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Claim No: CFI 054/2018

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

SBM (MAURITIUS) LTD

Claimant

and

(1) RENISH PETROCHEM FZE
(2) HITESHKUMAR CHINUBHAI MEHTA
(3) PRIME ENERGY FZE

Defendants

ORDER WITH REASONS OF JUSTICE LORD ANGUS GLENNIE

UPON the Claimant’s Application Notice No. CFI-054-2018/13 dated 11 August 2021 (the “Documents Application”)

AND UPON the First and Second Defendants’ Application Notice No. CFI-054-2018/14 dated 25 August 2021 (the “Deferment Application”)

AND UPON the Case Management Order of H.E. Justice Ali Al Madhani issued on 21 October 2020 (as varied by a Consent Order issued on 25 November 2020) (the “CMC Order”)

AND UPON the Consent Order issued on 22 June 2021 (the “Consent Order”)

AND UPON reading the evidence lodged in relation to the said Applications

AND UPON reading the Skeleton Arguments lodged on behalf of the Claimant and the Third Defendants

AND UPON hearing Counsel (Gregor Horgan) for the Claimant and Counsel (Thomas Plewman QC and Laurence Page) for the Third Defendants, there being no representation for the First and Second Defendants (as notified to the Court by email from Ashish Mehta & Associates dated 29 August 2021)

IT IS HEREBY ORDERED THAT:

1. The First and Second Defendants shall within 14 days of the date of this Order file and serve on all other parties a Document Production Statement.

2. In all other respects the Documents Application is refused.

3. The Claimant shall pay to the Third Defendants their costs of and occasioned by the Documents Application, assessed in the sum of AED 400,000.

4. The Deferment Application is refused in hoc statu.

5. The First and Second Defendants shall pay to the Claimants and the Third Defendants their costs of and occasioned by the Deferment Application, to be assessed by the Registrar if not agreed.

Issued by:
Nour Hineidi
Registrar
Date of Issue: 2 September 2021
At: 4pm

REASONS FOR THE ORDER

1. At a hearing on 31 August 2021 attended by counsel for the Claimant and for the Third Defendant (but not by any representative of the First and Second Defendants as explained in an email to the Court from Ashish Mehta & Associates, their solicitors, dated 29 August 2021), I gave my decision on the issues raised in the two Applications. I was asked by counsel for the Claimant to give my reasons for my decisions in writing. This Judgment sets out briefly my reasons for my decision.

The Documents Application

2. I deal first with the Claimant’s Documents Application.

3. The issues in this case appear fully from the pleadings. The case against all three Defendants alleges that they fraudulently induced the Claimant (“Bank”) to advance sums to the First Defendant (“Renish”) by falsely representing that the payments sought were in respect of genuine oil sale transactions involving Renish, the Third Defendants (“Prime”) and a buyer called Lanka, when these oil transactions were in fact a sham. The Bank’s case is explained in more detail in my judgment in this case dated 31 May 2021 in which, in effect, I set aside the fraud part of an order for Immediate Judgment against Renish and the Second Defendant (“Mr Mehta”) while keeping in place the Immediate Judgment against them in the same amount based on their liabilities under the Facility Agreement and the Guarantee. The claim against Prime is non-contractual, being based entirely on allegations of fraud and fraudulent conspiracy. Notwithstanding that there remains in place a judgment (based on their contractual liability to the Bank) against Renish and Mr Mehta for the full sums claimed in the action, the claims in fraud and fraudulent conspiracy are insisted on against each of them as well as against Prime. The action is set down for trial starting on 3 October 2021 (having been listed originally for 8 February 2021) and is due to last for 7-10 days.

4. By its Documents Application, the Claimant seeks to recover a wide range of documents from all three Defendants in advance of the trial. As framed in the Application, the Claimant seeks an “unless order” against each of the Defendants, but this was dropped at the hearing so far as concerned Renish and Mr Mehta (since a default judgment against them was not thought to be useful) and not pressed strongly against Prime.

5. The background to the Documents Application is of some importance. This consists of the CMC Order of October/ November 2020 (as between the Bank and Prime) and the Consent Order of June 2021 (as between the Bank and Renish and Mr Mehta). They are in materially the same terms, the operative paragraph in each case being to the following effect:

“By [date] 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 affects its or another party’s case, or supports another party’s case; (iii) that it is required to disclose by a relevant practice direction.”

That wording is taken from the CMC Order dealing with the position as between the Bank and Prime, but the wording of the Consent Order dealing with disclosure by Renish and Mr Mehta was similar. There followed in each Order an agreed timetable for disclosure and objection to disclosure and for seeking the ruling of the Court on any dispute about disclosure. In the case of the CMC Order, made at a time when the case was due to come on for trial in February 2021, that timetable envisaged that requests would be made and objections taken and ruled upon by the Court by about mid-December 2021. In the case of the Consent Order (issued in June 2021, when Renish and Mr Mehta had come back into the preparations for trial after the fraud aspect of the Immediate Judgment against them was set aside) the timetable contemplated disputes as to disclosure being resolved by about end-July 2021.

