[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Harley Street Capital Ltd v Tchigirinski & Ors [2005] EWHC 2471 (Ch) (24 May 2005) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2005/2471.html Cite as: [2005] EWHC 2471 (Ch)

[New search] [Help]

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		24 May 2005

THE DEPUTY JUDGE:

1. I have before me two applications by the first, third and fourth defendants. The first is for fortification of a cross undertaking given by the claimant upon the obtaining of a without notice freezing order which continues at present, and the second is for the provision of further information under Part 18 of the CPR.

Background

2. The background to these applications is briefly as follows. The fourth defendant, Sibir Energy Plc is a public company, the shares of which are listed on the alternative investment market. Its market capitalisation on 13 May was approximately £393 million and it had in issue 203 million shares. It is incorporated in England, but its main business is in oil exploration and production in Russia.
3. The first defendant, Chalva Tchigiringski, is the indirect beneficial owner of 43 per cent of the share capital of the fourth, indirectly, that is, through the third defendant, Bennfield Limited. He is a prominent Russian businessman. The second defendant is the first defendant's brother and has so far played no part in these proceedings. The claimant, Harley Street Capital Limited, is a £2 company acquired from formation agents in December last year for the specific purpose of acquiring a nominal holding of 200 shares in the fourth defendant. It is owned by an organisation known as the Regional Public Movement in Defence of Civil Rights ("RPM"), which the claimant says is a not for profit Russian organisation dedicated to the pursuit of concerns as to the manner in which business is conducted in Russia. The claimant acquired its 200 shares on 21 December last year. Their value immediately before the start of these proceedings was a little less than £500.
4. Late in the year 2000, the fourth defendant, through a Russian subsidiary, Yugraneft, entered into a 50/50 joint venture with another major Russian oil company, Sibneft, controlled by a Mr Roman Abramovitch, for the exploitation of certain oil fields in relation to which the fourth defendant had previously obtained exploration and development rights. It is common ground between the parties before me that some time prior to April 2004, the fourth defendant was cheated by Sibneft out of its 50 per cent share of the joint venture so that is present share is only 1 per cent as the result of a capital increase in the joint venture company in which either the fourth defendant or Yugraneft failed to participate. The fact that this alleged fraud is common ground between the parties does not, of course, mean that it is necessarily true.
5. The claimant's main claim in this action is that the first and second defendants were party to that fraud and profited from it by way of a related agreement with another Abramovitch company connected with a very large property development in Moscow. It is said that they did so in breach of fiduciary duties owed to the fourth defendant. As a shareholder in the fourth defendant, the claimant brings a derivative action to require the first three defendants to account to the fourth defendant in respect of that breach of duty.
6. There is a second claim which alleges the wrongful misappropriation of some $36 million from another Sibir subsidiary, Magma Oil Company, into what the claimant claims was a dormant company controlled and partly owed by the first defendant.
7. On 28 April, the claimant obtained a without notice freezing order from Blackburne J over to 12 May. Its principal effect was to restrain the first, second and third defendants (defined as "the respondent") from selling, transferring, charging, assigning, disposing of or encumbering all or any of their shares in either the fourth defendant, or in the case of the first and/or second defendants the third defendant, provided that no such dealing was to be prohibited if the sum of £30 million was paid into court on behalf of any of the respondents. That freezing order was supported by the usual cross undertaking in damages given by the claimant which Blackburne J ordered to be fortified by the provision of a £25,000 bank guarantee. In due course, £25,000 was paid into court after the order was varied to permit payment in as opposed to the provision of a guarantee.
8. On the return date on 12 May before Pumfrey J, the effective hearing between the parties of the application for a freezing order until trial, was adjourned and is now listed to come before the court on or very soon after 13 June. Directions for evidence on the defendants' application for further information now before me were given on that day; the application for fortification was, I am told, briefly mentioned but no directions were given in relation to it. It was issued on 17 May. Pumfrey J made an unless order for the issue by the claimant of an application under Part 19 of the CPR to have determined as a preliminary issue the question whether the claimant should be permitted to bring a derivative action on behalf of the fourth defendant. That is also listed to come before the court on or shortly after 13 June and on the same occasion the first and third defendants intend to resist the continuation of any freezing relief thereafter, regardless of whether the derivative action proceeds to trial.

