Parker J
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
1
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
CAUSE NO. FSD 162 OF 2019 (RPJ)
BETWEEN
RAIFFEISEN INTERNATIONAL BANK AG
Applicant / Plaintiff
AND
(1) SCULLY ROYALTY LTD
(a company incorporated in the Cayman Islands)
Respondent / First Defendant
AND
(2) LTC PHARMA (INT) LTD.
(a company incorporated in the Marshall Islands)
Second Defendant
(3) MERKANTI HOLDING P.L.C.(formerly MFC Holding Ltd, a company incorporated in
Malta)
Third Defendant
(4) 1178936 B.C. LTD.
(a company incorporated in British Columbia, Canada)
Fourth Defendant
(5) MFC 2017 II LTD.
Fifth Defendant
(6) 1128349 B.C. LTD.
Sixth Defendant
(7) IEM SERVICES CO. LTD.
Seventh Defendant
(8) ) LTCM ASSET PRIVATE LIMITED
Eighth Defendant
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
2
APPEARANCES:
Tim Penny QC instructed by William Jones and Will Waldron of
Ogier for the Applicant
John Wardell QC instructed by Peter McMaster QC and
Heather Froude of Appleby for the Respondent
BEFORE:
THE HON. RAJ PARKER
HEARD:
23 September 2020
Draft Reasons
Circulated:
23 October 2020
Reasons Delivered:
28 October 2020
Headnote
Anti-Suit injunction-Grand Court Law (2015 Revision) section 11(1)-Senior Courts Act section
37-Cayman defendants-Malta proceedings-principles to be applied-international judicial
comity-participation in Cayman proceedings-Cayman Islands the appropriate forum-trial of
conspiracy claims-multi party litigation-vexation and oppression-interests of and ends of
justice-risk of issue estoppel and irreconcilable judgments.
Introduction
1.
These proceedings were commenced by the Plaintiff (RBI) in the Cayman Islands in
August 2019. They concern a contested claim under an Austrian law governed
Guarantee dated 2 January 2017 (the Guarantee) under which D2 (or Old MFC)
guaranteed liabilities in respect of underlying borrowing, which together with interest
and other charges amounts to over EUR 43 million.
2.
The gist of the relief sought by RBI is to reverse transfers allegedly made by the MFC
group whereby D2 was allegedly asset stripped pursuant to a fraudulent conspiracy.
The stated purpose of RBI is to secure assets so that in due course RBI can enforce its
rights under the Guarantee.
3.
RBI applied by summons dated 22 June 2020 for an interim anti-suit injunction (ASI)
requiring D1 (or New MFC) to cease to engage in and withdraw from the proceedings
in Malta which were issued on 6 May 2020, some 9 months after the Cayman
proceedings were started.
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
3
4.
By a ruling dated 28 September 2020 the court granted the relief sought.
5.
These are the reasons for that decision.
6.
There were originally four defendants in the Cayman Islands proceedings.
7.
Of relevance to this application D1 is sued as transferee, both direct and indirect, of
the shares in D3, Merkanti Holdings PLC (Malta), and allegedly as a lead conspirator in
the asset stripping of D2. D2 is sued as transferor. D2 has been taken out of the MFC
group and has been served in the Marshall Islands (its current domicile). D3 is now
owned by D1.
8.
D4, (36 B.C Ltd), is sued as the ultimate transferee of certain mining rights. Four more
defendants D5 - D8 were subsequently joined. None of D4-D8 are parties to the
proceedings in Malta.
9.
D11 is a Cayman Islands company and has participated extensively to date in the
Cayman proceedings and in addition has pleaded a substantial counterclaim against
RBI in the sum of over EUR 203m.
The Malta case
10.
Proceedings were commenced in Malta by two of the defendants to the Cayman case,
D3 (Merkanti Holdings PLC)2 and D1, (as well as Merkanti Bank Ltd (M Bank)) against
RBI and D2.
