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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Ras Al Khaimah Investment Authority & Ors v Bestfort Development LLP & Ors [2015] EWHC 2926 (Ch) (16 October 2015) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2015/2926.html Cite as: [2015] EWHC 2926 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice The Rolls Building 7 Rolls Buildings London, EC4A 1NL
		16th October 2015

MASTER BOWLES:

1. By an application notice pursuant to Section 25 of the Civil Jurisdiction and Judgments Act 1982, the Claimants, which are all, in one form or another, entities of the government of the Emirates of Ras Al Khaimah, one of the Emirates forming the United Arab Emirates (UAE) sand which I am going to call RAK. They apply for wide ranging interlocutory relief by way of worldwide freezing injunctions and the appointment of receivers; in support of proceedings which have been commenced in the Republic of Georgia and which are, as I understand it, to be commenced in the UAE.
2. The application is brought in respect of a number of English registered LLPs, which I will call the LLPs, which are all said to be in the beneficial ownership of, or otherwise the creatures of, a gentleman called Mr. Mekadze, who it is alleged has, with others, fraudulently, or dishonestly, misappropriated money or property belonging to the RAK entities to the tune of $100,000,000 US. The claim brought against Mr. Mekadze is said to be in the sum of $42,000,000 and it is in that sum, as I understand it, that a freezing order is to be sought.
3. The application notice was issued in May of this year, and served in June. It initially came before Richard Spearman Q.C. on 18th June 2015, upon which occasion, but the not without some dispute, certain undertakings were given. The application was stood over to be heard over a number of days in the second half of November.
4. The application is hotly in issue. Mr. Mekadze has put in lengthy evidence, explaining and justifying all the matters against him, and contending, further, that the underlying claim, and this application are politically motivated by the RAK authorities and brought in response to his own proceedings, issued in Georgia, in which he seeks to set aside share transfers entered into by him in favour of three of the RAK entities on the basis that those transactions were entered into under duress. The duress in question was the arrest and imprisonment of Mr. Mekadze in Georgia in 2013, which imprisonment only ceased upon his entering into a plea bargain, under which the shares which he contends had originally been transferred to him by agreement with the RAK entities, by their agent a Dr. Massad, were retransferred to those entities.
5. The circumstances of Mr. Mekadze's arrest and imprisonment are, I am told, currently the subject of an application to the European Court of Human Rights.
6. In addition to the factual merits, Mr. Mekadze and the LLPs, challenge the sweeping relief sought under the Section 25 application.
7. Picking out the highlights, it is said that the conjunction of a worldwide freezing order and a receivership, in circumstances where there will have been no non-compliance with the freezing order, is novel; the moreso when it is not, as yet, suggested that the RAK entities have property rights in the assets of the LLPs, and where, therefore, the receivership, at least on its face, is to be not in relation to assets of the RAK entities but assets of the LLPs.
8. It is further said, given that it is common ground that the courts of Georgia and of the UAE, of which RAK forms a part, have no jurisdiction to give worldwide freezing relief, that that is in itself a strong discretionary reason why the UK court should not grant such relief.
9. It is said also that part of the relief sought, whereby the receivers sought to be appointed would be empowered to get in funds belonging to the defendants and currently believed to be held in bank accounts in Latvia and to do so, pursuant to powers of attorney, to be entered into by the defendants at the direction of the court is inappropriate where a freezing order would not be, as is conceded, enforceable in Latvia and would also have the effect of affording the RAK security for any judgment that they may obtain, long before such judgment has been obtained.
10. All of the foregoing is really by way of a preamble to a consideration of the application before me, which is an application, pursuant to CPR 25.12 and 25.13 (2) (a), that the RAK entities should give security for the costs of the Section 25 application in the sum of £500,000 and that the Section 25 applicant application should stand dismissed, or struck out, if security is not paid.
11. The 'gateway' ground upon which the application is based is not in contest. Three of the RAK entities are entities resident in RAK, the first Claimant being, in effect, the RAK sovereign fund. The three other entities are, as I understand it, Georgia subsidiaries of the RAK resident entities and reside in Georgia. Accordingly, none of the section 25 applicants reside in the UK jurisdiction or in any one of the EU or EEA areas.
