Skip to content

High court grants Norwich pharmacal orders against Italian banks with branches in London

15 July 2014

In Credit Suisse Trust v Intesa San Paulo SpA and Banca Monte dei Pasche di Siena [2014] EWHC 1447 (Ch), 6 March 2014, two London branches of an Italian bank were ordered to provide information about a customer, despite the fact that the banking activity took place in Italy and all the information sought was held in Italy. It is believed to be the first case where the court has exercised its Norwich Pharmacal jurisdiction where neither the activity complained of, nor the third party (here, the bank), were based in the UK.

Norwich Pharmacal – a reminder

The Norwich Pharmacal jurisdiction is a valuable tool available to claimants in fraud cases. It is an exception to the standard rule that third parties to litigation can only be required to disclose specific pieces of evidence, rather than conduct wide-ranging searches for documents and information. Norwich Pharmacal relief is generally only available in fraud or so-called dishonesty cases. It is available against third parties who have become mixed up in wrongdoing and who are believed to have relevant documents and information that will assist a victim of a fraud pursue its case against a fraudster.

Facts

Waksman J considered an application for Norwich Pharmacal relief by a professional trustee (Credit Suisse Trust (Credit Suisse)) against two Italian banks with London branches (Intesa San Paulo SpA (Intesa) and Banca Monte dei Paschi di Siena (BMPS)). Credit Suisse had obtained judgment in Guernsey against Mr Nemni (a customer of Intesa and BMPS) for dishonest breach of fiduciary duty. Credit Suisse took steps to enforce that judgment and to obtain further information about Mr Nemni's assets. No point was taken in relation to this being the enforcement of a Guernsey judgment – the judge was satisfied that this application fell within the definition of interim relief as set out in s25 Civil Jurisdiction and Judgments Act 1982 in aid of the Guernsey proceedings and the Guernsey judgment.

Order sought for disclosure of information

The key question was whether the Italian banks could be forced to disclose information about Mr Neumi's assets, given that the relevant banking activity took place in Italy and was therefore governed by Italian law and, in particular, Italian banking confidentiality rules. The evidence before the judge in respect of BMPS was that the London branch of BMPS was able to access the relevant information in Italy so as to ensure compliance with the order being sought. The availability of evidence concerning Intesa's London branch was less clear.

The Judge held that, as this was a fraud case, there was nothing in earlier case-law to prevent him from making an order simply on the basis that the information sought was held by the banks in Italy.

The court found that BMPS was willing to provide at least some of the information but felt inhibited about providing it unless it was ordered to do so by an order of the English court (given its concerns about Italian confidentiality laws). So far as Intesa was concerned, the Judge considered that if BMPS's London branch was able to obtain the information from Italy, it should not be impossible for Intesa's London branch to do the same. The Judge was also aware that if either of BMPS or Intesa did not comply, then Credit Suisse's intention was not to pursue those banks in England for contempt of court. Rather, Credit Suisse would apply to have the Guernsey judgment and/or the English Norwich Pharmacal order recognised in Italy. On that basis, the Judge granted the Norwich Pharmacal relief against the London branches of the two Italian banks.

COMMENT

Previous cases had considered the right to obtain Norwich Pharmacal relief from (i) a UK entity where the activity occurred in another jurisdiction or (ii) a non-UK entity, provided the relevant activity occurred within the jurisdiction. But, so far as we are aware, this is the first time relief has been obtained against a non-UK entity, in respect of non-UK activity, where the only link to the UK appears to be a local branch in the UK. According to recent Bank of England statistics, there are 145 branches of international banks operating in the UK. It remains to be seen whether victims of frauds perpetrated in other jurisdictions, who believe banks in those jurisdictions have relevant information and documents, will try to obtain information and documents via the English court by virtue of the bank having a UK branch.

The floodgates will not necessarily open. Norwich Pharmacal relief is only available in cases involving fraud or dishonesty. While it can result in banks or other third parties being required to conduct very broad (and sometimes onerous) searches for information and documents, it is not a jurisdiction which the court exercises lightly. As this case shows, it is a matter for a Judge's discretion whether to grant the relief being sought based on the evidence before the court. A Norwich Pharmacal order so obtained may also not be the end of the matter. As was plain in this case, Credit Suisse recognised that it might ultimately need to enforce the Norwich Pharmacal order in Italy. Accordingly, such Norwich Pharmacal orders may not ultimately cut across banking confidentiality or similar rules or restrictions which are applicable in other jurisdictions.