JC/97/1708
Neutral Citation Number: [1997] EWHC QB 320 
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Date: Tuesday, 16th December 1997.

Before:
Mr Justice Popplewell

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FIRST AMERICAN CORPORATION et al

and

SHEIKH ZAYED BIN SULTAN AL‑NAHYAN et al

-v-

CLARK M. CLIFFORD et al

and

FIRST AMERICAN CORPORATION et al

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(Transcribed by Harry Counsell & Co., 61 Carey Street, London WC2A 2JG.   Telephone 0171-242-9346)

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J U D G M E N T

MR	JUSTICE POPPLEWELL:  In this case the District court for the District of Columbia, have issued three letters of request to this court to have some intended witnesses examined orally and one witness to produce certain documents.
		The background to the case can be shortly stated. The plaintiffs are an American Corporation and have brought a civil action against Sheik Zayed Bin Sultan Al/Nahyan and other defendants in the United States court. (The Zayed Action). The basis of the claim which is in excess of US$500m is that the defendants assisted Bank of Credit and Commerce International (BCCI) to acquire and maintain control of First American by acquiring nominee shareholdings in its holding company (CCAH). This was in violation of various United States laws. In the result First American was liquidated. In the Zayed action there were some 30 defendants. They are sued on the basis that they were party to the illegal acts of BCCI.
		First American are defendants in a second action brought by some of the defendants who seek an indemnity from First American for the fees and costs they are alleged to have incurred in defending criminal prosecutions in the United States relating to their involvement in the affairs of BCCI and First American. This gives rise to substantially the same questions as in the Zayed Action.
		The intended witnesses who are within the jurisdiction, are Mr. Cowan, Mr. Chapman and Mr. Hoult whom the First American require to be examined on oath. In the case of Mr. Cowan only, First American also sought an order that documents be disclosed but this is no longer pursued.
		The nature of the litigation is such that the estimated trial length is said to be one year. There are on‑going proceedings in this jurisdiction brought by the liquidators of BCCI against their auditors and accountants Price Waterhouse and Ernst and Whinney. That action has reached the discovery stage. Preparation for that has been going on for two years and final lists of documents are not due to be served until June 1998. In the instant proceedings it was ordered that all statements should be ready by the end of October 1997. That date has been extended until June 1998.
		The involvement of the three intended witnesses can be shortly stated. Price Waterhouse UK (PW UK) were not involved with BCCI. However, Price Waterhouse (Cayman Islands) and Price Waterhouse (Luxembourg), were involved in the audit of the accounts of BCCI Companies Incorporated there and PW UK assisted those companies. The involvement of PW (Cayman Islands) was from 1985 and of PW (Luxembourg) from 1987 and ceased in 1991.
	Intended Witnesses
		The involvement of the three intended witnesses is deposed to by Mr. Thompson on behalf of the plaintiff. "Price Waterhouse were the auditors of BCCI Overseas, a company incorporated in the Cayman Islands from inception in 1975 and of BCCI SA and BCCI Holdings and their subsidiaries from 1987. They acted as the auditors for the entire BCCI group until the bank collapsed in June 1991. From about 1986 the principal supervisory responsibility for the audit of BCCI overseas, the audit of the BCCI Group from 1987 onwards and other engagements of Price Waterhouse in connection with BCCI rested with Mr. Hoult and Mr. Cowan who were partners of Price Waterhouse. Mr. Chapman who at material times was employed by Price Waterhouse as Senior Manager, played an important role in the audit work carried out by Price Waterhouse in relation to BCCI. He is presently a partner in Price Waterhouse. First American contend that Mr. Cowan was the lead Price Waterhouse engagement partner and worked closely with Mr. Chapman who was junior to him. Mr. Hoult was more senior than both of them and was responsible for client liaison."
		Miss Leydecker has deposed on behalf of the intended witnesses in relation to the individual part played by them. "Mr. Cowan first became involved in work relating to BCCI in January 1986 in respect of the 1985 audit of the Financial Statements of Overseas. He assisted PW (Cayman) in that audit and did so again for 1986 and in each subsequent audit until BCCI closed. In 1987 when PW (Lux) became the auditors of SA Holdings and the Group Mr. Cowan became an employee of PW (Lux) and assisted them in that role by becoming the principal engagement partner in respect of PW (UK) role in the co‑ordination of the audit of the consolidated financial statements of the BCCI Group. He continued in that capacity until the 5th July 1991. Mr. Cowan has not been a partner in any Price Waterhouse firm since April 1992 when he left to become Group Finance Director of Jardine Matheson Holdings Limited in Hong Kong.
		"Mr. Chapman was a senior manager of PW (UK) team assisting PW (Cayman) in their audit of the 1986 financial statements overseas and continued in that role until July 1989. He also assisted PW (Lux) in the coordination of the audits of the Consolidated Financial Statements of the BCCI Group from mid 1987 until July 1989. Mr. Chapman became a partner in PW (UK) in July 1989. From October 1989 until July 1991, he was seconded to Price Waterhouse Middle East firm but continued to work on audits of the BCCI Group. In November 1990 he became a member of the investigating committee.
		"Mr. Hoult has been a partner in PW (UK) since 1967. Between 1987 and 1991 he was the Senior Client Partner of the PW (UK) team responsible for the co‑ordination of the audits of the Consolidated Financial Statements of the BCCI Group. Mr. Hoult also became an employee of PW (Lux) in 1987."
	The nature of the litigation.
		The facts giving rise to the allegation in this litigation are summarised in Mr. Thompson's affidavit.
		"Under US law persons must receive the approval of US Bank Regulators before it can acquire majority control of a US Bank. In approximately 1980 BCCI which did not receive or require such approval, obtained illegal ownership of First American a US Bank through a series of fictitious loans to nominee shareholders of Credit and Commerce American Holdings NV (CCAH) the ultimate holding company for First American. When this fraud was uncovered BCCI and its accomplices were indicted by the US Authorities in New York and Washington, and in some cases charged by the Federal Reserve with civil violations. In particular BCCI was indicted for criminal violation of banking law in the US Court and in the Supreme Court in New York. BCCI pleaded guilty to both indictments and was required to forfeit all its US assets including its unlawful interest in First American via the CCHA shares.
		"In the Zayed action First American contends that some of the defendants knew that BCCI illegally owned First American through a series of loans to nominee CCAH shareholders, who pledged their CCAH stock as security and that the defendants conspired with BCCI to implement this illegal scheme. It is contended that BCCI was forced to use this nominee structure because of the US legal prohibitions referred to on unapproved bank ownership and because of the need to generate 'interest' from the 'loans' to generate fictitious profits 'in the wake of significant losses incurred by BCCI in its treasury operations in 1981 to 1986'. First American contend that the existence of the nominee relationships was known to the defendants in the Zayed action and that some of the defendants also knew of other BCCI frauds involving First American, such as the National Bank of Georgia transaction and BCCI's dealings with General Noreaga.
		"In addition to BCCI's illegal ownership of First American, First American was damaged by BCCI's other frauds. For example BCCI used First American to launder the drug money deposited with BCCI by Panamanian Dictator Manuel Noreaga resulting in a law suit filed against First American seeking US$75m in damages. BCCI also illegally owned National Bank of Georgia through its nominee Ghaith Pharaon and caused First American to purchase National Bank of Georgia at an inflated value so that Pharaon could repay loans he owed to BCCI. As a reward for defendants Clifford and Altman for causing First American to purchase the National Bank of Georgia, BCCI arranged for them to purchase shares of First American's holding company on extraordinary favourable terms resulting in substantial profits".
	The relevance of the evidence sought.
		The evidence and purpose of the evidence being sought from the intended witnesses is set out in the letters of request and in exhibit A. They are identical in respect of each intended witness.
		"Evidence to be obtained or other judicial act to be performed. The United States District Court for the District of Columbia seeks assistance in compelling the appearance of Christopher I Cowan to De examined on the subjects described in Exhibit A, and to produce the documents requested in Exhibit B. Mr. Cowan was a partner in Price Waterhouse and in that capacity was involved in BCCI audits and other work for BCCI from 1985 through 1991.
	Purpose of the evidence of judicial acts sought.
		"Christopher I Cowan is not a citizen or resident of the United States and thus cannot be compelled to testify in person at the trial of these actions. However sworn testimony of Mr. Cowan pursuant to letter of request is admissible evidence and will be offered at trial".
		During his final submissions Mr. Hochhauser Q.C. was prepared to delete or amend a number of the items below and I have marked those so deleted or amended in red.
	Exhibit A schedule of requested testimony.

