October 26, 2022 COURT OF FIRST INSTANCE - JUDGMENT
Claim No: CFI 042/2022
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
LUNARS
Claimant
and
(1) LIUNS
(2) LERSTIN
(3) LIWT
(4) LOHAN
(5) LUFITS.
Defendants
JUDGMENT OF H.E JUSTICE SHAMLAN AL SAWALEHI
UPON reviewing the Rules of the DIFC Courts (the “RDC”)
AND UPON reviewing the documents submitted by the Claimant and the Defendants (the “Parties”)
AND UPON the Urgent Application No. CFI-042-2022/1 dated 16 June 2022 seeking disclosure of documents from the Defendants (the “Urgent Application”)
AND UPON reviewing the Claimant’s Part 8 Application dated 16 June 2022 seeking; (a) pre-action disclosure against D1, D2, and D3; (b) a non-party disclosure application against the Fourth Defendant (“D4”) and the Fifth Defendant (“D5”); (c) a Norwich Pharmacal order against D4 and D5 (the “NPO”); and (d) a Banker’s Trust order against D4 and D5 (together the “Claim”)
AND UPON reviewing the Preliminary Order issued by Michael Harding KC in the ex-parte application dated 15 April 2022
AND UPON reviewing the DIFC Law on Damages and Remedies No.7 of 2005
AND UPON hearing counsel for the Claimant and counsel for the D1, D2, and D3 on 29 August 2022 (the “Hearing”)
IT IS HEREBY ORDERED THAT:
1. The Urgent Application is dismissed.
2. The Claim is dismissed.
3. The Claimant shall pay D1, D2 and D3 costs of this Claim on the standard basis, to be assessed by the Registrar, if not agreed.
Issued by:
Ayesha Bin Kalban
Acting Registrar
Date of Issue: 26 October 2022
At: 11am
Introduction
1. On 16 June 2022, the Claimant filed an Urgent Application and later a Part 8 Claim seeking pre-action disclosure under RDC 28.48 against D1, D2 and D3 (the “Lerstin Entities”), a non-party disclosure application under RDC 28.51, Norwich Pharmacal order relief (the “NPO”) and a banker’s trust order against D4 and D5 (the “Claim”).
2. I am satisfied that the use of the Part 8 procedure was appropriate in the circumstances of this case, as stipulated under RDC 28.47. However, the urgency of the Urgent Application is unclear to me.
3. D4 and D5 or their legal representatives did not appear before me during the Hearing.
4. I have been referred by the Claimant that D4 and D5 are company secretaries of the Lerstin Entities. The Claimant contended that D4 and D5 have not contested these proceedings and will disclose all documents if there is a court order compelling them to do so. The legal representative of D1 - D3 argued with those submissions, indicating that there has been no acknowledgement of service filed by D4 and D5. The Claimant objected and indicated that acknowledgment of service has in fact been filed with the DIFC Courts, however it was not exhibited in the Hearing Bundle.
5. The basis of the relief sought by the Claimant arises from the Claimant’s suspicion that the Lerstin Entities may have purportedly received proprietary interest, being the balance of the Lectra acquisition, which took place on or around 6 August 2018. Further, the Claimant contended that the relief sought against all Defendants would aid the Claimant in ascertaining the viability of their claim against D1 – D3.
6. My reasons for dismissing the pre-action disclosure, the NPO and the banker’s trust order are based on threefold and outlined in detail below. In summary, first of all, pre-action disclosure cannot be sought whilst arbitration proceedings are already on foot, this precludes me from exercising the powers vested under RDC 28.48 and RDC 28.51, secondly pre-action disclosure cannot be used as a mechanism to identify if the Claimant has a viable case against D1- D3, and finally I believe that the documents sought from this Court will inevitably arise in the arbitration proceedings.
7. I should make it clear that in addition to the oral submissions made at the Hearing, I have read carefully through the evidence submitted by both parties. The fact that I may omit some reference to some arguments or authorities does not mean that I have overlooked it.
Background
8. In February 2017, the Claimant and Mr. Livt Livt (“Mr Livt ”) decided to sell Lectra Holding to a third party (the “M&A Transaction”). Mr Livt , being the controller of the Lectra Group of entities, had acted as the Claimant’s authorised agent and representative for the M&A Transaction. The Claimant had no direct involvement in the M&A Transaction.