The Fortification Application

9. The defendants' case, in a nutshell, can be shortly stated. It is that the claimant is itself as a £2 company worthless on its cross-undertaking, and that £25,000 is a grave under-estimate of the loss likely to be caused by the freezing order. The defendants therefore seek an uplift by way of fortification of security for the cross undertaking in the sum of £10 million as, what they describe as, a modest proportion of a loss which they claim has already reached £30.5 million, mainly due to a fall in the share price of the fourth defendant which they attribute to the grant of the freezing order and the attendant publicity connected therewith.
10. An application for fortification put in that way gives rise to an immediate question for whose protection, other than the first, second and third defendants, was the cross-undertaking given and, alternatively, if for the protection only of the first, second and third defendants, the question whether it ought to be varied so as to give protection to a wider class of persons. The defendants' case is that the fall in the share price of the fourth defendant has caused loss, not just to the third defendant, Bennfield, as the direct shareholder, or to the first defendant as an indirect beneficial owner of those shares, but to every shareholder in the fourth defendant and to the fourth defendant itself.
11. Mr Trace QC, for the claimant, submitted that the undertakings given on 28 April related only to loss suffered by the "respondents" as defined by paragraph 1 of the order, that is the first, second and third defendants. Mr Trace is clearly correct so far as concerns the first paragraph of the undertakings given which is a cross-undertaking in damages in the following terms:

"If the court later finds that this order has caused loss to the Respondent and decides that the Respondent should be compensated for that loss, the Applicant will comply with any order the court may make."

Earlier in the order at paragraph 4, the "respondent" is defined by this formula:

"If there is more than one Respondent -

(a) unless otherwise stated, reference in this order to 'the Respondent' mean both or all of them×"

In this case the respondent is, as I have already stated, the first, second and third defendants but not the fourth defendant.

12. The parties are at odds, however, upon the true construction of the fifth of the undertakings recorded as given by the claimant in the order made in late April. That undertaking is in the following terms:

"The Applicant will pay the reasonable costs of anyone other than the Respondent which have been incurred as a result of this order including the costs of finding out whether that person holds any of the Respondent's assets and, if the court later finds that this order has caused such person loss, and decides that such person should be compensated for that loss, the Applicant will comply with any order the court may make."

