Annual International Litigation and Asset Recovery Forum 2016 Tracing and Recovery of Assets in Fraud and Economic Crime matters: Considerations for Defendants (and their lawyers) Jonathan Tickner Partner, Commercial litigation, civil fraud and asset recovery department Annual International Litigation and Asset Recovery Forum 2016 3 November 2016

Proceedings afoot: Dispute Jurisdiction? Defendant is within the jurisdiction of England, Wales and Northern Ireland Defendant is in Nigeria Rules for Service Defendant is domiciled in the jurisdiction and properly served with a claim form: ss.41(2), 41A(2) CJJA 1982 (substantial connection). ss.41(6), 41A(6) CJJA 1982 (presumed domiciled if resident for 3 months). Cherney v Deripaska [2007] EWHC 965 (Comm) Claimant has to apply for permission to serve out of the jurisdiction. Requires a witness statement asserting that: Claim falls within one of the “gateways” in CPR, e.g. tortious damage occurred in jurisdiction or there is already an “anchor” defendant; Claim has a reasonable prospect of success; and England & Wales is the “proper place” for the claim. Ex-parte application so duty of full and frank disclosure. Service CPR 6.3 (includes personal service, first class post and fax). CPR 6.42(3) – service must be effected directly and in accordance with the laws of the jurisdiction. Dispute jurisdiction/ set aside service? Defendant may argue forum non conveniens: Territorial connections; Parallel proceedings; Multiple parties; Applicable law; Documentary evidence. Practice points Indicate the intention to contest jurisdiction upon filing the acknowledgment of service (CPR 11(2)). Be careful not to take a step in the proceedings which in all the circumstances amounts to a recognition of the Court's jurisdiction (The Messiniaki Tolmi [1984] 1 Lloyds Reports, 266). Make the application disputing jurisdiction in time (Zumax Nigeria Ltd v First City Monument Bank plc [2014] EWHC 2075 (Ch)).

Parallel criminal proceedings: considerations Is there a real, and not merely a potential or fanciful danger that the disclosure of the defence in the civil proceedings would lead to a potential miscarriage of justice in the criminal proceedings? (Balfron Trustees Ltd v Peterson and others (No.2) [2001] All ER (D) 104). Special measures to ensure no cross-contamination (Attorney General of Zambia v Meer Care & Desai (a firm) and others [2006] EWCA Civ 390; Access Bank v Erastus Akingbola & Ors [2012] EWHC 1124 (Comm)).

Case management: Disclosure? CPR 31.6 Standard disclosure requires a party to disclose only – The documents on which he relies; and The documents which adversely affect his own case; adversely affect another party’s case; or support another party’s case.

Section 25, Civil Jurisdiction and Judgments Act 1982 Empowers English courts to grant interim relief in aid of substantive proceedings that “have been or are about to be commenced” in another country Generally used to obtain freezing and disclosure orders in support of foreign proceedings Basis: the facts of the proceedings in the foreign jurisdiction would warrant the relief sought if those proceedings were brought before the English Court; and if so, the English Court does not consider, in light of the fact that it has no jurisdiction in relation to the subject matter of the proceedings in question that it would be inexpedient to grant the relief sought. (Royal Bank of Scotland plc v FAL Oil Co Ltd and others [2012] EWHC 3628 (Comm); Kagalovsky and another v Balmore Invest Ltd and others 2013 EWHC 3876 (QB))

Where it can all go wrong: Duty of full and frank disclosure Where it can all go wrong: Duty of full and frank disclosure. Claimants take care! Material non-disclosure; Use of illegally obtained information; Disclosure of unlawful conduct; Limitation.

Dar Al Arkan Real Estate Development Company & Anor v Majid Al-Sayed Bader Hashim Al Refai & Ors [2012] EWHC 3539 (Comm) Background: Cs alleged that D1, the former CEO of C2, had deployed confidential material he had obtained from C2 without authority and prior to his dismissal, to instigate a campaign to discredit, damage and destroy C1 and C2’s business. Prior to issuing the claim, Cs had applied to the court to use e-mails and other evidence for the purpose of the proceedings. The ex parte application was made under s.55, Data Protection Act 1998, which prohibits disclosure of “personal data” and makes it an offence to do so, subject to a number of exceptions including disclosure authorised by a court order. The court granted the relief sought. The application was made following the receipt by the MD of C1 (also a director of C2), “SA”, of 2 hard drives sent anonymously by post containing D1’s e-mails and those of persons associated with him. SA swore evidence as to how he had come to be in the possession of the drives and what he had done with them upon receipt. On the basis of the evidence before it, the court made orders for interim relief.

