assets abroad: see Maclaine Watson &
Co Ltd v International Tin Council (No. 2) [1989] Ch. 286 CA. I would not
for my part accept that the English court was being asked to exercise a
long-arm jurisdiction; indeed, I think that an order of the New York court
might well have qualified for this description.
The explanation, to my mind, is that no or no sufficient regard was
paid to the fact that the defendants were resident in England. The case
was regarded as comparable with Republic of Haiti v Duvalier [1990] 1
QB 202 CA, where world-wide Mareva relief was granted against non-
resident defendants in support of substantive proceedings in France. The
only connection with England was the presence here of solicitors who
knew where the assets were located. That was an extreme case, which
Professor Collins QC describes as perhaps going "to the very edge of
what is permissible": op. cit. p.207. The circumstances can be said to
have been "very exceptional", though to my mind the circumstance which
justified the exercise of the jurisdiction was that otherwise no effective
protection could be given to the plaintiffs anywhere.
Rosseel NV v Oriental Commercial Shipping (UK) Ltd was not concerned
with Section 25, but it was followed in Bautrading v Nordling (Unreported
CA 29 July 1996). In that case substantive proceedings were pending in
Germany. The defendants were domiciled in this country. The plaintiffs
applied for world-wide Mareva relief. The judge limited the order to
assets in England and Wales, and this Court upheld his decision. No
consideration appears to have been given by the Court to the terms of
Section 25(2) or to the question whether the making of a world-wide
order would have been inexpedient; and no account appears to have
been taken by the Court of the fact that the defendants were domiciled in
England or of the absence of any question of conflicting jurisdictions.
It is in my judgment regrettable that a gloss has been placed on the
words of Section 25(2). The question for consideration is not whether the
circumstances are exceptional or very exceptional, but whether it would
be inexpedient to make the order. Where an application is made for in
personam relief in ancillary proceedings, two considerations which are
highly material are the place where the person sought to be enjoined
is domiciled and the likely reaction of the court which is seised of the
substantive dispute. Where a similar order has been applied for and
has been refused by that court, it would generally be wrong for us to
interfere. But where the other court lacks jurisdiction to make an effective
order against a defendant because he is resident in England, it does not
at all follow that it would find our order objectionable.
Mr C. is resident and domiciled in England. He carries on business here
in a substantial way, and he is alleged to have committed acts in England
which were part of the fraud. He is believed to have assets in other
jurisdictions, but the Swiss court has no power to order him to disclose
their whereabouts. Unless we make such an order, CSFT cannot apply
to the courts where the assets are located for appropriate protective
measures, and any final judgment obtained in Switzerland may be
rendered ineffective. There is no danger of conflicting jurisdictions, and
although the Swiss court cannot make an order against Mr C. because
he is not resident in Switzerland, there is no reason to believe that it
would not welcome assistance from the courts of the country where
he is resident. If CSFT ultimately obtains final judgment in Switzerland
against Mr C., we will be bound to give effect to it, and it will be our
responsibility to execute it against an English domiciliary. It is beyond
dispute that at that stage we will have all necessary powers to ascertain
the whereabouts of Mr C.'s assets both here and abroad. It cannot be said
to be inexpedient to compel disclosure now so that appropriate steps can
be taken to prevent Mr C. frustrating an eventual judgment of the Swiss
court. It would be a very different matter if we were being asked to make
a world-wide order against Mr V., but we are not.
In my judgment the Judge's decision to grant world-wide ancillary Mareva
relief is unassailable. I would dismiss Mr C.'s appeal.
2. Self-incrimination
The Judge found that there was no significant risk that Mr C. would
face prosecution in this country, and accordingly held that he could not
claim the statutory privilege against self-incrimination conferred by
Section 14 of the Civil Evidence Act 1968. He indicated, however, that he
would exercise his discretion not to order disclosure of information which
would expose him to the risk of self-incrimination in the Swiss criminal
proceedings. In my judgment he was fully entitled to take this course.
The Judge appreciated that some of the information which Mr C. was
being asked to disclose might consist of bank accounts which could be
directly linked with the money movements involved in the alleged fraud,
and that this might well incriminate him. He was, however, sceptical of
the suggestion that the disclosure of other assets would be incriminatory,
and he directed that Mr C. should swear a further affidavit making a
more limited and better focused claim to privilege. He referred to the
undertakings which CFST had offered not to make use of the information
in the course of the Swiss proceedings whether civil or criminal, but
indicated that he was concerned at the likelihood of inadvertent leakage.