9. On or around 2017, the Qatar diplomatic crisis began and in order to ease the complications for the M&A Transaction which have arisen as a result of the blockade, the Claimant’s 50% shareholding in Lectra Holding was transferred into Mr Livt ’s name on a trust basis. Subsequently, the Claimant’s 49% shareholding in Lectra Abu Dhabi was transferred to Lectra FZE on a trust basis.
10. Mr Livt proposed to buy out the Claimant’s stake in Lectra Holding for a sum of USD 136 million in three separate tranches between 2017 - 2018 and 2019 - 2020. Between December 2017 and January 2018, Mr Livt confirmed that c linit Limited and Al Waha Capital were shortlisted for the M&A Transaction as co-investors.
11. On 1 July 2018, Mr Livt confirmed that the M&A Transaction was in the closing stages and the delay was due to a reaudit in the Lectra Group by E&Y. Mr Livt further confirmed that the Share Purchase Agreement and the Share Holding Agreement would be signed within a couple of weeks.
12. On 7 August 2018, a settlement agreement (the “Settlement Agreement”) was entered between the Claimant, Mr Livt and the Lectra Group of entities. By virtue of this Settlement Agreement, a total settlement consideration of USD 114,009,487 (the “Total Settlement Consideration”) was payable to the Claimant in the following three tranches: (i) USD 23,182,965 which was expected to be paid on 30 September 2018 (the “First Tranche”); (ii) USD 45,413,261 which was expected to be paid on 30 September 2019 (the “Second Tranche”); and 45,413,261 which fell due on 30 September 2020 ( the “Third Tranche”).
13. The First Tranche of the Settlement Agreement was received on or around the 17 January 2019, however the Claimant has not received the Second or the Third Tranche of the Settlement Agreement, amounting in aggregate to USD 90,826,522.
14. On 15 April 2022, the Claimant filed an application for ex-parte emergency interim relief (the “Ex-Parte Application”) with supporting documents which were not served on the Defendants. Michael Harding KC was appointed as an emergency arbitrator (the “Emergency Arbitrator”).
15. On 26 April 2022, the Emergency Arbitrator ruled against the Claimant’s Ex-Parte Application indicating that the Claimant has failed to establish a proprietary claim, the Emergency Arbitrator acknowledged that the Claimant has been waiting for the money that he says he is owed under the Settlement Agreement, since the end of 2019. It was found by Harding KC there is no evidence that Mr Livt has any available funds worth UDS 90 million.
Parties’ Submissions
16. The Claimant argued that Mr Livt had the opportunity to raise funds through equity financing or debt financing. The funds that was required to be raised for the purchase of the Claimant’s shareholding in Lectra was therefore not subject to the success of the M&A transaction, which allegedly had been insinuated by D1, D2 and D3. In fact, the M&A transaction intended to be a security for Mr Livt in case he was unable to raise funds.
17. The Claimant referred me to an email from Mr Livt to the Claimant dated 29 October 2017, which was interpreted by the Claimant that Mr Livt would have honoured the agreement between him and the Claimant irrespective of the success of the M&A Transaction.
18. As part of the Claimant’s submissions, they relied on the Settlement Agreement entered between Mr Livt and the Claimant dated 7 August 2018 setting out his exit options, particularly relying on section 2 and section 7 explaining the concept of security, in such eventuality Mr Livt is unable to pay any part of the agreed full and final sum, Mr Livt agreed to assign such unpaid sum from the revenue of the M&A.
19. Fraud allegation has been advanced by the Claimant against D1, D2 and D3. It is D1- D3 submissions that the Claimant is using the alleged fraud and dishonesty as a cloak to obtain pre-action disclosure relief against the D1, D2, and D3.
20. There is currently ongoing arbitration proceedings in London against Mr Livt for alleged breach of the Settlement Agreement. The Claimant seeks pre-action disclosure relief under 28.47 and 28.48 in aid to assess the viability of potential proceedings against D1 - D3 once the relevant documents have been obtained from all Defendants.
21. The Claimant argued that document production from D1 -D3 may not particularly arise in the arbitration proceedings, since they are not party to the arbitration proceedings. The Claimant reasonably believes that Mr Livt has incorporated D1 - D3 to divert money from the Claimant.
22. The Claimant asserted that D1- D3 are not a party to the Settlement Agreement and rejected to participate in the arbitration proceedings. Based on their rejection, the Claimant resorted to seek pre-action disclosure from the DIFC Court. D1 – D3 argued that all documents sought by the Claimant could be obtained in the arbitration proceedings as part of the inter-party disclosure exercise which will commence on or around 12 September 2022.
