Wangzhou Meng v HSBC Bank Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Fordham |
| Judgment Date | 19 February 2021 |
| Neutral Citation | [2021] EWHC 342 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB-2021-000211 |
| Date | 19 February 2021 |
[2021] EWHC 342 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Fordham
Case No: QB-2021-000211
James Lewis QC and Rachel Scott (instructed by Mishcon de Reya) for the Applicant
Rupert Allen (instructed by Latham & Watkins (London) LLP) for the Respondents
Hearing date: 12 th February 2021
Final Judgment
Introduction
This case is about whether to order access to bank documents for use in extradition proceedings abroad. The case came before me as an application pursuant to section 7 of the Bankers' Books Evidence Act 1879 (“the 1879 Act”), issued on 19 January 2021. The applicant is the Chief Financial Officer of Huawei Technologies Co Ltd (“Huawei TCL”), the world's largest telecommunications equipment company. The respondents are UK-based subsidiaries of the HSBC Group, a multinational financial institution. There are criminal proceedings on foot in the United States (“the US Criminal Proceedings”), brought by US prosecutors (“the US Prosecuting Authorities”) against Huawei TCL and Huawei Device USA Inc (“Huawei DUI”). In those proceedings, a Protective Order (“the PO”) dated 31 May 2019 and Supplemental Protective Order (“the SPO”) dated 10 March 2020 make provision about what can and cannot be done with prosecution disclosure materials made available to Huawei TCL and Huawei DUI, their US lawyers and others. The applicant was detained by the Canadian Authorities at Vancouver International Airport on 1 December 2018. The United States (“the Requesting State Authority”) seeks her extradition from Canada, so that she can be prosecuted for fraud as a co-defendant in the US Criminal Proceedings. Extradition proceedings (“the Canadian Extradition Proceedings”) are on foot in the Supreme Court of British Columbia (“the Canadian Court”). In those proceedings, on 28 January 2019, the Requesting State Authority certified that the evidence summarised in a Record of the Case for Prosecution (“the ROC”) was “available for trial” and “sufficient under the laws of the United States to justify prosecution”. The Requesting State Authority subsequently issued a Supplemental Record of the Case (“SROC”) on 28 February 2019 and Second Supplemental Record of the Case (“SSROC”) on 14 December 2020. On 28 October 2020, Associate Chief Justice Holmes (“the Canadian Judge”) issued a ruling – United States v Meng 2020 BCSC 1607 (“the Canadian Ruling”) – following a hearing on 28–30 September 2020. The next hearing before the Canadian Court is fixed for 1 March 2021 with an abuse of process argument (§4 below) being heard on 26 April 2021.
Mode of Hearing and Open Justice
The mode of hearing in this Court was a remote hearing by Microsoft Teams. Counsel were satisfied, as was I, that this mode involved no prejudice to the interests of their clients. A remote hearing eliminated any risk to any person from having to travel to, or be present in, a court room. I am satisfied that a remote hearing was necessary and proportionate in the context of the national COVID-19 lockdown. The open justice principle was secured through the publication of the case and its start time on the Cause List, together with an email address usable by any member of the press or public who wished to observe the hearing, as many did. Open justice was also promoted by arrangements made with the parties prior to the hearing and embodied in an Order which I made at the start of the hearing, under which the skeleton arguments (and the Order) were obtainable immediately by any member of the press or public sending an email to my clerk (whose email address I gave in open Court), as many did. By the same Order, I directed ( CPR 5.4C(4)(d)) that access to those skeleton arguments and to documents from the Court file be restricted to versions of documents from which two names had been redacted, but with liberty to any person to apply to the Court on notice to vary or discharge that restriction. The reasons for that restriction were set out in a recital to the Order and were as follows. (1) The Requesting State Authority in the Canadian Extradition Proceedings has sought and obtained from the Canadian Court an order that the names in question be redacted in any documents which are provided to the media, such order having been made because the Canadian Court was satisfied that there was good reason for it. (2) Those Canadian Extradition Proceedings are the proceedings relied on by the Applicant as constituting the “legal proceeding” and “proceedings” for the purpose of which this application is made pursuant to section 7 of the 1879 Act. (3) There is no basis in the circumstances for declining to accept the Canadian Court's assessment of the need for and appropriateness of redaction. That order of the Canadian Court would be undermined and could be frustrated in the absence of this Order. It is necessary in the interests of justice, and in any event necessary in the interests of comity, that there be equivalent redaction. (4) The redaction of the two names does not interfere with the ability of any member of the press or public to follow and report on this hearing. Any member of the press or public who disagrees with this Order or wishes to challenge it is protected by being able to apply to vary or discharge it.