12. The consequence of that is that jurisdiction exists whereby security can be granted, if and provided that it is just and equitable that such security be provided.
13. It is at this point in the analysis that the decision of the Court of Appeal, in Nasser v United Bank of Kuwait [2002] 1 WLR 1868, and the principles to be derived from that decision are brought into play. As appears hereafter, that decision and those principles are fundamental to the determination of this case.
14. In Nasser, Mance LJ explained that a provision such as that in CPR 25.13 (2) (a), while not in itself discriminatory could only properly be applied if the discretion vested in the court to decide whether or not to order security; or put another way, the decision whether it was just and equitable to order security was exercised, or made, in a manner which was not discriminatory and which did not place claimants, such as the Section 25 applicants in the this case, in a disadvantageous position as compared with residents in the EU the EEA or the UK, in regard to the grant of security, other than on objectively justifiable grounds, arising out of their residence outside the EU, EEA or UK and further, that those grounds should be grounds relating to the enforcement of the costs order in respect of which security was sought, given that it was the perceived potential difficulties of enforcement in jurisdictions outside the UK, EU or EEA which warranted the existence of a ground for the security, which would otherwise improperly discriminate between the two classes of residents; those in and those outside the EU, EEA and UK.
15. In the light of Nasser, it is the primary, indeed inevitable, submission of the LLPs, given that it is not suggested that any of the RAK entities are impecunious, or that for any reason other than that they are resident outside the EEA, EU or UK, they could be subjected to an order for security, that objectively justified grounds do exist in relation to the potential problems of enforcement in the countries in which the RAK entities are resident and have, or may have, assets and which, therefore, render it just and equitable to order security.
16. I add, parenthetically, that it is not suggested that the RAK entities have assets in the EU, EEA or UK. I add further that the security sought in this case is not, as Mance LJ put it in Nasser, a 'tailored' order, tailored to the potential additional cost of enforcement occasioned by the fact that the RAK entities and their assets are resident and to be found outside the UK, EEA or EU, but, rather, that what is sought is what might be termed 'full' security, albeit in a reduced sum from the full amount of costs which are said to be likely to be expended in resisting the Section 25 applications; full security being ordered to reflect the prospect that, by reason of the RAK entities residence outside the EU, EEA or the UK and by reason of the place at which their assets are to be found, the problems of enforcement justify such an order.
17. The secondary submission of the LLPs, subject, I think, to the court being satisfied as to the primary submission, is that other good reasons also exist which point in the direction of the grant of security. Those reasons are essentially two-fold.
18. Firstly, it is said that on their own evidence, the Section 25 applicants would not be adversely affected in their conduct of this litigation by an order for security. The RAK entities are all backed by RAK itself. The first claimant is, as I understand it, and as already stated, the RAK sovereign fund. There is accordingly, say the LLPs, no prejudice at all to the Section 25 applicants arising from the grant and security. Secondly, it is said that the merits of the Section 25 applicants are weak, having regard in particular to the width and extent of the relief claimed, and the novelty, it is said, of that relief or some of it and that that factor, too, points towards the grant of security.
19. The first of the matters raised is necessarily bound in with the question as to whether there are, in this case, objective ground for discriminating against a non-EU, EEA or UK resident in respect of security when compared with a resident within those areas. If there are not and if, therefore, the court is to order security against a wealthy non-EU, EEA or UK resident when it would not and could not do so as against a similar resident within the EU, EEA or UK, then that would be discriminatory and, for that very reason, as I see it, prejudicial.
20. More simplistically, to require even a wealthy person, or entity, to lodge half a million pounds as a condition of continuing litigation is in itself prejudicial to that person as taking its assets, at least to that value, out of circulation.
21. As to the second matter, I was rightly told that I should not, indeed could not sensibly adjudicate upon the factual merits of the application, nor within the compass of this application, have I been realistically able to adjudicate upon the legal points drawn to my attention by the UK entities. Nor would it have been right to do so.