11.
The Malta proceedings concern a subset of the issues in dispute in the Cayman
proceedings, namely the transfer of D3 by D2 to D13. This is not disputed.
12.
The transaction is documented in an agreement dated 23 August 2017 (the Merkanti
SPA) between D2 and D1. There is also another agreement (the Clarification
Agreement) dated 28 September 2017 between the same parties. Both agreements
are governed by the laws of Malta and the Merkanti SPA contains an arbitration
clause. The choice of venue in the Clarification Agreement is the courts of Malta.
13.
D3, M Bank and RBI are not parties to those agreements which are the foundation of
the relief claimed.
14.
The relief sought in the Malta proceedings is for: declarations that the transfer of the
shares in D3 was lawful and not carried out to defraud creditors; that the transaction
1 Which is a traded entity on the NYSE
2 Following an Order that I made on 13 July 2020 permitting substituted service on D3, D3 was served on 16
July 2020 pursuant to that Order (Dellemann 8 §7.(f)), but has been on notice of the Cayman proceedings since
October 2019; and Mr Morrow, who is CFO of D1 and CEO of D3, has sworn two affidavits in relation to the
January 2020 hearing which resulted in the Judgment of 7 July 2020: see Dellemann 7, 19 June 2020 §15.
3 See Dellemann 7 §§57-60.
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
4
should not be impeached and so the shares are the property of D1; and that none of
D1, D3 and M Bank have acted illegally in bad faith or with fraud and so are not liable
in damages to RBI.
The Cayman proceedings
15.
It is common ground that the Malta proceedings involve a direct overlap with the
Cayman proceedings in relation to this transaction4.
16.
This court has found that RBI has a good arguable case that the transfer was at an
undervalue as the basis of the claim which is pursued pursuant to the Fraudulent
Dispositions Law (15 of 1989)(1996 Revision) (FDL) and in the tort of unlawful means
conspiracy.
17.
The court has found that RBI had the better of the argument on the available material
that D2 disposed of its shares in D3 to D1 at an under value for the purposes of putting
the shares beyond the reach of RBI.
18.
RBI's Cayman Islands claims under the FDL and in the tort of unlawful means
conspiracy are directed against two principal alleged co-conspirators, both Cayman
Islands companies, D1 and D5.
19.
It is alleged that D5 became the 100% parent of D2 following a Plan of Arrangement
dated 14 July 2017, and prior to D2 being transferred out of the group.
20.
RBI claims that D1 continues to hold an indirect interest in all of the assets that were
transferred which remain within the MFC group, and that it holds over 99% of the
shares in D3, which in turn holds over 99% of the shares in M Bank, with D5 holding
the only other share.
21.
The court has found, on a good arguable case basis, that RBI's claims are properly
brought against D1 and D5 and that these entities are at the apex of the conspiracy
alleged by RBI.
22.
It follows that D1 is a key player in the Cayman proceedings, as the parent of the group
and because D5 is its 100% direct subsidiary5.
23.
D2, takes no part in the proceedings, and has not made any challenge to the
jurisdiction of the Cayman court. All of its former assets are now allegedly held directly
or indirectly by D1 and D5.
4 See Amended Statement of Claim §§57.4.0 to 57.4.2 and D1 Amended Defence and Counterclaim at §53D
and Morrow 6 §19
5 §168 of Judgment of 7 July 2020
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
5
24.
In aid of these proceedings, RBI obtained a worldwide freezing order against D1 on 30
September 2019 which was continued on 3 February 2020 and which is currently under
appeal6.
25.
Some relevant background, RBI’s case, and the court’s interim findings are set out in the
judgment of the court dated 7 July 20207.
26.
The court decided that RBI had demonstrated that the Cayman Islands are clearly the
appropriate forum for the trial of all of its claims.8
27.
