Bank Mellat (Appellant (Plaintiff) v Mohammad Ebrahim Nikpour (Respondent

JurisdictionEngland & Wales
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE DONALDSON,LORD JUSTICE SLADE
Judgment Date21 April 1982
Judgment citation (vLex)[1982] EWCA Civ J0421-1
CourtCourt of Appeal (Civil Division)
Docket Number82/0171
Date21 April 1982
Bank Mellat
Appellant (Plaintiff)
and
Mohammad Ebrahim Nikpour
Respondent (Defendant)

[1982] EWCA Civ J0421-1

Before:

The Master of the Rolls

(Lord Denning)

Lord Justice Donaldson and

Lord Justice Slade

82/0171

1981 B. No. 548

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

(MR. JUSTICE ROBERT GOFF)

Royal Courts of Justice.

MR. DONALD RATTEE, Q.C. and MR. B.D. McCURE (instructed by Messrs. Stephenson Harwood) appeared on behalf of the Appellant.

MR. N. STRAUSS (instructed by Meesrs. Baker & McKenzie) appeared on behalf of the Respondent.

1

THE MASTER OF THE ROLLS
2

Bank Pars was a large bank in Iran. Its head office was in Tehran. It had many branches throughout Iran. It also had two branches in England. The London branch was in Cavendish Square.

3

Mr. Mohammad Ebrahim Nikpour was the chief executive of the bank. His family held 89 per cent of the shares. He personally held 12 per cent. Although the bank was a public company in Iran, Mr. Nikpour was in control of its affairs. He spent a great deal of his time in London.

4

In 1979 there was a revolution in Iran. By a decree dated the 8th July, 1979 the revolutionary government nationalised all the banks in Iran. Bank Pars was nationalised. Mr. Nikpour's shareholding was acquired without payment. It was worth £3 1/2 million.

5

In January 1980 a new manager was appointed to the London branch—Mr. Naieri. He had access to all the accounts and books of the bank. I should have thought he would have complained at once if he had found any misappropriation by Mr. Nikpour. But no complaint was made. Nothing was said to Mr. Nikpour until August 1981 when it was thought that he was coming to England. It was then alleged that in November 1978, when Mr. Nikpour was chief executive, his account with the London branch had been credited with two large sums—one of £102,000 and another of £97,000—which were not due to him. On discovering these credits, the new manager instructed solicitors to try and recover them from Mr. Nikpour.

6

The new manager's solicitors found that Mr. Nikpour had an account with the Security Pacific National Bank in London. He had assets of over £300,000 at that bank. So in September 1981 they applied to the court for a Mareva injunction to restrain him from dealing with those assets. The application was made hurriedly. There was no time to issue a writ. On an undertaking to issue a writ, they were granted a Mareva injunction against Mr. Nikpour.

7

The writ was prepared. When the judge saw it, he at once pointed out that it showed no cause of action. It just alleged that these sums were credited. Mr. Nikpour might have a perfectly good explanation of why his account had been credited with these sums. So the bank amended the pleadings. They said that these moneys were loans by Bank Pars to Mr. Nikpour: and that he was liable to reimburse the bank.

8

Afterwards the matter came before the judge inter partes. Mr. Nikpour was represented. An affidavit was put before the court on his behalf. He said that the moneys were properly credited to him for his own use. He said that they were not a loan.

9

So the plaintiff bank amended their pleadings yet again. They alleged that Mr. Nikpour had procured those sums to be credited to him without any proper justification. That was the state of the pleadings when the matter came before Mr. Justice Robert Goff.

10

Mr. Justice Robert Goff looked into the matter. He said that there had not been full and proper disclosure at the original ex parte application when the Mareva injunction was granted. He thought that that was so serious a fault on the part of the plaintiffs that he discharged the injunction. He went on to say:

11

"That being so, I discharge the Mareva injunction granted in September of this year.

12

"I am not prepared to grant a new Mareva injunction today since it is impossible to judge whether the money would still be here if the injunction had not been granted on the basis of the Affidavit which I have described. It would be unfair to the Defendant for the Court to enable the Plaintiff to renew the injunction on further evidence".

13

Although Mr. Justice Robert Goff would not grant a new Mareva injunction, he continued it pending an appeal to this court. We have heard the appeal yesterday and today.

14

It does raise an important point on Mareva injunctions. I would like to repeat what has been said on many occasions. When an ex parte application is made for a Mareva injunction, it is of the first importance that the plaintiff should make full and frank disclosure of all material facts. He ought to state the nature of the case and his cause of action. Equally, in fairness to the defendant, the plaintiff ought to disclose, so far as he is able, any defence which the defendant has indicated in correspondence or elsewhere. It is only if such information is put fairly before the court that a Mareva injunction can properly be granted. We stated the guidelines in 1979 in Third Chandris Shipping Corporation v. Unimarine S.A. (1979) 1 Queen's Bench 645 at page 668:

15

"The plaintiff should make full and frank disclosure of all matters in his knowledge which are material for the judge to know".

16

I think the judge in this case was well justified on the material before him in refusing to grant a new Mareva injunction. Three years had elapsed since these credits were made to Mr. Nikpour's account. There had been ample time to discover the basis on which they were made. All that Mr. Naieri's affidavit disclosed in the first instance were some credit advices and a document from which it was said that the defendant had accepted liability "for remitting rials to Tehran to cover the said sum". He exhibited a telegram from Mr. Nikpour to Bank Pars in Tehran, in which he said:

17

"…there have at this time unfortunately been difficulties, as never before, in the way of remitting moneys to Tehran. I have certainly taken steps but so far I have not achieved any definite result. If, which God forbid, these steps do not succeed, then in a few days' time, when my health has recovered and I come to Tehran, I shall myself effect settlement, since I have accepted liability. The purchase of riyals in the London Branch prior to the prohibition on purchase was only to make the name of Bank-e-Pars well known in London".

18

The two words "accepted liability" were picked out and included in the affidavit to indicate that Mr. Nikpour had accepted liability for the repayment of those sums. Whereas, in the light of the facts as they were put before us, it was not a case of accepting liability: but of accepting the responsibility for seeing that in due course the rials were transmitted to Tehran.

19

The judge felt that more inquiries should have been made before any application was made for a Mareva injunction. He said:

20

"There is an obligation to make a full and frank disclosure. I am not satisfied that that was done. Even allowing for all the difficulties from the Revolution and the change of personnel, I am not satisfied that proper enquiries were made in Tehran before asking for the injunction".

21

Mr. Rattee has challenged the judge's reasoning. He says that the non-disclosure was innocent. There was no fraud or deception or anything like that. He referred to one or two cases of service out of the jurisdiction, of which the latest was " The Hida Maru" (1981) 2 Lloyd's Law Reports 510. He suggested that, although initially there may not have been full disclosure, that could be rectified later.

22

I would accept Mr. Rattee's argument to this extent: There may sometimes be a slip or mistake—in the application for a Mareva injunction—which can be rectified later. It is not for every omission that the injunction will be automatically discharged. A locus penitentiae may sometimes be afforded: but not in this particular case. It is quite clear that the plaintiffs themselves had the greatest difficulty in showing what their cause of action was. At first they did not show any cause of action. Next they claimed that the moneys had been loaned to Mr. Nikpour....

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