	1.	The audits conducted by Price Waterhouse for BCCI or International Credit and Investment Company Overseas Limited (ICIC) and any related entities for each of the following years, 1982 ‑ 1990.

	2. 	Investigations, reviews or enquiries other than the audits referred to in topic No. 1 conducted by Price Waterhouse during years 1986 through 1991 into BCCI's deteriorating financial condition, its relationship to Credit and Commerce American Holding NV (CCAH) and its relationship to ICIC.

	3. 	The losses BCCI Central Treasury Division incurred from the early 1980's through 1986 and the circumstances surrounding the subvention used to cover certain such losses in 1986.

	4.	BCCI's termination of the accounting firm of Ernst and Whinney.

	5.	Price Waterhouse's assistance to BCCI and or United States Council for BCCI from 1988 to 1990 regarding BCCI's compliance with the worldwide monetary laundering laws and other banking regulations.

	6.	BCCI's banking relationship with Manuel Noreaga.

	7.	Loans by BCCI to defendant Ghaith R.Pharaon to purchase shares in National Bank of Georgia, Independence Bank, Atok Oil Company and/or Finance and Investment International Limited.

	8. 	Studies or analyses conducted by Price Waterhouse on the valuation of CCAH shares and communications with BCCI on that subject.

	9. 	CCAH share transactions funded and/or orchestrated by BCCI or ICIC including the following: -

		a.	The acquisition of CCAH shares by defendants Clifford and Altman in 1986 including the con‑recourse loan from BCCI to Clifford and Altman to purchase the shares and the agreement to pledge those shares to BCCI.

		b. 	The acquisition of CCAH shares by defendants Clifford and Altman in connection with the CCAH share rights offering in August 1987 including the con-recourse loans from BCCI to Clifford and Altman to purchase the shares and the agreements to pledge those shares to BCCI.

		c. 	The transfer of CCAH shares held by Clifford and Altman to defendants Mohammed Mahmoud Hammoud on or about March 11th 1986 and the source of funds provided to Clifford and Altman in connection with that transfer.

		d. 	The CCAH share transactions funded or orchestrated by BCCI or ICIC in connection with the tender offer for shares of Financial General Bank shares in March 1982 and the share rights offerings occurring in August 1982, December 1983, July 1986, August 1987 and July 1989, and

		e. 	BCCI's role in transfers of CCAH stocks among CCAH record share holders.

	10. 	BCCI's plan for a merger or other business combination of BCCI and First American.

	11. 	The adequacy of documentation covering the loans made by BCCI to record shareholders of CCAH.

	12. 	The relationship between BCCI and the record shareholders of CCAH including the following.

		a. 	Loans made by BCCI or ICIC to the record shareholders of CCAH.

		b. 	The pledge of CCAH shares by record shareholders of CCAH to BCCI or ICIC.

		c. 	Signed agreements between BCCI or ICIC and the record shareholders of CCAH.

		d. 	Agreements between BCCI and the record shareholders of CCAH that loans were non‑recourse.

		e. 	Guarantees by BCCI or ICIC to cover principal and or interest payments on loans to the record shareholders of CCAH to purchase CCAH shares and

		f. 	Powers of Attorney by record shareholders of CCAH authorising ICIC, BCCI, defendant Abidy, defendant Naqvi and or other ICIC or BCCI representatives to vote, sell or otherwise dispose of interests in CCAH shares.

	13. 	Loan confirmation requests directed to the record shareholders of CCAH during the period 1982 to 1991 and the responses of the record shareholders of CCAH.

