Deutsche Bank AG v Sebastian Holdings Inc & Anor

An order under CPR Part 71 may require an officer of a judgment-debtor company to provide information about its means, including assets transferred in the past where they may remain beneficially owned by the company or constitute choses in action. There is no threshold requirement of exceptional circumstances merely because the officer is a non-resident foreign national temporarily present in the jurisdiction. The court must nevertheless exercise care, having regard to sovereignty, alternative procedures and the officer’s connection with the judgment debt. Part 71 is a summary enforcement procedure and may operate alongside proceedings in other jurisdictions. The court may postpone examination to avoid disproportionate practical prejudice while maintaining an existing deadline for document production.

The claimant had obtained judgment against the first defendant for approximately $243 million and an indemnity costs order. A non-party costs order was subsequently made against the second defendant, who had been the first defendant’s sole shareholder and director and had controlled substantial asset transfers.

Teare J later made a without-notice order under CPR Part 71 requiring the second defendant to attend for examination as an officer of the judgment debtor and to produce documents concerning its assets and finances. The second defendant applied to set aside or vary that order, arguing that Part 71 was not engaged, that the application had a collateral purpose connected with United States proceedings, and that compliance would cause unfair disruption. The central issues were the scope and territorial reach of Part 71 and the appropriate timing of examination.

1. Application substantially refused. The order made by Teare J was not set aside. The examination was postponed to a date in December 2015, but the deadline for producing documents, 14 October 2015, remained.
2. CPR 71.2 permits an order requiring an officer of a corporate judgment debtor to provide information about the debtor’s means or any other matter about which information is needed to enforce the judgment. The applicant need not already know the extent or location of the assets. Questions and documents concerning historic transfers were relevant because the court had found that the assets remained SHI’s assets, and any claim for their return could itself be an asset.
3. Part 71 is a summary and straightforward enforcement process. It may assist a judgment creditor in deciding which enforcement methods to use, including methods directed at assets outside the jurisdiction. Relevant documents may be required where they relate to property or other means of satisfying the judgment debt. Interpool Ltd v Galani [1988] 1 QB 738 was applied.
4. There was no threshold requirement of exceptional circumstances for an order against a foreign officer temporarily present in the jurisdiction. Nationality and residence remained relevant to the exercise of discretion. The order was not exorbitant because the applicant was closely connected with the judgment debtor, the English judgment and the relevant asset transfers. Kuwait Airways Corporation v Iraq Airways Co & anor [2010] EWCA Civ 741 and MacKinnon v Donaldson, Lufkin and Jenrette Securities Corporation [1986] 1 Ch 482 were distinguished. CIMC Raffles Offshore (Singapore) PTE Ltd v Schahim Holdings SA [2014] EWHC 1742 (Comm) supported jurisdiction where the officer was present when the application and order were made.
5. The existence of parallel proceedings in the United States did not make the English application collateral or oppressive. The different proceedings concerned different issues, and the foreign courts could control the use and admissibility of material in their proceedings. The application could therefore proceed in parallel.
6. The document requests were properly directed to enforcement. However, the burden of preparing for the examination alongside the United States trial and the English non-party costs appeal justified postponing the examination. The applicant was ordered to pay 90% of the application’s costs.

The judgment refers to earlier findings against SHI and a subsequent non-party costs order against Mr Vik. It also records observations made by the Court of Appeal concerning SHI’s transferred assets. The present decision concerned Mr Vik’s application to set aside or vary Teare J’s without-notice CPR Part 71 order.