Karamanolis & Karamanolis LLC successfully represented the intervening companies, in a high profile and very important Norwich Pharmacal/Disclosure Order case, related to a multi-million cross border dispute involving professional service providers acting as Trustees of Cypriot International Trusts.
The Cyprus Court rejected the Claimants’ application for disclosure orders against Cypriot companies which had acted in the past as trustees or advisors of several Cypriot International Trusts.
The analysis of the Court in this case is instructive in regard to the murky area of disclosure requests against service providers in aid of the enforcement of a judgment issued abroad and while cross border litigation proceedings involving the trust structures are pending.
The decision of the Cyprus Court provides significant insight and guidance to the relevant principles and it should be taken into account by professionals providing trustee and fiduciary services.
Key Points of Judgment
The Cyprus Court dismissed the application and held that:
(a) The Norwich Pharmacal relief is not available simply because a foreign judgment has been entered. Instead, the Court clarified that the Claimant must establish that the respondent professional service providers were mixed up in dishonest attempts to defeat execution of the judgment.
(b) In cases involving trust structures, the claimant must show that the professional trustees were parties to a dishonest arrangement. The “shamming intent” must be shared by both the third party/settlor and the trustees, who must be parties to the dishonest arrangement at the time that the trusts were created.
(c) The court held that the purpose of a Norwich Pharmacal order is not to be used for wide-ranging discovery, or for gathering of evidence, but to be strictly limited to necessary information. The provision of oral or documentary evidence in assistance of foreign judicial proceedings has always been exclusively statutory. Even though the boundaries between information and evidence are not always clear since information can be converted to evidence, the Courts must refuse to issue a Norwich Pharmacal order for obtaining evidence that will be used in foreign proceedings, and the applicants must proceed in accordance with the provisions of the available statutory framework.
(d) where the requested information can be obtained by other means either abroad or in Cyprus, applications for Norwich Pharmacal/Disclosure Orders may be considered abusive.