Alexander Gorbachev v Andrey Grigoryevich Guriev
| Jurisdiction | England & Wales |
| Judge | Lord Justice Males,Lord Justice Lewis,Lady Justice Nicola Davies |
| Judgment Date | 30 September 2022 |
| Neutral Citation | [2022] EWCA Civ 1270 |
| Docket Number | Case No: CA-2022-001544 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 1270
Lady Justice Nicola Davies
Lord Justice Males
and
Lord Justice Lewis
Case No: CA-2022-001544
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice Jacobs
Royal Courts of Justice
Strand, London, WC2A 2LL
Sam O'Leary and Harry Stratton (instructed by Enyo Law LLP) for the Appellants
Paul Stanley KC and Mark Belshaw (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the Claimant
No Appearance for the Defendant
Thomas James (instructed by Forsters LLP) for Forsters LLP
Hearing date: 19 August 2022
Approved Judgment
The principal issue on this appeal is whether an order for disclosure of documents can be made against a third party outside England and Wales pursuant to section 34 of the Senior Courts Act 1981 (“the SCA”) and CPR 31.17. Mr Justice Jacobs held in this case that such an order can be made. In so holding he disagreed with the view taken earlier this year by Mrs Justice Cockerill in Nix v Emerdata Ltd [2022] EWHC 718 (Comm).
The claimant in this action is Mr Alexander Gorbachev. He wishes to obtain third party disclosure of documents held electronically by Forsters LLP, a firm of English solicitors, and has issued an application against Forsters pursuant to CPR 31.17. Forsters' position is that they hold the documents on behalf of the appellants, T.U. Reflections Ltd and First Link Management Services Ltd (“the Trustees”), that the Trustees were the only proper parties to the application under CPR 31.17, and that any order for disclosure should be made against them.
On 11 th April 2022 HHJ Pelling QC granted permission to the claimant, pursuant to CPR PD 6B, to serve the application for third party disclosure on the Trustees, which are Cypriot companies, out of the jurisdiction. The claimant submitted that permission could be granted under “gateway” (20) in Practice Direction 6B. This provides for service out of the jurisdiction with permission where:
“(20) A claim is made – (a) under an enactment which allows proceedings to be brought and those proceedings are not covered by any of the other grounds referred to in this paragraph.”
The enactment on which the claimant relies is section 34(2) of the SCA which enables the court to make orders for third party disclosure.
Judge Pelling also granted permission for the application to be served by alternative means pursuant to CPR 6.15, namely by delivery to Forsters' office within the jurisdiction and by email to two addresses specified in his order. Service was effected by those means on 12 th April 2022. The Trustees' application to set aside Judge Pelling's order came before Mr Justice Jacobs on 6 th July 2022. In his judgment dated 20 th July 2022 he held that: (1) the court has jurisdiction to permit service of an application for third party disclosure out of the jurisdiction pursuant to gateway (20) of Practice Direction 6B; (2) it was appropriate to exercise that discretion in view of the fact that the documents are within the jurisdiction even though the Trustees are not; and (3) it was appropriate to order service by alternative means in view of the outstanding application against Forsters and the imminence of the trial. Each of these conclusions is now challenged by the appellant Trustees.
The issues
Accordingly the issues on this appeal are as follows: Jurisdiction
(1) Does the court have jurisdiction to make an order for disclosure of documents against a third party outside England and Wales?
Mr Sam O'Leary for the Trustees submitted that the court has no such jurisdiction for two reasons. The first depends on the meaning of the terms “claim” and “proceedings” in gateway (20). Mr O'Leary submitted that an application for third-party disclosure is not a “claim” and does not constitute “proceedings”. The second submission is that, applying the principle of territoriality whereby, unless the contrary intention appears, an enactment applies to all persons and matters within the territory to which it extends, but not to any other persons and matters, section 34 of the SCA does not allow proceedings to be brought against persons outside England and Wales.
Discretion
(2) If such jurisdiction exists, was the judge wrong to exercise his discretion to permit service out of the jurisdiction?
