Jersey Unreported Judgments

2001/9

6 pages

ROYAL COURT

(Samedi Division)f

 

11^th January, 2001

 

Before:  M.C. St. J. Birt, Esq., Deputy Bailiff, and

Jurats Myles and Quérée

 

In the matter of undertakings given by Grupo Torras S.A. and Torras Hostench London Limited in an action commenced by Order of Justice dated 22^nd December, 1993

 

Between:                                                       Grupo Torras S.A.                                                  First Representor

 

And:                                                 Torras Hostench London Limited                                 Second Representor

                                                                           (in liquidation)

 

And:                                          The Royal Bank of Scotland International                               First Respondent

                                                     (formerly Royal Bank of Scotland PLC)

 

And:                                                       NatWest Offshore Limited                                         Second Respondent

                                                 (formerly National Westminster Bank PLC)

 

And:                                                      Abacus (Nominees) Limited                                           Third Respondent

 

And:                                              Deutsche Bank International Limited                                Fourth Respondent

                                                    (formerly Morgan Grenfell (CI) Limited)

 

(RBS Disclosure Proceedings: Court File PL94/32)

 

In the matter of undertakings given by Grupo Torras S.A. and Torras Hostench London Limited in an action commenced by Order of Justice dated 29^th April, 1994

 

Between:                                                       Grupo Torras S.A.                                                  First Representor

 

And:                                                 Torras Hostench London Limited                                 Second Representor

                                                                           (in liquidation)

 

And:                                          The Royal Bank of Scotland International                                         Respondent

                                                     (formerly Royal Bank of Scotland PLC)

 

                                         (RBS 2 Disclosure Proceedings: Court File SD94/109)

 

In the matter of undertakings given by Grupo Torras S.A. and Torras Hostench London Limited in an action commenced by Order of Justice dated 29^th April, 1994

 

Between:                                                       Grupo Torras S.A.                                                  First Representor

 

And:                                                 Torras Hostench London Limited                                 Second Representor

                                                                           (in liquidation)

 

And:                                          The Royal Bank of Scotland International                                         Respondent

                                                     (formerly Royal Bank of Scotland PLC)

 

(Sierra Trust Disclosure Proceedings: Court File SD94/110).

 

In the matter of undertakings given by Grupo Torras S.A. and Torras Hostench London Limited in an action commenced by Order of Justice dated 25^th July, 1994

 

Between:                                                       Grupo Torras S.A.                                                  First Representor

 

And:                                                 Torras Hostench London Limited                                 Second Representor

                                                                           (in liquidation)

 

And:                                          The Royal Bank of Scotland International                               First Respondent

                                                     (formerly Royal Bank of Scotland PLC)

 

And:                                              Deutsche Bank International Limited                               Second Respondent

                                                    (formerly Morgan Grenfell (CI) Limited)

 

(RBS 3 Disclosure Proceedings: Court File SD94/190)

 

 

Application by the First and Second Representors in the four above proceedings for an Order:

 

(1)   releasing them from their undertakings given to the Court with regard to the use of information and documents obtained from the Respondent; or

(2)   varying the said undertakings to allow the Representors to use any information obtained in the above proceedings for the following purposes:

 

(i)    to take any step in any jurisdiction relating to the enforcement of the judgments of the English Commercial Court entered in proceedings 1993 Folio No. 624 and 1996 Folio No. 1206 consolidated as 1993 Folio No. 624; and/or

(ii)   of the criminal complaint commenced in the Audiencia Nacional in Madrid, Spain, in December, 1992, under proceeding No. 67/93; and/or

(iii)  of the civil proceedings commenced in the Tribunal of First Instance in Geneva, Switzerland, on 26^th September, 2000 (reference number C/22828/2000), 29^th September, 2000 (reference number C/23306/2000), 29^th September, 2000 (the reference number of which is presently unknown - the parties are GT, THL, Watch Foundation, Watch Portfolio Limited, Pamela Rosa Ball, Deborah Alexandra Platt and Emma Frances Ball) and 2^nd October, 2000 (reference number C/23323/2000); and/or

(iv)  of the criminal investigation commenced in Switzerland in December 1993, May 1998 and November 1998, now consolidated as one investigation under reference number P/6133/1998; and/or

(v)   any proceedings including proceedings in relation to the enforcement of any judgment, order or award, in any jurisdiction, whether the proceedings are civil, criminal or otherwise concerning any part of the transactions or recovery of any part of the monies, the subject of the proceedings in the English Commercial Court in action 1993 Folio No. 624 and 1996 Folio No. 1206 consolidated as 1993 Folio No. 624 or any of the judgments in those proceedings.

