In a recent decision, the Commercial Court found that it did not have jurisdiction to permit service out of the jurisdiction in respect of an application for Norwich Pharmacal relief, ie an application requiring a third party who had been (innocently) mixed up in wrongdoing to provide information enabling proceedings to be brought against the wrongdoer. Notably, the judge held – in the first decision of its kind by an English court – that a Norwich Pharmacal order did not constitute "interim relief" under section 25(1) of the Civil Jurisdiction and Judgments Act 1982: AB Bank Limited v Abu Dhabi Commercial Bank PJSC  EWHC 2082.
This decision provides guidance, albeit only at first instance, on what is an uncertain area of the law. The judge cast doubt on previous authorities that had permitted service of Norwich Pharmacal orders against respondents out of the jurisdiction and indicated that, even if (contrary to the court's decision) it did have jurisdiction to permit service out of the jurisdiction, it should exercise restraint before exercising an "exorbitant jurisdiction" over a foreign bank. The decision cites with approval various passages from Disclosure of Information, Norwich Pharmacal and Related Principles, co-authored by Gary Milner-Moore, a partner in our dispute resolution team.
Overall, this decision suggests that claimants who require information from third parties out of the jurisdiction to enable them to bring proceedings against a wrongdoer may have to look to the relevant local law for assistance.
James Allsop, a Senior Associate in our disputes team, considers the decision further below.
The claimant, a Bangladeshi bank (AB Bank), alleged fraud against a Singaporean company (Pinnacle). AB Bank entered into an agency agreement with Pinnacle for the purpose of raising funds in the UAE which it intended to lend in the domestic Bangladeshi market (the Agreement). In February 2014 AB Bank paid US$20million into an account with the defendant, an Abu Dhabi bank (ADCB), for the purposes of the Agreement. That money was subsequently paid out to an unknown party and never recovered.
No allegations of fraud were made against ADCB. However, AB Bank alleged that ADCB was sufficiently "mixed up" in the events as to make it appropriate for a Norwich Pharmacal order to be made against it. In particular, AB Bank claimed that ADCB had information as to where the money went, which may assist it in advancing a proprietary claim.
A Norwich Pharmacal order was made against ADCB at a without notice hearing. ADCB sought to have it set aside on the grounds that the court had no jurisdiction to permit service of the application out of the jurisdiction.
The court considered three of the jurisdictional "gateways" for service out of the jurisdiction under the Practice Direction to CPR Part 6 and found that none were satisfied. Further, the judge (Teare J) noted that he would, in any event, have declined to exercise the court's discretion to allow service out of the jurisdiction because it was not a proper case to do so.
(i) "Interim remedy"
The first gateway AB Bank sought to rely on was that the claim was for "an interim remedy under section 25(1) of the Civil Jurisdiction and Judgment Act 1982" ("CJJA") (PD 6B paragraph 3.1(5)).
The object of this gateway is to enable the court to permit service out of the jurisdiction of an application for interim relief in the context of foreign proceedings. The usual example of such relief is a freezing order in support of foreign proceedings. Although the basis on which a Norwich Pharmacal order is justified is different to that for a freezing order, both are in a real and practical sense orders in aid of foreign proceedings.
The judge observed that this gateway is not available to permit service out of the jurisdiction of an application for Norwich Pharmacal relief in support of proceedings within the jurisdiction (not being an application for an interim remedy under section 25(1) CJJA). The judge concluded from this distinction that the object of the gateway was to enable service out of applications for relief in support of foreign proceedings where the relief was sought against the defendant in the foreign proceedings and was interim as between the claimant and the defendant, as would be the case with a freezing order.
In order for a claim to be an "interim remedy" within the meaning of PD 6B paragraph 3.1(5), it must be "interim" as between the applicant for such relief and the respondent to the application. An application for Norwich Pharmacal relief is not interim in that sense: it is the final relief sought against the respondent. There will be no further proceedings against the respondent which would justify describing the remedy as interim.
Notably, in reaching this decision, the judge declined to follow authorities from the Court of Appeal in Gibraltar (Secilpar SL v Fiduciary Trust Limited (2004)) and in the British Virgin Isles (Morgan and Morgan Trust Corporation Limited v Fiona Trust & others (2006)), which had permitted service of Norwich Pharmacal orders out of the jurisdiction on the basis that it was an interim remedy.
(ii) Injunction ordering act within the jurisdiction
The second gateway relied upon was that the claim was for "an injunction ordering ADCB to do or refrain from doing an act within the jurisdiction" (PD 6B paragraph 3.1(2)).
The order made by the court was an injunction because it required ADCB to take steps to procure the information requested and to provide a witness statement or affidavit in this respect. However, the injunction did not require any action within the jurisdiction: the steps ADCB would take pursuant to the injunction to provide the requested information could be in the UAE and/or Bangladesh.
The judge considered the case of Bacon v Automattic Inc & others  EWHC 1072 (QB) where permission to serve a Norwich Pharmacal order out of the jurisdiction was granted on the basis that the defendants were required to do an act within the jurisdiction, namely disclose information to the claimant's solicitors. This case was distinguished because the principal matter considered by the judge was not the question of the jurisdictional gateway but whether the court had power to permit service by an alternative method, namely email. Further, the judge noted that it is possible that the order sought specifically mentioned providing the requested information to solicitors in London, which was not the case here.
(iii) Necessary or proper party
The final gateway relied upon was that the claim was against a "necessary or proper party" (PD 6B 3.1(3)). In order for this gateway to apply, two conditions must be satisfied. First, there must be a claim against an "anchor" defendant and a real issue between the claimant and that defendant which it is reasonable for the court to try. Second, the claimant must be seeking to serve the claim form on another person who is a necessary or proper party to that claim.
The first condition was assumed to be satisfied. However, the second condition was not satisfied – AB Bank did not wish to serve the claim form alleging fraud on ADCB; no allegation of fraud was made against ADCB. Rather, AB Bank wished to serve a claim form on ADCB raising a different cause of action, namely that which established a basis for Norwich Pharmacal relief. That claim would be established long before the fraud claim and the two claims would never be tried together. Accordingly, ADCB was not a necessary or proper party to the action alleging fraud.
In reaching this decision, the judge declined to follow the decision in Lockton Companies International & others v Persons Unknown and Google  EWHC 3423 (QB), noting that the judge in that case had not had the benefit of the arguments against permitting service out which he had received.
(iv) Other arguments
The judge went on to consider whether, if he was wrong regarding the application of the jurisdictional gateways, this was, in any event, a proper case for the court to exercise its discretion to permit service out of the jurisdiction. He concluded that it was not for two reasons: (i) there was a risk that a Norwich Pharmacal order might be a breach of UAE law; and (ii) there was a means available by which the information could be provided in the UAE.
Notably however, the judge indicated that the existence of a closely related action in this jurisdiction would probably have been sufficient to make it proper to order service out of the application for Norwich Pharmacal relief (if the court had jurisdiction to do so), had it not been for the risk of a breach of UAE law.
One further argument of note was whether service of the application could be served within the jurisdiction at ADCB's UK office on the basis that it was a "place of business" of ADCB, pursuant to CPR 6.9. The available evidence suggested that ADCB UK had no business of its own and no function other than marketing for ADCB in Dubai. On that basis, the judge accepted that such an argument could be made, but noted that information about other matters concerning the relationship between the two companies must be considered before a decision could be reached as to whether ADCB Dubai had a place of business within the jurisdiction (per, Cape Industries v Adams  1 Ch 433). That information was not available in this case.