23. As part of the submissions put forward by D1 - D3 arguing that the Court should not exercise its jurisdiction under RDC 28.48, they assert that the Claimant’s Claim must be dismissed in its entirety for failing to demonstrate a good arguable case on the merits. Further, D1 - D3 indicated that in the absence of any proprietary claim being established under the Settlement Agreement, the Claimant is thereby precluded from advancing such an Application against D1- D3. In doing so, D1 - D3 rely on section 7 of the Settlement Agreement, which reads as follows:
“That upon the parties successfully completing the agreed actionable covenants as set out in Article 4 Sub Clause (a-f) and subject to the [Mr Livt ] successfully concluding the execution of the proposed M&A transaction and subject to [Mr Livt ] receiving such consideration from the successful closing of the M&A transaction of the company, [Mr Livt ] undertakes to perform the following obligations:
a. To ensure that all agreed payments shall be made to the [Claimant] as per Schedule A of this agreement on such relevant dates as in Schedule A, without fail on the due dates as agreed therein, subject to [Mr Livt ] receiving the agreed values from the M&A transaction…”
24. The obligation to pay by Mr Livt is based on two conditions being satisfied (i) Mr Livt successfully concluding the execution of the proposed M&A Transaction and (ii) Mr Livt receiving such considerations from the successful closing of the M&A Transaction of the company. The first condition has been satisfied, the M&A Transaction has been concluded, this has not been challenged by D1, D2 or D3 that the M&A Transaction has not occurred. The second condition is one that had been determined by the Emergency Arbitrator in his preliminary order. Mr Harding KC indicated that the Claimant had “no reasonable possibility of establishing that the conditions for further payments under the Settlement Agreement have been satisfied, or that the Claimant is entitled to the sums he claims in these proceedings” [sic].
25. D1 - D3 referred me to the decision of Re Lind, stating that any property interest is only created once the property is in the possession of the assignor, it is only when the property comes into existence, equity is created, and it becomes a complete assignment. The Emergency Arbitrator applied this to his ruling in the Ex-Parte Application and concluded that the Claimant was unable to establish a proprietary claim.
26. I acknowledge that the Claimant has been waiting for the money that he says he is owed under the Settlement Agreement, since 2019 and the salient issue if the Claimant has proprietary interest in the First Tranche Balance will be determined in length in the DIAC Arbitration on 3 October. I am conscious that if the Tribunal are of the same view as the Emergency Arbitrator, there will be no justification for the DIFC Court to order a pre-action disclosure relief because any remedy granted will be disproportionate and unnecessary against D1 - D3.
27. The Claimant acknowledged during the Hearing that the requested four categories of documents could be obtained as part of the procedural steps of the Arbitration Hearing. Further, I understand that the Claimant was also seeking similar documents against other entities incorporated in Singapore and controlled by Mr Livt (“Singaporean Lerstin Entities”).
28. On the 24 August 2022, the Claimant’s application for pre-action disclosure against the Singaporean Lerstin Entities was dismissed. The dismissal was based on two discrete grounds: (i) the documents sought by the Claimant were not necessary nor just and the application failed on the requirements of proportionality and minimum intrusiveness; and (ii) the requested documents could be obtained as part of the ongoing DIAC Arbitration against Mr Livt .
Reasons
Pre-Action Disclosure D1-- D3
29. The Claimant seeks disclosure under the RDC 28.47 and 28.48 which provides for document production before proceedings have commenced, alternatively, under RDC 28.51 which provides for orders for document production against non-parties. These rules are closely based on equivalent provisions in English Civil Procedure Rules (“CPR”) being 31.16 CPR in respect of pre-action disclosure and 31.17 in respect of non-party disclosure.
30. Applications for pre-action disclosures must be made before proceedings start. The Court does not have jurisdiction to make an order once proceedings have been issued: Personal Management Solutions Ltd v Gee 7 Group wealth Ltd [2015] EWHC 3859 (Ch) at [14] – [18]. If proceedings are started after the application is made, but before it is decided, the Court cannot make a pre-action disclosure order.
31. It is only where an application is made in respect of issues which are not the subject of current proceedings that a pre-action disclosure order may be made: Anglia research Services Ltd Finders Genealogists Ltd [2016] EWHC 297 (QB). The Claimant’s Application is made in respect of the same issues that are the subject of ongoing DIAC arbitration proceedings.
32. The application for pre-action disclosure requires a two-stage test (Smith v SoS for Energy and Climate Change) [2013] EWCA Civ 1585 at [10]: first the Court must consider whether it has power to make the order, by reference to the test set out in RDC 28.48; and second, the Court must decide whether, in its discretion, an order should be made.