13. Mr Trace's submission was that the reference to "compensation for loss" and the "suffering of loss" was no more than a loosely worded reference back to the incurring of costs as a result of the order referred to earlier in paragraph 5. By contrast, the defendants submit, by Mr Christopher Carr QC, that "such person" means anyone other than the respondent and that "loss" means loss in general terms rather than the incurring of cost earlier referred to. Alternatively, the defendants invite me to vary the order so as to make clear that it has that wider effect. Strictly speaking I could not compel the claimant to give a wider undertaking than it has already given, but would have to make the continuation of the freezing order conditional upon the giving of a wider undertaking if I was otherwise with Mr Carr on his submission.
14. The defendants' broader construction of paragraph 5 is supported by Mr Gee's book on commercial injunctions in its fifth edition, but if the effect of paragraphs 1 and 5 of the standard form cross-undertakings is that anyone to whom an interim injunction causes loss is potentially within the benefit of the cross-undertaking, it is at least at first sight strange to find the benefit separately distributed to different classes of persons in two separate paragraphs of the claimant's undertakings. It seems to me that within the potential meanings of paragraph 5 are also the possibility that "such person" in references to "loss" means a person who finds out that he is holding some of the respondents' assets, or possibly a person who has incurred cost by reason of the order who, by reason of having incurred cost, is then entitled to recover also the loss under the cross-undertaking.
15. In my judgment, the claimant's submission that "loss" merely means costs is plainly wrong. I can see no reason why it should be so limited nor, in that case, for any part of the second half of paragraph 5, nor any sensible reason for distinguishing the word "loss" in paragraph 1 from its repetition in paragraph 5. Equally, I can see no good reason in principle why third parties, by which I mean any persons other than the respondents to the order, should be protected only if they have incurred cost by reason of the order, or only if they find that they hold some asset of a respondent. There must be many cases in which other innocent parties suffer loss from an injunction which should not have been granted, for example, the intending buyer of property where the seller has been restrained from selling may suffer loss during the currency of the injunction if the property is in a rising market.
16. In my judgment, the underlying principle is that a cross-undertaking in damages, as the quid pro quo for the court making an interim order without having determined the facts or the claimant's entitlement to it, is given not to identified respondents, but to the court to enable the court, if it thinks fit, to compensate any innocent sufferer from an interim injunction which ought not to have been granted. In my judgment, therefore, Mr Gee's construction of paragraph 5 and therefore the defendants' submissions on this point, are correct and are in accordance with principle. Both the fourth defendant and other shareholders in the fourth defendant than the first, second and third defendants, are at least potentially protected by the present form of the cross-undertakings and they therefore need no variation to achieve that result. If I had reached a different view as a matter of construction, I would have been minded to seek a broader undertaking from the claimant as requested by the defendants as the condition for the continuation of the freezing relief.
17. Have the defendants made out a case for fortification? Counsel reminded me of three relevant principles which must be addressed when considering that question. The first is that where fortification is sought, then although the loss itself, and certainly the quantification of the loss will lie in the future, the court is nonetheless required to make an intelligent estimate of the likely amount of the loss. That much was laid down in Re DPR Futures Limited [1989] 1 WLR 778 at 786 by Millett J (as he then was).
18. Secondly, it is for the applicant for fortification to show a sufficient level of risk of loss to require fortification. That much was laid down by Mann J in the following passage from Sinclair Investment Holdings v Cushnie [2004] EWHC 218 (Ch) at paragraphs 24 and 25:

"I have already identified the evidence in this case which indicates that the cross-undertaking is of very uncertain value, but that does not automatically mean that fortification is required. In the light of the authorities just cited, it is both appropriate and necessary for me to consider the extent to which a risk of loss has been shown. In many cases the fact that there is a risk of loss will be obvious merely from the general situation, and while it may not be possible to put anything like a precise figure on the loss, the court, will if necessary, do what it can on the evidence before it to reach an appropriate figure. The courts are well accustomed to assessing the appropriate value to be given to things whose valuation is difficult. In some cases it will be possible to make a more precise or confident assessment than in others. The mere absence of particularised evidence does not mean that there is no evidence of a risk of loss. [Counsel] submitted that what he had to show was a risk of loss; any more refined questions of causation and likelihood would be appropriate for the enquiry (if any) should the cross-undertaking be called upon. I agree with that as a general approach. By and large it will be unnecessary and inappropriate for a court to go into a detailed and prolonged assessment of difficult questions on causation on applications for interim relief, not least because it might become entirely academic.

25. However, that leaves open the question of a threshold which has to be crossed by a Respondent in establishing that there is a sufficient risk of loss. If it is not sufficiently apparently that there is a sufficient risk of loss, then while that is no reason for not extracting a cross-undertaking, it would be a reason for not requiring fortification. It seems to me impossible to specify any formula for or definition of that level of risk. All that can be said is that the court must be satisfied that there is a sufficient level of risk to require fortification in all the circumstances. That will be a question of judgment in every case where it arises (though there will be large numbers in which it will not have to be the subject of any particularly anxious enquiry.)"