At § 174 of the judgment the court found that the Cayman Islands were the appropriate
forum to have the case determined:
“It is also appropriate to have the case determined in the Cayman Islands to
avoid a multiplicity of potential proceedings in a number of different
jurisdictions with the risk of conflicting judgments. This is particularly so when
a conspiracy is alleged where there is clearly a good reason to have all the facts
determined in one court. There is no other clearly more suitable forum”.(Parker
J)9
Other jurisdictions
28.
It is to be noted that in addition to the Malta proceedings, entities in the MFC group
have attempted to have their disputes with RBI determined in other jurisdictions. D4
and D6 (each 100% subsidiaries of D5 which in turn is owned by D1) have started
proceedings (in March 2020) in the Canadian courts seeking an anti-suit injunction to
restrain the Cayman proceedings; although RBI has not to date been served in those
Canadian proceedings.
29.
It is also worth noting that D4 made a forum challenge to this Court and was
unsuccessful10. D3 and D6 have now similarly filed jurisdiction challenges.
Submissions of the parties.
RBI submissions
30.
Mr Penny QC appeared for RBI.
6 The appeal may not be heard until September 2021
7 §§34-75 of Judgment of 7 July 2020.
8 §154-167 of Judgment of 7 July 2020.
9 See also §§ 94, 130, 133, 167 -176 on forum conveniens, of Judgment of 7 July 2020.
10 §159-180 of Judgment of 7 July 2020.
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
6
31.
Mr Penny QC argued that the Malta proceedings are both objectively and subjectively
vexatious and/or oppressive, have been brought to harass and vex RBI and that the
ends of justice require an ASI to be granted. Further he submits D1 has acted in bad
faith in participating in the Malta proceedings.
32.
He submits, relying on expert evidence on Maltese law11, that the claim in Malta is a
bad claim12. The Maltese court is bound to find that it lacks jurisdiction and
alternatively is likely stay the claim, which are factors this court should take into
account in the exercise of its discretion.
33.
He submits that principles of comity and the interests of justice favour the grant of
relief at this relatively early stage of the Malta proceedings. Moreover as a matter of
discretion, given D1's extensive participation in the Cayman proceedings to date, the
relief should be granted.
34.
He submits that D1 has not suggested in its pleading13 in the Cayman proceedings that
Maltese law (to the extent it differs from Cayman law) governs any part of its defences
(or specifically claims regarding M Bank) or that the courts of Malta are the
appropriate forum to have them determined.
35.
Mr Penny QC further argued that if the Malta claim proceeds to trial and is resolved
prior to the trial in Cayman in favour of the claimants in the Malta claim so that the
transfer is held to be lawful and not carried out with intent to defraud a creditor, there
would be an issue estoppel as between RBI and D1 pending an appeal, which could
take four or five years, but no issue estoppel as between RBI and D4-D8 because they
are not parties in Malta. He submitted that this would be a recipe for chaos in the
Cayman proceedings.
36.
By contrast if D1 was restrained and M Bank and D3 chose to and were able to
continue in Malta that will not lead to a risk of irreconcilable judgements or a relevant
issue estoppel.
D1 submissions
37.
Mr Wardell QC appeared for D1.
38.
Mr Wardell QC submits that the court should take note that RBI’s strategy has been
to obtain a worldwide freezing order in order to put pressure on the defendants for a
settlement whilst not progressing the Cayman proceedings, and not making any
attempt to bring proceedings under the Guarantee. Mr Morrow in his affidavit dated
14 July 2020 puts the point like this at § 14:
11 Mamo TCV Advocates 18 June 2020 (Mamo 1) §§12.1-12.18
12 Article 7 (1) (a) of the Recast Brussels Regulation EU Regulation 1215/2012 and Mamo 2 §3.16
13 §§57-67 of the Amended Defence and Counterclaim of D1
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
7
“ The Plaintiff’s object in these proceedings is to sit on its over collateralized
injunction and use it as a lever for settlement.”
39.
