United Company Rusal Plc & Ors v 1) HSBC Bank Plc & Ors

A Norwich Pharmacal order is available only where the applicant shows a good arguable case of wrongdoing, involvement by the respondent, necessity in the interests of justice, and information within the proper scope of the jurisdiction. The jurisdiction may assist foreign proceedings and need not be confined to information required for litigation, but it is not a general discovery procedure.

Where the respondent is a law firm, the court must identify involvement by the relevant office and respect the territorial limits of the jurisdiction. Orders against innocent lawyers require especially careful scrutiny. Wide-ranging requests for transactional documents and money-laundering material will generally exceed the permissible scope. Relief was refused.

Rusal and Mr Sokov applied under CPR Part 31.18 for Norwich Pharmacal relief against HSBC, Citigroup and Debevoise. The banking applications were discontinued, leaving the application against Debevoise, an international law firm instructed by companies connected with Norilsk Nickel and Interros.

Rusal sought information and documents concerning the Trafigura Deal and Buy Back Deal, to support proceedings in Russia and St Kitts and Nevis and to inform an extraordinary general meeting. Mr Sokov sought information said to be necessary for his functions as a director. The central issues were whether there was arguable wrongdoing, whether Debevoise was involved, whether disclosure was necessary, whether the draft order was within the jurisdiction’s scope, and whether relief should be granted.

1. Rusal’s application. The applicant had to establish a good arguable case of wrongdoing. The court rejected speculative allegations concerning the value or financing of the Trafigura Deal and found no good arguable case that the 10 per cent foreign-ownership threshold had been exceeded. However, on the limited material, it was arguable that Trafigura and Interros had an agreement or arrangement forming a group which had crossed the 30 per cent threshold under Russian law and thereby attracted a mandatory offer obligation.
2. Involvement. A respondent need not have caused the wrongdoing. A law firm may be involved where it drafts documents forming part of the wrongdoing, although it may be no more than a witness where it merely receives documents for advice. The relevant inquiry concerns the involvement of lawyers in the England and Wales office. On the evidence, there was a good arguable case that the London office had some involvement in preparing the Offer Memorandum.
3. Mr Sokov and the EGM purpose. Mr Sokov’s complaint concerned failure to provide information about his directorial rights, not wrongdoing in which Debevoise was mixed up. His application therefore failed at the first stage. Similarly, shareholder access to information for an EGM was not a form of redress comparable to correcting a defamatory publication or disciplining a disloyal employee.
4. Necessity and scope. The remedy could assist foreign proceedings, but disclosure had to be necessary in the interests of justice and proportionate to the information sought. Rusal had not exhausted available Russian procedures, and applications in New York and Connecticut had to be pursued first. The schedules sought wide-ranging discovery, including all agreements, related instruments, affiliates and due-diligence material, contrary to the confined nature of Norwich Pharmacal relief.
5. Conclusion. The order was also insufficiently specific, particularly given Debevoise’s international structure and professional obligations. The application was refused. The court noted that orders against innocent lawyers are exceptional and require especially close scrutiny.

First-instance application in the High Court. The application was refused.