Cyprus Popular Bank Public Company Ltd v Vgenopoulos and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Picken,The Honourable Mr Justice Picken,The Hon. Mr. Justice Picken |
| Judgment Date | 22 June 2016 |
| Neutral Citation | [2016] EWHC 1695 (QB),[2016] EWHC 1442 (QB) |
| Court | Queen's Bench Division |
| Docket Number | No. FJ65/15,Case No: FJ65/15 |
| Date | 22 June 2016 |
[2016] EWHC 1442 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Picken
Case No: FJ65/15
Charles Samek QC and James McWilliams (instructed by DLA Piper LLP) for the Claimant
Ali Malek QC and James Evans (instructed by Three Crowns LLP) for the Defendants
Hearing dates: 10 and 17 June 2016
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This high value case raises two interesting and apparently novel questions: first, whether, in the case of a worldwide freezing order obtained in a foreign jurisdiction, the effect of obtaining an order under Article 38 of the Judgments Regulation ( Council Regulation (EC) No. 44/2001 of 22 December 2000) (the 'Judgments Regulation') permitting the registration of the worldwide freezing order as a judgment of the Queen's Bench Division of the High Court of Justice of England and Wales is that the worldwide freezing order becomes immediately effective and fully enforceable or whether it only becomes effective and fully enforceable if there is no appeal brought in respect of the registration order within two months of its being made or, if there is an appeal in that time period, on determination of that appeal; and secondly, whether "measures of enforcement" (as referred to in Article 47.3 of the Judgments Regulation) includes service of the worldwide freezing order on, and/or notification of its terms to, third parties or whether "measures of enforcement" are confined to processes in which the Court is involved in securing enforcement.
As to the first of these questions, the Claimant argues for the former position whilst the Defendants argue for the latter. As to the second question, the Claimant argues for the latter position whilst the Defendants argue for the former. The Defendants contend that it is appropriate in this case that the Court should exercise its inherent power to vary its own orders to make the meaning and intention of the Court clear (see Practice Direction 40B, paragraph 4.5) and to grant declaratory relief as to the parties' rights under a Court order, as happened in Masri v Consolidated Contractors (Oil & Gas) Company SAL [2009] EWCA Civ 36 and as also happened, in a freezing order context, in JSC BTA Bank v Ablyazov [2015] UKSC 64, a case in which Lord Clarke described at [16] the " sole question" as being "what the freezing order in fact made means".
Factual background
Before I come on to address the questions to which I have referred, I should firstly describe the factual context in which the questions come to be considered. That factual context, which is either not in dispute at all or which for present purposes is not in dispute, was helpfully summarised in the skeleton argument submitted by Mr Charles Samek QC and Mr James McWilliams on the Claimant's behalf, as well as in the witness statements of Dr Fotios Karatzenis, who is Chief Legal Counsel of the Twelfth Defendant ('Marfin'), and Mr Jeremy Andrews, a partner in DLA Piper LLP, dated, respectively, 9 May 2016 and 7 June 2016.
The Claimant is a registered Cypriot entity, which until 2012 offered a full range of banking, insurance and other related financial services and products operating in Cyprus, Greece, the United Kingdom, Serbia, Romania, Ukraine, Malta and Russia. On 18 May 2012, the Cypriot Government decided to underwrite the new issue of shares in the Claimant valued at €1.8 billion on the basis of the provisions of the Cypriot Law on Financial Crisis Management of 2011, Law 201/2011. On 26 March 2013, Mrs Andri Antoniadou of Nicosia was appointed as Special Administrator of the Claimant pursuant to Order 94/2013 of the provisions of the Cypriot Law on Resolution of Credit and Other Institutions 2013 (L.17(I)/2013). The Claimant is now under a process known as 'resolution' in Cyprus.