As has been noted, the worldwide freezing order against D1 is under appeal and this
may well be an argument for another day. Mr Wardell QC also criticized the volume
and scope of the material put in issue by RBI on this application. Mr Penny QC
vehemently refuted that RBI was sitting on its hands and unnecessarily complicating
matters so as to run up costs. Again, this is not a matter which needs to detain the
court in considering the key issues on this application.
40.
Mr Wardell QC forcefully argued that if RBI wishes to protect its interests in the Malta
proceedings, in the interests of comity, RBI should make an application in Malta to ask
the Maltese courts to decline jurisdiction and alternatively to stay their own
proceedings. If RBI is right, then there will be no injustice to it (although he accepted
it might not recover all its costs in bringing such a jurisdiction challenge in Malta).
41.
He further submitted that Malta is party to the “Recast Brussels Regulation” (EU
Regulation 1215/2012) and the Cayman Islands is not. The Malta court ought to apply
that legislation in relation to jurisdiction. The Cayman court should not interfere with
the Maltese courts in relation to the jurisdiction issue by applying a foreign law.
42.
He argued that there is a strong connection between Malta and the substance of the
Maltese claims. Two of the claimants (but not D1) are Maltese entities and the
relevant share sale and purchase agreement between D1 and D2 is governed by
Maltese law with the shares being registered in Malta where the share register is kept.
There is a legitimate interest pursued by M Bank and its shareholders in the home
forum.
43.
If RBI is wrong on jurisdiction and the case proceeds in Malta he accepted that there
may be some risk of inconsistent judgments with the Cayman court but asserted that
would not be materially reduced by granting an anti-suit injunction against D1.
44.
In any event if it is the case, as RBI’s Maltese law expert states, that the time likely to
get an appeal heard against any refusal to decline jurisdiction in Malta is four to five
years, the Cayman proceedings would be heard before then and are likely to be
dispositive. The relief sought by way of the ASI is therefore futile and does nothing to
protect RBI’s interests.
45.
If RBI fails in its case in Cayman the Maltese claim will become obsolete and will not
need to be pursued by the claimants. If RBI’s claim succeeds in Cayman and judgment
is satisfied by payment of damages the Maltese claim also falls away. There would be
no prejudice to RBI if the court dismissed the application for an ASI.
46.
Mr Wardell QC went on to submit that even if an anti-suit injunction against D1 is
granted, RBI’s expert Maltese law evidence does not say that the two remaining
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
8
claimants do not have an arguable case to bring a claim, albeit RBI’s expert says that
the claim is relatively weak14.
47.
Therefore, he submits an ASI against D1 would not bring the Maltese proceedings to
an end and RBI would still need to persuade the Maltese courts that they lacked
jurisdiction over those two claimants. In that event, RBI will have obtained no saving
of costs or time or advantage from the prior restraint of D1 by this court.
Legal principles
48.
The power to grant an order for an anti-suit injunction arises under the Grand Court
Law (2015 Revision) s.11 (1), and s.37 of the Senior Courts Act 1981 in England (by
cross reference15). The grant of the relief is discretionary. The court may restrain a
defendant over whom it has personal jurisdiction from instituting or continuing
proceedings in a foreign court when it is necessary in the interests of justice to do so16.
The remedy binds the respondent to the proceedings in personam.
49.
The general principles as to the exercise of the discretion may be summarized as
follows.
a)
As the remedy cannot avoid being seen as an indirect interference with
the process of the foreign court the jurisdiction also requires regard to
be had to the principles of international judicial comity17. The court
should therefore exercise the jurisdiction with caution18.
