Finance litigation update - July 2022

FINANCE LITIGATION UPDATE – JULY 2022 3 and suggested an 'impermissible investigatory purpose' on the part of the Applicants. As such, the court refused to grant the order. Key issues The power of the English courts to make an order pursuant to a letter of request from a foreign court derives from sections 1 and 2 of the Evidence (Proceedings in other Jurisdictions) Act 1975 ("the 1975 Act") and CPR 34.17. Pursuant to section 1 of the 1975 Act, the courts may only make such an order if satisfied that: 1. the application is made in pursuance of a request issued by and on behalf of the requesting court; and 2. the evidence to which the application relates is to be obtained for the purposes of civil proceedings instituted before the requesting court.2 Provided that the above conditions are satisfied, the courts have a discretion as to whether (and on what terms) to make an order under section 2 of the 1975 Act giving effect to a letter of request, including, under s. 2(2)(b), an order for the production of documents. In coming to its judgment in this case, the court restated a number of principles which guide the approach of the English courts to requests for judicial assistance from the courts of foreign jurisdictions. We highlight below an overview of the key issues. Relevance The courts will strive to give effect to the request of a foreign court, particularly in the context of matters concerning international fraud3. On questions of relevance, the courts will generally defer to the requesting court (as the court seised of proceedings4), and the burden of establishing that a foreign court did not consider relevance will lie with the party opposing the application5. While Farrer & Co did not actively oppose the LOR, by bringing the issue of the broader scope of the LOR to the court's attention, the LOR was successfully challenged. 2 Sections 1(a)-(b), the 1975 Act. 3 First American Corp.v Zayed [1999]1 WLR 1154 4 Rio Tinto Zinc Corporation v Westinghouse Electric Corp. [1978] AC 547 5 Galas v. Alere Inc [2018] EWHC 2366 (QB) Standing Another reason for the successful challenge in this case was Dr Al Jabri's involvement in the hearing. A non-respondent who is party to the underlying civil proceedings before the requesting court has locus standi to apply to set aside an order obtained ex parte under the 1975 Act6. In this case, although Dr Al Jabri was not a respondent to the LOR, the court considered that there was no reason why he should not make submissions in relation to the Applicants' application. Oppression In exercising its discretion, the court must consider the need to protect intended witnesses from oppressive requests. There is a balance to be struck between the interests of the requesting court and the burden placed on the witness to be examined7. If the court considers that the request is irrelevant, or fishing, or speculative, or oppressive, it should refuse it8. In Sakab, none of the Respondents objected to the granting of the requested order under the 1975 Act. Only Dr Al Jabri argued that the request was oppressive in nature. Dismissing Dr Al Jabri's objections on that basis, the court affirmed the decision of the Honourable Mr Justice Treacy in Land Rover North America Inc. v. Windh9; namely that where witnesses subject to a request do not object to it, considerations of oppressive burdens on witnesses do not arise. Commentary The letter of request regime is a stringent one. It is essential to ensure not only that any request meets the requirements of the requesting court but also that it complies with the law and practice of the receiving court. While the English courts will always aim to give effect to the request of a foreign court, where requests are framed too broadly, or where it appears that the requesting court has not considered the relevance of the documents sought, there is a significant risk that the request will be refused. Edward Davis, Ciaran Fitzpatrick and Harriet Campbell 6 Boeing Company v. PPG Industries Inc. [1988] 3 All E.R. 839 7 The State of Minnesota v Philip Morris [1997] ILP 170 8 Senior v Holdsworth, ex-parte Independent Television News Ltd [1976] QB 23, 30 5A 9 Land Rover North America Inc. v. Windh [2005] EWHC 432 (QB)