19. The third principle is that loss will not qualify for compensation under the cross-undertaking unless it has been caused by the grant of the injunction. Though normally that is an issue decided on an enquiry as to damages at the end of the day, the causation issue must also be examined in forming an intelligent estimate of likely loss at the fortification stage.
20. I was referred to two authorities on this causation issue. In Air Express v Ansit [1981] 146 CLR 249, the High Court of Australia decided that a claimant for damages for loss under a cross-undertaking had to show that the making of the order was a cause without which the damage would not have been suffered. That was a case in which the rival competitor for having caused the relevant loss was, as here, the very existence of the proceedings in which the injunction was obtained. That test is, in effect, if I may be excused the Latin, a causa sine qua non test.
21. The same court also imposed a foreseeability test. In Tharros Shipping Co Ltd v Bias Shipping Limited [1994] 1 Lloyds LR 577, Waller J affirmed both those requirements as part of English law, and at page 581 continued as follows:

"[The court] retains a discretion not to enforce the undertaking if it considers that the conduct of the defendant in relation to the obtaining or continuing of the injunction or the enforcement of the undertaking makes it inequitable to do so, but if the undertaking is enforced the measure of the damages payable under it is not discretionary. It is assessed on an enquiry into damages at which principles to be applied are fixed and clear. The assessment is made upon the same basis as that upon which damages for breach of contract would be assessed if the undertaking had been a contract between the plaintiff and the defendant that the plaintiff would not prevent the defendant from doing that which he was restrained from doing by the terms of the injunction: see Smith v Day (1882) 21 ChD 421, per Brett LJ at p.427."