b)
The discretion to be exercised is a broad and general one and takes into
account all material facts and circumstances which go to the interests
of and the ends of justice19. The court does not proceed on the same
principles as those applied when granting a stay of proceedings on the
ground of forum non conveniens. Although the question of whether the
action is oppressive and/or vexatious is material in determining
whether the interests of justice require the restraint, the court has also
to consider the injustice to the party being restrained to what is the
natural forum for determining the dispute, if that restriction would
unjustly deprive him of advantages available in the foreign forum.20
c)
The authorities indicate that there needs to be some conduct identified
(variously described as unconscionable, vexatious or oppressive
14 See §21.2 Mamo 1
15 Al Sadik [2018 (2) CILR 464]
16 Aerospatiale v Lee Kui Jack and [1987] AC 871 UKPC and Origami [2012 (2) CILR 191] per Cresswell J
17 See Origami §98 and Dicey Morris and Collins on the Conflicts of Laws (15th)at 12-078.
18 Aerospatiale § 892 E-F, Star Reefers [2012] EWCA Civ 14
19 Aerospatiale §§ 892-893 per Lord Goff
20 §§892e, 895c-f and 896 c-h per Lord Goff.
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
9
without any distinction in meaning) which gives rise to the right to the
grant of the remedy. This will include conduct which interferes with the
due process of the court.21
d)
The injunction must be necessary to protect the applicant's legitimate
interest in the relevant proceedings. In this regard the fact that the
court has found that the Cayman proceedings are the natural forum for
this litigation is a necessary but not a sufficient condition22. This can
however be a factor in finding that parallel proceedings are
oppressive23.
e)
The risk of inconsistent judgments and the undesirable consequences
of concurrent actions in respect of the same subject matter in two
different jurisdictions is also not in itself sufficient to show an ASI ought
to be granted, but is a factor that is to be taken into account.24
f)
Similarly, the mere inconvenience of parallel proceedings is insufficient
of itself, unless it amounts to real injustice.
g)
Further, it is not inherently vexatious or oppressive to bring a claim to
which the foreign court will apply a different substantive law than
would be applied in the Cayman Islands even where this would give a
significant advantage to the claimant abroad25 .
h)
Whilst there is nothing inherently improper about a litigant tactically
preferring a foreign court, where there is no adequate explanation for
why competing foreign proceedings have been brought the court may
be willing to infer that the foreign proceedings are motivated by a
deliberate strategy of harassment and vexation and not for proper
purposes26.
i)
The court will not grant an ASI where the order would serve no purpose
or where it would be futile to do so27.
J)
The court needs to determine which party has the better case on the
material available at an interim stage28.
21 Glencore[2002] CLC 1090 EWHC and EWCA at § 42 and Re Maxwell Communications (No 2) (Barclays v
Homan) per Glidewell LJ at p 773 G-H
22 Glencore § 42 per Rix LJ
23 Aerospatiale § 894 F-G, Turner v Grovit [2002] 1 WLR 107 §25 HL
24 Origami § 103,Aerospatiale §894C and Raphael 2019,the Anti Suit Injunction (2nd) 5.03
25 See Raphael at 5.10
26 See Glencore v Metro (No 3) [2002] CA CLC §§69-70 per Rix LJ
27 Barclays v Homan[1992] BCC 757 (EWHC) 767 per Hoffmann J.
28 The Magellan Spirit [2016]2 Lloyd’s Rep §9-10 and Raphael ,The Anti Suit Injunction 2nd 2019 13.41
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
10
Discussion and Analysis
The expert evidence29
50.
The law firms engaged to provide expert opinion to assist the court disagreed on the
question of whether the Maltese proceedings were flawed on jurisdictional grounds.
51.
The law firm engaged by RBI, Mamo TCV Advocates (Mamo), are of the view that the
action is flawed and the Maltese court will decline jurisdiction.
52.
Ganado Advocates, the law firm engaged by D1, disagrees and says that the claimants
have a good arguable case.
53.
They also disagree on the time it would take to hear an appeal on the preliminary issue
of jurisdiction where Mamo say five years and Ganado says 9 to 12 months.
54.
Mr Wardell QC indicated that for the purposes of this application he accepted that
Mamo had the better of the argument on both of those issues.
55.
