October 21, 2020 Court of First Instance -Orders
Claim No: CFI 054/2018
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
SBM BANK (MAURITIUS) LTD
and
(1) RENISH PETROCHEM FZE
(2) MR HITESHKUMAR CHINUBHAI MEHTA
(3) PRIME ENERGY FZE
Defendants
CASE MANAGEMENT ORDER OF H.E JUSTICE ALI AL MADHANI
UPON the Claimant’s Amended Claim Form dated 6 August 2018
AND UPON the Third Defendant’s Acknowledgment of Service dated 3 October 2019
AND UPON the Claimant’s Particulars of Claim dated 25 February 2020
AND UPON the Third Defendant’s Defence dated 31 March 2020
AND UPON the Claimant’s Reply to the Third Defendant’s Defence dated 1 July 2020
AND UPON the Third Defendant’s Case Management Information Sheet dated 3 September 2020
AND UPON the Claimant’s Case Management Information Sheet dated 3 September 2020
AND UPON reviewing the Claimant’s and the Third Defendant’s draft Case Management Order
AND UPON reviewing the Court file
AND UPON reviewing the Case Management Bundle
AND UPON hearing counsel at the Case Management Conference held on 9 September 2020
IT IS HEREBY ORDERED:
Production of Documents
1. Disclosure of documents will be dealt with as follows:
a. by 4pm on 14 October 2020 the parties must give to each other standard disclosure of documents by list and category (including any documents on which (i) a party relies; (ii) that adversely affect its or another party’s case, or support another party’s case; (iii) that it is required to disclose by a relevant practice direction);
b. by 4pm on 21 October 2020 any request must be made to inspect the original of, or to provide a copy of, a disclosable document;
c. any such request unless objected to must be complied with within 14 days of the request;
d. where objections to any requests to produce have been made, the Court will determine those objections and will make any disclosure order within the following 14 days; and
e. the parties shall comply with the terms of any disclosure order within 14 days thereafter unless otherwise ordered.
Witness Statements
2. Signed statements of witnesses of fact, and hearsay notices where required by RDC 29, to be exchanged on 2 December 2020.
3. Any witness statement evidence in reply to be filed and served by 13 January 2021.
4. Unless otherwise ordered, witness statements are to stand as evidence in chief of the witness at trial.
Expert Evidence
5. Following document production, and by 2 December 2020 at the latest, the parties have leave to apply for permission to appoint an expert in the field of forensic accountancy.
Progress Monitoring Date
6. Fixed for 21 January 2021.
7. Parties to send the Registrar (with copy to all other parties) a progress monitoring information sheet (at least 3 clear days before progress monitoring date) in accordance with RDC 26.57 and RDC 26.58.
Trial Bundles
8. Agreed trial bundles to be completed in accordance with RDC 35 and lodged by not later than 2 weeks before trial.
Reading List
9. A single reading list approved by all parties’ legal representatives for trial to be lodged with the Registry not later than 4 days before trial, together with an estimate of time required for reading in accordance with RDC 35.51A.
Skeleton Argument, Opening Statements and Chronology
10. Skeleton arguments and written opening statements to be served on all other parties and lodged with the Court by the parties not later than 4pm 1 day before the trial.
11. Parties to prepare a chronology of significant events cross-referenced to significant documents, pleadings and witness statements to be agreed, insofar as possible, and to be filed by no later than 1 week before trial.
Trial
12. The trial of this matter is to take place from midday GST on 8 February 2021 with an estimated duration of 3.5 days.
13. Costs in the case.
14. Liberty to apply.
Issued by:
Nour Hineidi
Deputy Registrar
Date of Issue: 21 October 2020
Time: 11am
SCHEDULE OF REASONS
Case Management Directions
1. The parties have agreed on the directions which are necessary to enable the case against the Third Defendant (“Prime”) to proceed to trial. The only outstanding points concern, firstly, Prime’s view, not shared by the Claimant (“SBM”), that an order for expert evidence in the field of forensic accountancy is necessary and should be made and, secondly, the date of trial. I will discuss these points in turn.
Expert evidence
2. Prime says that its relationship with the First Defendant (“Renish”) involved an extended credit line which was discharged on occasion by Renish making payments to third parties, with such parties keeping track of the so-called “ledger” account by way of a spreadsheet maintained at Renish’s Dubai offices. But Renish’s default, Prime submits, has meant that the ledger has disappeared.
3. Following disclosure, Prime proposes to engage a forensic accountant to “interrogate and explain the financial transactions between these two counterparties.” This “complex exercise,” Prime says, will enable it to make good its defence that the payments received were in consideration of a bona fide trading relationship and were legitimate.
4. For its part, SBM argues that no proper explanation has been given for why the assistance of an expert is required and that if an expert would be employed to read bank statements and other such documents in order to present that material to the Court, the parties, with the assistance of their lawyers, are equally able to undertake that exercise. SBM submits, further, that, insofar as Prime has kept proper records of its purported business transactions, Prime should have no difficulty in assembling the relevant information. Ultimately, SBM has concerns that Prime will seek to use expert evidence as a smoke screen for the inadequacy of its own record keeping and/or to fill the relevant gaps in those records.
5. In my judgment, as matters stand, it is presently unclear what, if any, documents Prime will produce and so it cannot be known whether assistance is likely to be required by the Court in understanding those documents. It remains to be seen whether or not after disclosure an expert’s assistance will be desirable, but in any event I do not think that this is a question that can even be estimated at this stage, based on the evidence currently before the Court.