 

 

Advocate N.F. Journeaux for the Representors.

Advocate R.J. Michel for the Royal Bank of Scotland International

and Deutsche Bank International Ltd.

Advocate N.M.C Santos Costa for NatWest Offshore Ltd

and Sierra Trust Co Ltd.

Abacus (Nominees) Ltd did not appear and were not represented.

 

 

JUDGMENT

 

THE DEPUTY BAILIFF:

 

1.                  GT has been the subject of a massive fraud which took place between 1988 and about 1990 and it subsequently instituted proceedings in the English High Court in 1993.

 

2.                  In support of those proceedings it brought four Orders of Justice in Jersey during the course of 1993 and 1994.  These Orders of Justice sought information from various financial entities in the Island in support of the English proceedings.  Information was supplied pursuant to the four Orders of Justice and we will refer to that information as "the disclosure information".

 

3.                  At the time that the Orders of Justice were brought GT and another plaintiff, Torras Hostench London Ltd, gave an undertaking to the Court in the following terms:

 

"Not to use any information obtained from the Defendants upon the terms of the Orders set out hereafter except for the purposes of the English action or any proceedings in any jurisdiction in relation to the funds claimed as being the property of the Plaintiffs in the English action or with leave of the Court."

 

4.                  In March, 1999, Mance LJ gave judgment in the English action.  In essence he found that there had been a conspiracy to defraud on the part of a large number of defendants and he gave judgment against those defendants for a principal sum of approximately $450 million but with interest and so forth, the total judgment was approximately $800 million.  GT is now taking steps to try and enforce that judgment around the world.

 

5.                  It is in that context that it now brings four representations, one relating to each of the four proceedings which we described earlier.  They seek to vary the undertaking given so that the disclosure information can be used for the following purposes:

 

(a)     Any step in any jurisdiction relating to the enforcement of the judgments of the English Commercial Court entered in the English action;

 

(b)     The criminal complaint commenced in the Audiencia Nacional in Madrid, Spain, in December, 1992, under proceedings number 67/93 ("Spanish Criminal Complaint"); and/or

 

(c)     The civil proceedings commenced in the Tribunal of first instance in Geneva, Switzerland, on 26^th September, 2000, (reference Number C/22828/2000), 29^th September, 2000 (reference number C/23306/2000, 29^th September, 2000 (the reference number of which is presently unknown - the parties are GT, THL, Watch Foundation, Watch Portfolio Limited, Pamela Rosa Ball, Deborah Alexandra Platt and Emma Frances Ball) and 2^nd October, 2000 (reference number C/23323/2000) ("Swiss Civil Proceedings"); and/or

 

(d)     The criminal investigation commenced in Switzerland in December, 1993, May, 1998, and November, 1998, now consolidated as one investigation under reference number P/6133/1998 ("Swiss Criminal Proceedings"); and/or

 

(e)     Any proceedings including proceedings in relation to the enforcement of any judgment, order or award, in any jurisdiction, whether the proceedings are civil, criminal or otherwise concerning any part of the transactions or recovery of any part of the monies, the subject of the proceedings in the English action or any judgments entered in the English action."

 

6.                  The principles upon which the Court will act are clear.  A Court will allow the use of information which has been obtained compulsorily in civil proceedings where it is satisfied that the interests of justice in this respect outweigh the need to protect privacy and confidential information so as not to deter litigants from making full discovery in civil proceedings.

 

7.                  Given the findings in the English proceedings we are in principle willing to agree to the release of the disclosure information for use in civil proceedings related to those English proceedings.  In essence the defendants in this matter, that is the financial institutions, did not object to what was suggested although they did have certain observations, particularly in relation to sub-paragraph (e) which I have just read.