22. The merits of a particular claim are only relevant to an application for security if either the merits are plainly very strong or plainly very weak. In the case of the very strong claim, that fact may well point against the grant of security, the court being able to say that the strong likelihood is that the claim will succeed, that a costs order in favour of the relevant defendant will, in all likelihood, therefore, never be made and, therefore, that the small risk of such an order does not warrant the grant of security. That position, or circumstance, could potentially arise even where otherwise it might be appropriate to order security on grounds relating to problems of enforcement.
23. In the opposite case, the weak case, the court may conclude that the weakness of the claim and the consequent likelihood that the claim will be lost does warrant, all other things being equal, the grant of an order for security.
24. In this case, however, all things are not equal. Even in a case where the merits are weak, the court cannot order security against a non-EU, EEA or UK resident where security could not be ordered against an EU, EEA or UK resident with an equivalently weak case, unless objective grounds exist to justify that discriminatory approach; those grounds being, as explained in Nasser, grounds relating to the potential, or expected, difficulties of enforcement.
25. I turn therefore to the question of whether such grounds exist, and to the question as to the burden to be satisfied by an applicant for security where security is sought upon such grounds. As to the latter I find myself in complete agreement with Hamblen J in Dumrul v Standard Chartered Bank [2010] EWHC, 2625 (Comm); namely that, as a matter of both principle and authority the authority being Nasser) the court needs to be satisfied that there is likely to be an obstacle, or burden, to enforcement, by which is meant, in accord with paragraph 62 of Nasser, that there is likely to be a substantial obstacle, or burden, to enforcement, and that a real possibility that such an obstacle or burden might exist is insufficient. The point of principle identified by Hamblen J is that a mere, or real, possibility that there might be a substantial obstacle or burden in respect of enforcement should not be sufficient to justify different treatment being applied to a resident outside the UK, EEA or EU, as compared with a person resident within those jurisdictions.
26. In this regard, I received after the hearing, but not in the course of argument at the hearing, a supplemental submission from Philip Marshall Q.C., who is the leading counsel for the LLPs but who did not appear before me at the hearing, challenging the approach adopted by Hamblen J in Dumrul and submitting, or suggesting, that that decision was per incuriam, a decision of the Court of Appeal in De Beer v Kanaar [2003] 1 WLR 38. De Beer v Kanaar was not an authority cited, referred to or provided to the court at the hearing. I say no more on this than that, as just stated, I consider the approach adopted in Dumrul to be correct. More to the point, however, is the basis, or the lack of it, upon which Mr. Marshall's submission is advanced. The context of that submission was a permission that I had given that the parties could put in written submissions limited to the question (dealt with later in this judgment,)as to whether, in respect of the enforcement of an order of the English court within the EU or EEA areas, it would be open to the respondent to oppose enforcement upon the ground of fraud. I made it specifically clear that my invitation for assistance on this point was not to allow re-argument of any other point.
27. In the light of that indication, I have to say that I regard Mr. Marshall's supplemental submission, in so far as it goes, as it does, beyond the invitation given as inappropriate and unhelpful. The submission I add, as well as raising, for the first time, a debate as to standard of proof, also purported to open up another matter not challenged at the hearing; namely, that a Georgian judgment would be enforceable in the English courts.
28. It seems to me that the proper approach, with respect to Mr. Marshall, is to disregard these additional submissions as coming too late in the day. Particularly on an application brought on urgently, because of the imminent hearing of the section 25 application, there must be finality. All of the matters now sought to be raised could have been raised at the hearing, but were not. Enough is enough.
29. Reverting, therefore, to the application of the test identified by Hamben J, it is, I think, not insignificant, albeit far from conclusive, that in his initial witness statement in support of this application and in reference to enforcement in Georgia, the LLP applicants' solicitor, Mr. Clayman, states, at paragraph 21 of his witness statement, that the materials he advances in support of the proposition that security is justified in this case by reason of the potential obstacles to, or burdens in respect of, enforcement, raise a clear possibility that the LLPs would face, as he put it, some difficulty in enforcing an award of cost in Georgia.