	14. 	The investigation initiated in 1989 by the Office of the District Attorney for the County of New York (DANY) into BCCI and its relationship with inter alia First American.

	15.	BCCI's participation in CCAH's purchase of the National Bank of Georgia from defendant Ghaith R. Pharaon.

	16. 	Price Waterhouse' involvement in and response to any investigation of BCCI initiated by the United States Senate Sub-committee on Terrorism, Narcotics and International Operations of the Committee on Foreign Relations in 1988 through 1991.

	17. 	Meetings attended by and other communications between members or employees of Price Waterhouse on the one hand and the United States Council for BCCI on the other, which occurred during the period from January 198 to April 1991 concerning any of the subjects listed in paragraphs 1 ‑ 16 and 18. above

	18. 	Meetings attended by and other communications between members or employees of Price Waterhouse on the one hand and BCCI or ICIC officers and directors on the other, concerning any of the subjects listed in paragraphs 1 ‑ 17.

		It is contended on behalf of the plaintiff, that each witness has relevant evidence to give on each of the topics identified in exhibit A.
	In particular
		(a)	evidence as to the genuineness of the CCAH loans, including evidence on pervasive indicia fraud, exhibited by those loans such as the absence of adequate loan documentation whether interest was paid and whether satisfactory security arrangements were in place.

		(b) 	Evidence as to the connection between BCCI management and a group of companies and foundations operating under the name ICIC, such as ICIC Overseas, ICIC Foundation UK, ICIC Foundation (Cayman) and Associated entities collectively called ICIC. First American contends that ICIC was controlled by BCCI and used the fund loans to fund among others the CCAH nominee shareholders and Ghaith Pharaon, the nominal owner of the National Bank of Georgia. ICIC was generally used to manipulate accounts and disguise the true financial position of the BCCI group. Price Waterhouse were also the auditors of virtually all of ICIC from their foundation until their collapse with BCCI in 1991. The auditors have knowledge of the loans and transactions between ICIC, BCCI and defendants and can provide evidence concerning the details and the genuineness of those transactions and similar issues."

		(c)	The Treasury losses in 1981 and 1986 referred to above, wiped out a large portions of BCCI stated capital. Mr. Naqvi the BCCI executive with supervisory authority over treasury operations has testified that in order to replace the lost "profit" generated by its treasury operations BCCI began to use the CCAH loans to generate profits for the bank. The treasury losses ended BCCI's plan to merge First American into BCCI or vice versa. In addition the losses were partially offset by a bridge loan fraudulently provided by the Moktoum defendants. The Price Waterhouse partners involved will have evidence among other issues as to the cause and of the extent of treasury losses. The effect of the losses and the absence of treasury profits on BCCI's financial conditions, whether losses were fraudulently covered by a bridge loan from the Moktoums and the extent to which the lost profits were replaced by the recording of fictitious profits in the CCAH loans.

		(d) 	Evidence as to the effectiveness or otherwise of the anti‑money laundering and compliance programme created in the wake of the indictments of General Noreaga and BCCI and the extent which the relevant regulatory bodies were deceived by BCCI and its accomplices.

		(e) 	Evidence as to BCCI's relationship with General Noreaga including its use of BCCI accounts at First American, to launder his money which it is contended caused damage to First American. It is further contended that some of the defendants knew of these relationships and did not disclose them to First American. Had they done so First American could have stopped its accounts being used for money laundering.

		(f) 	Evidence as to Ghaith Pharaon's involvement in frauds perpetrated by BCCI including its illegal ownership of National Bank of Georgia and Independence Bank, his loans from BCCI and ICIC and how those loans were repaid when First American purchased National Bank of Georgia.

		(g) 	Evidence of the witnesses knowledge as to the extent to which evidence subpoenaed by the Kerry Committee was improperly withheld by BCCI at the expense of First American and the extent to which the defendants knew of such improper withholding.

		(h) 	Evidence from the witnesses concerning the extent to which Price Waterhouse were retained as worldwide auditors to BCCI after it determined the true relationship between CCAH and BCCI and between ICIC and BCCI to the extent to which the conclusion for each on such matters were discussed with any of the defendants and the extent to which Price Waterhouse's knowledge affected the merger plans between CCAH and BCCI which were known to defendants."

		In the light of the alteration to the items in schedule A it is clear that not all the points made above are necessarily good ones. In essence the evidence of the intended witnesses is required to prove that the purported loans made by BCCI to certain defendants in the U.S. actions were nominee arrangements whereby BCCI became owners through CCAH of shares in First American were fictitious and that the intended witnesses knew from February 1987 at least, and in any event before November 1990, that these loans were a disguised nominee arrangement as described. This would counter a defence of Clifford and Altman that if Price Waterhouse did not know this it could not be found that they must have known it.
		Further that BCCI used ICIC to fund what were BCCI's nominee shareholdings in CCAH and the National Bank of Georgia and that ICIC was part of BCCI and not a separate entity. They could also authenticate BCCI's internal documents received by Price Waterhouse witnesses at the time they were generated, and authenticate Price Waterhouse documents which the plaintiffs seek to introduce into evidence at the trial.
		It is further contended that Clifford and Altman were not the only defendants and that there was a continuing obligation on Price Waterhouse. Thus the continuing state of arrears during the period when the witnesses played a significant role is important and the fact that the right issues caused further drawdowns. Therefore the fact that they were not present is irrelevant.
		Mr. Hochhauser Q.C. does not seek to avoid a problem created by the pleading. He accepts that the pleading which now dates from 1993 does not allege that Price Waterhouse were aware of the fraud being perpetrated but it is open to the plaintiffs to make the allegation at the trial. He maintains that it is part of his case that Price Waterhouse were aware of the fraud, did nothing about it and therefore were strictly a party to a fraud.
	The law.
		This is not seriously in dispute. The applications are made by the plaintiff pursuant to Order 70 Rule 2. The United States Court seeks international judicial assistance pursuant to the Hague Convention 1970 and the Evidence (Proceedings in Other Jurisdictions) Act 1975. Letters of request in the instant case have been issued pursuant to Section 2(1) of the 1975 Act.
	Section 2(1) reads:-
		"Where application is made to the High Court... for an order for evidence to be obtained in the part of the United Kingdom in which it exercises jurisdiction and the court is satisfied 

		(a)	that the application is made in pursuance of a request issued by or on behalf of a court or tribunal ("The requesting court") exercising jurisdiction in a country or territory outside the United Kingdom and 

		(b) 	that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated, 

		the High Court... shall have the powers conferred upon it by the following provisions of this Act."