Notwithstanding that indication, the court is not in a position to assess, having
reviewed the expert opinions in this case, with any certainty how the Maltese
proceedings are likely to progress or conclude.
56.
Having carefully reviewed the expert Malta law expert evidence it may be that the
Malta court would decline jurisdiction over D1 and allow the case by D3 and M Bank
to proceed. It is also possible that it would not. There are likely to be appeals either
way.
57.
There must be a risk that the proceedings could end (allowing for appeals on
interlocutory matters, such as jurisdiction) with a trial in Malta and if that were to be
the case there is a real risk of inconsistent judgments with the Cayman proceedings in
relation to the material subject matter.
58.
Even with Mr Wardell QC's indication that he is prepared to accept that RBI has the
better case on jurisdiction in Malta, it does not follow therefore that an ASI is futile.
59.
If the relief is granted D1 would be prevented from continuing with the Malta
proceedings and the remaining two claimants would be left to obtain relief in Malta
as to the legitimacy of the relevant transactions, assuming they have a sufficient
juridical interest.
29 Mamo TCV Advocates 18 June 2020 (Mamo 1) 30 July 2020 (Mamo2) 18 September 2020 (Mamo3),Ganado
Advocates 13 July 2020(Ganado 1) 11 September 2020 (Ganado 2)
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
11
60.
However, the Cayman proceedings would be left to continue in respect of the case
against D1 and there would not be the potential issue estoppel and chaos that Mr
Penny QC alluded to.
61.
Nor is it clear that any appeal on that point would not be heard by the Maltese appeal
courts before the Cayman proceedings concluded. There are simply too many
variables to make a confident determination about that at this stage.
The exercise of discretion
62.
Applying the legal principles set out above, and approaching the grant of the relief
with caution and with due respect to the courts in Malta, the court is satisfied that it
is in the interests of justice to grant the injunction against D1 and that RBI needs such
protection.
63.
The court recognises that judges of different legal systems could legitimately arrive at
different answers and it is not for this court to predict how the Malta court would
determine jurisdiction in this matter or to interfere with its processes without good
reason.
64.
However, the court is satisfied that it is right, in the interests of and for the ends of
justice, for this court to intervene to prevent further participation at this relatively
early stage by D1 in the Malta proceedings.
65.
I therefore reject Mr Wardell QC’s submission that RBI should apply in Malta in the
interests of comity and because the Malta court is better placed to determine its own
jurisdiction.
66.
This court has already determined that the Cayman Islands is the proper forum for the
trial of all claims including claims in relation to the merchant bank transaction.30
67.
It would not be in the interests of justice for there to be multiple proceedings in
different jurisdictions, particularly in the light of the unlawful means conspiracy case
made by RBI, which is an overarching claim and which will involve the analysis of
extensive evidence both factual and expert31. It will also involve the analysis of
contemporaneous documentary material passing between the relevant individuals
and entities. It is relevant to note in this regard that there is no obligation of disclosure
in Maltese courts and D1 could therefore have its case heard in Malta without having
to disclose material adverse to its case32. This is clearly a potential disadvantage to RBI
given its burden to prove a conspiracy case.
30 This Court has also dismissed D4’s challenge to the jurisdiction
31 See ED&F Man v Straits [2019] EWCA Civ 2073 §§21 and 49 per Flaux LJ. See also Donohue v Armco [2002]
CLC 440 per Lord Bingham and Contadora v Chile [1999] CILR 194 CICA
32 Mamo 1 §5.3
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
12
68.
Moreover D1, a Cayman company, is a critical player in relation to that claim and has
participated extensively in the Cayman proceedings and advances a substantial
counterclaim. There have been substantial pleadings filed. The court has considered
very detailed factual evidence on a significant number of issues that will need to be
determined at trial. Extensive expert evidence has been submitted on issues of
forensic accounting and foreign law including the law of Austria, Canada and the
Marshall Islands. The parties have already incurred considerable costs in furtherance
of the Cayman proceedings.