The Judge's decision has been criticised, but in my judgment it was one
which he was entitled to reach. It is said that it was premature, in that
the Judge should not have ruled out the possibility of further protection
against inadvertent leakage. But as I understand his judgment, the Judge
was not making any final decision pending the receipt of a more detailed
claim to privilege. It will still be open to CSFT to suggest measures which
will ensure that there is no significant risk that incriminating information
will come into the possession of the Swiss prosecuting authorities. The
best way of doing this is to prevent it coming into the possession of CSFT.
There are various mechanisms that could be put in place to ensure this
without reducing the effectiveness of the Mareva relief. Some of them
were suggested in the course of argument. So far as bank accounts are
concerned, it appears to be the entries in the accounts which are thought
to be sensitive rather than the location and amount of the final balances.
It should not be beyond the skill of those advising Mr C. to find a means
of providing the latter information without disclosing the former.
In my judgment the Judge's decision in principle was one which he was
entitled to reach. I would dismiss CSFT's cross-appeal.
LORD JUSTICE POTTER: I have had the advantage of reading both
judgments with which I agree.
LORD CHIEF JUSTICE: I also agree.
1. The world-wide Mareva
CSFT commenced proceedings against Mr C. in Switzerland claiming
substantive relief. They then brought proceedings against him here
seeking interim relief pending judgment in Switzerland.
Had the law as laid down in The Siskina [1979] AC 210 remained
unaltered, the English court could not have granted such relief. But the
country where substantive proceedings had been issued was a Lugano
Contracting State and the subject matter of those proceedings was within
the scope of the 1968 Brussels Convention as determined by Article 1
of that Convention. Therefore, by virtue of section 25 (1) of the Civil
Jurisdiction and Judgments Act 1982, the High Court in England and
Wales had power to grant interim relief on an application made under that
subsection.
Subsection (2) of that section makes plain that the court is not bound
to grant such relief. This is not an entirely straight-forward subsection,
but its meaning is in my view accurately paraphrased and elaborated
as follows: on an application for interim relief under subsection (1), the
court may refuse to grant relief if it is in its opinion inexpedient to do so
because the court has no jurisdiction in relation to the subject matter
of the proceedings in question apart from section 25; but the court may
grant relief if it is in its opinion expedient to do so even though the court
has no jurisdiction in relation to the subject matter of the proceedings
in question apart from the section. Thus attention is focused on the
inexpediency or expediency of granting interim relief having regard to the
absence of jurisdiction to do so apart from section 25.
Where substantive proceedings are brought in this country, and there
is an ancillary application for a Mareva injunction and an associated
disclosure order limited to England and Wales, the court will wish to
satisfy itself that a sufficient case is made out for granting such relief. So
it will where such an application is made under section 25, and regard will
be paid to expediency as required by subsection(2). In the present case
it is common ground that the judge would have been fully entitled, on the
present application, to grant interim relief limited to England and Wales
under section 25.
Where substantive proceedings are brought in this country, and there
is an ancillary application for a Mareva injunction and an associated
disclosure order on a world-wide basis, the court will wish to satisfy itself
that the facts are (or appear to be) such as to justify the making of so
unusual and far-reaching an order. Such relief is not, and should not be,
granted routinely or without very careful consideration. Mr C. accepts
that in the present case, had the substantive action been brought here,
the court would probably, and unobjectionably, have granted such relief.
Where the substantive proceedings have been commenced elsewhere,
and application is made here for such world-wide relief under section 25,
the court will be even more cautious in granting relief having regard to
the terms of subsection (2).
It would be unwise to attempt to list all the considerations which might
be held to make the grant of relief under section 25 inexpedient or
expedient, whether on a municipal or a world-wide basis. But it would
obviously weigh heavily, probably conclusively, against the grant of
interim relief if such grant would obstruct or hamper the management of
the case by the court seized of the substantive proceedings ("the primary
court"), or give rise to a risk of conflicting, inconsistent or overlapping
orders in other courts. It may weigh against the grant of relief by this
court that the primary court could have granted such relief and has not
done so, particularly if the primary court has been asked to grant such
relief and declined. On the other hand, it may be thought to weigh in
favour of granting such relief that a defendant is present in this country
and so liable to effective enforcement of an order made in personam ,
always provided that by granting such relief this court does not tread on
the toes of the primary court or any other court involved in the case. On
any application under section 25 this court must recognise that its role is
subordinate to and must be supportive of that of the primary court.
Since Mr C. accepts that, if this court had been the primary court, it
would probably and unobjectionably have granted a world-wide Mareva
injunction and disclosure order, it is unnecessary to review the judge's
reasons for concluding that such an order was, on the basic facts,
appropriate. Was it therefore inexpedient to grant such relief because
the court had no jurisdiction in relation to the subject matter of the
proceedings in question apart from section 25?