30. In regard to RAK, Mr. Clayman's conclusion in his first witness statement is that his clients were justified in having serious concerns with regard to enforcement in the RAK courts. His overall conclusion in that witness statement and which he invites the court to accept, is that it is reasonable to assume that his client might face, at the least, real difficulty in enforcing a costs order in the two relevant countries. At no point does he go so far as to say, in that witness statement, that it is likely, and the court can be so satisfied, that there would be substantial problems in either country in respect of enforcement.
31. In his second, responsive, witness statement, Mr. Clayman's conclusion in regard to Georgia is no more, having regard to his own expert evidence, as discussed later in this judgment, than that the recognition of a foreign commercial judgment remains uncertain. As regards RAK, Mr. Clayman takes a stronger position; namely, that enforcement will not be straightforward, maybe costly and time-consuming and is likely to require the merits underlying the judgment or order for which enforcement is sought to be reconsidered.
32. In regard to the evidence upon which Mr. Clayman's conclusions as to Georgia are based, two expert reports have been provided by a Professor Kereselidze in respect of Georgia law, together with a letter from Mr. Uplisashvili, a senior associate of a firm of Georgia lawyers, BLC Law Office.
33. As to RAK, Mr. Clayman relies upon the report of a Mr. Galadari, head of litigation at a Dubai law firm and, extraneously to any expert evidence as such, to concerns that he raises about the likely independence of the RAK or UAE judiciary in dealing with an application against the RAK entities to enforce a cost claim, given the close connection between the RAK entities and RAK itself; including in that regard to the Emir and his son, Sheikh Mohammed, who is the Chairman of the RAK judicial council and, as such, as I am told, akin to the administrative head of the RAK judicial system, both of whom are said personally to have had some connection with the matters in issue in this case.
34. Additionally, reliance is placed by Mr. Clayman upon comments made in respect of RAK in a Fitch Report dealing with the country's financial status in relation to debt default and to adverse reports pertaining to the RAK legal system, to be found in Amnesty reports dealing with political dissidents. As to the former, Mr. Clayman highlights the Fitch Report reference to the weakness of institutional checks on the executive, when compared with other states. As to the latter, Mr. Clayman draws attention to the political dimension that he says attaches to Mr. Mekadze and through him to the LLPs.
35. In this regard, Mr. Clayman is also able to pray in aid, as explained in Mr. Galadari's report, the existence within the RAK and UAE of specific provisions regulating proceedings concerning the RAK state and against the RAK government; in particular, proceedings against the RAK government (government being defined as including bodies owned by the government of RAK and potentially therefore all or some of the RAK entities) must be first submitted to the Office of the Legal Consultant of the RAK government and cannot come before the court without his consent.
36. A further problem exists in respect of enforcement against the RAK entities, namely that public property owned by one of the Emirates, including therefore property of RAK, cannot be attached. If this rubric extends to assets of RAK owned entities, that would plainly be highly relevant in this case.
37. It is having regard to these circumstances, as well as his concern that an attempt to enforce the cost order against the RAK entities in the UAE, or in RAK, would require the UAE or RAK courts to reconsider the underlying merits of the claim, that Mr. Galadari is led to opine, as a likelihood, that the UK entities would face considerable difficulties in enforcing a costs order in RAK/UAE, and that they might well be faced with a complete impossibility in this regard.
38. As a final plank in his argument, in respect of RAK, Mr. Clayman prays in aid prospectuses issued by the RAK government itself, in respect of RAK government bonds, known as Sukuks, in which prospective investors are warned that the UAE courts are unlikely to enforce an English court judgment without first examining the merits of the claim to which they may simply apply UAE law.
39. Before turning to the RAK entities' response to this material, I should point out in passing that although both parties have deployed extensive expert evidence, neither party has at any stage sought the court's permission in this regard. At the hearing I gave permission to both sides but could not forebear from mentioning that CPR 35 applies as much in interlocutory proceedings as in final proceedings and that the need for permission should not therefore be overlooked.
