In Louis Dreyfus Commodities Mea Trading Dmcc v Concorde Pour L’industrie Et L’exploitation SPRL & ORS Charles Samek QC acted for the claimant on its successful application that a foreign company director attend for cross-examination in relation to alleged deficient disclosure of personal and corporate assets pursuant to a worldwide freezing order. The claimant obtained worldwide freezing order relief (WFO) and anti-suit injunctions against the defendants. The anti-suit relief had been granted to restrain the defendants’ prosecution of proceedings in the Democratic Republic of Congo (DRC) in breach of English court exclusive jurisdiction clauses in various commercial agreements for the development and exploitation of mines in DRC. The claimants had argued that the prosecution of the DRC proceedings was intended to attack security in DRC for monies which the claimant had lent the first – third corporate defendants. The fourth defendant was the director and ultimate sole or majority owner of the corporate defendants. The claimants contended that the defendants had failed to give proper asset disclosure as required by the WFO and following unsatisfactory responses to correspondence applied to cross-examine the fourth defendant on the defendants’ asset disclosure. The defendants resisted the application arguing that it was disproportionate, oppressive and that in any case the claimants were sufficiently protected by the security which they had in DRC.Phillips J rejected the defendants’ arguments and granted the claimants’ application. The judge also ordered that the defendants give disclosure in relation to specific bank accounts and awarded the claimants their costs. In making the cross-examination order, Phillips J followed the approach of Vos J in the leading case of Jenington International Inc v Assaubayev [2010] EWHC 2351 as followed by Field J in Otkritie International Investment Management Ltd v Urumov [2012] EWHC 3106 (Comm).
Those requirements were:
- the statutory discretion to order cross-examination is broad and unfettered. It may be ordered whenever the court considers it just and convenient to do so
- generally cross-examination in aid of an asset disclosure order will be very much the exception rather than the rule
- it will normally only be ordered where it is likely to further the proper purpose of the order by, for example, revealing further assets that might otherwise be dissipated so as to prevent an eventual judgment again the defendants going unsatisfied
- it must be proportionate and just in the sense that it must not be undertaken oppressively or for an ulterior purpose. Thus it will not normally be ordered unless there are significant or serious deficiencies in the existing disclosure
- cross-examination can in an appropriate case be ordered when assets have already been disclosed in excess of the value of the claim against the defendants.
Phillips J held that the essential issue was whether it was it was proper to order cross-examination where the claimants’ principal source of recovery was likely to be the DRC security. However, the manner in which the fourth defendant had addressed the various issues gave rise to considerable concern in relation to the veracity of his initial asset-disclosure evidence. That evidence had been deficient. Moreover, the claimants’ reasonable requests for information had not been met by appropriate answers; the last witness statement which the fourth defendant had made was in truth as an attempt to frustrate the disclosure application rather than provide proper and sensible evidence of assets. In addition, the defendants had produced a bank statement from an account in Beirut which suggested that there could be other undisclosed
assets, and as to which the fourth defendant had been at best coy. It was appropriate in the circumstances to order that the fourth defendant attend for cross-examination.The case is significant as it confirms that cross-examination on asset disclosure may be ordered even where the value of the assets disclosed exceeds the sum frozen and even where, on the face of it, the claimant has security. However, so far as security is concerned, the important point is that the WFO had taken account of the fact that that the security in question was under attack and for the purpose of setting a maximum sum under the WFO had effectively discounted it. The defendants had not applied to vary the WFO by seeking to reduce the maximum sum.