Like the judge, I do not think so. The order which the judge made was
one the Swiss court could not have made. It did not conflict with any
order the Swiss court had made. It was made on terms which obviated
any risk of conflict with any order made by any other court. It was
made in personam against a defendant domiciled and resident here,
and amenable to the enforcement of the order. It did not seek to assert
jurisdiction over any person or any asset outside the territorial jurisdiction
of the court. It gave rise to no jurisdictional disharmony or confusion. It
promoted an object which might reasonably be assumed to find favour
with the Swiss court by seeking to preserve funds which, if CSFT's claim is
well-founded, Mr C. had dishonestly misappropriated and which would be
needed to satisfy the judgment of the Swiss court.
In criticising the judge's reasoning Mr Briggs QC for Mr C. relied primarily
on Rosseel NV v Oriental Commercial Shipping (UK) Ltd [1990] 1 WLR
1387. In that case the plaintiffs were seeking to enforce a New York
arbitration award in England and sought a Mareva injunction pending
satisfaction of the award. Their entitlement to such relief in England and
Wales was accepted, but world-wide relief was refused by Hirst J, who
held that the appropriate court to grant such relief was the New York
court or the foreign court in the place where assets were to be found. The
Court of Appeal upheld his ruling, although there were no proceedings
(actual or contemplated) in New York, and there seems to have been no
evidence of assets in the territory of any foreign court. The application
in that case was not made under section 25, and to that extent the
case is not strictly in point. But insofar as the court discouraged the
grant of ancillary relief where such grant would obstruct or hamper the
management of a case by the primary court or give rise to a risk of
conflicting, inconsistent or overlapping orders in other courts I have no
doubt that it was right to do so.
Reliance was also placed on S. & T. Bautrading v Nordling (Court of
Appeal, C.A.T. 1018, unreported, 29 July 1996). The primary court in that
case was German. Mareva relief was sought here on a world-wide basis
but the deputy judge held that the relief should be limited to England and
Wales, and the Court of Appeal upheld his decision. It does not appear
that the Court of Appeal gave detailed consideration to the expediency
or inexpediency of granting world-wide relief, nor that the plaintiffs
placed reliance in this context on the English residence and domicile of
the defendant. Rosseel was treated as laying down a guideline for the
exercise of discretion under section 25. As already indicated, Rosseel
correctly and strongly discouraged the grant of interim relief which would
lead to jurisdictional conflict, confusion or disharmony. I cannot read it as
authority that the grant of such relief under section 25 should necessarily
be regarded as inexpedient even where these results would not follow.
In my view the judge's decision was correct and I would dismiss Mr C.'s
appeal against it.
2. Self-incrimination
Since the judge held that Mr C.'s response to the disclosure order would
not expose him to the risk of prosecution in this country, Mr C. was not
entitled to claim the statutory right not to incriminate himself provided
by section 14 of the Civil Evidence Act 1968. This right is, however, one
widely respected among civilised nations irrespective of statute, and the
judge was in my view fully entitled to indicate that he would exercise
his discretion so as to protect Mr C. against the risk that he might be
subjected to criminal penalties in Switzerland on the basis of answers
which he had been compelled to give by order of the English court.
The judge's order was, as I understand, designed to ensure that
Mr C. made any disclosure which he could make without any risk of
incriminating himself in Switzerland. He therefore ordered Mr C. to
swear an affidavit defining the scope of his claim that disclosure would
incriminate him, on which no ruling has been finally given. It is still open
to CSFT to show that there will be no significant risk of self-incrimination
in practice because effective measures can and will be taken to ensure
that incriminating disclosures do not become known to the prosecuting
authorities in Switzerland. That is for the future. So far, the judge has
only indicated that he will exercise his discretion against ordering any
disclosure which might realistically incriminate Mr C. in Switzerland. In my
view this was a proper decision to reach.
I would dismiss CSFT's appeal on this issue.
THE LORD CHIEF JUSTICE: For the reasons that have been given in the
judgments which have been made available in writing, the appeal and the
cross-appeal will both be dismissed.
MR ONIONS: My Lord, in those circumstances I would ask for the costs of
the defendant's appeal and I do not think I can resist the costs in my own
appeal.
THE LORD CHIEF JUSTICE: In each case with costs, Mr Briggs?
MR BRIGGS: My Lord, I suppose that is the ordinary order. I do have it
in mind that it is in your Lordships' power, to avoid unnecessary cross-
taxation in exercises which occupied the court for similar periods of time
in terms of preparation and arguments before your Lordships, just to
make no order for costs. I realise that is not the ordinary order and I fall
back on the proposition that I should have the costs of the cross-appeal
and could not resist the costs of the appeal. My Lord, it would just save
a cross-taxation of two probably broadly similar amounts of costs if they
cannot be agreed.
