In AB Bank Ltd v Abu Dhabi Commercial Bank PJSC, the Commercial Court set aside a Norwich Pharmacal Order (“NPO”) made against a bank in the UAE on the basis that the court had no jurisdiction to serve the order on the bank out of the jurisdiction because none of the permitted jurisdictional gateways under Practice Direction 6B to the Civil Procedure Rules were applicable.
The claimant, a Bangladeshi bank, alleged that it was the victim of a fraud perpetuated by a Singaporean company (P). The claimant had paid US$20 million into an account with the defendant, a UAE bank, pursuant to an agreement with P (to which the parties had agreed that English law and jurisdiction would apply). This sum was subsequently paid out to an unknown party. The claimant alleged that the defendant was mixed up in the fraud and sought an NPO against it in the English courts to discover where the sums in question went. The NPO was subsequently granted at a without notice hearing. The defendant then sought to have the order set aside on the grounds that the court had no jurisdiction to permit service of the order on the defendant out of the jurisdiction.
An applicant can seek an NPO against a third party where it knows that wrongdoing has taken place but does not know the identity of the wrongdoer, yet can identify a third party who has the information. If the respondent third party is resident outside the jurisdiction, the applicant must seek the court’s permission to serve the NPO on them. To obtain such permission, the applicant must show that there is a good arguable case that the claim falls within one of the jurisdictional gateways listed in paragraph 3.1 of Practice Direction (“PD”) 6B.
Mr Justice Teare considered the claimant’s arguments in relation to three jurisdictional gateways:
- where a claim is made for an interim remedy under section 25(1) of the Civil Jurisdiction and Judgments Act 1982 (paragraph 3.1(5) of PD 6B);
- where a claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction (paragraph 3.1(2) of PD 6B); and
- where the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim (paragraph 3.1(3)(b) of PD 6B).
In relation to the first gateway, Teare J noted that the object of the gateway was to aid foreign proceedings, and that it was therefore not available to permit service out of the jurisdiction of an application for relief in support of proceedings within the jurisdiction. He stated that an application for an NPO is not “interim” within the meaning of paragraph 3.1(5) of PD 6B, because the third party from whom information is sought will not be the defendant to the substantive proceedings. Norwich Pharmacal relief is the final relief being sought against that third party. Therefore the gateway did not apply.
The judge also held that the second gateway did not apply, as the necessary steps to procure the information would have to be taken in the UAE.
Finally, Teare J considered whether the claim was against a “necessary and proper party”. As no allegation of fraud was being made against the defendant, and the claimant did not wish to serve a claim form on the defendant, the third gateway did not apply.
The judge went on to hold that even if he was wrong on the jurisdictional gateways, he would have exercised his discretion and refused to allow service out of the jurisdiction as there was a risk that compliance with the NPO would breach UAE law. He considered that there was a more appropriate means by which the information could be provided in the UAE, namely by seeking the consent of the defendant and asking it to pass on the information. He observed that the court should exercise restraint before deciding to exercise an “exorbitant” jurisdiction over a foreign bank, and it would be “far more appropriate” for the claimant and defendant to cooperate than for the court to seek to exercise such a jurisdiction over the defendant.
This decision casts doubt on earlier authorities permitting service of an NPO outside the jurisdiction. Following the judge’s comments, it may be more appropriate for parties seeking information from a third party outside the jurisdiction to look to local law for assistance.