6. In both cases, the form of the Order ignored the Rules of the DIFC Courts as to production of documents (RDC Part 28) and instead sought to incorporate the default form of “standard disclosure” applicable to English proceedings in terms of Rule 31.6 of the (English) CPR. It is no doubt competent for parties to agree and for the Court to pronounce an order mirroring the “standard disclosure” provisions of the (English) CPR – the Court’s Case Management powers under RDC Part 4, especially RDC r.4.2(14), are very wide – but before inviting the Court to take this course parties ought to take care to think through the consequences of doing this and to consider what the next steps might be in case of alleged non-compliance. I am not persuaded that they did so in the present case.

7. The relevant Rules in the DIFC for disclosure and production of documents adopt a very different approach from that pertaining to litigation in England. There is no general requirement for standard disclosure, under which a party is required to disclose documents which adversely affect its case as well as documents on which it relies. Instead, each party is required to make standard production in accordance with RDC r.28.15. Standard production is only of documents on which a party relies (as well as other documents which that party is required to produce by any Law, Rule or Practice Direction). Under RDC r.28.16 a party may submit to the other party a Request to Produce, containing (RDC r.28.17) a description (1) of the document requested or (2) “of a narrow and specific requested category of document” and in addition (3) a description of how such documents are said to be relevant and material to the outcome of the case. Within such time as is ordered by the Court, the other party must carry out a search for and produce documents as to which no objection is made and provide information as to how such search has been undertaken (see Rule r.28.20). RDC r.28.26 provides that the party from whom documents are requested may object to production of some or all of the documents requested on grounds set out in RDC r.28.28 (including arguments that the documents sought are not of sufficient relevance or materiality, that finding and producing the documents would place an unreasonable burden on him, and considerations of proportionality and procedural economy). If that objection to production is challenged, the party requesting production may apply to the Court for a Document Production Order (RDC r.28.36). If such an Order is granted, a party complying with it must verify compliance by lodging a Document Production Statement (RDC r.28.42). It is worth noting also RDC r.28.60 and 28.61, which deal with the consequences of non-compliance with an order for production – consequences which flow from non-compliance with a Request to Produce or any Order of the Court.

8. How do the English style “standard disclosure” Orders made in this case (both in the CMC Order and the Consent Order) fit in with the scheme set out in RDC Part 28? The short answer is that they do not fit happily into the scheme, but to the extent that they can be slotted into the carefully crafted provisions of Rule 28 they might be said to do no more than widen the initial obligation to make “standard production” in RDC r.28.15. In other words, they impose on parties an obligation to make “standard disclosure” in the English sense instead of standard production as described in RDC r.28.15. But they do not otherwise usurp the scheme of the Rules in Part 28. If a party is not content with the documentation disclosed in accordance with standard disclosure as defined in the Court Orders, that party may operate the provisions of Part 28 from RDC r.28.16 onwards. He may submit a Request to Produce specific documents or a “narrow and specific” category of documents and, depending on the response, take the subsequent steps as laid down in the Rules. The procedure is clearly laid out and is designed to be followed.

9. None of that has been done here. In the case of Renish and Mr Mehta, the Claimant seeks an Order that they comply with the terms of the Consent Order “and associated provisions of the RDC” (whatever that means) by providing standard disclosure and production of documents (including but not limited to filing a Document Production Statement). This is not a Request to Produce in terms of RDC r.28.17, since no individual documents nor any narrow and specific categories are identified. Effectively the Order now sought simply repeats the terms of the Consent Order. Absent any new sanction (the request for an unless order having been withdrawn), simply to repeat that Consent Order is pointless. If the Claimant wanted to recover specific documents of categories of documents if could and should have proceeded under RDC r.28.17. It has not done so, presumably because it cannot identify any documents which it seeks to recover.

10. Subject to one point, therefore, the Documents Application as against Renish and Mr Mehta must be refused. The only exception is that in the exercise of my case management powers under RDC r.4.2(14) I am prepared to order the service of a Document Production Statement. Such a Statement has been offered but not yet produced. It should be served within 14 days of today.

11. A similar criticism can be made about the Documents Application directed against Prime. The application ignores the provisions of Part 28 of the DIFC Rules. In so far as it is sought to equate the application with a Request to Produce under RDC r.28.17, it fails. There are a number of respects in which the Application fails to meet either the letter or the spirit of the Rules. The Application is also late, being made only some four or five weeks before the trial is due to start. I would have been minded to refuse the Application on these grounds, but in fairness to the Claimant I have thought it right to go on to consider the substance of the Application.