40. Without any form of formal concession, the RAK entities did not in any serious way join battle in respect of problems of enforcement likely to exist in RAK. Their response to the application, put at its simplest, was that the RAK entities had ample assets in Georgia, that it was not established that there was likely to be serious, or substantial obstacles, or burdens, in respect of enforcement in Georgia and that, since any order for costs against the RAK entities in respect of a section 25 application would give rise to a joint and several liability against all the RAK entities, wherever resident, then, providing that enforcement could take place in Georgia, as against the assets of one or other of the RAK entities, resident or having assets in Georgia, without the likelihood of substantial obstacles or burdens arising, there was no occasion for the grant of security. On that footing, which I regard as conceptually sound, the key question, it was submitted, was as to the likelihood of serious problems or delays in enforcement arising in Georgia.
41. I am content to consider the matter on that basis, and on the assumption, for this purpose, that it would be likely that enforcement in the RAK would run into serious difficulties; not least the apparent bar on enforcement against property owned by the RAK state.
42. It is not in doubt but that at least three of the RAK Georgia resident entities own significant assets in Georgia. Although, given the LLPs, or Mr. Mekadzes' distrust of the RAK entities, a question has been raised as to those assets and a suggestion has been made that some or part of the entities' land held in Georgia is on the market, it does not seem to me to be seriously suggested that there are not assets in Georgia to meet any costs order which might be made against the section 25 applicants, should their application fail.
43. The first Claimant, an RAK resident, is said to own land and buildings in Georgia to a value in excess of US$13 million. The fifth Claimant and the sixth Claimant, both Georgia resident entities, own respectively the Tbilisi Mall, a modern shopping centre in Tbilisi, said to have a net value of US$42 million and the Sheraton Metechi Palace Hotel with a book value of US$27 million. The sixth Claimant, likewise as I understand it, Georgia resident, owns Poti Airport in Poti, Georgia with a value of some $10 million. Although the point was made that those figures might not reflect obligations to the Georgia authorities, it is manifest that if enforcement is available in Georgia, there are more than adequate assets to meet any order for costs that could conceivably be made in this case.
44. Under the Georgian Civil Code, recognition of foreign judgments is dealt with primarily under Article 68. That article provides that Georgia will recognise legally effective decisions of foreign courts, but then, rather in the manner of the Lugano and Brussels Conventions, provides further for a number of derogations. Relevant to this case are said to be derogation 2(e), which applies where the foreign country in question (i.e. England) does not recognise judgments from the Georgian court; 2(f), where proceedings are pending in the Georgian court between the same parties on the same issues and on the same basis and, potentially, 2(g), where the decision contradicts the basic legal principles of Georgia. As to (e), the RAK entities submit that there is no question but that Georgian judgments can be enforced in the English courts. As set out earlier, that submission was not put in contest at the hearing.
45. What is said however, by the LLPs, is that there is a body of Georgian law which demonstrates that in the absence of some bilateral, or other treaty arrangement, and, in this case, there is none, recognition and, hence, enforcement of a foreign judgment will not be granted. That contention is put in issue by the RAK entities, who point to four cases of foreign judgments recognised in the Georgian court in circumstances where either there was no bilateral treaty or the decision was not based upon the existence of such a treaty.
46. In the other camp, the LLPs make the point that the four cases relied upon by the RAK entities are divorce cases, to which it is said different criteria apply. They, in turn, place reliance upon a 2010 decision of the Georgian court in a non-divorce case, refusing recognition in respect of an Israeli judgment in circumstances where it is said that recognition was refused by reason simply of the lack of a bilateral arrangement for the enforcement of a Georgian judgment in Israel.
47. That latter analysis is put in issue by the RAK entities, which point out that the 2010 judgment, in addition to referring to the lack of a bilateral agreement, also makes apparent reference to the fact that there is separately, as between Israel and Georgia, no recognition of Georgian judgments. The point is further made that although the four cases relied on by the RAK entities were divorce cases, in each case the recognition of the judgment was said to be based on Article 68 as well as Article 69, which relates to foreign marriages and divorce, and, as already stated, in no case was reliance based upon the fact of a bilateral arrangement between Georgia and the relevant foreign jurisdiction; even where such an arrangement existed.