69.
There are clearly costs and timing disadvantages to RBI of having to litigate in two
jurisdictions over the same subject matter. This is not balanced out by any potential
prejudice to D1 if the court grants an ASI.
70.
The court is entitled to look for an explanation for D1’s motivation and conduct in
relation to its case in Malta. In the absence of a satisfactory explanation the court may
draw such inferences as are appropriate from all circumstances of the case33. M Bank,
D3 and D1 have or had common directors and officers. Mr Morrow is the CFO of D1
and was the CFO of D2 and is or was a director of M Bank. He has submitted affidavit
evidence in this application.
71.
Mr Dellemann in his seventh affidavit of 19 June 2020 sets out RBI’s case on why it
considers that the Malta claim was brought illegitimately and in bad faith34. In
particular he makes the assertion that the declarations sought in the Malta claim are
really for the benefit of D1 alone35.
72.
Whilst Mr Morrow clearly took the view, on advice that a large part of Mr Dellemann’s
affidavit went beyond what was necessary or appropriate, this is a fairly short point
and there is no evidence from Mr Morrow in response.
73.
Nor indeed is there any evidence from Mr Morrow as to why D1 needs to participate
in the Malta proceedings. Indeed, there is no evidence as to D1’s motivation at all.
74.
The only relevant evidence on this point that Mr Morrow gives is that at paragraph 24
of his sixth affidavit of 14 July 2020 in which he deals with timing and D3 only:
“The third defendant, who is a claimant in the Malta claim, made a commercial
decision to wait and see if it was successfully served in these current proceedings. Its
intention was always to commence proceedings locally in Malta as it does not view the
Cayman Islands to be an appropriate jurisdiction for this claim. However, the third
defendant has yet to be served in these proceedings and the Board of Directors
determined that it would be in the best interests of the company to commence local
proceedings at this time.”
33 Glencore per Rix LJ §§69-70
34 §§90-110
35 §100
201028 In the Matter of Raiffeisen Bank International AG v Scully Royalty Ltd. et al – FSD 162 of 2019 (RPJ) Judgment
13
75.
The inference the court draws is that the Malta proceedings have been brought by D1
in bad faith to harass and vex RBI. In this regard, I accept what is said by Mr Dellemann
at §§ 97-110 of his seventh affidavit. I also accept what is said at Mamo 2 at paragraph
7.7 to the effect that the relief sought is unnecessary as a matter of Malta law and is
brought to cause damage or create obstacles to RBI enforcing a judgment in Malta.
76.
In sum the court is not persuaded that D1 has a good claim in Malta, or that it
genuinely seeks relief in Malta, or that it would suffer any real prejudice if restrained
from proceeding in Malta. D1 has participated extensively in the Cayman proceedings,
it is a central party, and should not be permitted to gain any illegitimate advantage by
bringing flawed proceedings in Malta.
77.
I accept Mr Penny QC’s submissions on the potential for issue estoppels and
conflicting decisions should D1 continue with its Malta claim, which could lead to great
uncertainty and significantly complicate the enforcement of any Cayman judgment in
other jurisdictions.
78.
RBI has shown a real risk of injustice in the meantime, including material
inconvenience, and potentially irrecoverable costs. On the other hand, no legitimate
deprivation of advantage has been shown by D1 if restrained from proceeding in
Malta.
79.
I echo Rix LJ’s views in Glencore that litigation of this complexity and with multiple
differently domiciled parties should be conducted with as much economy and
efficiency as is possible and preferably in one forum so as to do justice between the
parties36. This is particularly so where fraud and conspiracy are alleged.
80.
The court therefore is satisfied that the interests of and the ends of justice necessitate
an ASI and grants the mandatory relief sought against D1 with the usual cross
undertaking in damages from RBI.
HON. JUSTICE RAJ PARKER
JUDGE OF THE GRAND COURT
36 See § 63 Glencore per Rix LJ