	Section 2 reads:-

		"(1) Subject to the provisions of this Section the High Court... shall have power on any such application as is mentioned in Section 1 above, by order to make such provision for obtaining evidence in the part of the United Kingdom in which it exercises jurisdiction as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made, and any such order may require a person specified therein to take such steps as the court considers appropriate for that purpose."

	Sub‑section 2:-

		"Without prejudice to the generality of Sub‑section 1 above, that subject to the provisions of this Section, an order under this Section may in particular make provision (a) for the examination of witnesses either orally or in writing, (b) for the production of documents."

	Section 2 sub‑section 3 and 4 contain limitations. Sub‑section 3 reads:-
		"An order under this Section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purpose of civil proceedings in the court making the order (whether or not proceedings of the same description as those to which the application for the order relates; but this sub‑section shall not preclude the making of an order requiring a person to give a testimony either orally or in writing, otherwise than on oath where this is asked for by the requesting court.)

	Sub‑section 4 reads:-

		"An order under this Section shall not require a person 

		(a)	to state what documents relevant to the proceedings to which the application for the order relates, are or have been in his possession custody or power, or 

		(b) 	to produce any documents other than the particular documents specified in the order as being documents appearing to the court making the order, to be or are likely to be in his possession, custody or power."

		The court is precluded from making any order in aid of proceedings in a foreign jurisdiction which it could not make in aid of its own proceedings and precludes the court from ordering the production of any document other than particular document specified in the order. The result is that effect will not be given to a letter of request which contemplates or is liable to be used for the pursuit of a line of enquiry which may enable some allegation of fact to be made. Thus "a roving enquiry by means of examination or cross‑examination of witnesses which is not designed to establish by means of their evidence allegations of fact which have been raised bona fide with adequate particulars but to obtain information which may lead to obtaining evidence in general in support of a party's case" will not be allowed.
		The principles on which the Court acts are set out in a number of authorities. In Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 Lord Wilberforce said at 612:-
		"Following the spirit of the Act (of 1975) which is to enable judicial assistance to be given to foreign courts, the letters rogatory ought to be given effect in so far as possible."

	At page 634 Lord Diplock said:-

		"The English court cannot be expected to know the systems of civil proceedings of all countries from which requests for an order under the Act 1975 may come. It has to be satisfied that the evidence is required for the purpose of civil proceedings in the requesting court, but in the ordinary way in the absence of evidence to the contrary it should in my view, be prepared to accept the statement by the requesting court, that such is the purpose for which the evidence is required... I think the court should hesitate long before exercising its discretion in favour of refusing to make an order unless it was satisfied that the application would be regarded as falling within the description of frivolous, vexatious or an abuse of the process of the court."

	At page 654 Lord Keith of Kinkell said:-

		"Any letters rogatory should be approached in the spirit that they should receive effect to the fullest extent possible under our law. In the face of a statement in a letter rogatory that a certain person is a necessary witness for the applicant, I am of the opinion that the Court of request should not be astute to examine the issues in the action and the circumstances of the case, with excessive particularity for the purpose of determining in advance whether the evidence of that person will be relevant and admissible. That is essentially a matter for the requesting court. Should it appear necessary to apply some safeguard against an excessively wide ranging examination that can be achieved by making the order for examination, subject to a suitably worded limitation."

		In The State of Minnesota v Phillip Morris Inc. CA 30.7.97 unreported the court declined to give effect to the letters of request primarily on the ground of uncertainty, but Lord Woolf M.R. said at page 10:-
		"That situation apart [Fishing] the approach of this court and other courts in this jurisdiction will be to seek to assist a foreign court wherever it is appropriate. For that reason the courts will seek to give effect to a letter of request wherever this is practical. Comity between jurisdictions demands no different an approach."

		Lord Justice Peter Gibson at page 24, referred to what Lord Denning MR. had said in Westinghouse:-
		"It is our duty and our pleasure to do all we can to assist that court just as we would expect the United States court to help us in like circumstances. Do unto others as you would be done by."

	and Lord Justice Otton at page 31 said:-

		"In the interests of comity the courts of each country should strive and be seen to strive to give effect to the requests of the courts of others. In the vast majority of cases the more so as the courts on both sides of the Atlantic Ocean are becoming increasingly accustomed to requests of this nature, this object is achieved comfortably within the jurisprudence of both countries and to the satisfaction of the parties."

		The first objection that can be made in this type of case is that the application is a fishing one. The question of what constitutes fishing was considered by Lord Justice Kerr in Re State of Norway's application No.1 [1987] QB 433 at page 482 and cited with approval by Lord Justice Woolf as he then was, in the Minnesota case (State of Minnesota v Morris C/A unreported July 1997).  Lord Justice Kerr said this:-
		"Although fishing has become a term of art for the purposes of many of our procedural rules dealing with applications for particulars of pleadings, interrogatories and discovery. Illustrations of the concept are more easily recognised than defined. It arises in cases where what is sought is not evidence as such, but information which may lead to a line of enquiry which would disclose evidence. It is the search for material in the hope of being able to raise allegations of fact as opposed to the elicitation of the evidence to support allegations of fact, which has been raised bone fide with adequate particularisation.

		In the present context fishing may occur in two ways. First the evidence may be sought for preliminary purposes such as a process of pre‑trial discovery in the United States. The fact that this is clearly unpermissible for the purpose of the Act 1875 is established in the Westinghouse case... But fishing is in my view, also relevant in another sense... It is perhaps described as a roving enquiry by means of the examination and cross‑examination of witnesses which is not designed to establish by means of their evidence, allegations of fact which have been raised bone fide with adequate particulars, but to obtain information which may lead to obtaining evidence in general support of a party's case."