33. The Claimant’s position for pre-action disclosure is somewhat misconceived, the DIFC Court has no power to grant pre-action disclosure where proceedings are already on foot.
34. The Claimant needs to demonstrate to the Court a prima facie case in respect of which pre-action disclosure is necessary, the Claimant must show, at least a prima facie case on the substance of the claim: Mars UK Ltd v Waitrose [2004] and the case advanced must have a real prospect of success or the application will be dismissed.
35. The Claimant asserted in their submissions that they seek pre-action disclosure to identify whether Mr Livt is the alter ego of the Lerstin Entities so that it could be sued for proprietary wrongdoing, breach of trust and dishonest wrongdoing. The purpose of the pre-action disclosure must not be an investigation of potential claims: Gwelhayl. Pre-action disclosure is not a mechanism for a party to discover whether he has a case at all: BSW Limited v Balltec Limited [2006] EWHC 822.
36. The purpose of this pre-action disclosure sought by the Claimant is to permit the Claimant to work out whether they have a “viable” claim against D1-D3. The Claimant has not provided this Court with sufficient detail to establish an arguable case against D1-D3. Rather, the Claimant intends to use the RDC 28.48 as a method to investigate potential claims.
37. The evidence filed in support of the application must be sufficient to allow the Court to form a view on the underlying claim and so whether document production is justified: Bermuda International Securities Ltd v KPMG [2001] EWHC Civ 269.
38. The principles were summarised by Blair J. in Assetco Plc v Grant Thornton UK LLP [2013] EWHC 1215 (Comm) at [17]. At the second stage, when considering the Court’s discretion:
(iv.) “In considering whether to make an order, among the important considerations are the nature of the loss complained of, the clarity and identification of the issues raised by the complaint, the nature of the documents requested, the relevance of any protocol or pre-action inquiries, and the opportunity which the complainant has to make his case without pre-action disclosure (Black v Sumitomo Corp at [88]).
(v.) The anticipated claim must have a real prospect of success.
(vi.) In the commercial context, a pre-action disclosure order, even if not exceptional, is unusual.”
39. In any event, no prima facie claims were articulated by the Claimant.
40. It should be noted that applications for pre-action disclosure in commercial cases are less likely to be successful, there must be convincing grounds which make the case out of the ordinary such that an application should be granted: Assetco at [17] and Carrillon Plc v KPMG [2020] EWHC 1416 at [15]. I am not entirely convinced that there is anything that is out of the ordinary in the Claimant’s case which would prompt me to grant the pre-action disclosure relief against D1 - D3.
41. The criteria that must be satisfied for the Court to exercise its discretion for a pre-action disclosure is set out under RDC 28.48. An order for disclosure may be made before proceedings have been commenced where: (1) there are documents within the control of a person who is likely to become a party to proceedings; (2) the Claimant is likely to be a party to these proceedings; (3) if proceedings had started, the Defendant’s duty would extend to the documents, or classes or documents sought; and (4) disclosure of those documents is desirable in order to (i) dispose fairly of the proceedings; (ii) assist the resolution of the dispute without proceedings; or (iii) save costs. Even where all of the criteria have been met, the Court retains a discretion whether or not to grant the order.
42. Both the Defendants and the Claimant must be “likely” to be parties to subsequent proceedings. It is not necessary to show that it is likely that proceedings will be issued, merely that, if proceedings are issued, the persons concerned are likely to be parties.
43. A pre-action disclosure relief should not be common or standard and should not always be available simply because an issue has arisen between the parties that may result in litigation. In PHD Modular Access Services Ltd v Seele GmH [2011] Akenhead J held that “there must be a real prospect, if not a certainty or likelihood, of proceeding between the parties before an order for pre-action disclosure can be made”.
44. Also, a pre-action production may be refused where proceedings are inevitable and so RDC 28.48(4) cannot be satisfied: Ittihadleh v Metcalfe [2016] EWHC 376 (Ch).
45. Further, the DIFC Court will not grant pre-action disclosure in aid of a dispute that will be referred to arbitration, rather than litigated in court. The power to invoke pre-action disclosure could only be invoked by an applicant who appeared to the Court likely to be a party to subsequent proceedings in that Court. Hence, it is common ground that the Court will not have jurisdiction to make an order under RDC 28.48 for pre-action disclosure where the dispute between the parties will be decided in arbitration, which is the case before me.
