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CFI 048/2018 Skat (The Danish Customs and Tax Administration) vs (1) Elysium Global (Dubai) Limited (2) Elysium Properties Limited

CFI 048/2018 Skat (The Danish Customs and Tax Administration) vs (1) Elysium Global (Dubai) Limited (2) Elysium Properties Limited

September 27, 2018

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Claim No: CFI-048-2018

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BEFORE JUSTICE SIR JEREMY COOKE

BETWEEN

SKAT

(The Danish Customs and Tax Administration)

Claimant

and

(1) ELYSIUM GLOBAL (DUBAI) LIMITED

(2) ELYSIUM PROPERTIES LIMITED

Defendants


ORDER WITH REASONS OF JUSTICE SIR JEREMY COOKE


UPON reviewing the Defendants’ Application No. CFI-048-2018/4 dated 23 September 2018 relating to release of funding (the “Application”);

AND UPON hearing Counsel for the Claimant and Counsel for the Defendants at a Hearing on 23 September 2018;

IT IS HEREBY ORDERED THAT:

1. The Defendants’ Application is adjourned.

2. The parties shall liaise with the Registry to fix a further date on which the Application is to be heard and shall agree a timetable for the service of evidence and skeleton arguments in advance of that hearing.

3. The Defendants pay the Claimant’s costs of the hearing on 23 September 2018, such costs order not to be enforced without the Court’s permission.

 

Issued by:

Ayesha Bin Kalban

Assistant Registrar

Date of issue: 27 September 2018

At: 9am

 

SCHEDULE OF REASONS

 Transcribed from the ex tempore reasons delivered by Justice Sir Jeremy Cooke at the Hearing held on 23 September 2018

1. Putting to one side the question of the black box documents, which will be the subject of an order which I understand will be largely agreed in its terms and the details of which fall to be discussed, because the privilege review in respect of those documents has already been carried out by Davidsons, I am now faced with what is, on any view, an 11th hour application made by the Defendants seeking a stay of the performance of their obligations in relation to sifting for privilege until such time as funding has been obtained for them to effect that task.

2. There is also a wider aspect of funding which has been referred to by Mr Jones QC, which is the need for much more substantial funding in order to deal with the drafting of a defence and the like. He has talked of very considerable figures in that regard.

3. The position in so far as that is concerned is unsatisfactory because I do not consider that I have adequate evidence about the funding difficulties to be able to form a considered view. Mr Montagu-Smith QC has pointed to inadequacies in the material put forward, particularly by reference to the second witness statement of Mr Crosse and the correspondence upon which that is largely based, including a letter of 9 September from Davidson & Co.  It appears to me that those points are well made.  Mr Jones is not in a position to deal with them today and that is not entirely explained because he has had the opportunity of putting in a witness statement from Mr Shah and has made an application at a late stage in the light of this second witness statement of Mr Crosse which is dated 19 September.  It is all very unsatisfactory that all this should come about at the last moment.

4. The position generally is that time has moved on with very little overall progress so far as the Claimant is concerned in seeing documents that are responsive to the search, but there are issues of principle with regard both to the nature of the order made and the question of privilege. Cutting to the chase, to use the jargon currently popular, the view I have taken is this; there can be no stay of the Defendants’ obligations with regard to the orders already made in relation to sifting for privilege unless there is proper satisfactory evidence about inability to fund.  I cannot be satisfied that £1 million or more is required for the future conduct of the litigation that cannot be found from sources available to the Defendants at this stage.

5. Dealing then with where that leaves us, it is of course open to the Defendants to produce such evidence and to seek release of funds which are the subject of freezing orders in order to run their defence and for ordinary business expenditure. There are provisions in the existing freezing order, in paragraph 10, about the use of frozen funds for those purposes with notification to the Claimant of the source of those funds.  As matters stand, with regard to the funds frozen in onshore Dubai, I am informed that there is no way that currently the Claimant can agree to release part, but it is said that once the DIFC order has been recognised in Dubai then that should be possible.

6. Dealing next with the issue of the non-responsive documents, of which there are said to be some 9 million or so, the current position is that Pinsent’s independent team, who are reviewing those documents for privilege, have carried out a day or so of review and expect to finish a batch sometime within the next few days. I take the view that it would be wrong in principle for the Defendants to be deprived of the opportunity of reviewing those documents themselves following Pinsent’s independent team’s decision.  They should be given adequate time for that to take place.  In that context Pinsent’s independent team should spell out, as previously indicated at the time the structure for review was put in place, the length of time in which it could properly be expected that Davidsons should review those documents by indicating the time it has itself spent and the number of persons involved.  If then there is no response from Davidsons, or those instructed by the Defendants, in the relevant period, then it will be open to the Claimant to come before the Court to say that adequate opportunity has been given and that at that stage, the Defendants having failed to avail themselves of the opportunity to sift for privilege, the Pinsent’s independent team’s decision should be taken as definitive and the balance of documents released.  That can happen on a batch-by-batch basis.

7. In reality this means that nothing is likely to arise for at least a matter of a week or more, which would enable the Defendants to get their house in order in relation to the funding issues about which concern has been expressed and about which I am not yet satisfied. It is very unfortunate to my way of thinking, that this hearing, which was arranged with a view to ironing out what one perceived to be potential major problems in the context of the future conduct of the case, has not proved to present an opportunity of so doing and thus there will inevitably be a future hearing at which such matters have to be dealt with if they are not the subject of agreement.

8. I should make it plain also that Pinsent’s independent team should inevitably give an equivalent time for the response from Davidsons as they themselves have taken, with some latitude, because of the lesser facilities available to Davidsons to deal with the review. I should make it plain too that Pinsent’s independent team, in case it was not plain before, have the ability to ask the Defendants and/or the Defendants’ solicitors questions in relation to particular documents under review in order to come to a conclusion as to privilege.  It is therefore inevitable, it seems to me, that absent agreement the parties will come back before the Court.

9. Whilst not making an order, I express the view that in any event there is room for the Claimant to agree to release some £250,000 of funds, once it is able to do so, from the assets frozen in onshore Dubai on the recognition of the DIFC order. It seems to me a sum of that sort is what I would envisage being released simply to oil wheels and get this process moving.

10. I am unclear how speedily an application that deals with the overall funding, if there is to be one, can be put together and I am particularly conscious, as I have already expressed, that these matters should be considered in the round globally, in the context of litigation that is taking place in the Commercial Court in England as well.

11. I have already indicated in the course of discussion with counsel that it appears to me self-evident that the substantive matters that are in dispute should be the subject of litigation in one jurisdiction only and that the findings there should be binding in one way or another on all the relevant parties that form part of what I may loosely call Mr Shah’s empire. To collapse the multiple proceedings into one set of proceedings would seem to make obvious sense and the taking of tactical steps by one side or another does not advance matters further in the context of ultimate resolution of the dispute and simply leads to increased cost, delay and work all round.  No court will be pleased with that, and I anticipate that the Commercial Court in London will be likely to take and express a similar view.

12. We will deal with the black box documents in a due course, but I think that is as far as matters can be taken for the moment, it being open, as I say, to either party to come back before the Court, but I emphasise it must be on the basis of adequate evidence so the Court can determine the matter one way or the other.

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