Arcelormittal North America Holdings Llc v Essar Global Fund Ltd and Essar Capital Ltd

• Jurisdiction: Cayman Islands
• Judge: (Kawaley, J.)
• Judgment Date: 16 November 2021
• Court: Grand Court (Cayman Islands)

ARCELORMITTAL NORTH AMERICA HOLDINGS LLC

and

ESSAR GLOBAL FUND LIMITED and ESSAR CAPITAL LIMITED

(Kawaley, J.)

Grand Court, Financial Services Division (Cayman Islands)

Civil Procedure — disclosure — Norwich Pharmacal order — setting aside — final orders only set aside exceptionally, where order made in circumstances, such as fraud, which fundamentally undermined basis upon which order made — insufficient that subsequent developments allegedly showed that order no longer necessary

	Held, dismissing the defendants’ summons:

	(1) There was no reason to doubt that the Norwich Pharmacal order was final for appeal purposes, as the court had previously decided. Orders could not be final for some purposes and interlocutory for others. Their status was necessarily a fixed one. The appellate status of an order and the jurisdiction the court which made the order retained to revoke or vary it were two sides of the same coin. In respect of an order which was final for appeal purposes, the retained reviewing jurisdiction was narrower, while in the case of an interlocutory order the retained reviewing jurisdiction was, potentially at least, broader. The notion of a hybrid order which was final for appeal purposes but interlocutory for retained reviewing purposes was not a legally cognizable proposition. Norwich Pharmacal orders were not a special category of order to which sui generis rules applied. The Norwich Pharmacal order was a final order for the purposes of delineating the court’s jurisdiction to revoke or vary it by reason of subsequent developments (paras. 29–39).

	(2) The court would only exercise its jurisdiction to set aside a final order in exceptional circumstances. Apart from fraud, no clearly defined categories existed in which final judgments or orders could be set aside. The starting point for any analysis of whether recourse to the exceptional inherent jurisdiction was available in the circumstances of a case must be to remember that, apart from the nuclear option of setting aside, judgment debtors had access to a broad array of lesser remedies under GCR O.45, r.11. Applying to set aside a final order on the ground that it was procured by fraud would ordinarily be pursued through a separate action. Apart from that, the sort of exceptional circumstances which would justify the court setting aside one of its own final orders made on an inter partes basis would have to be circumstances which, like fraud, undermined the basis upon which the order was made in a fundamental way. The circumstances relied upon in the present case by the defendants for setting aside the Norwich Pharmacal order did not qualify for such relief. The submission that subsequent developments showed that the order was no longer necessary was not an exceptional circumstance which undermined the basis on which the order was made in a fundamental way. The ground for setting aside a final order must relate to the date when the order was made and demonstrate that the order should never have been made. The appropriate remedy for obtaining relief from the burden (based on post-judgment developments) of complying with a final judgment or order which was for any reason effectively spent or otherwise causing injustice, was to apply for a stay or other appropriate relief under GCR O.45, r.11. It would be very rarely appropriate for a judgment debtor to substitute its judgment for that of an unpaid judgmentcreditor as to whether or not further enforcement steps were required. Demonstrating that a Norwich Pharmacal order should never have been made, based on information discovered after the event, was a potentially valid general ground. However, the newly discovered evidence would have to reveal that (a) the order was procured by fraud; or (b) the order was granted on the basis of a fundamental mistake or misrepresentation which was analogous to fraud. The court considered the defendants’ application to be a thinly veiled manifestation of their determination to frustrate the plaintiff’s attempts to enforce the award through the instrumentality of the Norwich Pharmacal order. There had been no fundamental mistake or misrepresentation. Neither the English nor the United States proceedings were based on facts or allegations which were concealed from this court when the Norwich Pharmacal order was obtained. The narrow scope of those proceedings was not fundamentally inconsistent with the Norwich Pharmacal order having been granted with a view to assisting the plaintiff to obtain information about the award debtor’s worldwide assets. No legal valid grounds for setting aside the Norwich Pharmacal order had been made. The defendants’ application to set aside the order would therefore be refused (para. 42; paras. 46–57).

Cases cited:

(1)	Clutterbuck v. A, [2017] EWHC 1127 (Ch), referred to.

(2)	Cristel v. Cristel, [1951] 2 K.B. 725; [1951] 2 All E.R. 574, referred to.

(3)	Kirkconnell v. Cook-Bodden, 1996 CILR 326, considered.