12. The Application, as defined by the draft Order served with it, identifies at paras 2.1 – 2.6 certain types of information sought by the Claimant. Some of these have fallen away. Those that remain are: 2.1.3, 2.1.4, 2.2, 2.5 and 2.6. They are, in summary, in the following terms:

13. Dealing with each of these in turn, it is apparent that the request at 2.1.3 and 2.1.4 as framed is not a request for production of documents at all – rather it is a fishing expedition seeking to find out if there are any documents which might be relevant. Nor does it seek a narrow and specific category of documents – 2.1.3 seeks to identify all documents held by agents relating to all of Prime’s business. The request in 2.1.4 is also illegitimate on the grounds that it seeks a list of documents determined to be irrelevant. On what basis can such an order be made? Further, Mr Sadr has explained in various witness statements that these so-called “Agents” are not agents in any legal or technical sense so that documents held by them are deemed to be in the possession or control of Prime. He says that the term refers to various individuals in a number of countries and places periodically employed by Prime to carry out various logistical and administrative tasks concerning the delivery of cargoes and the processing of payments. On that basis, their documents are not Prime’s documents. The Claimant has not put forward anything to suggest that that analysis is wrong. There is no basis therefore in fact for making any order under these categories. Notwithstanding that, Mr Sadr has sought their co-operation. He has explained the instructions provided to these agents as to the search for documents and the fruits of his enquiries. I am not persuaded that these is any more that can usefully be done.

14. Para 2.2 is a hybrid request. It does not fit readily into the RDC Rules. It is not a Request to Produce in terms of RDC r.28.17. But in any event, the request is, in my opinion, far too wide. The period sought to be included within the request extends to the end of 2020. The alleged fraud pertains to a period up to July/August 2018. That is when Renish “disappeared”. I see no basis for the call for any documents after that date. Further, it is clear from the evidence, summarised in Prime’s Skeleton Argument, that Prime has already undertaken the search under all but two of the search terms for the period up to August 2018. The exceptions are “Lanka” and “NBK”. Neither are likely to be useful or would justify Prime in re-doing its search of its documents. The task of re-doing such a search is disproportionate in time and expense compared with the likely value of anything found as a result. This category must be refused.

14. Para 2.2 is a hybrid request. It does not fit readily into the RDC Rules. It is not a Request to Produce in terms of RDC r.28.17. But in any event, the request is, in my opinion, far too wide. The period sought to be included within the request extends to the end of 2020. The alleged fraud pertains to a period up to July/August 2018. That is when Renish “disappeared”. I see no basis for the call for any documents after that date. Further, it is clear from the evidence, summarised in Prime’s Skeleton Argument, that Prime has already undertaken the search under all but two of the search terms for the period up to August 2018. The exceptions are “Lanka” and “NBK”. Neither are likely to be useful or would justify Prime in re-doing its search of its documents. The task of re-doing such a search is disproportionate in time and expense compared with the likely value of anything found as a result. This category must be refused.

15. Para 2.5 proceeds on the basis that a few documents produced by Prime have a reference to Yahoo at top and bottom of the page. But this does not indicate the existence of a Yahoo e-mail address. This request, in so far as it can be classified as a call for documents within RDC r.28.17, is simply misconceived.

16. Para 2.6 does not challenge the loss of WhatsApp data but simply questions the efforts made to recover such data. This does not fall to be considered as a Request to Produce in terms of RDC r.28.17. The request at 2.6.3 is simply argumentative and without substance. I am satisfied that a sufficient explanation has been given of the attempts made to recover the data. I refuse to make an order under this head. It will be open to the Claimant at trial to question the adequacy of such steps if it has material to suggest that the data was in fact recoverable.

17. Accordingly, I refused the Discovery Application in so far as directed at Prime.

18. I ordered the Claimant to pay Prime’s costs of the Application, which I assessed at AED 400,000. I was satisfied that the draconian nature of the order sought by the Claimant – an “unless order” – justified the use of senior as well as junior counsel and a partner within the firm of solicitors instructing them.

The Deferment Application

19. The Deferment Application by Renish and Mr Mehta proceeded on the basis that he was unable to secure funding to enable them to be represented at trial. The Application was supported by a Third Witness Statement from Mr Mehta explaining that the third-party funder, Mr Kankani, had been unable to return to Singapore because of the pandemic and therefore could not access or release funds from his Singapore bank accounts. The situation was, he thought, likely to change early next year. But no explanation was given as to why he could not release funds from his Singapore bank account without being physically in the country. There was no Witness Statement or Affidavit from Mr Kankani. Without more I cannot accept that excuse.

20. Renish and Mr Mehta are permitted, as an exception to the Worldwide Freezing Order, to spend a reasonable sum from the frozen accounts on obtaining legal advice and representation. Mr Mehta says that there are funds in two frozen accounts in Dubai, but that since the funds have been non-operational for some three years and he has not during this time submitted updated KYC information to the banks, he apprehends that at present the accounts may be dormant and not accessible to him or Renish. He asks the Court to issue necessary directions to the banks to allow him to access and operate the accounts and withdraw funds for his legal expenses. The problem is that Mr Mehta does not say that he has approached the banks or what precisely he wants from the Court. Nor has he produced anything from the banks to explain their position. The Court cannot simply accept his Application without fuller evidence. It is open to him to come back to the Court with better information, but without more detail the Deferment Application must be refused in hoc statu (i.e. as matters stand).

21. I awarded the costs of that application to the Claimants and to Prime, to be assessed if not agreed.