FM Capital Partners Ltd v Frédéric Marino
| Jurisdiction | England & Wales |
| Judge | Peter MacDonald Eggers |
| Judgment Date | 31 October 2018 |
| Neutral Citation | [2018] EWHC 2889 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2014-000863 |
| Date | 31 October 2018 |
[2018] EWHC 2889 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Peter MacDonald Eggers QC
(SITTING AS A DEPUTY JUDGE OF THE HIGH COURT)
Case No: CL-2014-000863
Tim Akkouh (instructed by Hogan Lovells International LLP) for the Claimant
Laurence Emmett and James Fox (instructed by Cooke Young and Keidan LLP) for the Third Defendant
Hearing dates: 9 October 2018
Judgment Approved
Peter MacDonald Eggers QC:
Introduction
On 9th October 2018, I dismissed the application by the Third Defendant (Mr Ohmura) for the discharge of a worldwide freezing order made by the Court on the Claimant's application, holding that there was a real risk of dissipation of assets by Mr Ohmura. I also directed that the worldwide freezing order continue until further order. The freezing order was made following the entry of judgment in July 2018 against Mr Ohmura in respect of Mr Ohmura's liability for dishonest assistance in the First Defendant's breaches of fiduciary duty and bribery.
The worldwide freezing order is directed against Mr Ohmura (described in the order as the Respondent) and contains the following provisions:
“ FREEZING INJUNCTION
4. Until further order of the Court, the Respondent must not —
(1) remove from England and Wales any of his assets which are in England and Wales up to the value of US$11,250,000; or
(2) in any way dispose of, deal with or diminish the value of any of his assets whether they are in or outside England and Wales up to the same value.
5. Paragraph 4 applies to all the Respondent's assets whether or not they are in his own name and whether or not they are solely or jointly owned and whether the Respondent is interested in them legally, beneficially or otherwise. For the purpose of this order the Respondent's assets include any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. The Respondent is to be regarded as having such power if a third party (which shall include a body corporate) holds or controls the asset in accordance with his direct or indirect instructions.
6. This prohibition includes the following assets in particular (but without limitation) —
(1) any interest the Respondent has retained in the property known as Villa Rive d'Or …
(2) any money in the bank accounts:
a. of the Respondent, including (without limitation) any account at UBS AG Bank, Zurich branch, Switzerland (or elsewhere in Switzerland) including … any bank account held in the United Arab Emirates …;
b. of Conquest Financial Partners AG …
c. of Rubicon Financial Holding Ltd …
d. of Squadra Corse Ltd …
(3) any shares or other interest in:
a. Conquest Financial Partners AG;
b. Rubicon Financial Holding Ltd;
c. Squadra Corse Ltd;
d. StileF Service Srl;
(4) any pension;
(5) the following cars …
(6) any interest under any trust or similar entity including any interest which can arise by virtue of the exercise of any power of appointment, discretion or otherwise howsoever …
EXCEPTIONS TO THIS ORDER
(1) This order does not prohibit the Respondent from spending £1,000 a week towards his ordinary living expenses and also a reasonable sum on legal advice and representation. But before spending any money the Respondent must tell the Applicant's legal representatives where the money is to come from.
(2) This order does not prohibit the Respondent (or any company whose assets are frozen pursuant to paragraphs 5 or 6 above) from dealing with or disposing of any of his/its assets in the ordinary and proper course of business, but the Respondent must give the Applicant's solicitors 2 clear working days' notice of his intention of so doing in respect of any transaction (or series of connected transactions) exceeding £10,000 in value …”
The parties have produced for consideration by the Court a draft revised worldwide freezing order to reflect the Court's judgment dated 9th October 2018. Accordingly, the paragraph numbering of the current draft order has changed. I shall for the purposes of this judgment continue to refer to the original paragraph numbering of the order.
The Claimant and Mr Ohmura each now apply for a variation of the worldwide freezing order. In addition, the Claimant applies for an order for further disclosure in respect of Mr Ohmura's assets.