 

8.                  Having considered the matter we think that those observations were correct and that (e) as originally requested was too wide and meant that the Court would have completely lost control over the use to which the information - which was obtained by order of this Court - was put.  We therefore vary the wording in (e) so that it reads as follows:

 

(e)     Any civil proceedings (including proceedings in relation to the enforcement of any judgment, order or award) in any jurisdiction directly or indirectly concerning recovery of any part of the monies, the subject of the proceedings in the English action or any judgments entered in the English action."

 

9.                  In relation to the request for use in criminal proceedings, the position is rather different.  There are clear procedures laid down where the prosecuting authorities of one jurisdiction wish to obtain documents or information situated in another jurisdiction.  As a general principle we think it is not right to use civil discovery proceedings as a back door method of getting information required for criminal proceedings.  But there is jurisdiction in this Court to allow information which has been obtained compulsorily in civil cases to be used subsequently for criminal purposes in other jurisdictions.  The case of Jyske Bank (Gibraltar) Limited -v- Spjeldnaes & Recolte Investments Ltd (1993) JLR 99 so held although the facts of that case were quite specific in that the Court took into account that the person in possession of the disclosed information in England could be compelled by English law to provide that information to the English prosecuting authorities and the Court therefore felt that it would be pointless to hold the possessor of the information to the undertaking.

 

10.              There are two cases in England which also support the principle that the Court has jurisdiction to give leave for information to be used in criminal proceedings.  These are AG for Gibraltar -v- May [1999] 1 WLR 998 and Bank of Crete S.A. -v- Koskotas & Ors (No 2) [1992] 1 WLR 919.

 

11.              We are satisfied that there is jurisdiction for this Court to give permission for documents to be used in criminal proceedings in other jurisdictions.  Nevertheless in such cases the Court should scrutinise the request for use of documents in criminal cases with care in order to ensure that the proper procedures for obtaining information in criminal cases, with their built-in safeguards, are not being circumvented.

 

12.              In connection with the Spanish proceedings, the Spanish prosecuting authorities already have all the disclosure information as they seized it from one of the defendants in the English proceedings who was resident in Spain.  The undertaking given is therefore of little effect in relation to the criminal proceedings in Spain save that it inhibits GT from using the information fully.  We see little point in maintaining the undertaking in those circumstances.

 

13.              The position is not the same in the Swiss criminal proceedings in that, as we understand it, the disclosure information is not yet available to the Swiss prosecuting authorities.  Nevertheless the disclosure information has been widely disseminated in a number of jurisdictions and is already in many hands.  The case involves a massive fraud which concerned many jurisdictions and, in our judgment, the public interest requires that this Court should give assistance in a matter of this seriousness and this nature and we think that GT should be free to use the disclosure information in the Swiss criminal proceedings as well as in the Swiss civil proceedings.

 

14.              We therefore make an order in the terms requested by GT as to paragraphs (a) to (d) and in the amended form of paragraph (e) that we have set out earlier in this judgment.

 

15.              As to the question of costs GT agrees to pay costs of all the defendants with the exception of Sierra Trust Company Limited and to pay those costs on an indemnity basis. In relation to Sierra Trust Company Limited the position is somewhat different as we have been referred to a settlement agreement between Sierra and GT, paragraph 7 of which provided that the partners of Sierra would carry out various activities at their own expense.

 

16.              Mr Costa has argued that it was only following the giving of an undertaking by GT in paragraph 3 of a letter dated 8^th January that Sierra was able to take the stance which it has in these proceedings and the Court certainly has noted the undertaking given by GT.  Nevertheless we think that in the light of paragraph 7 the right course is that Sierra should bear its own costs of this hearing.

 

17.              We should add one final matter in relation to paragraph (e) in its amended form we wish to make it clear that the phrase "recovery of any part of the monies" is not of course limited to a proprietary claim but includes any attempt to recover monies which GT says are owed to it in relation to the matters covered by the English action.

Authorities

 

 

A.G. for Gibraltar -v- May [1999] 1 WLR 998.

 

Bank of Crete S.A. -v- Koskotas & Ors (No. 2) [1992] 1 WLR 919.

 

Jyske Bank (Gibraltar) Limited -v- Spjeldnaes & Recolte Investments Ltd (1993)

JLR 99.