22. That analysis strongly suggests to me that it is loss caused by the preventative or, as the case may be, coercive effect of the injunction that is recoverable under the cross-undertaking.
23. Two aspects of the court's task on the present application were common ground. The first is that the claimant neither has nor could be expected ever to have any means of satisfying the cross-undertaking from its own resources, being a £2 company. In other words, the value of the cross-undertaking is and will always be no greater than the amount of any fortification actually provided. Secondly, that because of the uncertainty whether the injunction, or indeed the action as a whole, will survive the hurdles which it will have to surmount on the hearing on or shortly after 13 June (both because of the defendants' challenge to any further freezing relief and because of the Part 19 preliminary issue) I should confine my estimate of likely loss to the period between the grant of the freezing order on 28 April and the forthcoming hearing on or soon after 13 June (I will refer to that as "the relevant period").
24. The defendants' case on loss may be summarised as follows. First, the shares in the fourth defendant fell soon after 29 April when the freezing order was announced by 7.2 per cent, representing a £13.4 million loss to the third defendant and therefore indirectly to the first defendant. Secondly it is said that the 7 per cent fall was well in excess of the general fall on the Alternative Investment Market during the same period of some 2.2 per cent, and equally indeed further in excess of the fall of the FTSE Oil and Gas Index of 0.5 per cent.
25. Third, it is said that this fall was in all probability caused by the grant of the freezing order and its attendant publicity rather than by the publicity connected with the proceedings themselves and the serious allegations being made therein against the first defendant, who is alleged to be the controlling shareholder of the fourth defendant.
26. Fourthly, it is said that a freezing order such as the present on a large block of shares with a supposed consequential inhibition, for example, on takeover activity, would be likely to drive away speculative investors causing a fall in value which might never be fully restored. Fifthly, it was said that the freezing order was potentially destructive of the fourth defendant's relationship with its bankers and with certain other third parties. This last point was based upon highly confidential material deployed while the hearing before me was briefly held in private.
27. It is evident that it is no part of the first and third defendants' case that the freezing order had actually prevented some transaction which they would otherwise have concluded between the end of April and now, such as, for example, a sale or other specific dealing with their shares, or that it will prevent some imminent transaction that would otherwise be likely to take place in relation to those shares before 13 June. Such a case would, in my judgment, have been difficult to advance since the court would readily entertain a variation of the freezing order to permit a beneficial dealing with the frozen shares, for example on terms as to payment in or other restraint in relation to the proceeds of a sale. Indeed, Mr Trace QC, who appeared for the claimant, volunteered such a variation, at least for the period going forward to 13 June.
28. Rather the defendants' case was that the freezing order damaged the fourth defendant's share price by lending credence to the very serious allegations made in the proceedings, by suggesting to potential investors that the court regarded those allegations as having some substance. Some support for that analysis was obtained by reference to press coverage (copies of which were exhibited in evidence) which did indeed appear to place particular emphasis on the freezing orders as opposed to a general description of the proceedings and the allegations contained in them.
29. Mr Carr acknowledged that potential investors might well over-estimate the weight or credence intended by the court to be given to a claimant's allegations by the grant of a freezing order, particularly, as here, when granted on a without notice application in the absence of hearing argument, still less evidence, from any of the defendants. In truth, of course, the court gives no such credence or weight to such claims by the making of such an order. At its highest, the continuation of a freezing order after hearing full argument from defendants, would point to there being an arguable case, but this will not occur during the relevant period.
30. Mr Trace challenged every aspect of the defendants' case on loss. First, as to fall in the share price he demonstrated by reference to published statistics of movements in the fourth defendant's share price, that the 7 per cent movement was well within the fourth defendant's typical volatility over a slightly longer period, and that the freezing order did not generate heavy trading in the fourth defendant's shares. Secondly, as to whether the freezing order rather than the proceedings themselves were the operative cause of any such fall in value, he submitted that the two were impossible to disentangle so that the sine qua non test was not satisfied.
31. Thirdly, as to the threats to the fourth defendant's relationship with its bankers and other third parties, he said that the confidential material lacked the weight or the specificity sufficient to demonstrate a sufficient risk of loss caused by the freezing order or likely to be caused by it during the relevant period.
32. Finally, Mr Trace placed great emphasis on submissions as to the merits of the claimant's underlying claim. In my judgment, those submissions were misconceived. Submissions as to the merits in an application of this kind are, in my judgment, generally misconceived, except in cases where the claimant both argues and supports by evidence a claim that an order for fortification would stifle a meritorious claim due to inability by the claimant to provide the fortification ordered. For that see again Sinclair v Cushnie at paragraphs 19 to 21. The point that a provision of fortification in the sum of £10 million or any similar sum would stifle this claim was argued by Mr Trace but without much enthusiasm, and it was wholly unsupported by any evidence.
33. In my judgment, the defendants have not disclosed a sufficient risk of loss during the relevant period to justify further fortification of the cross-undertaking beyond the very modest sum ordered by Blackburne J. My reasons are as follows. First, viewing the price fall after 29 April in the context of the fourth defendant's price volatility and trading levels over a wider period, the evidence of a significant and lasting fall, caused either by the proceedings or by the freezing order is, in my judgment, very thin. Secondly, while the very serious allegations being made by the claimant against those said to be in control of the fourth defendant might even, while untested, cause some loss of investor confidence, I am disinclined to treat a misconceived notion by investors that the grant of the freezing order lent the court's credence to those allegations as part of a chain of causation between the freezing order and any loss in share value. It is a factor wholly unrelated to any restraint placed by the freezing order, either on the first, second and third defendants or on anyone else. It therefore lies outside the quasi contractual analysis of causation, set out originally by Brett LJ in Smith v Day, and more recently re-affirmed as clear law in Tharros Shipping.
34. Neither I nor counsel were aware of any case in which the purely reputational consequences of being the subject of a freezing order have formed a part of an award of damages under the cross-undertaking, wholly divorced from the consequences of the restraint which the freezing order imposed on the applicant for damages or upon anyone else. In this case, the reputational loss is not even that of the defendants against whom the freezing order was made, but of the fourth defendant. That makes the supposed causative link even more tenuous.
35. Equally, I am not persuaded by the confidential material that it is the freezing order rather than the proceedings themselves and the serious allegations made therein which risks damage to the fourth defendant's relationship with its bankers or the other specified third parties. They are all bound to be sophisticated, or at least very well-advised entities, well capable of understanding that a without notice freezing order says little or nothing about the merits of the underlying allegations. By contrast, the allegations themselves are of a seriousness which, even while untested, might cause any such entities at least to think carefully about their relationship with the fourth defendant.
36. I emphasise that my attempt at an intelligent pre-estimate of likely loss is strictly limited to the relevant period which, by comparison between now and a full trial, is both short and already over half expired. In concluding, as I do, that no fortification is justified for the relevant period, I say nothing about whether the present level of £25,000 would be appropriate for the much longer period thereafter should the freezing order, and of course the proceedings, continue to trial.