On 26 November 2012, the Claimant issued a writ of summons in the District Court of Nicosia against the First, Second and Third Defendants along with 8 others. The claims brought in those proceedings allege, on the Defendants' part, various breaches of fiduciary duties, breach of trust, negligence, abuse of position, conflict of interest, and conspiracy in a manner contrary to the interests of the Claimant. Subsequently, on 29 April 2013, the same day as the writ of summons was amended by the Claimant to add Marfin to the proceedings (as the Twelfth Defendant), the Claimant filed an ex parte application in the District Court of Nicosia which sought worldwide freezing orders and discovery orders against the then defendants. On 8 May 2013, this application was granted and a worldwide freezing order was obtained on an interim basis up to the value of €3,790,000,000 in the case of the First and Second Defendants and up to the value of €1,500,000,000 in the case of the Third Defendant. The same order prohibited Marfin from transferring assets to the First, Second and Third Defendants. The following month, on 23 May 2013, the Claimant filed an ex parte application and obtained an order for permission to serve the writ of summons and the interim worldwide freezing order out of the jurisdiction on the Defendants in Greece. Following this, on 28 June 2013, the First and Fourth Defendants applied to set aside the writ of summons and the interim worldwide freezing order on procedural grounds, something which was also done by the Second and Third Defendants a few days later on 1 July 2013. The next day, the First, Second and Third Defendants filed oppositions to the interim worldwide freezing order.
These applications were ultimately unsuccessful, the District Court of Nicosia on 23 May 2014 issuing a final judgment following an inter partes hearing which had the effect of making the interim worldwide freezing order a final worldwide freezing order which is to remain in force until the completion of the proceedings before the District Court of Nicosia. This final order (the 'Cypriot Freezing Order'), like the interim worldwide freezing order, deals with each of the Defendants separately and provides as regards the First, Second and Third Defendants (but not Marfin) as follows:
"iv (1) Save as provided in paragraph (2) above, the conditions of this Order do not affect or concern anybody outside the jurisdiction of the Courts of the Republic of Cyprus.
(2) The conditions of this Order affect the following persons which are found in a country or state outside the jurisdiction of the Courts of the Republic of Cyprus:
…
b Any person, including any banking institution or other financial organization,
…
ii in relation to which this Order has been determined as being applicable and/or otherwise executable by the Courts of a country which has jurisdiction on the said person or on the assets of this person."
Before turning to deal with the steps which the Claimant has taken to register the Cypriot Freezing Order in this jurisdiction, I should mention that I have been made aware of the fact that the First Defendant and Marfin are claimants in an ICSID arbitration brought by them against the Republic of Cyprus. In his witness statement Dr Karatzenis suggested that the claims in that arbitration cover the same ground as that covered by the claims made by the Claimant against the Defendants in the proceedings before the District Court of Nicosia. He went on to suggest that the latter proceedings have been pursued by the Claimant, which he described as being state-owned and state-controlled, as part of an attempt by the Republic of Cyprus to "hamper" the Defendants' pursuit of the ICSID arbitration claim, and that the obtaining of the Cypriot Freezing Order, as well as its registration in this jurisdiction, also forms part of that attempt. On the Claimant's behalf, Mr Andrews explained in his responsive witness statement that this is not accepted. It is, in any event, for immediate purposes not a matter which is relevant.
Somewhat more relevant is the fact that, on 12 February 2015, the Claimant (then instructing Eversheds LLP rather than DLA Piper LLP, but with Mr Samek QC acting at that stage also) made an application to the Queen's Bench Division of the High Court of England and Wales to register the Cypriot Freezing Order as a judgment pursuant to Article 38 of the Judgments Regulation. Although registration applications are normally dealt with on paper, and indeed the Claimant's application requested that the application be addressed "without a hearing", it is apparent that Master Leslie was not willing to proceed in that way because he made a note on the application notice stating: "See me in Practice, if so advised. See Art 31 of EC Reg 44/2001". He clearly had in mind that it would be open to the Claimant to apply for a freezing order (a "protective measure" as described in Article 31: see below) and was querying whether, in those circumstances, the appropriate course was to seek an order permitting registration of the Cypriot Freezing Order.
At the hearing which subsequently took place before Master Leslie, on 26 February 2015, he raised the point which was concerning him as regards Article 31. Indeed, he asked, somewhat prophetically and certainly relevantly, what the effect would be were the Cypriot Freezing Order to be...
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