Norwich Pharmacal disclosure orders ("NPOs") are a powerful tool in the arsenal of any aggrieved party looking to discover information in its efforts to pursue the wrongdoers and recover their property.  NPOs enable the aggrieved party to obtain information from third parties who have become mixed up in the fraud, to enable the victim to prosecute claims against the wrongdoer.  For example, the Cayman Courts are frequently asked to make NPOs against companies which provide registered office services to companies incorporated in the Cayman Islands, who are likely to hold information concerning the identity of the shareholders and ultimate beneficial owners of a company.  In many cases of complex fraud, it is common for there to be a connection to several jurisdictions, and it is always a strategic question as to where the victim should seek to obtain the assistance of the Courts.

This article delves into the contrasting approaches of the English and Cayman Islands courts in dealing with NPOs in support of foreign proceedings, and examines jurisdictional nuances and the interplay between statutory mechanisms and Norwich Pharmacal relief in these jurisdictions.

The Cayman Position

In the Cayman Islands, the Courts have held that the existence of a statutory regime in the Cayman Islands for parties to obtain evidence for use in foreign proceedings (namely the Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978) does not preclude aggrieved parties from seeking NPOs to discover information that the victim can then use to pursue the wrongdoer in a foreign jurisdiction.

In Essar Global Fund Ltd v ArcelorMittal [2021 (1) CILR 788], the Cayman Islands Court of Appeal (the "CICA") clarified that Norwich Pharmacal relief is available in parallel with statutory mechanisms for gathering evidence in foreign proceedings.  The Privy Council subsequently denied leave to appeal the CICA's decision.

In its judgment, the CICA emphasised that the Cayman statutory regime pertains to giving "evidence" for foreign proceedings, while Norwich Pharmacal relief focuses on providing information about wrongdoing.  The CICA drew a distinction between the equitable remedy of discovery (which is sought in an NPO application), and the ability to compel the giving of evidence, particularly in support of foreign proceedings that are already underway and for which the statutory mechanisms were created. 

The CICA held that there is no obvious reason why the wrongdoing in question should be confined to acts within the Cayman Islands.  The judgment considered this limitation to be unnecessary, particularly as NPOs are frequently sought at a pre-action stage to discover crucial information to enable the victim to issue a claim against the wrongdoer, and the most appropriate jurisdiction in which the victim should bring the claim may depend on information disclosed pursuant to the NPO.  For example, it is common for NPOs to order the relevant third party to disclose information concerning the identity of the wrongdoer, and, depending on where any misappropriated assets are held, it may be most appropriate for the victim to issue proceedings against the wrongdoer in the wrongdoer's home jurisdiction.

The English Position

However, the English Courts have taken a divergent view on this issue.  In the latest example of the English Courts' approach to NPO applications, in the December 2023 decision in Green v CT Holdings Limited [2023] EWHC 3168 (Comm)), the English High Court declined to make an NPO, because it considered that the NPO was primarily sought to obtain evidence for use in foreign legal proceedings (in this case, in the Channel Islands).  The judgment noted in passing, by reference to Essar, that the Cayman Islands Courts had previously determined that the equivalent legislation did not preclude the Courts from granting NPO relief. 

Nonetheless, the English Court found that the NPO procedure should not be employed in support of foreign proceedings.  Rather, the judgment emphasised that evidence for foreign proceedings should be sought using the "letter of request" procedure, under the Evidence (Proceedings in Other Jurisdictions) Act 1975. The Court determined that the exclusive remedy to obtain evidence for use in foreign civil proceedings was the statutory scheme, and as a result the Court had no jurisdiction to make an NPO.

The English Court suggested that, in addition to the limbs of the traditional test for an NPO, which requires the applicant to establish that (1) a wrong has been carried out against the applicant, (2) the respondent to the NPO was mixed up in the wrongdoing, and (3) the respondent is likely to be able to provide information to enable the wrongdoer to be pursued for redress, the Court should be satisfied that the applicant has brought the NPO application for a proper purpose.  In the Court's view, the applicant in this case had not satisfied the Court that the NPO was sought for a legitimate or proper purpose, as the applicant was primarily seeking evidence for use in the foreign proceedings.  The Court therefore declined to grant the NPO.

Conclusion

Whilst the Cayman Islands Courts frequently follow decisions of the English Courts, there are occasions where the Courts' respective approaches do diverge, with NPO applications being one example. The broader availability of the relief in the Cayman Islands will ensure that NPOs remain one of the principal investigatory tools for asset tracing practitioners seeking information to allow claims to be pursued against wrongdoers, whether in the Cayman Islands or elsewhere