Mark Byers v Samba Financial Group

JurisdictionEngland & Wales
JudgeMr Justice Fancourt
Judgment Date08 April 2020
Neutral Citation[2020] EWHC 853 (Ch)
Docket NumberCase No: HC-2017-001598
CourtChancery Division
Between:
(1) Mark Byers
(2) Hugh Dickson (as Joint Official Liquidators of Saad Investments Company Limited)
(3) Saad Investments Company Limited (in liquidation)
Claimants
and
Samba Financial Group
Defendant

[2020] EWHC 853 (Ch)

Before:

THE HON. Mr Justice Fancourt

Case No: HC-2017-001598

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

BUSINESS LIST (ChD)

Rolls Building

7 Rolls Buildings

Fetter Lane, London

EC4A 1NL

Mr Stephen Smith QC, Mr Adam Cloherty and Mr Timothy Sherwin (instructed by Morrison & Foerster (UK) LLP) for the Claimants

Mr Andrew Onslow QC, Mr Alan Roxburgh, Mr Edward Harrison and Ms Sarah Tulip (instructed by Latham & Watkins (London) LLP) for the Defendant

Hearing dates: 25, 26, 27 February 2020

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.

THE HON. Mr Justice Fancourt

Mr Justice Fancourt Mr Justice Fancourt

This Judgment comprises the following sections:

I. Introduction to the applications (paras 1–17)

I. Introduction to the applications

1

On 20 November 2018, at the first case management conference in this claim (“CMC 1”), His Honour Judge Klein made an order that the Defendant (“the Bank”) give standard disclosure of documents. The Claimants were also ordered to give standard disclosure. (These orders were made before the Disclosure Protocol in the Business and Property Courts ( CPR 51UPD) came into force, though that Protocol has applied to the claim from 1 January 2019.)

2

The order was for the parties to give disclosure in two tranches: the first by 17 May 2019 and the second by 27 September 2019. This was because the Bank drew to the Judge's attention that it considered that its ability to give disclosure of some at least of its documents depended on the agreement of the Saudi Arabian Monetary Authority (“SAMA”), the financial and banking regulator in the Kingdom of Saudi Arabia (“KSA”). The Bank therefore asked for a generous time in which to complete the disclosure exercise, to allow time for the necessary approval to be obtained. The Claimants also had to seek the permission of the Court to disclose certain documents that had been obtained through other court process. The first tranche of disclosure was therefore to be of documents “where disclosure does not require third party consent or the permission of any court”.

3

The first tranche of disclosure and a disclosure statement was provided by the Bank, but the categories of documents were limited and the number (in the context of this claim) quite small. The substantial majority of the Bank's disclosure would arrive in the second tranche, as the Bank contended that SAMA approval to all further disclosure was required. However, no second tranche of disclosure has been given by the Bank – neither a list of documents nor a further disclosure statement – and no copies of any further documents have been provided save for two letters from SAMA.

4

On the very day on which the second tranche of disclosure was due, 27 September 2019, the Bank applied for an extension of time, so that it could complete the exercise of searching for and reviewing hundreds of thousands of documents in order to show them to SAMA and obtain SAMA's consent. It considered that it would need until 6 January 2020 to do so. On 22 October 2019, despite misgivings about the Bank's conduct, I granted an extension of time until 13 December 2019. The Bank stated that its ability to give further disclosure, once it had completed the review exercise, depended on SAMA giving consent. At that time, the Bank expressed guarded optimism that consent would be granted in due course, but it indicated that there was a possibility that a further application in that regard would have to be made, possibly one for an order to revoke or vary its disclosure obligation.

5

The Claimants complied with the original order for disclosure and served their list of documents and disclosure statement on the Bank on time. They raised with the Bank's lawyers whether inspection should be delayed until the Bank too had given disclosure, but the Bank insisted that the Claimants allow inspection of their documents, in accordance with the court's order, and the Claimants did so. The Bank has therefore had access to copies of all the Claimants' documents since early October 2019.

6

When extending the date for the Defendant's disclosure, I ordered that if any further application was made for an extension of time or to vary the Bank's disclosure obligations on grounds that were connected with its regulation by SAMA, the Bank must at that stage disclose its relevant correspondence and notes of meetings with SAMA from 6 December 2017 up to the date of the application (save for any privileged documents) and file a disclosure list supported by a statement of truth (“the SAMA disclosure”). There has been no appeal against that order.