(4)	Sangha v. Amicus Finance plc, [2020] EWHC 1074 (Ch), considered.

(5)	Simmons v. City Hospitals Sunderland NHS, [2016] EWHC 2953 (QB), referred to.

(6)	Terry v. BCS Corporate Acceptances Ltd., [2018] EWCA Civ 2422, considered.

(7)	Thynne v. Thynne, [1955] P. 272; [1955] 2 All E.R. 377, considered.

(8)	Tibbles v. SIG plc, [2012] EWCA Civ 518; [2012] 1 W.L.R. 2591; [2012] 4 All E.R. 259; [2012] C.P. Rep. 32, considered.

Legislation construed:

Court of Appeal Rules (2014 Revision), r.12(1): The relevant terms of this subrule are set out at para. 25.

r.12(3): The relevant terms of this subrule are set out at para. 26.

r.12(5): The relevant terms of this subrule are set out at para. 26.

r.12(6): The relevant terms of this subrule are set out at para. 27.

Grand Court Act (2015 Revision), s.11: The relevant terms of this section are set out at para. 42.

Grand Court Rules 1995, Preamble, para. 4.1: The relevant terms of this paragraph are set out at para. 65.

O.45, r.11: The relevant terms of this rule are set out at para. 19.

	The defendants sought to set aside a Norwich Pharmacal order.

	The original plaintiff (ArcelorMittal USA LLC, “AMUSA”) obtained a Norwich Pharmacal order on an ex parte basis, having obtained an ICC award against a subsidiary of the first defendant (Essar Steel Ltd.) in the United States. The defendants applied unsuccessfully to set aside the Norwich Pharmacal order on legal jurisdictional grounds. The court considered the order to be a final order for appeal purposes. The defendants filed a notice of appeal and execution of the order was stayed pending appeal. AMUSA served English proceedings in which its application for a worldwide freezing order was dismissed on the ground of the absence of a good arguable case. The defendants wrote to the Court of Appeal indicating their intention to apply to the Grand Court to discharge the Norwich Pharmacal order on the ground that the English proceedings showed the order was not needed. AMUSA invited the Court of Appeal to proceed to deliver its judgment. The Court of Appeal dismissed the defendants’ appeal against the Norwich Pharmacal order (see 2021 (1) CILR 788). ArcelorMittal North America Holdings LLC (“AMNAH”), substituted for AMUSA, commenced a New York avoidance claim, which the defendants asserted provided further grounds for setting aside the Norwich Pharmacal order.

	The defendants brought a summons seeking the setting aside of the Norwich Pharmacal order. AMNAH contended that the application was an abuse of process. The summons raised the following issues of law and practice: (a) whether Norwich Pharmacal orders were final or interlocutory, both generally and/or specifically as regarded the grounds on which the orders could be set aside; and (b) whether Norwich Pharmacal orders were a hybrid form of order in relation to which a bespoke continuing review jurisdiction, analogous to that applicable to interim freezing injunctions, applied so that the trial judge retained the competence to set aside NorwichPharmacal orders made on an inter partes basis on the grounds of a material change of circumstances.

	The defendants submitted inter alia that (a) Norwich Pharmacal orders, which had features of both final and interim orders, should not be regarded as final orders for review purposes; (b) the question for the court was not whether the Norwich Pharmacal order was, in some absolute sense, an interim or final order, but whether the order should be treated as an interim or final order for the purposes of the particular application which the defendants had brought; (c) the defendants’ application was premised on there having been a material development in respect of the foreign proceedings which the Norwich Pharmacal order was intended to enable the plaintiff to bring; (d) the Norwich Pharmacal order was properly to be treated as an interim order for the purposes of this application, which invited the court to assess the impact of the foreign proceedings (particularly the English proceedings) on the appropriateness of the Norwich Pharmacal order; (e) the Norwich Pharmacal order was only ever justifiable as an order made in support of some future course of action which the plaintiff might wish to take and it made sense for the court to be able to consider whether, in light of the actions which the plaintiff had been able to take without the benefit of the information, the order remained (or ever was) appropriate; (f) if the Norwich Pharmacal order was granted in support of steps to be taken in other (actual or contemplated) proceedings, it was appropriate for the court to be able to review (and if necessary revisit) its order in light of developments in those other proceedings; (g) for the purposes of this application, the Norwich Pharmacal order should be treated as an interim order, but even if it was to be treated as a final order, it was of a very unusual type, which should inform the court’s...