Alternative service
(3) Was the judge wrong to permit alternative service on the Trustees?
The factual background
The application for disclosure arises out of a dispute between the claimant and the defendant, Mr Andrey Guriev concerning their interests in a valuable fertiliser business based in Russia called PJSC PhosAgro. That dispute is currently listed for a six-week trial commencing in January 2023. One of the issues in the trial will be how and why Mr Gorbachev was financially supported between 2004 and 2012 through two Cyprus Trusts which were created for his benefit and which are alleged to have been operated by Mr Guriev's close associates.
From 2006 onwards, the Trustees were advised by a partner at Lawrence Graham LLP who has since joined Forsters. As a result, Forsters have possession in this jurisdiction of documents which, on the claimant's case, are likely to be relevant to those issues. The documents are held electronically. Although they may deal also with other matters, the documents held by Forsters include documents concerning transactions taking place in this jurisdiction for which the Trustees engaged Forsters to give advice.
In 2021 the claimant's solicitors (“CMS”) wrote to Forsters seeking disclosure of relevant documents. Negotiations continued between CMS and Forsters, while Forsters reviewed the documents in its files within the jurisdiction in order to determine whether it would be possible to provide the requested disclosure with the agreement of the Trustees. However, no agreement was reached and in August 2021 Mr Gorbachev issued an application seeking third party disclosure from Forsters under CPR 31.17 and section 34 of the SCA.
This application was listed for hearing before Judge Pelling on 11 th April 2022. One point taken by Forsters was that no order could be made against them, because they held the documents on behalf of their clients, the Trustees. At the start of the hearing, Judge Pelling invited the claimant to consider joining the Trustees to the application. The claimant's primary position was that such joinder was unnecessary and that Forsters were the correct respondent. However, the joinder of the Trustees would avoid the need for argument on that point. Accordingly the claimant applied orally and without notice for an order joining the Trustees to the application and for permission to serve them out of the jurisdiction and by alternative means. That application was granted and an application notice was issued on the same day. Service was effected on the next day, 12 th April 2022.
The Trustees applied to set aside Judge Pelling's order and this application came before Mr Justice Jacobs on 6 th July 2022. Accordingly Mr Justice Jacobs was only concerned, as are we, with the Trustees' jurisdictional objections. The claimant's principal argument, that the application can be made against Forsters without joinder of the Trustees, has yet to be determined. So too has the question whether, if Judge Pelling's order for service was rightly made, an order for third party disclosure should be made.
The legal framework
Section 34 of the Senior Courts Act
Section 34 of the SCA enables orders to be made on the application of a party to proceedings against a third party. It provides in its current form:
“(2) On the application, in accordance with rules of court, of a party to any proceedings, the High Court shall, in such circumstances as may be specified in the rules, have power to order a person who is not a party to the proceedings and who appears to the court to be likely to have in his possession, custody or power any documents which are relevant to an issue arising out of the said claim—
(a) to disclose whether those documents are in his possession, custody or power; and
(b) to produce such of those documents as are in his possession, custody or power to the applicant or, on such conditions as may be specified in the order—
(i) to the applicant's legal advisers; or
(ii) to the applicant's legal advisers and any medical or other professional adviser of the applicant; or
(iii) if the applicant has no legal adviser, to any medical or other professional adviser of the applicant.
(3) On the application, in accordance with rules of court, of a party to any proceedings, the High Court shall, in such circumstances as may be specified in the rules, have power to make an order providing for any one or more of the following matters, that is to say—
(a) the inspection, photographing, preservation, custody and detention of property which is not the property of, or in the possession of, any party to the proceedings but which is the subject-matter of the proceedings or as to which any question arises in the proceedings;
(b) the taking of samples of any such property as is mentioned in paragraph (a) and the carrying out of any experiment on or with any such property.
(4) The preceding provisions of this section are without prejudice to the exercise by the High Court of any power to make orders which is exercisable apart from those provisions.
(5) Subsections (2) and (3) apply in relation to the family court as they apply in relation to the High Court.”
The preceding section of the 1981 Act, section 33, makes similar provision for...
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