Worldwide Financial Holding v Citel

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P., Georges and Kerr, JJ.A.)
• Judgment Date: 20 April 1995
• Court: Court of Appeal (Cayman Islands)
• Date: 20 April 1995

Court of Appeal

(Zacca, P., Georges and Kerr, JJ.A.)

WORLDWIDE FINANCIAL HOLDING

and

CITEL

C.G. Quin for the appellant;

R.D. Alberga, Q.C. and S.T. McCann for the respondent.

Case cited:

(1) Rio Tinto Zinc Corp. v. Westinghouse Elec. Corp., [1978] A.C. 547; [1978] 1 All E.R. 434, considered.

Legislation construed:

Constitution of Peru, art. 97: The relevant terms of this article are set out at page 393, line 40 – page 394, line 3.

art. 99: ‘It is the responsibility of the Standing Committee to impeach any of the following before Congress: the President of the Republic . . . for violations of the Constitution and for any offence that they may commit in the exercise of their functions and up to five years after they have relinquished them.’

art. 100: The relevant terms of this article are set out at page 394, lines 10–26.

Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978 (S.I. 1978/1890), Schedule, s.1: The relevant terms of this section are set out at page 398, lines 7–19.

s.2: The relevant terms of this section are set out at page 398, lines 21–33.

s.5: The relevant terms of this section are set out at page 398, lines 35–43.

Regulations of the Democratic Constitutional Congress, art. 35: The relevant terms of this article are set out at page 394, line 44 – page 395, line 18.

Evidence-assistance to foreign court-‘court or tribunal’-under Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978, Schedule, s.1, commission mandated to make enquiry prior to administrative or judicial decision not a ‘tribunal’ since conclusions merely recommendations not binding on judiciary

Evidence-assistance to foreign court-‘proceedings which have been instituted’-preliminary investigation as to criminal liability not institution of proceedings as required by Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978, Schedule, s.5, when criminal action only instituted by public prosecutor

The appellant sought the discharge of an ex parte order, granted upon an application by letters rogatory from the respondent, for the examination of documents and witnesses.

Allegations were made against high-ranking Peruvian Government officials that they had corruptly received payments of money from a consortium which was subsequently awarded a substantial Government contract. The Peruvian Congress set up an Investigative Commission (the respondent) to investigate the charges and prepare a report. It was provided by the Constitution that its conclusions were not binding on the judiciary but were to be sent to the Attorney General. Congress could then pass a resolution obliging the public prosecutor to proceed with criminal charges.

In the course of the hearing conducted by the respondent, evidence was given that certain payments had been made by the consortium, at the behest of one of the officials, into the appellant”s bank account in Grand Cayman. The respondent then applied for judicial assistance pursuant to the Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978. An ex parte order was granted providing for the examination of the bank manager and any shareholder, director or officer of the appellant company, and all documents relating to the specified transactions and any subsequent transactions on the bank account and the appellant”s corporate records. The appellant applied to set this order aside.

The Grand Court (Schofield, J.) set aside the order in part. It held that (a) the appellant had a legal interest in the proceedings and consequently had locus standi; (b) the respondent was a ‘tribunal’ within the meaning of the Evidence (Proceedings in Other Jurisdictions) (Cayman Islands)

Order 1978, Schedule, s.1; (c) criminal proceedings had been instituted against the suspected officials; and (d) the terms of the order were, however, too wide. The proceedings in the Grand Court are reported at 1994–95 CILR 254.

On appeal, the appellant submitted, inter alia, that (a) the respondent was not a tribunal since it could not produce a binding decision but merely prepared a report which made recommendations to Congress; and (b) no criminal proceedings had been instituted in Peru since it was the public prosecutor who instituted criminal proceedings, albeit at the behest of Congress, and the respondent”s conclusions were not of themselves binding upon him.

The respondent in reply submitted that criminal proceedings had been instituted because the appointment of the respondent was an essential first step in those proceedings.

Held, allowing the appeal:

(1) Since the conclusions of the respondent did not bind the judiciary but were merely recommendations to Congress, the respondent was no more than a commission mandated to make enquiries preliminary to an administrative or judicial decision. Consequently, the respondent was not a tribunal and the court had no jurisdiction to entertain an application from it pursuant to the Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978 (page 400, lines 4–25).

(2) In any case, although the appointment of the respondent might have been the first stage in investigating whether to institute criminal proceedings, all such proceedings in Peru were instituted by the public prosecutor. Since there was no evidence that he had done so in this case, it followed that criminal ‘proceedings’ had not ‘been instituted’ as required by the Evidence (Proceedings in Other Jurisdictions) (Cayman Islands) Order 1978, Schedule, s.5, and for this reason too the Grand Court had no jurisdiction to entertain the application (page 400, line 30 – page 401, line 7; page 401, lines 20–26).

ZACCA, P.: On December 12th, 1994, we allowed this appeal and
promised to put our reasons into writing. This we now do.
15	On February 13th, 1989, a contract was entered into between an Italian
consortium and a Peruvian government organisation for the Lima Electric
Train Project. It is alleged that certain Peruvian officials, including a
former President of the Republic of Peru, Mr. Alan Garcia, corruptly
received payments of money in relation to the project.
20	In Peru, an ordinary criminal action is instituted with an accusation filed
by the public prosecutor before a judge of the Criminal Court. When
charges are laid, the judge issues a resolution either opening the
investigative process or dismissing it. During the investigative stage, the
judge directs the gathering of evidence as well as ascertaining the liability
25	of the accused person or persons. Once the preliminary investigation is
over, the judge and the public prosecutor prepare reports which are
considered by the Criminal Branch of the Superior Courts which decides
whether a public hearing shall commence. Three judges determine the
guilt or otherwise of the accused person or persons.
30	Criminal proceedings have been instituted in the Peruvian courts against
certain individuals for allegedly corrupting high-ranking state officials in
connection with the Lima Electric Train Special Project.
The Constitution of Peru, in art. 99, provides that it falls to the Standing
Committee of the Congress to determine whether criminal charges against
35	high state officials, including the President or the former President of the
Republic, shall proceed to trial before the Supreme Court. Provision is also
made for the Congress to commence investigation into matters of public
interest.
Article 97 states:
40	‘The Congress may initiate an inquiry into any matter of public
interest. It is mandatory to appear, upon their request, before the
committees charged with such inquiries, subject to the same
sanctions as in judicial proceedings.
For the implementation of their purposes, said committees may
45	have access to any information, which may involve the lifting of

banking secrecy and tax confidentiality, with the exception of
information that may bear on intimate personal matters. Their
conclusions do not obligate judicial organs.’
It appears therefore that art. 97 deals with the investigation of any
5	matter of public interest, whereas art. 99 deals with the standing
committee determining whether criminal charges should commence
against high officials including the President of the Republic or a former
President.
Article 100 provides:
10	‘It is the responsibility of the Congress, without participation of its

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