Oao Baltiyskiy Bank v Kirlenko et Al

• Jurisdiction: Belize
• Judge: Hafiz, J.
• Judgment Date: 19 October 2011
• Court: Supreme Court (Belize)
• Docket Number: 39 of 2010
• Date: 19 October 2011

Supreme Court

Hafiz, J.

39 of 2010

Oao Baltiyskiy Bank

and

Kirlenko et al

Appearances:

Nigel Ebanks for applicant.

Mr. Dereck Courtenay SC for first defendant.

Mrs. Andrea MsSweeney McKoy for second defendant.

Mrs. Ashanti Arthrus-Martin for interested party.

Civil practice and procedure - Disclosure application — Whether the defendant carried out a legal wrong — Whether the defendant “mixed up or facilitated” in any wrong doing — Necessity.

INTRODUCTION

Hafiz, J.

1 This is an application issued on 18th May, 2011 by OAO Baltiyskiy Bank (“OAO Bank”) for an order for disclosures from the second respondent, Morriston Trading Ltd. (“Morriston”) to disclose the identity of the registered and beneficial owners of all issued shares of their Company and how such persons came to own those shares. OAO Bank is also seeking disclosures which include all transactions undertaken between Morriston and the first Respondent, Arthur V. Kirlenko (“Kirlenko”) since 2nd April, 2007. The Application is supported by an affidavit sworn to by Josh Wong on 13th May, 2011. Morriston filed an affidavit by Georgios Chr. Kyrou in opposition to the application praying the court dismiss the application.

GROUNDS OF APPLICATION

2 The applicant relies on the following grounds:

• i. The defendant has carried out or, has arguably carried out, a legal wrong, particularly - breach of, or failure to make good on, a contract of guarantee in respect of a loan facility extended by the claimant.

• ii. Morriston Trading Ltd. is an entity that was mixed up in or facilitated the wrongdoing or has facilitated the wrongdoing or has some relationship with the defendant.

• iii. The claimant/applicant is asserting legal rights against the defendant.

• iv. The Disclosure which the claimant/applicant seeks is necessary to enable it to take action.

• v. It is just and convenient in the interests of justice to make the order sought as without the information sought herein, the claimant/applicant will not be able to take such action.

• vi. The interests in disclosure weigh in favour of the private interests asserted by the claimant/applicant as against the public interest

FACTUAL BACKGROUND

3 The factual background of this application is stated in the affidavit of Josh Wong from paragraphs six to ten. These proceedings relate to the Kirlenko's failure to pay funds under two guarantee agreements with the OAO Bank. Kirlenko guaranteed loans advanced by the OAO Bank to two of his companies. Following proceedings in Russia, OAO Bank obtained two separate Court judgments against Kirlenko in relation to each guarantee agreement.

4 The judgments which became final on 09/06/09 against Kirlenko totalled 967,217,649 Russian Rubles and 20 kopecks (€22,907,220.93 as at 01/02/2010). Following the Judgments, OAO Bank sought to enforce the Judgments against Kirlenko in Russia. However, he has avoided execution of the Judgment by moving his assets out of the Russian jurisdiction.

5 In an attempt to enforce the Judgments, the claimant has issued proceedings against the defendant, Kirlenko in Liechtenstein, Luxembourg, Belize and Cyprus.

THE LAW

6 In the case of Norwich Pharmacal Company Limited v. Commissioners of Customs & Excise [1973] 2 All E.R. 943 cited by learned counsel Mr. Ebanks, it was held that that where a person, albeit innocently and without incurring any personal liability, became involved in the tortious acts of others he came under a duty to assist one injured by those acts by giving him full information by way of discovery. Lord Reid in the leading judgment referred to several authorities and said that they seem to point to a very reasonable principle which is that:

…. if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration. ( [1973] 2 All E.R. 943 at page 949)

7 Learned counsel also referred the court to a later English Court of Appeal decision, Bankers Trust Co. v. Shapira [1980] 3 All E.R. 353 which extended the scope of this area of law. There the court held that:

The court was entitled, for the purpose of giving effect to a defrauded plaintiffs equitable right to trace his money, to order a bank to disclose the state of, and the documents and correspondences relating to a defrauded plaintiffs equitable right to trace his money, to order a bank to disclose the state of, and the documents and correspondences relating to, the account of a customer who was prima facie guilty of fraud even though the bank had not incurred any personal liability for the fraud, for unless there was the fullest possible disclosure the fund could not be traced.

8 All the parties before the court were in agreement with the authorities cited by Mr. Ebanks as to the law for the granting of Norwich Pharmacal Orders. The court finds these authorities persuasive.

9 I agree with learned counsel Mr. Ebanks submission that this court has an inherent jurisdiction to grant the Norwich Pharmacal Order. This type of Relief is no longer a novel area of the law for the jurisdiction of Belize. This relief has been granted...