ED&F Man Capital Markets LLP v Obex Securities LLC & Anor

An application for pre-action disclosure is a free-standing proceeding. It may be served out of the jurisdiction where the statutory and procedural requirements for service out are satisfied.

The relevant merits threshold concerns the pre-action disclosure application, not the underlying substantive claim. The applicant must show a serious issue to be tried, a good arguable case within an applicable gateway, and that England and Wales is clearly or distinctly the appropriate forum. The court may assess the application without requiring fully pleaded particulars of the anticipated claim.

Man sought to serve an application for pre-action disclosure on Obex Securities LLC and Randall Katzenstein in New York. The application concerned documents said to relate to representations about the solvency of an introduced client and anticipated fraud proceedings.

Master Teverson granted permission to serve out. The respondents applied to set that order aside, arguing that the court lacked jurisdiction, that there had been material non-disclosure, and that the disclosure application had no reasonable prospect of success.

1. Application dismissed. The Master’s order permitting service out was upheld.
2. The word “claim” in CPR 6.2(c) includes applications made before action. It therefore includes an application for pre-action disclosure.
3. An application for pre-action disclosure is itself a free-standing proceeding, although commenced by application notice. Senior Courts Act 1981, s 33(2), provides the jurisdiction to make the disclosure order. The application therefore falls within paragraph 20(a) of PD6B paragraph 3.1, subject to satisfaction of the applicable rules.
4. The service-out test required a serious issue to be tried on the merits of the disclosure application, a good arguable case that the application fell within an applicable gateway, and England and Wales to be clearly or distinctly the appropriate forum. The first two limbs concerned the disclosure application rather than the underlying fraud claim: CPR 6.37.15.
5. The evidence established a sufficiently focused case. The anticipated claim against the respondents, including the proposed claim against Katzenstein, was arguable, and the documents sought might be relevant to standard disclosure in such proceedings. The court was not required to decide the ultimate merits or require pleaded particulars at this stage. The approach in Black v Sumitomo [2002] 1 WLR 1562 CA required specificity and conviction, and the application was sufficiently tightly drafted and explained.
6. The respondents’ complaints about non-disclosure did not materially affect the Master’s exercise of discretion. Although fuller disclosure of the United States proceedings would have been preferable, the alleged failures did not cast doubt on the safety of the order.
7. The agreed forum for the substantive dispute supported the forum limb, although it was not itself the basis for the construction of the rules. The court accordingly had jurisdiction to permit service of the pre-action disclosure application out of the jurisdiction.

Master Teverson made an ex parte order on 3 February 2017 permitting service of the pre-action disclosure application out of the jurisdiction. The respondents applied to the High Court to set that order aside. The application was dismissed.