The Disclosure Application

37. The defendants seek disclosure by way of provision by the claimants of the following further information pursuant to Part 18.1 of the CPR (and for this purpose I am reading from the draft order which they invite me to make). They seek to be given full and proper answers to the following questions:

"(a) Who are the officers and members of the Regional Public Movement in Defence of Civil Rights ("RPM")?

(b) What are the names of the officials of RPM instructing Class Law Solicitors LLP [the claimant's solicitors]?

(c) Who is funding Harley Street Capital Limited/RPM? What is the precise nature of any funding arrangements? Who is the source of the £25,000 undertaken by Mr Alexander to be paid into court?

(d) How much money have Harley Street Capital Limited/RPM available in the UK which can serve to fund proceedings, provide security for costs to defend such proceedings and provide security to fortify cross-undertakings in damages?"

38. The jurisdiction to make orders for the provision of further information is contained in CPR Part 18.1 in the following terms:

"(1) The court may at any time order a party to -

(a) clarify any matter which is in dispute in the proceedings; or

(b) give additional information in relation to any such matter,

whether or not the matter is contained or referred to in a statement of case."

Subparagraph (2) provides that paragraph (1) is subject to any rule of law to the contrary, which would, of course, include the law as to legal professional privilege.

39. This application is made separately, as it were, by the fourth defendant and by the first and third defendants. The fourth defendant says that the information sought is relevant to an issue to be determined under the forthcoming Part 19 application in June, namely whether the proceedings are being brought bona fide for the benefit of the fourth defendant. It will be recalled that when a derivative action is brought, the applicant must satisfy the court as a preliminary matter that it is an action which he ought to be permitted to bring on behalf of the company. The question whether the proceedings are being brought bona fide for the benefit of the company is a primary question to be considered on the hearing of such an application.
40. The fourth defendant says that disclosure of the identity of those individuals who are directing and funding this litigation is critical in a case where the normal profit motive for bringing a derivative action must be absent, which they say it is in this case because of the purely nominal shareholding which the claimant has in the fourth defendant.
41. The first and third defendants say that the same information is relevant to the question whether the claimant has an arguable case sufficient to support a freezing order over until trial, that is, from the hearing in June because, they say, if the proceedings are not brought bona fide for the benefit of the fourth defendant, then the derivative action will not be permitted and, of course, no further freezing relief will continue.
42. The first and third defendants put their case in this slightly more limited way out of a desire to limit their participation in the proceedings to issues concerned with the freezing order itself, so as to preserve the possibility of challenging the court's jurisdiction in relation to them. It is not, of course, for me to rule today whether that challenge will succeed.
43. The defendants collectively say, therefore, that there being both jurisdiction and relevance in the further information, sensible case management favours an order for its disclosure before rather than, for example, during the hearing to be held on or shortly after 13 June.
44. By contrast, Mr Trace for the claimant submits that I have no jurisdiction to make such an order because there is, at present, no issue to which the information sought relates. While accepting that the claimant in a derivative action must show that it is suing bona fide for the benefit of the company, Mr Trace says that the onus is on the claimant to demonstrate that and if the claimant chooses, as it has so far chosen to do, not to reveal their stakeholders or funders, then the only consequence is that they risk failure on the application.
45. As to discretion, the claimant relies on a fear on the part of those unidentified persons who are said to be members of RPM, of being subjected to intimidation by the first defendant if their identity as backers or funders of this litigation is revealed to him. They say that this is bound to occur (that is the revelation of their identity to the first defendant) if the fourth defendant is given the information because of their allegation that the first defendant is in control of the fourth defendant. They point to press publicity in Russia suggesting links between the first defendant and various types of criminal activity, including the attempted murder of two Mayors of Moscow, all of which the first defendant denies and none of which is supported by evidence of much probative value. At its highest the first defendant appears to have admitted to a journalist driving in Russia in an armoured car for his own protection, and to having described aspects of life in post-Soviet Russia as having some similarity with the days of the Wild West in the United States of America.