Dar Al Arkan Real Estate Development Company & Anor v Majid Al-Sayed Bader Hashim Al Refai & Ors [2012] EWHC 3539 (Comm) Where it all goes wrong: D2 asked Cs’ solicitors for an independent forensic review of the drives. Cs’ solicitors took that action, but without informing the solicitors for D2 that they had done so. Analysis showed that material on the drives may have originated from D1. SA told Cs’ solicitors that the drives with which they had been provided were not the original drives. 2 further drives were provided. Upon analysis, these also contained material that may have originated from D1 and showed that the MD of “Special Projects” for C2 (“DA”) was the author of the deleted material. D1 applied to have the interim orders discharged. D1 examined the hard drives and found that the first set of drives was not a copy of the second set, and hacked data was loaded on to the first set by C1’s head of IT. At the hearing of D1’s application, the judge permitted Cs’ witnesses to be cross-examined.

Dar Al Arkan Real Estate Development Company & Anor v Majid Al-Sayed Bader Hashim Al Refai & Ors [2012] EWHC 3539 (Comm) The judgment: “The Claimants' more culpable failings relate to the data complaints and the financial complaints: here I conclude that the Claimants were in breach of their duties not only by failing to make proper disclosure but because some of their evidence, including that of [SA] and [DA], was misleading. Their evidence was dishonest…In this case my conclusions mean that the Claimants' breaches of duty on the ex parte applications were extensive and culpable, and their culpability was aggravated by their subsequent conduct…In my judgment, the public interest requires that the Claimants' conduct should deprive them of the relief that they obtained ex parte, either through continuing the original orders or through making renewed ones.”

Boreh v Republic of Dijbouti and others [2015] EWHC 769 (Comm) Prior to an injunction hearing, a solicitor from the firm representing the Claimants (G) became aware of an error in the date of a transcript of evidence which rendered the defendant’s conviction for terrorism unsafe. G failed to draw the court’s attention to this error at the injunction hearing when the conviction was relied on as evidence of the defendant’s likelihood to dissipate assets.  Flaux J sitting in the High Court set aside a freezing injunction on the grounds G deliberately misled the court at the injunction application: G’s deliberate misleading of the court was so serious that it would be wrong to let the Cs retain any advantage in the form of the freezing order.  This did not apply to the proprietary injunction, as the misleading evidence related to the risk of dissipation of assets only. The same conclusion would have been reached on the grounds that the Cs did not come to court with clean hands.

Jonathan Tickner Jonathan is highly recommended in leading legal directories and was recognised in The Lawyer’s ‘Hot 100’ list in the litigation/regulatory category in 2014. Jonathan specialises in commercial litigation, with particular emphasis on international civil fraud and asset tracing cases, corporate investigations and private damages claims in competition law. Jonathan has extensive experience in dealing with multi-jurisdictional emergency procedures in the US, Europe and worldwide. He regularly deals with claims involving search orders, freezing injunctions, document preservation orders and information orders. Headline cases include: acting on behalf of the Department of Health in relation to claims against pharmaceutical companies in abuse of dominant position cases, as well as price and supply fixing; acting for Lakshmi Mittal, chair and CEO of ArcelorMittal, in a claim brought by Manmohan Varma; acting in the US$242m claims by shareholders of Banco Noroeste, Brazil, to recover funds stolen from the bank and laundered through the UK, Switzerland, Nigeria and Hong Kong; acting for the former Group Chief Executive of Intercontinental Bank Plc; representing Tom Hicks and George Gillett in the litigation concerning the sale of Liverpool Football Club. Jonathan trained at Peters & Peters, qualified in 1995 and became Partner in 2002. His publications include the 2014 and 2015 editions of ‘Getting The Deal Through-Asset Recovery’ (co-author) and ‘Anti-Competitive Camouflage: Pay for Delay Agreements’, in the 6th edition of ‘The International Comparative Legal Guide to Competition Litigation 2014’. He lectures and writes widely on his specialist areas. Jonathan is recognised in ‘Chambers UK’, ‘Legal 500’ and ‘The International Who’s Who of Asset Recovery Lawyers’. E: jtickner@petersandpeters.com D: +44 (0)20 7822 7766 F: +44 (0)20 7822 7788 15 Fetter Lane, London EC4A 1BW