The Context
A Gist of the US Prosecuting Authorities' Case Against the Applicant
The essence of the case being made by the Requesting State Authority against the applicant is encapsulated thus, in her written submissions (17 July 2020) filed in the Canadian Extradition Proceedings: “The Applicant's deceit placed HSBC at financial risk” so that “a fraud was committed”. Key features of the Requesting State Authority's case against her include the following claims. HSBC Group was Huawei's most important international bank with relationships in over 40 countries. US-dollar denominated transactions are required to be processed through the US, whose laws and regulations contain certain prohibitions on banks providing such transactions if related to Iran. HSBC Group cleared US dollar transactions through its US-based subsidiary HSBC US. After Reuters news articles in December 2012 and January 2013 claimed Skycom Tech Co Ltd (“Skycom”) was closely associated with Huawei TCL and had attempted to sell US-manufactured equipment to an Iran-based customer, some “junior” HSBC Group employees initiated the closure of Skycom's account. The applicant gave a PowerPoint Presentation (“the PPP”) on 22 August 2013 in Hong Kong to HSBC Group's Head of Global Banking. The PPP involved untrue representations made by the applicant denying Huawei TCL's ownership and control of Skycom. In fact, Huawei TCL controlled Skycom's operations in Iran until at least 2014. HSBC Group relied on those and other misrepresentations in deciding to continue the banking relationship with Huawei TCL, action which it took believing the civil, criminal and reputational risks of banking Huawei TCL to be acceptable. Whether to continue the banking relationship was considered at a global risk committee meeting in London on 31 March 2014. HSBC Group and HSBC US cleared more than $100 million worth of transactions related to Skycom through the United States between 2010 and 2014, at least $7.5 million of which were payments by Skycom made to Networkers International UK Plc (“Networkers”), a staffing company in the United Kingdom providing contractors to work on Huawei TCL's telecommunications projects in Iran, contrary to US sanctions law.
A Gist of the Applicant's Position in the Extradition Proceedings
Key features of the applicant's case in the Canadian Extradition Proceedings include the following claims. The ROC is (i) manifestly unreliable such that the evidence is not sufficient and she should be discharged under section 29(1) of the Extradition Act and (ii) deliberately misleading by reason of evidence being deliberately withheld or misstated by the Requesting State Authority such that the extradition proceedings should be stayed as an abuse of process. Each of these arguments is supported by reliable and relevant evidence which the applicant seeks to adduce pursuant to section 32(1)(c) of the Extradition Act. The insufficient, unreliable and misleading nature of the case against the applicant can be seen by reference to points such as the following. There was no misrepresentation within the PPP, once the contents of the PPP are fairly considered. Relevant personnel within HSBC Group, moreover, were aware of the relationship between Huawei TCL and Skycom, not just at what has been portrayed as ‘junior’ level, HSBC Group having carried out other enquiries, and HSBC Group personnel were not therefore relying on the PPP. Furthermore, there was no link between (1) a post-PPP decision to continue the banking relationship with Huawei TCL and (2) actions to process US-dollar denominated transactions through the United States, even after August 2013 (still less before that date). Indeed, the logic of that case breaks down completely, given that: (a) those US-dollar denominated transactions were between Skycom and Networkers; (b) they were not processed by any HSBC Group entity as banker to Skycom (that relationship having ended in February 2013 with Skycom's account closure); (c) they were processed by HSBC Group entities (including the first respondent) as bankers to Networkers; and (d) none of this banking action was a function of continuing as Huawei TCL's banker.
The Reuters Report (26 February 2019)
A Reuters news report dated 26 February 2019, on which the applicant relies, refers to an “HSBC probe of Huawei … in late 2016 and 2017” which is said to have “helped lead to US charges against [the applicant]”....
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