46. In my judgment, disclosure of the identity of the stakeholders behind and the funders of this litigation is plainly relevant to a main issue which will arise under Part 19 of the CPR at the hearing on or shortly after 13 June, namely the issue whether this claim is brought bona fide for the benefit of the fourth defendant or rather for some ulterior purpose. RPM is an entity of which the defendants say they are entirely unaware in Russia. Financial motivation as a shareholder in the fourth defendant cannot sensibly be the motivation for this litigation because of the nominal amount and value of the claimant's shares. That is, of course, unless the stakeholders behind the claimant and RPM include other shareholders in the fourth defendant who are concealing their identity behind the structure of the claimant and RPM. Furthermore, the asserted public-spirited desire to improve business standards in Russia, though possibly true, is a motivation for this litigation which, in my judgment, cries out to be subjected at least to thorough scrutiny.
47. The defendants have a real basis for concern, therefore, that the real motive behind the litigation may be not to benefit but to harm the fourth defendant and that the claimant's stakeholders and funders may be business rivals of the first defendant, or for that matter of the fourth defendant. I would therefore, subject to one matter, be minded to order the disclosure sought, except for the second sentence of paragraph (c) or any part of paragraph (d) of the proposed draft order, which appear to me to be directed at a different objective. The one matter which gives me cause for hesitation is the fear of intimidation said to be entertained by the unnamed members of RPM.
48. In my judgment, that cannot simply be dismissed out of hand as obviously too fanciful to need to be taken into account, however thin the evidence may be. I was initially concerned that the claimant's readiness to provide names and addresses of shareholders of the fourth defendant who supported the claimant's litigation, rather suggested that the claimant itself entertained no real belief in the reality of that fear of intimidation, but it was demonstrated to me that the shareholders whose names and addresses have been revealed, are almost entirely resident within the United Kingdom or the European Union and that none of them are resident in Russia where it is said that the members of RPM are resident.
49. In my judgment, I ought therefore to do what I can to limit the risk of intimidation, without, of course, making any finding one way or other as to the seriousness of that risk.
50. The claimant submitted on this point that it should make disclosure of the information requested purely to the court and then the defendants could identify any business rivals who they were concerned might be behind this litigation, also in a list to the court for the court to make the appropriate comparison. By contrast, the defendants on this point said that disclosure ought to be made to their solicitors, Ashurst, to the non-executive Chairman of the fourth defendant, to the Chief Executive Officer of Strand Nominees, the fourth defendant's advisers, and to the Moscow solicitors of the first and fourth defendants. In my judgment, the claimant's proposed solution is, I am afraid to say, impracticable, and the defendants' proposed solution, in my judgment, provides for a wider disclosure than is appropriate at this first stage.
51. I consider that an order ought to be made for disclosure of the requested information, subject to the exceptions to which I have referred, to Ashurst on terms that it is not communicated, at least at this stage, beyond the defendants' legal team, that is Ashurst and counsel. They will be able to compare the list of names provided with any list of business rivals or parties with an obviously ulterior motive that the defendants may wish to provide to them. If disclosure of all or part of that information to a wider class is then sought as a result of a comparison, as it were, of the two lists by the defendants' legal advisers, then any application for a wider dissemination of that information should then be considered by the court on its merits, having regard in particular to any evidence then available about safeguards, and in the light of the offer of undertakings to the court by any such persons other than the defendants' legal advisers to whom the information is sought to be shown, and further having regard to the question whether such persons are susceptible to the court's jurisdiction, for example, by being resident here.
52. I therefore allow the information request application in part, subject to the restrictions which I have mentioned. I dismiss the application for further fortification, and I will hear submissions both as to timing of the provision of the information and to any matters of detail which arise on the formulation of an appropriate order.
- - - - - -