Ras Al Khaimah Investment Authority & Ors v Bestfort Development LLP & Ors

This is an application for interim relief, including freezing injunctions, under section 25 of the Civil Jurisdiction and Judgments Act 1982 (“s25”). It came before me on 18 June 2015 amidst a flurry of activity in the run up to that hearing, continuing into the hearing.

On that occasion, the Applicants were represented by Stephen Moverley Smith QC and Alexander Pelling, and the majority of the Respondents were represented by Philip Marshall QC and Ruth den Besten, who also appeared for an individual known as Gela Mikadze (“Mr Mikadze”) - who has or is said to have an interest in all or some of the Respondents - for the purpose of giving certain undertakings on behalf of Mr Mikadze.

Due to a large measure of good sense on both sides it was possible to avoid a lengthy contested hearing and, in sum, to give directions for the matter to be listed for an effective hearing over 2-3 days later this year, but subject to suitable undertakings in the meantime.

Following the hearing on 18 June 2015, the parties made substantial progress in agreeing an appropriate form of Order. However, they have been unable to resolve a number of differences, and have asked me to rule on the outstanding matters without a hearing.

Ms den Besten contends that:

Mr Pelling submits that:

In my judgment, this issue is covered by CPR 25. This provides at CPR 25.1(1) that the court may grant various interim remedies, including an interim injunction (which plainly includes a freezing injunction made pursuant to s25), and, at CPR 25.2(3), that “Where it grants an interim remedy before a claim has been commenced, the court should give directions requiring a claim to be commenced”.

I consider that this also makes sense: a claim provides a vehicle for an application for an interim remedy; and the existence of a claim enhances the court’s ability to control the proceedings. Further, Mr Pelling has not cited any case in which an applicant for interim relief has not been required to commence a claim, and I am not aware of any case in which a claim form has not been required to be issued when interim relief is being sought at an effective hearing (although in cases where an urgent injunction is obtained and the proceedings are entirely compromised very shortly afterwards, as sometimes happens in privacy cases, I daresay there have been instances where no claim form has been issued).

Part of note 25.4.2 states with regard to CPR 25.2(3) that “In terms this rule applies where the court grants an interim remedy in support of foreign proceedings yet to be commenced (perhaps on the undertaking recited in the order that proceedings will be commenced in the foreign jurisdiction)”. At least on one reading, this suggests that the references in CPR 25.2(3) may be interpreted as being to a claim in a foreign jurisdiction. In my judgment, however, if that is what is intended by the note, it is not correct. As I read CPR 25, it is concerned, and only concerned, with claims in this jurisdiction. That is not to say that the existence of foreign proceedings should not be considered by the court when granting relief pursuant to s25, but merely that such proceedings are properly dealt with not by directions but instead by an undertaking of the type referred to in the note.

The explanation for the language used in note 6.37.33 is that the general rule contained in CPR 25.4(2) that an application for an interim remedy in (among others) a s25 case must be made in accordance with CPR 23 is overridden in the Commercial Court by paragraph F15.15 of the Admiralty and Commercial Courts Guide, such that where that paragraph applies a Part 8 claim form must be used rather than an application notice. That has the effect of bringing forward the issue of a claim in those circumstances, but leaves untouched the requirement to commence a claim in any case where CPR 25.2(3) applies.

The second issue which has arisen is whether it should be expressly recited that Mr Marshall QC and Ms den Besten appeared at the hearing on 18 June 2015 on behalf of the Third, Fourth, Sixth to Eighth, and Tenth to Fourteenth Respondents for the purposes of that hearing only (it being common ground that they appeared for the First and Second Respondents in any event and they did not appear for the Fifth and Ninth Respondents).

Ms den Besten argues that this should be recorded in the form of Order that is to be made following on from that hearing, if only to avoid any confusion about the basis upon which Mr Marshall QC and she appeared in future.

Mr Pelling submits that:

I consider that a form of recital which records that, at the time of the hearing on 18 June 2105, Mr Marshall QC and Ms den Besten had only obtained instructions to appear for the Third, Fourth, Sixth to Eighth, and Tenth to Fourteenth Respondents for the purposes of that hearing reflects (a) the facts (as they have been represented to me by them, and as I have no reason to doubt, and as the Applicants do not appear to assert to be incorrect) and (b) what I was told at the hearing.