THE LORD CHIEF JUSTICE: Mr Onions, what do you say about this? Shall
we cut out some legal flummery in this instance?
MR ONIONS: My Lord, I appreciate the attractiveness of that. I would
submit that certainly the substantive appeal was the appeal upon which
we have been successful and so there is a significant sum flowing one way
rather than the other way in terms of costs of the two appeals and so I
would ask your Lordships not to cut out legal flummery in this case.
THE LORD CHIEF JUSTICE: We shall dismiss both the appeal and the
cross-appeal in each case with costs and we shall leave it to the good
sense of the parties' respective advisers to try and avoid unnecessary
taxation.
MR BRIGGS: My Lord, I am instructed to ask for leave to appeal to the
House of Lords. My Lords, my submissions can be shortly put. There is
clearly, in my submission, a point of principle involved here on my appeal
-- not so much the cross-appeal because no point of jurisdiction was
taken in the cross-appeal. It is a point on which one might be forgiven for
thinking that practitioners could, looking at the three judgments which
have addressed themselves to this issue, detect at least a difference
of emphasis between the three differently constituted Courts of Appeal
which have so far considered the matter, and it is in those circumstances
a matter which in my submission is of general public interest, it being an
area which is likely in one's experience -- and I am sure in your Lordships'
experience -- to be an expanding one and one where clear guidance,
rather than three consecutive decisions looking not entirely happy with
each other, are all that the profession have to go on.
My Lord, I would also at the same time in that context have to ask for
an extension of time until after determination of any such appeal of the
time for Mr C.'s further affidavit. The time starts running again from
the date of your Lordships' order on this appeal and, my Lord, even if
your Lordships were not minded to grant me leave to go to the Lords but
leave me to try and persuade their Lordships, I would ask for a similar
extension in relation to that affidavit for as long as I am pursuing, but
not had dismissed, a petition for leave to appeal. My Lord, my reason for
so doing is not purely for the avoidance of work. Clearly Mr C. is going
to have to steer a very difficult path between saying something and not
saying something about what assets he may have and where they might
be, possibly even in order to persuade the court that he is under a real
risk. My Lord, in my submission it would not be right to require him to do
that if there is the prospect of his not, in fact, at the end of the day being
subject to the international part of the Mareva order and the obligation to
give evidence about where his foreign assets are.
MR ONIONS: Insofar as the question of leave to appeal is concerned, we
would respectfully submit that the matter should be left to their Lordships'
House. It is an appeal from the exercise of Mance J's discretion and in our
submission appeals on those matters are not encouraged and should not
be encouraged.
So far as the question of the extension of time is concerned, my Lord, we
do oppose that as well. What we are talking about here is an extension
of time for an affidavit in which Mr C. defines his claim to privilege as a
matter of Swiss law. This matter has now been going on for some two
years and we are still awaiting the affidavit which defines the claim to
privilege. In my submission it is not an overly burdensome task to do
that. It means that, at least to some extent, first of all, the matter can
proceed and, secondly, if my learned friend persuades their Lordships'
House to give leave and we are, as we anticipate, successful, we will then
be in a position to start from a further point on. We will have the affidavit
and will then be in a position to make any further application to the court
in relation to that affidavit. I would invite your Lordships not to grant
leave to appeal and not to order a stay.
THE LORD CHIEF JUSTICE: Thank you. Mr Briggs, we say for your benefit,
and for any use you may be able to make of it hereafter, that we do
consider that the guidelines which should influence the exercise of
discretion by a judge in a situation of this kind raise a point of importance
and we recognise that it is a point which their Lordships might think it
right to review, but we think that the decision whether they should review
it or not is one which essentially must be left to them. So we refuse you
leave, but of course leave you free to petition their Lordships for leave.
We think it is right to extend the time for swearing the affidavit until the
outcome of your petition to the House of Lords is known, subject to your
undertaking to pursue that petition with all reasonable diligence.
MR BRIGGS: May I take instructions? I am sure they will be forthcoming.
Yes, my Lord, that undertaking is given.
THE LORD CHIEF JUSTICE: Yes, very well. If they grant leave, it is until
the determination of the appeal. If leave is refused, then time starts
to run from then. We think, Mr Onions, that it is not really sensible to
order Mr C. to swear an affidavit on what could turn out to be a false
hypothesis.
MR ONIONS: My Lord, I am also instructed to ask for leave to appeal. I
simply make an application.
THE LORD CHIEF JUSTICE: That is refused, Mr Onions. Thank you.
ORDER: Appeal and cross-appeal both dismissed with costs; leave to
appeal refused.