	Lord Justice Woolf in the Minnesota case at page lO, said:-
		"If a court comes to a conclusion in this jurisdiction that an application is a fishing application, then the application will be refused... the consequence is that the Court does not have the power under the 1975 Act to make an order."

		At page 11 in the Minnesota case Lord Woolf M.R. referred to another aspect, namely uncertainty.
		"Furthermore because of the need to hold the balance between the requesting court and the witnesses who are to be examined, if the request is given effect, the court will not allow uncertain, vague or other objectionable requests to be implemented. A witness is entitled to know within reasonable limits the matters about which he or she is to be examined."

		Lord Justice Kerr said in Re Norways No.1 application at page 483:-
		"The scope of the present request is so wide I am left in no doubt that it goes far beyond the elicitation of evidence and contains a great deal of impermissible fishing".

	At page 491 Lord Justice Glidewell said:-

		"I agree with Lord Justice Kerr, the scope of the matters or questions about which the State in the present application is seeking information and evidence, is so wide that the questions intended to be asked will inevitably include a substantial number which will elicit information, which may lead to a line of enquiry rather than evidence in the proceedings themselves. Since such questions would be fishing they would be unacceptable."

	At page 20 Lord Woolf M.R. in the Minnesota case further said:-
		"The uncertainty point. I consider it is only possible to give one answer to the question as to whether or not letter of request is sufficiently certain... The letter of request in its terms is wholly unacceptable, it is too wide and uncertain in its scope and if the matter had ended there could only be one outcome to this appeal."

	At page 28 Lord Justice Peter Gibson said:-

		"However there is a further fatal defect in the letter of request in its failure to specify with sufficient particularity the matters upon which the witnesses are to be examined. As was held in Re Norways application [1987] 1 QB 433 where the matters, examination on which is requested by the letter of request to proceed, are too widely drawn it will lead to the inference that the letter of request is designed to elicit information which might lead to the obtaining of evidence rather than to establish allegations of fact and that would amount to an impermissible fishing expedition... The litigation in Minnesota is on a grand scale but the wider the scope of the matters on which examination is sought, the more necessary it is for particulars to be given so as to indicate to the witnesses the scope of the matters on which they can lawfully be examined. The Judge himself found the letters of request lacked specificity. To my mind that is obviously correct."

		Mr. Sumption Q.C. made the further following propositions of law:-
		"If a letter of request is in terms which will permit the examination to be used for both proper and improper purposes then effect cannot be given to it unless it can be cut down to limited to proper purposes... The English Court is entitled to limit the effect of a letter of request but only if (a) it is able to identify with precision what material is relevant when the request in court has ex hypothesi left it broad and imprecise and (b) the decisions can be made by applying a blue pencil to several parts of the document that do not radically alter its effect.. The English Court must make up its own mind about whether any particular letter of request is being used for a proper purpose."
		Those principles are clearly set out in the Westinghouse case, in the Re Norways application No.1 and in the Minnesota case and I hope I may be forgiven for not citing the various passages from the judgments and speeches upon which those propositions are based. I accept them.
		Mr. Hochhauser Q.C. relied on what Lord Justice Woolf as he then was said in Re Norways No.2 [1990] 1 AC 723 at 781:-
		"I have difficulty in applying the concept of fishing to a request that a witness should be required to give oral evidence. It is in English proceedings commonly used on applications for interrogatories and it may be said there is little distinction between oral cross-examination and written cross‑examination and the administering of interrogatories. But subject to the question of privilege what I would expect normally to concern the court when considering whether effect should be given to a request is whether the request is confined to seeking to obtain evidence which will be relevant to the proceedings in the foreign court. If it is, then normally that would be the end of the matter. Under the Act of 1975 the court does however, have a general discretion and if there are special circumstances making it important that the examination is confined the court can take the appropriate action... Subject to confidentiality I can see no possible objection to the latest request which is clearly designed to obtain evidence for use at the hearing. In this connection I should make it clear that what I have said already, which is of general application, is on the assumption that the evidence of the witness is required for the hearing. If the examination of the witness it sought as part of a pre-trial process, in other words is part of the process of discovery, then different considerations would apply and the principle of fishing could when appropriate be invoked. Here therefore I would regard Ralph Gibson LJ as indicating the correct approach rather than the majority on the first appeal who as I understand their judgments would extend the principles which I would regard as applicable to discovery to evidence required for the hearing itself."

		Mr. Sumption Q.C. points out that what Lord Justice Kerr and Lord Justice Glidewell said in Norway No.1 was a majority decision and that Lord Woolf M.R. subsequently in the Minnesota case effectively adopted what Lord Justice Kerr had said. Mr. Hochhauser Q.C. in reply pointed to what Lord Woolf M.R. had said in Minnesota at page 19:-
		"Looking at this matter as a whole I consider that the witnesses make out a significant case which indicates that letters of request viewed through the eyes of this jurisdiction is misconceived. However, I would not on that basis alone, determine this appeal adversely to the plaintiff. Reflecting the general approach that I have indicated, if there is doubt on this matter I should give the benefit of that doubt to the plaintiffs. I bear in mind that it is accepted that this is a case where the witnesses could give relevant evidence, I also bear in mind that it is accepted that if there was a properly drafted request an order would and should be made. In that event I would be reluctant indeed to send this letter of request back to the United States on the basis of technical grounds only."

