Transcript Document
Fraud Remedies in Arbitration ICC Fraudnet Calgary 1st October 2010 Steven Philippsohn PCB Litigation LLP E-mail : [email protected] Web Site : www.pcblitigation.com PCB Litigation 2010 Clients • Government Agencies • Financial Institutions • State Enterprises • International Businesses • Investors/Shareholders © PCB Litigation 2010 2 PCB Litigation 2010 Current Arbitrations include: • US$1.8bn dispute between offshore interests • Claim by Cypriot company regarding the misappropriation of assets by offshore companies © PCB Litigation 2010 3 PCB Litigation 2010 Current proceedings include: (a) Freezing, disclosure, asset tracing proceedings in: i) 7 jurisdictions relating to misappropriation of energy company`s assets; ii) several jurisdictions in relation to misappropriation of Bank`s assets; (b) Acting for a government authority. © PCB Litigation 2010 4 Powers of Arbitration Tribunals to grant Interim Measures Arbitration Act 1996 section 38 (where the arbitral seat is in England) Measures include those for the preservation of assets, but note that the Tribunal cannot grant freezing injunctions or search orders unless the parties confer on the Tribunal the power to do so. Measures may include anti-suit injunctions if the parties expressly confer on the Tribunal the ability to grant them. © PCB Litigation 2010 5 Power of English Courts to grant interim measures in aid of Arbitration Arbitration Act 1996 section 44. Measures include: taking of evidence; inspection of property; sale of goods; interim injunctions; appointment of a receiver. Also (where there is urgency): orders to preserve evidence or assets - which include freezing injunctions and search orders. Arguably also possible to obtain disclosure orders against third parties. The Court can only make interim orders where the Tribunal is unable to do so (typically because it has not yet been constituted). © PCB Litigation 2010 6 Taking of evidence • Measures can include a requirement for a witness to attend the Court for cross-examination in order to obtain evidence for use in a foreign arbitration:Commerce and Industry Co of Canada v Certain Underwriters at Lloyd's of London [2002] 2 All ER (Comm) 204 • However this is a discretionary exercise, and it may well be inappropriate where the arbitral seat is abroad and the curial law is that of a foreign jurisdiction. • But if the procedures under the foreign curial law for taking evidence are not dissimilar to those of English law, it would be more likely to be appropriate to make an order for evidence to be taken in England in support of the foreign arbitration. © PCB Litigation 2010 7 Orders that may be granted to assist in asset tracing and asset tracing recovery Freezing Orders Disclosure Search Orders Orders for examination Surrender of passport Committal to prison Appointment of a Receiver Summary Judgment Criminal prosecution © PCB Litigation 2010 8 The anti-suit injunction • Creation of the English Courts in the 16th Century • Now developed into a sophisticated regime designed to protect parties from oppressive and vexatious conduct as well as to restrain breaches of choice of court and arbitration agreements • Criticisms: (i) seen as an unwarranted interference by a Judge in the legal process of another country; (ii) gives extraterritorial effect to the determinations of a national court where otherwise there should be no such effect; (iii) within regional jurisdiction and enforcement regimes they are particularly controversial since they bypass the agreed mechanisms for the allocation of jurisdiction as between the Courts of different Member States. © PCB Litigation 2010 9 Case Study • Party to arbitration declined to give discovery of material documentation • Other party discovered that it was likely to be held by 3rd party in Greenwich, Connecticut, USA • 3rd party refused, prior to the hearing, to provide disclosure voluntarily and despite Court Order to do so • After the Tribunal hearing a) intense negotiations led to discovery being made available in the US b) despite opposition, the Tribunal admitted the evidence © PCB Litigation 2010 10 Fraud Remedies in Arbitration ICC Fraudnet Calgary 1st October 2010 Steven Philippsohn PCB Litigation LLP E-mail : [email protected] Web Site : www.pcblitigation.com