09/03/18- 10 AM

International Commerce Litigation

Freeze orders- Tuesday handout

Discovery-English Rules- How they deal with documents in foreign countries

English court in France

Today:
US court- Both party should have access to all the information- Both sides can take depositions

TO gather information- to take oath- Deposition- leads to better results.

US courts are impatient- these are the rules in the US- parties must play by the US rules- they would like
to play specifically under their rules- they believe they have the right to all the information

Unique about US system- pre-trail – right to retain information- even by people who are not directly
related in the case

If we have jurisdiction on the case as long as we can subpoena the information is kept raw. E.g.: Banks

Eg: French statue case- the US court says they don’t care as it would in the French court

Ultimate weapons- to not turn over the docs- violate the case- loose the case automatically

If there is a blocking statue- we don’t countries either of the French governments case- we don’t we think
it is wrong in general-throughout the case if u don’t turn in the docs- we will assume the documents will
prove u guilty-otherwise you will turn them over—US court says we don’t recognize you rights to the
French government- other countries don’t like this

US court said that the French statue was enforced- it is there to help French companies- US courts will
order what is known as jurisdictional custody. Depend upon the communication-which is likely to be in
the hands of the defendant

If u are contesting under the US court- jurisdiction to the tern jurisdiction- always have the right to tell the
party to turn over the facts- u turn it over- then we decide if we have jurisdiction- if u don’t turn over the
documents we will find we if the jurisdiction is valid to turn in the documents that are related.

Non-parties-Page 1 handout

Bank of Nova Scotia, - 3rd party – docs in question were in Cayman Islands-US court says we are not going
to recognize these – instead we are going to conduct a balancing test and decide who has the rights over
the documents-indeed most times the balance comes in favour of the US courts

Next case- US courts- if the bank involved is Bank under English law- even the US can serve a subpoena
W.r.t parties the English courts tend to have – if a party involved is of the US then u must play by the
English law- and say that they decide if they get turned over.

Case pending in the US supreme - Microsoft Corp. v US

Trying to get information on a drug deal- has asked Microsoft information for the guy dealing with drug-
Microsoft had info in Ireland server- asked Irish court to turn it over-

It governs-the US could not get this information- most likely outcome- amend the communications act-

Cloud act- Both US court and the Irish court will support the bill- Microsoft will give this information as it
only needs to pull the data out

In Europe- prohibition of information supply is high- the EU is very concerned- will enforce regulations-
on Microsoft in order to prevent them from pulling out and supply in the information without their
consent. Microsoft had chosen to store in Ireland- US court is impatient that Microsoft should turn over
data- But this is a serious data protection issue in the EU

Hague Evidence Convention:1970

Basic idea: Courts in one country send letter of request to Central Authority in another, will send a letter
od request

French blocking statue does not apply- French can defend their statue- through the convention- u can’t
order the party to turn in the information- ask other 3rd parties

Produce transcript- French way of taking evidence—examine witnesses – ask them tough question-
translation is required if the documents are not in English or French

Refer to article 9: what its saying to other parties- try to use other methods.

Article 10: follow the same procedures that u would in France and comply with convention

May request to give the evidence – privilege in France

Article 12: A gaping loophole

Extradition Treaties: Unless if it’s a crime in other countries as well- double criminality

Has to prove its not only a crime in the one country but is also a crime in the other as well

Limits of the Convention: Article 23- a contracting state may – a lot of countries – have reservation under
the article 23 whether it is a common law countries- most countries don’t have discovery in US – disclosure
in UK
Most countries don’t have procedure to turn-in before the trial – US style discovery is excessive- other
countries said – don’t want to comply with the fishing expeditions-phrase in most countries

Fishing expeditions – specify what the docs are- but do not specify the broad category of documents- to
the UK court- specific docs- will not execute broad category of docs- UK exercised the article 23- not going
to tur over everything

We will disclose those documents only specific docs- as it is too expensive to turn in all the docs which the
US courts want

That gave rise to problem of exclusivity- reluctant to use it-US refused to go through The Hague
convention

Other countries were surprised- as Hague is an exclusive convention- huge misunderstanding

Docs in France are under the French sovereignty – the Us will take a view that if under French
government- under French sovereignty

There is also a EU regulation Citation is given: If in England- use this particular regulation-Will not be
subject to any problem

Volunteer evidence: France can allow examination of procedure by the English court- but this only in the
EU- French are ok with this

Statue mentioned in the handout: If u have an investigation- anywhere in the world- if we can provide any
information we will provide- US believes information should be disclosed- come to us if u want info- we
will order it