The more substantial application is made by Mr Ohmura, who seeks a variation of the worldwide freezing order, including in the following respects:
(1) The removal of the references to (a) a “ body corporate” in para. 5 of the order, (b) the assets of various companies which are wholly owned (directly or indirectly) by Mr Ohmura in para. 6 of the order, in particular the bank accounts of the companies in para. 6(2) and motor vehicles owned by the companies or motor vehicles not owned by Mr Ohmura or the companies in para. 6(5), and (c) “ any company whose assets are frozen” in para. 9(2) (including any reference to a notification requirement in this respect).
(2) The removal of the reference to the words “ and whether the Respondent is interested in them legally, beneficially or otherwise” in the first sentence of para. 5 of the order. This phrase, described by Christopher Clarke, J in JSC BTA Bank v Ablyazov (No 5) [2012] EWHC 1819 (Comm); [2012] 2 All ER (Comm) 1243, para. 34 as “the Commercial Court words”, is intended to extend the operation of the freezing order to assets held by the respondent as a trustee or nominee for a third party in which the respondent has no beneficial interest.
(3) The removal of the reference to the Swiss Property (Villa Rive d'Or) in para. 6(1) of the order, which was the subject of my judgment dated 9th October 2018.
(4) Subject to any other variations, an increase in the value of a transaction or series of transactions which require notification under para. 9(2) of the order.
The Claimant applies for (a) a variation of the worldwide freezing order in order to reduce the value of a transaction or series of transactions which require notification under para. 9(2) of the order, and (b) an order for further disclosure in respect of Mr Ohmura's assets.
Each of the parties also sought further variations to the wording of the worldwide freezing order, depending on the outcome of the issues which attracted the more substantial argument and which are determined by this judgment. Such potential variations will have to be addressed and considered in light of this judgment.
There was also some discussion about para. 9(1) of the order which permits Mr Ohmura to spend £1,000 on ordinary living expenses. However, as it was agreed between the parties that this provision would not embrace expenses incurred in the ordinary course of business (including expenses incurred personally by Mr Ohmura and reimbursed by the companies for business purposes), this provision was no longer disputed.
The reference in the order to Mr Ohmura's companies
The parties' submissions
The reference in the order to Mr Ohmura's companies is the most complex issue arising from the parties' applications. It involves both the determination of issues concerning the interpretation of the worldwide freezing order as well as the consideration of the amendments which might be made to the order. Only Mr Ohmura applies to vary the order; the Claimant makes no application for a variation of the order in this respect.
Mr Ohmura's application is based on the contention that the worldwide freezing order should not attach to the assets of the companies referred to in the order, namely:
(1) Rubicon Financial Holding Ltd (“Rubicon”), the shareholding of which is held 100% by Mr Ohmura. It is a holding company and does not trade on its own account.
(2) Conquest Financial Partners AG (“Conquest”), which is a financial advisory and structuring company. Its shareholding is owned 100% by Rubicon. Mr Ohmura and his sister are directors of this company. According to para. 45 of Mr Ohmura's fourth witness statement, Conquest no longer has any employees.
(3) Squadra Corse Ltd (“Squadra”), which is a motor sport events and marketing company. Its shareholding is owned 100% by Rubicon. Mr Ohmura and his sister are directors of this company.
(4) StileF Service Srl (“StileF”), which is a company in the business of mechanics and technical support and is San Marino's official Ferrari authorised service dealer. This company was founded by Mr Giovanni Zonzini. Mr Zonzini and Mr Ohmura are both directors of the company. Rubicon has approximately a 30% shareholding in this company. However, according to Mr Ohmura's fourth witness statement, at para. 75, neither Mr Ohmura nor Rubicon has any control over the day to day activities of this company.
As far as Rubicon, Conquest and Squadra are concerned, Mr Ohmura has a 100% direct or indirect shareholding and is a director, along with his sister.
Mr Ohmura applies for a variation of the worldwide freezing order insofar as it purports to apply, not to Mr Ohmura's assets, but the assets of these four companies. Mr Laurence Emmett, who appeared with Mr James Fox on behalf of Mr Ohmura, submitted that the order should be varied to omit reference to these companies' assets on the ground that the assets belong to and are in the control of third parties, not Mr Ohmura.
In answer to this, Mr Tim Akkouh on behalf of the Claimant argued that the companies' assets are covered by the order, (1) indirectly because if a person who owns shares in a company procures that that company dissipates its assets, it reduces the value of Mr Ohmura's...
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