46. The salient issues pertaining to the Claimant’s proprietary interest in the First Tranche and the requested documents will be decided in the DIAC Arbitration in due course. The same approach was adopted in Mi-Space (UK) Ltd v Lend Lease Construction EMEA Ltd [2013] which noted that the Court does not have jurisdiction to make an order under CPR 31.16 for pre-action disclosure where the dispute between the parties will be decided in arbitration.
47. Whilst I acknowledge that D1-D3 are not parties to the DIAC Arbitration, nonetheless, Mr Livt is the controller of D1-D3 and this concept has been accepted by the Claimant to the extent of an alter ego degree of control. I am conscious that the question of liability in First Tranche Balance will be relitigated before this Court when it is subject of ongoing DIAC arbitration proceedings.
48. Further, the documents that are being sought from D1-D3 before this Court are documents that would have been requested from Mr Livt in the DIAC Arbitration and any pre-action disclosure granted by the DIFC Court would be disproportionate and an excessive exercise against D1-D3.
49. The third criteria under RDC 28.48(3) being the documents sought by the Claimant ought to fall within the scope of the standard disclosure. The Claimant must show that it is more probable than not that the requested documents from D1 -D3 would be disclosed by way of standard disclosure pertaining to the issues that are likely to arise if proceedings were to commence.
50. It follows from that, that the DIFC Court must be clear what the issues in the litigation are likely to be [that is] what case that Claimant is likely to be making and what defence is likely to be run so as to make sure the documents being asked for are ones which will adversely affect that case of one side or the other, or support the case of one side or other. The lack of clarity about the issues would suggest that the Claimant could not demonstrate that the documents sought would fall within the standard disclosure.
51. It is quite unclear to me what the issues in the wide range of litigation are likely to be, what case is the Claimant likely to be making and the defence that might be advanced by D1- D3 to grant the pre-action disclosure relief. This lack of clarity was also evident in the list of documents sought from the Claimant, which lacked focus and specificity and sometimes were speculative in nature.
52. Therefore, I am not satisfied that the four discrete classes of documents sought by the Claimant would be subject to a standard disclosure exercise, if potential DIFC Court proceedings were to arise.
53. It was incumbent on the Claimant to demonstrate to this Court that it is more than probable than not that the documents would be within the scope of standard disclosure, the classes should have been defined so it is limited to what is relevant and proportionate, and should not encompass categories of documents which might lead to a train of investigation. The Claimant’s Application failed on the requirement of “highly focused” and the requested documents were not “strictly necessary” for the purposes of granting pre-action disclosure.
54. I am of the view that granting the pre-action disclosure relief against D1 - D3 would not be fair and would rather be disproportionate.
55. The fourth criteria under RDC 28.48(4) is that granting pre-action disclosure is desirable to dispose fairly of the anticipated proceedings, to assist the dispute to be resolved without proceedings and to save costs. Whether disclosure is desirable, this involves a two-stage process (i) the jurisdictional threshold and (ii) the discretionary judgment.
56. For jurisdictional purposes, the Court is only permitted to consider the granting of pre-action disclosure where “there is a real prospect in principle of such an order being fair to the parties if litigation is commenced or of assisting the parties to avoid litigation, or of saving costs in any event. If there is such a real prospect, then the Court should go on to consider the question of discretion, which has to be considered on all the facts and not merely in principle in detail.”
57. I have already concluded that the pre-action disclosure sought by the Claimant is very wide and unfocused, and on balance, it would be an unfair and burdensome exercise if the relief is granted against D1 - D3. Further, to assess whether the Claimant has a real prospect, that very question is being determined in the DIAC Arbitration. I am quite doubtful if any pre-action disclosure may give rise to any significant saving in costs.
58. The Claimant’s Application also fails on the “desirability” requirement.
59. The Claimant contended that in the event the disclosure exercise in the DIAC arbitration proceedings reveal that D1 - D3 were in fact incorporated as an alter ego for Mr Livt , the Claimant would be precluded from bringing any legal action against D1 - D3 before the DIFC Court. That is untrue, under Article 38 of the DIAC Rules 2022 which stipulates that as a general principle, disclosure and documents between the parties including any awards issued by the tribunal will all be confidential, unless disclosure is required from a party to pursue legal action, there is a legal duty, or to enforce or challenge an award before a court or a judicial authority.
Permission under RDC 28.64
60. Since the pre-action disclosure order against D1-D3 has not been granted, permission sought under RDC 28.64 is denied.