		Given that this goes to jurisdiction I confess some anxiety about this passage.
		There are some conflicting views in the Court of Appeal about the extent to which fishing is a bar. But I come firmly to the view based on all the authorities to which my attention has been drawn, that fishing is not confined to discovery but is a ground for refusing a letter of request for oral examination of a witness. "Fishing" has two bases of which the width of the request is one part. Uncertainty is a discrete objection.
		These principles are comparatively easy to state, but often difficult to apply to the particular facts of a case. Nor do the particular facts of another case necessarily indicate the answer in the instant case.
		The starting point is the letters of request themselves. It is Mr. Hochhauser's submission
	(1)	That the letters of request do not have to specify the precise facts that are disputed in the litigation but because the issuing court is familiar with the details of the case, it is for them to decide whether the matters on which the witnesses are to be deposed, are in fact relevant to the issues that are likely to be raised in the litigation.
	(2) 	That it is accepted that evidence required for discovery  purposes is not admissible under the letters of request, but there are separate proceedings for discovery which has been openly sought and has been the subject of court proceedings in the United States at a crucial period of time.
	(3) 	It was by reason of the material obtained on discovery, that these three letters of request were addressed to the particular intended witnesses.
	(4) 	No discovery is being sought against Mr.Chapman or Mr. Hoult and the only documents sought from Mr. Cowan relates to evidence in previous proceedings.
	(5) 	When the application was made to the United States Courts by the plaintiff, there was no opposition from the defendants, nor from the intended witnesses, which is significant in that Price Waterhouse have retained United States lawyers since 1992.
	(6)	Documents are no substitute for oral evidence, more particularly in the instant case where fraud is alleged, and where the documents themselves may not be accurate.
	(7) 	Mr. Cowan has already given evidence on two occasions in litigation involving criminal trials in England in which he was a witness for the prosecution. Although the charge was somewhat different it nevertheless related to substantially the same matter.
	(7) 	Loretta Keene, also a Price Waterhouse witness, has given evidence in similar circumstances in the instant action, without objection from the lawyers acting for the intended witnesses.
		Mr. Sumption Q.C. submitted that having looked at the letters of request, the next matter is to consider what the issues in the case are and that can only be done by looking at the pleadings. He observes that pleadings at this stage do not condescend to the sort of particularity with which English Courts are familiar. That occurs after the pre‑trial discovery. The practice in America which is deposed to in the affidavits, is that the parties obtain discovery and depositions from witnesses. Having obtained that, they then make their specific allegations on which they seek to rely at trial.
		Jane Wessel who is a solicitor for the plaintiffs, swore in her third affidavit as follows:-
		"In order fully to appreciate the context on which the present applications are being made, it is important to understand the fundamental differences between the pleading rules applicable in this jurisdiction and those that apply to the U.S. Actions. Rule 8 of the F.R.C.P. requires what is generally known as notice pleading. Rule 8(a) of the F.R.C.P. provides that a pleading setting forth the claim for relief must give no more than "a short and plain statement of the claim showing that the pleader is entitled to relief". Rule 9 of the F.R.C.P. lists certain exceptional matters that must be pleaded with particularity. Thus not all of the specific facts that underlie the plaintiff's claim for relief are pleaded... Pleadings do not fulfil the same function under the F.R.C.P. as would be the case in English litigation. At the discovery stage of litigation under the F.R.C.P. the pleadings do not specify fully all of the particular facts that would make an issue between the parties.
		"Only after the close of discovery when the parties are typically required to file pre‑trial memoranda under Rule 16 of the F.R.C.P. listing the facts and issues that remain in dispute, are the specific factual issues that in the issue are fully identified. Yet it is during the discovery stage of proceedings that the parties are required under the F.R.C.P. to obtain any evidence pursuant to the Hague Evidence Convention they will require for use at trial. Mr. Dugan has confirmed that this is the case in respect of the U.S. actions that underlie the present applications".
		Mr. Sumption Q.C. submits that the plaintiff's claim is essentially contained in a few paragraphs starting at Paragraph 510.
		"510. On February 18th 1990 BCCI's auditors met with defendant Naqri at which time he admitted that fake documentation was prepared on some loans to deceive auditors and that the terms of certain loans to CCAH shareholders were not as reflected as the books and records of BCCI.
		"511. In February 1990 a Task Force comprised of several BCCI Executives was formed to review and report on certain loans and transactions, identified by BCCI's auditors in the course of the 1989 audit. In a report issued in April 1990, the Task Force admitted to the auditors that BCCI had provided over $850m to ten borrowers secured by 41% of the shares of CCAH..
		"513 ‑ By October 1990 Price Waterhouse was reporting estimated shortfall between the low amounts outstanding and the value of underlying CCAH shares on the order of S300m...
		"517 ‑ On April 18 1990 BCCI auditors issued a confidential report to the BCCI Board indicating a number of uncertainties surrounding the 1989 Financial Statements, including suspect lending to shareholders and other false and fictitious transactions. The auditors noted that "Loans secured on CCAH shares had increased to $87m compared to $702m a year ago, despite managements assurances the exposure would be reduced during 1989. The report described the extent of the problems as follows:‑ 'Our enquiries as confirmed by the Task Force have indicated that certain accounting transactions, principally booked in Cayman and other off‑shore centres have been either false or deceitful...'
		"518. At a BCCI board meeting on April 30th 1990 defendant Mazrui acting on behalf of the Abbu Dabi Group allowed management to lie about the obligations and true state of BCCI's account to BCCI's auditors...
		"519. It was to be nine months before the alleged misuse of the Ruling Families investment portfolio was revealed to BCCI's auditors or to the Bank of England".
		Thus what was being said, was, argued Mr. Sumption, that the defendants concealed the facts about the loan, which were not enforceable against the borrowers beyond the security. In effect that Price Waterhouse were aware of the loans, but only that they were non‑recourse. The suggestion therefore was that they were victims and not perpetrators. There is no allegation in the pleadings which run to some 687 paragraphs, that Price Waterhouse have been guilty of any improper conduct. This was first raised in an earlier memorandum to the Court relating to a different application for subpoenas which Mr. Hochhauser says will be part of his criticism of Price Waterhouse.
		Mr. Hochhauser does not accept this view of the pleading and in his reply drew my attention to a number of other passages namely paragraphs 378 ‑ 389 which relate to the July 1986 Share allocation of shares. Paragraph 463 which relates to the August 1987 Share allocation of shares and paragraph 484 which relates to the July 1989 Share allocation of shares.
		It is submitted by Mr. Sumption that the oral evidence to be used at trial is not the sole, or even the main purpose. That when one looks at the whole background of this application and grant, it is more apposite to discovery of documents than to taking of oral evidence. There is nothing he says in the letters of request to suggest that they were issued other than as part of the ordinary process of discovery. It is clear from the material before the U.S. Court which was made ex parte, that nothing was said about the difference between the exploratory basis of evidence and the evidential basis of oral evidence nor about an allegation of fraud. Price Waterhouse were not parties to the application, which was made ex parte, and was drafted by the plaintiffs lawyers.
		That submission gets support from the documents to which I have been referred and finds some support from the third affidavit of Miss Wessel at paragraph 16.
		Under Rule 26B(1) of The Federal Rules of Civil Procedure :-
		"Parties may obtain discovery regarding any matter not privileged which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defence of the parties seeking discovery or to the claim or defence of any party including the existence, description, nature, custody, condition and location of any books, documents or other tangible things and the identity and location of persons, having knowledge of any discoverable facts. The information sought need not be admissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence".