6. The relevant transactions were relatively few in number and took place, moreover, in a rather short period of time. And Renish, who it is to be assumed would have been the source of most of any important documentation, has disappeared, while Prime itself has said it is not in possession of many relevant records. Counsel for Prime said at the hearing on 9 September 2020 (the “Hearing”) that an expert’s investigation would function as a “backwards-building audit trail.” As things stand, and particularly on account of the small number of both transactions and months the alleged fraud is spread across, explanation of the transactions in question could prove a relatively straight-forward task. And, indeed, even if it does become clear that an expert report would be of assistance in understanding the transactions in question, due to Prime’s highly-irregular record keeping, it may be the case that any trails an expert might have explored have long since become, as it were, overgrown.
7. It follows, I think, that it would be premature to make any order for expert evidence at this stage, which will require the parties to incur substantial costs and could unnecessarily enlarge the scope of the trial.
8. Moreover, it is important in my judgment that it is not claimed to be known that expert evidence is actually required. This strikes me as significant as the appropriateness or otherwise of the introduction of expert evidence into proceedings ultimately comes down to a threshold question. Relevantly, RDC r. 31.12 provides:
Expert evidence shall be restricted to that which is reasonably required to resolve the proceedings.
The fact that in this case it is unclear that expert evidence will be required was borne out in oral submissions at the Hearing. In reassuring SBM about the possible consequences of an expert report being produced, counsel for Prime intimated that it was within the range of possibilities that an expert report would prove “a pointless document that does not help us at all and is irrelevant” and suggested, furthermore, that the exercise of engaging an expert was necessary to “see if [a report] will be helpful.”
9. A spectrum of possible values of proposed expert evidence which includes on it “pointless” and “irrelevant” does not appear to me to be capable of clearing the hurdle provided by RDC r. 31.12. Indeed, I think it can be said that, by its request, Prime is in effect asking for permission to adduce expert evidence in order to determine initially whether or not the requirement of RDC r. 31.12 is satisfied. Such a reversal of the principle of RDC r. 31.12 would, in my judgment, deprive the rule of the effect it was intended to have and constitutes a further reason why Prime’s request should be denied.
The trial date
10. This is a convenient place to begin discussing the issue of the trial date. In its submissions, Prime dismisses as contradictory SBM’s position that the Court should make no order at this stage for expert evidence and should instead revisit the question after production, on the one hand, and its seeking a trial date in February 2021, on the other, as, Prime says, “any later application for expert evidence (plus the time taken to prepare the same) would almost certainly cause the trial date to be varied.”
11. Prime’s suggestion of a sequential exchange of evidence followed by a joint meeting and the issuance of an expert report is a series of steps that would, on Prime’s estimation, conclude at the end of March 2021. Prime asks that a trial be listed in May or June 2021. As such, according to what Prime considers would be the best course of action, whether or not an order for expert evidence is made now or later, a trial in February would be too early.
12. A trial in February rather than May or June would, by itself, be preferable; not least so that resolution of this dispute which has been on foot since the summer of 2018 is not delayed further. By asking that a hearing be listed in May or June, therefore, Prime’s position is, in effect, that it would be better to push back a trial from dates which are preferable in order to accommodate a process which might later be required, but of which for now the value is unknown and, indeed, even questionable. In my view, if it becomes clear after production that expert evidence would be of value, or reasonably required in the language of RDC r. 31.12, nothing will prevent Prime from making an application under Part 31 of the RDC for permission to introduce it. But so long as the need for expert evidence is not yet established, in my view, such uncertain value should not be allowed to displace a thing about which there is surety, namely the preferability of an earlier trial in February.
13. Prime’s timetabling preferences are mainly premised on its position that there is a need for expert evidence. Aside from this consideration, however, Prime also prefers a later trial due to its counsel’s engagement with other matters at the start of February and thereafter in March. Prime’s counsel has said that a hearing in February “ignores the availability of Prime’s legal representatives. Therefore, even if permission for written expert evidence is not granted now, the trial should not be listed before May 2021.”
14. Counsel for SBM takes the position that, as there has already been very substantial delay in these proceedings, it is essential that the trial is listed as soon as possible. Counsel for SBM has highlighted that Prime’s counsel already indicated in correspondence on 2 September 2020 that he was available for a trial window on 7 February 2021: “Prime has now sought to back-track… by asserting that “our counsel will struggle with 7 February.”
15. As SBM points out, the difficulties which are now said to have arisen followed an earlier assertion in an email from Prime’s legal representatives to SBM’s representatives that “a trial date in February is unrealistic” on account of the question of expert evidence. SBM says it is concerned that Prime is simply seeking to delay matters.
16. Based on the representations made by Prime’s counsel and his instructing solicitors, there does not appear to be any actual diary clash so far as the proposed February dates are concerned. Moreover, while Prime’s counsel says he will have difficulties with a listing in February, SBM’s counsel will have difficulties with a listing thereafter as a result of other trial fixtures all the way through to June. It seems to me that if the parties do not seize the window of opportunity they have in February for a trial, however undesirable the dates may be – and it has not been suggested that they are significantly undesirable – there will be a disproportionate delay to resolution of this dispute. Nor is it insignificant that SBM has established a good arguable case that there is a real risk that Prime will dissipate assets which could satisfy judgment in SBM’s favour, albeit that Prime is now restrained by a freezing order. And Prime itself wishes to continue with its ordinary business immediately. The parties should not be prejudiced, therefore, by an unnecessarily delayed trial of the matter on account of diary difficulties – but not impossibilities – on the part of their representatives.
17. At the hearing, SBM assented to a hearing that commences at midday on 8 February 2021, which would give Prime’s counsel an additional day and a half after the weekend to prepare for the trial, resulting in him having three and a half clear days after the conclusion of his other February trial which will end on 4 February 2021. Prime’s counsel will be able to mitigate any other or remaining scheduling difficulties in the usual ways.
18. I direct the trial to be listed for three and a half days, commencing at midday GST on 8 February 2021.