I do not consider that such a recital is opaque. Nor am I persuaded that it is, or may be, designed to have any effect other than to record the true position (and no actual or potential consequence that is sinister or detrimental to the Applicants has been identified by Mr Pelling).

Accordingly, I decide in favour of the form of recital for which Ms den Besten contends.

The third issue that has arisen concerns the form of certain undertakings offered to the court in connection with the ascertainment of the balance of various ABLV bank accounts. There are two aspects to this issue. The first concerns the identity of the person who should be undertaking to use best endeavours to provide the account balance and supporting documents. The second concerns the documents that are to be provided.

With regard to the first aspect, Mr Pelling submits that:

The second aspect concerns the circumstances in which the relevant Respondents may provide a document from the bank verifying the balance that is not a bank statement.  Mr Pelling’s draft Order provides that the relevant Respondents must use their best endeavours to provide a bank statement “or, in the absence of a bank statement being available from the bank” such other document as may be available from the bank verifying the balance.  On this draft the Respondents do not have a choice as to whether they produce a bank statement or some other document: if a bank statement is available to them, as one would expect it to be, they have to produce it. The Applicants resist the contrasting wording put forward by the relevant Respondents, which leaves them free to avoid producing a bank statement if some other document is available. Mr Pelling suggests that, at the hearing, I was unsympathetic to suggestions by Mr Marshall QC that there was no need for bank statements to be produced. 

Ms den Besten submits that:

It is unfortunate that I should be asked to make rulings based on rival assertions by opposing Counsel in written submissions as to (a) what was said in court, and (b) the understanding of the parties based on what occurred at the hearing. The details of what was said will be recorded on a transcript, although none has been obtained. A detailed attendance note of solicitors – such as I believe I am right in saying that the applicants’ solicitors are required to produce on a without notice application for a freezing injunction – may be an adequate substitute, but I do not have the benefit of that either.

In these circumstances, and doing the best that I can to remember what transpired at the hearing, I prefer Ms den Besten’s submissions with regard to the first aspect. I should say that in the event that I am wrong in my reasoning on this point that will emerge from the transcript, and it will be open to the Applicants to raise the matter in future if that transpires to be the case, certainly by comment and potentially by application to the court.

So far as concerns the second aspect, however, I prefer the submissions of Mr Pelling. I consider that it is desirable that, as a preferred option, a bank statement should be produced if practicable, and I consider that the remaining form of wording suggested by both sides contains the necessary flexibility to cater for that not being practicable.

Accordingly, my ruling on this issue is that the undertakings following undertaking (c) in Schedule A to the Order should take the form of paragraphs (d) and (e) in the draft submitted by Ms den Besten, save that the concluding words should read “(ii) provide to the Applicant’s solicitors a bank statement (or in the event that a bank statement is not available such other documents as may be available) verifying the said balance”.

The final issue relates to service of the Order.

The Applicants contend that the Order should reflect that, as they submit to be correct, they may serve it on the Respondents by serving it on Peters & Peters. They rely on the fact that, at paragraph 11 of his witness statement dated 18 June 2015, Keith Oliver of Peters & Peters stated that firm had instructions “to represent the Third to Fourteenth Respondents at the hearing on 18 June 2015 for the purpose of seeking an adjournment”.  In Mr Pelling’s words: “The Applicants cannot see why the order granting the adjournment in favour of the Respondents should not be served on Peters & Peters”. 

Ms den Besten submits that since Mr Marshall QC, she and Peter & Peters appeared for the Third, Fourth, Sixth to Eighth, and Tenth to Fourteenth Respondents for the purposes of the hearing on 18 June 2015 only, they cannot agree to the Applicants’ proposal that service of the Order should be effected upon all the Respondents by service on Peters & Peters. The order should be served upon the Respondents in the usual way (that is to say, apart from the First and Second Respondents, at their separate addresses), and only upon Peters & Peters if and to the extent that they continue to be retained by the Respondents.

I consider that Ms den Besten is right on this point, and I rule accordingly. Whether and to what extent the adoption of that stance by the relevant Respondents will or may reflect well or badly (or not at all) on them as the litigation progresses is not for me to say.