		It is of course, a condition precedent that the requesting court forms the view that the documents are relevant and for use at trial. But it is for the English courts, taking fully into account the necessity for comity in these matters to decide for itself whether that is the true position.
		What then is the relevance of the evidence which is sought to be obtained. I have already set out the relevance in so far as Mr. Thompson, a partner in the plaintiff solicitors firm, the first deposed and the submissions of Mr. Hochhauser. Miss Wessel in her third affidavit deposes as follows:-
		"I refer below to examples of evidence indicating the Price Waterhouse personnel involved in the audit of BCCI, in fact had some knowledge in relation to events predating their involvement, as indeed as one would expect to be the case.  (a) At the Gokall trial Mr. Cowan was himself shown and asked to comment on documents dating from as early as 1979, which he did.   (b) Mr. Cowan gave evidence during the course of the Gokall trial, that he was given a briefing by other Price Waterhouse partners concerning matters in relation to BCCI, when he became involved in BCCI's audits. (c) Further in Mr. Cowan's evidence in the Gokall trial, he states that when a new partner, Tim Charge, joined the BCCI team, he was briefed up by him over several meetings.  (d) On 23rd October 1996 First American took the deposition of Loretta Keene, a Price Waterhouse Senior Manager in the U.S. who reported directly to Mr. Chapman in relation to BCCI. Miss Keene stated that when she was assigned to the BCCI account in around September 1988 she was given a briefing from Mr. Cowan on the account."
		"It appears as a consequence that it was usual practice for new additions to the BCCI team, to be fully briefed up on matters relating to the account including information pre‑dating their appointment to the team. In fact Mr. Chapman in his evidence in R v Gokall said what when he started working on BCCI he was given a briefing by Mr. Fear, who was a Senior Manager of Price Waterhouse, in Grand Cayman. It was therefore reasonable to assume, that he and other relevant intended witnesses, had knowledge relating to events that pre‑date their personal involvement with BCCI, and First American should be permitted to enquire as to that knowledge, to the extent that Mr. Chapman or indeed any of the intended witnesses, lack personal knowledge on this or any other issue that is put to them during the course of the depositions, they will no doubt testify to that effect, as they did when giving evidence in the criminal trials of Mr. Iman and Mr. Gokall at the Central Criminal Court... "
		Miss Wessel further deposed :-
		"Two issues lie at the very heart of the U.S. action. First American has alleged that most of the defendants deny that the defendants in the U.S. actions who were purported shareholders of CCAH were actually nominees of BCCI's illegal ownership of CCAH. Secondly First American has alleged, and many of the defendants including in particular Clifford and Altman have denied, that defendants Clifford and Altman knew of these nominee relationships and more generally that CCAH which illegally owned and/or controlled by BCCI. Many of the remaining defendants, including Clifford and Altman, have asserted that if there were nominee arrangements as First American has alleged, they were unaware of them and they were unaware that BCCI illegally owned and/or controlled CCAH.
		It is not suggested as I understand it, that any of the Price Waterhouse witnesses can give first hand evidence that the defendants who were purportedly shareholders of CCAH were actual nominees of BCCI's illegal ownership of CCAH. What they may be able to do is give evidence at some time that they appreciated that the so called loans were no such thing.
		It is submitted by Mr. Hochhauser on behalf of the plaintiff, that their evidence is derived from personal observations of relevant facts. But it is very difficult to extract from the various affidavits what the direct knowledge is alleged to be.
		The second matter upon which the plaintiffs rely appears in Miss Wessel's third affidavit:‑ 
		"First American expects Clifford and Altman to rely in part on Price Waterhouse's alleged lack of knowledge of BCCI's wrongdoing to justify their own actions. This expectation is based upon the fact that these defendants explicitly argued that criminal prosecutions against them in the U.S. relating to their failure to uncover BCCI's fraud, should not proceed on the grounds that BCCI's auditors who had far greater access than Clifford Altman to BCCI's internal files, failed to uncover that fraud... The oral testimony of the intended witnesses as to the timing of their knowledge of BCCI's alleged wrongdoing will have a direct relevance to the validity of Clifford and Altman's defence.
		"It is clear that the plaintiffs have a vast quantity of disclosed documents, in excess of 2.5m pages. The plaintiffs further contend that they do not provide a substitute for intended witnesses evidence or for evidence of the knowledge of each of the intended witnesses themselves, nor do they provide necessary authentification in respect of the documents themselves for the purposes of the U.S. action."
		In her fifth affidavit, sworn three days before the hearing, Miss Wessel deposed :-
		"The evidence to be obtained from the intended witnesses is to counter Clifford and Altman's defence. They could not be assumed to have known of various matters concerning the nominee shareholders in CCAH if even Price Waterhouse's auditors with access to more material did not... I am informed by Mr. Dugan that he believes communications did in fact take place prior to November 1990, between the intended witnesses and certain of the defendants in the U.S. actions and their agents, in which intended witnesses referred to matters indicating their knowledge of BCCI's fraud... Mr. Dugan informs me there is evidence that other such communications also took place between the intended witnesses and Clifford and Altman and their agents. Further evidence of these communications from the intended witnesses is necessary to the counter defence is that First American anticipates will be asserted at trial by Clifford and Altman". The source of the information is not deposed to.
		In a document headed "Memorandum in Support of First American's petition to compel Price Waterhouse to comply with subpoenas" it was alleged "Price Waterhouse colludes with BCCI to conceal BCCI's fraud. Price Waterhouse's stonewalling and obstruction are also part of a long standing pattern of collusion with BCCI to conceal BCCI's fraud. Indeed without Price Waterhouse's collusion BCCI would have been closed long before 1991".
		A number of allegations are then made. It is pertinent to point out that this allegation of fraud was never mentioned to the U.S. Court in seeking the letters of request. It appears nowhere in the pleadings, nor was it mentioned in the affidavits. Miss Wessel deposes:-
		"First American's contentions relating to Price Waterhouse's knowledge of BCCI's fraud would be put to intended witnesses at their depositions. I submit that First American is entitled to question as to their knowledge of these highly significant events. Neither the Hague Evidence Convention nor the 1975 Act contained any provision making it improper to give effect to Hague Convention requests in which such questions will be posed and I submit that this is no proper basis on which to oppose these applications."
		It is difficult to know when the witnesses are called to give evidence (who will be the plaintiff's witnesses) whether it is going to be alleged that they were party to the fraud, whether they were innocent but negligent, what they did or did not tell Clifford and Altman. If these witnesses are going to be required to prove some facts relating to the fraud, and deny it, it is difficult to see what the purpose of it is except to discredit their evidence in advance, and to seek to establish from lines of enquiry some other allegations.
		The attempt to show the state of mind of these various witnesses is in my judgment irrelevant to any direct issue which has to be established in the case, unless the allegation is that they were party to the fraud. Absent any such allegation in the pleadings or in the affidavits, or in the submissions to the U.S. court, it is difficult to see the relevance of the witnesses state of mind.
		For all those reasons I am wholly unpersuaded that the evidence which is sought to be obtained is other than a fishing expedition.
		I consider the case under the head of "uncertainty". I look at the letters of request. While of course it is not right to make a comparison between one letter of request and another, it seems to me that the analogy of Norway 1 is very apt. The present letters of request deal with topics not with issues. They are exceedingly wide in scope, they cover a period which is very wide. I take one or two of the paragraphs at random.
		(3) The losses BCCI's Central Treasury Division incurred from the early 1980's through 1986 and the circumstances surrounding the subvention used to cover certain of such losses in 1986.
		It is difficult to see the relevance of that issue in relation to the witnesses, particularly having regard to the dates.
		(12) The relationship between BCCI and the record shareholders of CCAH including the following. A ‑ F.
		The area of enquiry in this aspect includes A ‑ F but is not limited to A ‑ F and is a wide ranging enquiry without the issue involved ever being identified or specified, either in relation to the participation or involvement of each of these three proposed witnesses or when this participation or involvement is alleged to have taken place.
		(17) Meetings attended by and other communications between Members or Employees of Price Waterhouse on the one hand and the U.S. Council for BCCI on the other, which occurred during the period January 1986 to April 1991 concerning any of the subjects listed.
		Again the issue is not dealt with specifically, it is enormously wide ranging and is clear from looking at the letters of request as a whole, that it clearly fails to condescend to any particularity which the English courts require.
		I have to stand back and take a broad view. The very width of the request and the uncertainty in relation to it leads me to the conclusion that this is a fishing exercise also under Lord Justice Kerr's second proposition and is too uncertain.
	The Limiting Process
		It is quite clear that the English Court can use a blue pencil and to some limited extent amend the requests so as to comply with the English procedure. Quite clearly a court should do so if it sensibly can, both to avoid further expense and difficulty and in comity with the American Court.
		But clearly there are limits to this. I adopt what Lord Woolf M.R. said in the Minnesota case at page 23:-
		"Those are topics of unlimited generality. I do not see how a witness can prepare himself and deal with matters that happened years ago in relation to questions of that sort. I think therefore on this third point the plaintiffs are in the greatest possible difficulty.  It is therefore necessary to consider whether this appeal should be allowed. If I thought by undertaking the exercise this Court could redraft the questions in a way which would be fair to both sides, although I would not have welcomed the task, I might have been prepared to embark upon it. However, Kerr LJ said in the Norway No.1 case, "I do not know how to undertake that exercise. With regret I have come to the conclusion that it is not for me or this court to undertake that exercise. That is a task which I must remit back to my American colleague so that he can address the matter again." I entirely agree with these sentiments which echo my own in the instant case.