7

Late on 13 December 2019, the Bank applied for a further extension of time and/or a variation of the order for standard disclosure and the order for SAMA disclosure. No further disclosure had by then been given by the Bank, save that it had provided a copy of one letter from SAMA dated 5 November 2019 and a translation of it. The Bank said that the reason why it had not given disclosure was that SAMA had refused on 11 December 2019 to give its permission for disclosure to take place, and had suggested to the Bank that the proper course was for the Court to approach the Ministry of Foreign Affairs in KSA to seek its assistance in connection with the Court's “request” for disclosure of the Bank's documents. The Bank was in any event behind schedule with its review of certain categories of documents and so sought a further extension of time to complete that exercise and to engage with SAMA at a high level to try to obtain its consent to disclosure. In the alternative, it sought a variation of the order for disclosure to remove the requirement to disclose those documents for which third party consent was needed but could not be obtained.

8

On 16 December 2019, the Claimants issued an application for the Bank to be debarred from defending the claim and for the Defence to be struck out; alternatively for an order that unless disclosure were given by 3 January 2020 the Bank be debarred and the Defence struck out.

9

I heard the Bank's application for a further extension of time urgently on 19 December 2019. I was unable to consider the communications between SAMA and the Bank because, in breach of the Order of 22 October 2019, the Bank did not give the SAMA disclosure or provide a verified list of those documents. The Bank asserted that SAMA had forbidden disclosure of correspondence between it and the Bank on grounds of confidentiality. It produced the letter from SAMA dated 5 November 2019 to that effect. It referred to but did not produce the letter sent by SAMA on 11 December 2019, in which SAMA is said to have expressed its requirement for the Court to petition the Ministry of Foreign Affairs in KSA.

10

On 20 December 2019, I rejected the Bank's application for a further extension of time, on the grounds that: the evidence of the Bank in support of its application was inadequate and opaque; the Bank was not putting the full picture before the Court; and there was no credible basis in the evidence for believing that a further extension of time would be productive. I did not decide then whether the application should be dismissed because the Bank had failed to comply with the SAMA disclosure order. The Bank's application to vary the orders for disclosure and the Claimants' application to strike out the Defence were adjourned to be heard at a later date. I indicated that if by then the Bank had been able to give disclosure, the Court would have to consider, in the context of the Claimants' application to strike out and debar, whether a fair trial of the claim remained possible notwithstanding the serious delay.

11

No further disclosure has been given by the Bank to date, save for a further single letter from SAMA dated 1 January 2020, explaining that criminal proceedings would be initiated against the Bank if it disobeyed SAMA's directions. That letter was written in response, the Bank says, to a letter from it to SAMA (undisclosed) in which the Bank asked SAMA to spell out the consequences of providing disclosure without SAMA's consent. The Bank then asked SAMA for permission to rely on that one letter in these proceedings and SAMA gave permission, on terms as to confidentiality.

12

On 10 January 2020, the Bank issued a further application. This was for the trial of preliminary issues, which the Bank said could fairly be tried before the Bank needed to give further disclosure. This application was made in the alternative to the Bank's existing application to be discharged from its disclosure obligations. There was also an application for a direction that a letter of request be sent by the Court to the Ministry of Foreign Affairs of KSA, and for relief against sanctions “to the extent necessary”.

13

All these outstanding applications were heard over 3 days from 25 February 2020 on the basis of written evidence, including evidence of four expert witnesses on Saudi Arabian law, banking practice and regulation. I was assisted by written and oral submissions of the highest quality from both sides. The applications raise a number of difficult case management problems. At bottom is the question of whether the Bank has forfeited its right to a trial on the merits in October 2020, on account of serious and deliberate breaches of the Court's orders, or whether it should – without giving disclosure – be allowed to defend the claim, or at least defend certain issues.

14

Mr Stephen Smith QC, who appeared with Mr Adam...

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    ...15 Samba did not comply with the order for disclosure and, in my judgment handed down on 8 April 2020 ( Byers v Samba Financial Group [2020] EWHC 853 (Ch)), I held that Samba must be debarred from defending the claim save for certain limited issues. These were the only issues where it was ......
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