Non-Party Disclosure
61. The Claimant seeks pre-action disclosure under RDC 28.51 which permits “an order for disclosure against a person who is not a party to the proceedings”. The Rule therefore requires DIFC Court proceedings to which the respondent is not a party.
62. Similar considerations apply to the grant of pre-action disclosure and the Claimant fails to meet the test set out under RDC 28.51.
63. I now turn to the NPO relief sought by the Claimant. The three conditions to be satisfied for the Court to exercise the relief are: (1) wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer; (2) there must be the need for an order to enable action to be brought against the ultimate wrongdoer; and (3) the person against whom the order is sought must (a) be mixed up in so as to have facilitated the wrong doing; and (b) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued. Those conditions were set out by Lightman J, in Mitsui & Co Ltd v Nexen Petroleum UK Ltd [2005] EWHC 625.
64. When these conditions are satisfied, it remains for the Court to consider the circumstances in order to assess whether the interest of justice requires the relief.
65. In the present case, I am not satisfied that D4 and D5 have been mixed up in or facilitated any wrongdoing. The Claimant has not established a prima facie case that a form of wrongdoing was (or arguably) committed by Lerstin Entities which involved D4 and D5.
66. Further, the Claimant has not presented this Court with any evidence demonstrating that the Claimant’s property has been misappropriated and that D4 and D5 have been mixed up in that wrongdoing. In the event there was such evidence the Court would not have hesitated in issuing an order to ascertain the whereabouts of property and prevent its disposal.
67. I am of the view that orders such as the NPO or a banker’s trust order are very intrusive into what would otherwise be confidential customer information and the primary requirement in granting a NPO relief is based on whether such relief is necessary and proportionate, the degree of necessity and proportionality for the NPO or a banker’s trust order relief involves a higher threshold in contrast to a pre-action disclosure relief.
68. The degree of necessity and proportionality has not been met in the Claimant’s case.
69. As part of the Claimant submissions where they alluded to the fact that the DIFC Court has a discretion to grant the release of the requested documents by general equitable formula, relying on CFI-054-2020 of Nasdaq Dubai Limited which is not the case. In that authority, Justice Roger Giles demonstrated in his decision that, “a Norwich Pharmacal order should not be made unless there is a real purpose to be served, because it is shown that the contemplated legal action, aided by the information sought, has a sound basis.” At para [16].
70. The Claimant’s application for the NPO against D4 and D5 is not granted, the Claimant has failed to establish that such an order satisfies the criteria of “necessity” or proportionality and granting the NPO order would not serve a real purpose.
Banker’s Trust Order
71. The Claimant seeks an order under Article 36 of the DIFC Law of Damages and Remedies No. 7 of 2005 against D4 and D5 to provide “relevant information or assets”.
72. A banker’s trust order is a relief that is classically only sought against third parties and financial institutions holding information relating to assets which are in issue.
73. I was referred by D1–D3 to the discussions in the judgment of CPOD SA v De Holanda Jr & Ors [2020] EWHC 1247 (Ch) relating the equitable and statutory basis for powers of the court to order disclosure where proprietary interest is in issue. Lord Denning LJ asserted in Banker’s Trust v Shapira [1980] that a banker’s trust relief should only be ordered where there is good ground for thinking the money in the bank is the plaintiff’s money – for instance where the customer has got the money by fraud – or other wrongdoing – and paid it into his account at the bank.
74. A bankers trust order will not be granted lightly, to obtain such an order, the evidence of fraud against the wrongdoer must be very strong, that is, there must be good reasons to believe that (a) the property in question belongs to the Claimant (b) the Claimant has been fraudulently deprived of it and (c) delay might result in the dissipation of the funds before the action comes to trial.
75. Similar to a NPO, there must be a real prospect that if the information sought by the Claimant might lead to the location or preservation of assets against which the Claimant might make a proprietary claim. The Claimant’s case is based on “suspicion” that sums owed to the Claimant from the Settlement Agreement were diverted to the Lerstin Entities, and the net result is D4 and D5 were involved and mixed up (innocently) in the wrongdoing.
76. I am not satisfied that the DIFC Court has jurisdiction to exercise its powers and grant such relief, the Claimant has not convinced me that there is a clear contemplated case that the relevant information held by D4 and D5 on behalf of Mr Livt in fact may lead to funds allegedly belonging to the Claimant.
Conclusion
77. The Claimant’s Claim against all Defendants is dismissed in its entirety.
78. D1, D2 and D3 are the successful party and so the Claimant shall pay D1, D2, and D3 costs of this claim on the standard basis, to be assessed by the Registrar, if not agreed.