		Finally I think it is fair to say in justice to the American Court that the difficulty which arises may have resulted from the way that the matter was presented to them by the plaintiffs' lawyers, without any assistance from the intended witnesses and without having the assistance of any expert evidence as to how the English Courts proceed on this sort of applicant.

		While I therefore echo and repeat the words of Lord Justice Otton in the Minnesota case as to how the Court of this country should strive to give effect to the request of the American Court, I have come to the clearest possible conclusion that this request cannot be given effect."

		For the sake of completeness Mr. Sumption Q.C. pointed out that there are customer injunctions and there is a problem of the Cayman Islands legislation. Section 4 of the Confidential Relationships (Preservation) Law requires a Court's approval to disclosure of confidential information.
		If I had found in favour of the Plaintiff I would not have found this point prevented the letter of request being complied with. I have no doubt that both these matters could be easily resolved.
		Finally may I add this. At the conclusion of the argument I said that I would reserve judgement and deliver it as soon as possible. Both parties indicated that whoever lost would appeal and the urgency is self evident. However Counsel indicated that as there might be some developments I should do nothing unless I heard further. On Friday last I was told that a judgment was required ‑ I have therefore had to prepare the judgment much more rapidly than I would have liked so that if necessary the parties can take the matter elsewhere without delay.
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