Very neglected tool- only useful if the foreign court comes to America for information- that’s a decision
to disclosure

South Carolina insurance case: we will order the information ourselves, courts said go to the US and get
the evidence

Generally, attitude of English- if u can get more info any where in the world- go get it – more power to u-
this puts US companies in a disadvantage-

Might be required to turn in al the evidence because of the statue- reflects a very open policy to disclosure
in the United states- that’s discovery

Freeze Orders:

Arguable the English courts- acting as arguably the world’s police- available in most countries- colonies of
UK have these- except the US

Freeze orders are nuclear weapons of international litigation

As a court in general- Mireva case/Injunctions:

In many cases; once a party gets sued

If u get sued in England- if lost a case cease to satisfy a judgement- money out to Cayman Islands- where
the English courts can’t touch it

Stop somebody will move all their assets- tells the defendant- u many not do anything with ur money until
the case is over- a very serious over- u have not been adjudicated- not proven guilty

The court is telling defendant u can’t spend ur money- granted Ex-parte- only in one side of the court
defendant is not even there

Once the defendant knows he has been sued- court can grant a freeze order- if u defendant know the
freeze order- the party may move all the asses

With only one-party present- not in some frivolous assets-many requirements are there

1. Good arguable case on the merits. Must normally file suit or at least have draft ready.
2. Real risk that if refused judgement will be unsatisfied.
3. Party must disclose all relevant facts that D would argue if there.
4. P must normally give undertaking in damages, and perhaps security, against damages to D
or third parties. If damages u must reimburse for it.
5. Once served D may apply to modify or discharge it.

It does bind 3rd arties- basic idea- we get a freeze order – 1st person u give the order to is the bank- if
support the conspirator- the 3rd party banks become a co-conspirator –

Eg: Barclays Vs Customs case

After Break:

English court can issue order- to other international parties- if the swiss court can’t freeze the assets-
hence the English courts will issue the order

The court has discretion- makes it sets the limits in support of the government-

Baby do’c case: - had solicitors in England- granted a worlds wide freeze order- about as far as the English
court could go- they were the Turkish courts- English courts –

Appealed to the court of appeal- the distinction was the D must live in Uk- the court freezes the orders

In-expedient – in UK has assets pretty much where it sits- court has jurisdiction from the defendant if the
D continues to oppose the order- Derby v. Weldon case
Paragraph 20: Assets located outside the England and Wales- Baltic proviso- Bank of China v NBM LLC,-
order does not prevent bank from complying with foreign court orders or what it reasonably believes to
be its obligations under relevant foreign law

Brussels Regulation- recognizes the right to grant- For provisional remedy, there must be “real connecting
link” between subject matter and territory of court- Freeze order is the important example- Article 35

The court must preserve the status quo- while case is pending u have to pay- court will grant that if the
court knows the D will win- would not the covered by article 35

Basically, in the case itself- u can only issue the court – then u can only grant freeze orders – world wide
freeze orders except – court will not give the order- as the party is not resident or domicile

A freeze order – judgement for Brussels – unless court can have it dissolved

Once u had had the opportunity its no longer an inter-parte

Eg: Mietz v IntershipYachting Sneek BV, Case

In general English court will not provide a worldwide court order – it abusive to freeze the assets over the
world- will only the English assets- enough to the pay the expenses- Meroni v Recoletos Ltd

Discussions:

1. Have the courts done enough to limit the use of worldwide freeze orders where the English courts
do not have jurisdiction over the underlying case? What additional limitations would you suggest?
Are English courts acting as world police in these cases? - Very important

Ans: Motorola- attitude of the Turkish court to order to order – in English court we going to hide-
negative reaction- decent arguments
Arbitration proceeding- no court in EU has jurisdiction- article 35- particularly in case governments
not willing to pay arbitration which may have huge assets- dissolved the injunction- English courts
listen to the defendants then get tough if doesn’t go through

2. Compare the approaches of the UK and US courts to ordering discovery of documents located
abroad, both with respect to parties and non-parties. Are the US courts too willing to order
production of evidence located abroad? Or should US courts be able to regulate what evidence is
produced in their own proceedings?

Going a bit too far- w.r.t parties- US – jurisdiction is too broad- recent trends – less arguable now-
with recent cutback
Was the Supreme Court right in Intel to allow discovery under 28 USC s. 1784 even if the material would
not be discoverable abroad? Is it enough that the foreign court can limit its use at trial? Does the South
Carolina Insurance case provide enough protection to the other party?

Ans: one party is subject to the US jurisdiction- if one side reveals all the info the other party
doesn’t – puts American companies at an odd disadvantage