Ramilos Trading Ltd v Buyanovsky

A Norwich Pharmacal applicant must show a good arguable case of wrongdoing. This means a case which is more than barely capable of serious argument, although it need not have a better than 50% prospect of success.

The jurisdiction is exceptional and narrow. It permits focused disclosure of information necessary to identify a wrongdoer, bring a claim or obtain other legitimate redress. It cannot provide wide-ranging pre-action disclosure, gather evidence generally or enable a claimant to discover whether it has a cause of action.

Where evidence is sought for civil proceedings instituted or contemplated abroad, the exclusive procedure is the Evidence (Proceedings in Other Jurisdictions) Act 1975. The Norwich Pharmacal jurisdiction cannot be used to bypass that statutory regime.

The claimant, a shareholder in a group holding company, applied for Norwich Pharmacal and Bankers Trust relief against the defendant, who held senior management positions in the relevant businesses. It sought answers to an extensive schedule of questions concerning suspected cost shifting, unpaid dividends, transfer pricing through intermediary companies and allegedly uncommercial loans.

The defendant disputed the alleged wrongdoing and contended that the requested material amounted to wide-ranging pre-action disclosure. He also argued that any material claims would be pursued in Cyprus, Russia or other foreign jurisdictions, engaging the exclusive procedure under the Evidence (Proceedings in Other Jurisdictions) Act 1975.

The central questions were whether the claimant had a good arguable case of wrongdoing, whether the information was necessary and properly confined, and whether the court had jurisdiction to order evidence intended for foreign proceedings.

1. The application was dismissed. The appropriate threshold for arguable wrongdoing was the freezing-injunction formulation of a good arguable case: the case must be more than barely capable of serious argument, but need not have a better than 50% prospect of success. The more demanding requirement that an applicant have much the better of the argument did not apply to Norwich Pharmacal relief.

2. The jurisdiction remained exceptional and narrow. It could extend beyond identifying a wrongdoer to providing crucial information or a missing piece of the jigsaw. It nevertheless could not be used for wide-ranging discovery, general evidence gathering or a fishing expedition intended to establish whether a cause of action existed. The requested schedule, even if narrowed, sought extensive evidence and disclosure outside the permissible scope of the jurisdiction.

3. Necessity was a threshold condition, although it had to be applied flexibly in the circumstances. Where an applicant already possessed enough information to plead its claim, it should commence proceedings and use the ordinary disclosure process. Norwich Pharmacal relief was not a means of obtaining advance disclosure.

4. The Evidence (Proceedings in Other Jurisdictions) Act 1975 established the exclusive regime for obtaining evidence in England for civil proceedings instituted or contemplated abroad. Its requirements, including a request from the foreign court and the restriction in section 2(4) to specified documents, were substantial statutory safeguards. Parliament could not have intended a parallel common-law procedure. The court therefore lacked jurisdiction to grant Norwich Pharmacal relief for the proposed claims in Cyprus, Russia or elsewhere overseas.

5. The claimant had a good arguable contractual case concerning non-payment of dividends, but it already had sufficient information to pursue that claim in Cypriot arbitration. The remaining dividend questions were speculative and unnecessary. The evidence established an arguable degree of integration between the two business groups, but did not establish a good arguable case that costs were shifted improperly. The transfer-pricing and loan allegations were also insufficiently arguable, particularly given the audited accounts and the absence of evidence that the auditors had identified impropriety.

6. Delay, the availability of proceedings or contractual information remedies elsewhere, and the extraordinary breadth of the requested disclosure provided additional reasons to refuse relief.

not stated in the judgment.