Vale SA v BSG Resources Ltd & Anor

An application under CPR Part 71 may be made without notice where the Rules permit that procedure. The process is intended to be summary and straightforward. If the prescribed requirements are met, an order will ordinarily issue. The duty of full and frank disclosure applies, but its scope is confined to matters material to the decision being made. The court may require an officer of a judgment debtor company to provide relevant information and documents, even where the exercise is extensive or overlaps with separate proceedings. The examination remains subject to judicial control, including control of oppressive questioning and questions engaging privilege or self-incrimination. A director cannot require advance questions, transfer the burden to other potential sources, or make compliance conditional on payment of his costs.

Vale sought to enforce a London arbitration award of approximately US$2.2 billion against BSG Resources Ltd. The award had been recognised as enforceable in England. BSGR was in voluntary administration in Guernsey, and had paid nothing.

Vale obtained an order under CPR Part 71 requiring Dag Lars Cramer, a BSGR director, to attend court for examination concerning BSGR’s means and to produce specified categories of documents. Mr Cramer applied to set aside or vary the order, arguing that the application should have been on notice, that Vale had failed in its duty of full and frank disclosure, and that the order was oppressive. He also advanced fallback proposals concerning the scope and conduct of the examination.

The central issues were whether the order was procedurally valid, whether its breadth and potential overlap with separate fraud proceedings made it oppressive, and whether Mr Cramer’s proposed alternatives justified setting it aside.

1. Application without notice. The Set Aside Application was dismissed. CPR rule 71.2 expressly permits an application without notice. Importing a requirement that notice could be dispensed with only for good reason would deprive that provision of practical effect. The affected person is protected by the right to apply to set aside the order and by the court’s control of the examination (paras [34]–[36]).
2. Full and frank disclosure. The duty applied, but the material facts were those capable of influencing the decision on the application as made. At the initial stage the court principally had to ascertain whether the prescribed form and information requirements were satisfied. The administration, the judgment debt and the absence of recognition of the administration in England had been properly disclosed. The matters relied on by Mr Cramer could not have affected the making of the order (paras [37]–[41]).
3. Control of the examination. Overlap between enforcement questioning and separate fraud proceedings did not justify refusing the order. The judge conducting the examination could determine the proper limits of questioning and prevent oppressive or disproportionate questioning. Privilege and self-incrimination issues were matters for that judge, not reasons to discharge the order (paras [42]–[44], [55]).
4. Documents and proportionality. The reference to “specific documents” in the Practice Direction permitted relevant classes or categories of documents to be identified. The complexity of BSGR’s affairs and the breadth of the schedule did not make the order oppressive. Mr Cramer remained responsible, by virtue of his office, for producing documents within his control relevant to enforcement (paras [45]–[55]).
5. Vale was entitled to pursue parallel enforcement routes. Mr Cramer’s proposed cooperation did not remove the need for the order and would risk delay and obstruction. He was not entitled to advance questions or topics, nor to make compliance conditional on payment of his costs. The Set Aside Application was dismissed in full (paras [57]–[61]).