48. In some measure, in acknowledgment of this, the second report of Professor Kereselidze, explains that, in his view, there are now, as he puts it, two lines of authority operating in the Georgian court; one of which will recognise a foreign judgment without need of bilateral arrangement and helpfully, he makes reference to two such decisions falling outside the rubric of Article 69; that is to say, non-divorce judgments. It is on that footing that the Professor concludes that there is no discernable consistency to be found in the approach taken by the Georgian court in respect of the recognition of foreign judgments where no bilateral arrangement is in place.
49. However, in my judgment, that is not sufficient to enable a court to conclude in reliance on, or in respect of, Article 68(2)(e) that it is likely that there may be substantial difficulties in recognition or enforcement arising from the lack of a bilateral arrangement. It is undoubtedly possible, but not, on the evidence as I see it, likely.
50. Turning to the derogation at Article 68(2)(f), that is to the say to the existence of pending proceedings in Georgia on the same issues and on the same basis as those underlying the judgment to be enforced, it is noteworthy that Professor Kereselidze's final view on this is no more than it is arguable that the Georgian court might treat the section 25 application and any costs order made in respect of it as amounting to the same proceedings as the proceedings pending in Georgia, in support of which the section 25 application has been brought, and, for that reason, refuse recognition.
51. Put shortly, an arguable position is not a likelihood and, even in respect of the argument, I find it hard to see how proceedings in England for the appointment of worldwide freezing orders and receivers, neither of which are available, as I am told in Georgia, can realistically be said to be proceedings on the same basis and upon the same issues as those pending in Georgia.
52. There remains for consideration the question first raised in Mr. Clayman's evidence in reply, as to whether recognition of an English costs order might be refused on the grounds that the decision contradicted basic legal principles of Georgia; or, in the alternative, might give rise to a delay in costs on the footing that the Georgian court might be required to reconsider the merits underlying the costs order.
53. The genesis of this argument or submission, derives from the legal advice received from the BLC Law Office, to which reference has already been made, and to the proposition there set out that, on the basis of Article 68(2)(g), it would be open to the RAK entities to argue that the English costs order contradicted basic principles of Georgian legislation and thus warranted the Georgian court in reconsidering the merits. It is unfortunate that neither Professor Kereselidze, or the RAK entities expert, Professor Ninidze, was asked to comment on this possibility. It is not however surprising, since certainly in so far as it relates to recognition, as opposed to problems of cost and delay, the point was not in any sense the focus of the LLPs argument when this application was issued.
54. Indeed, it was not until Ms. Den Besten, acting for the LLPs, made her submissions in reply that the relevance of Article 68(2)(g) and the basis of the argument arising out of that article was seriously developed. That basis, as it emerged, was that in the event that the RAK entities failed in their section 25 applications and did so by reason of, or potentially by reason of, documents relied upon by the LLPs and by Mr. Mekadze, then it would, or might, be open to the RAK entities, which have already asserted that many such documents are fabricated, to challenge recognition of the order on grounds of fraud and on the ground that to enforce an order arising from fraud would contradict basic legal principles of Georgia.
55. The first point to be made about this is that there is not a scrap of evidence that the Georgian court would act in that way. The second point is that it postulates that the RAK entities would challenge the decision of the English court in this way. It is at this point that I must factor in the fact that by leading counsel the court has been offered an undertaking by the RAK entities, that if they are ordered to pay costs, those costs would be paid in 14 days; and further, and in so far as necessary, that they will not oppose recognition of any order obtained in favour of the LLPs in Georgia.
56. Ms. Den Besten submits powerfully in this regard that undertakings proffered by offshore entities and, in consequence, not enforceable by the English court should carry no, or very little, weight. I am not persuaded, however, that the undertakings which have been proffered can be disregarded by this court in quite such a preemptory fashion. Although Mr. Mekadze is manifestly distrustful of the RAK Claimants and alleges political motivation and, in effect, a witch-hunt, I have no evidence that undertakings emanating from apparently responsible quasi-governmental bodies would be cynically offered and cynically disregarded when the purpose of those undertakings was achieved; such as to enable me to hold that it is likely, or even that there is a real risk, that that might happen.
57. Thirdly, I come to the question upon which I was prepared to take in post hearing submissions; namely, whether a plea of fraud raised against an English order in a Georgian court would cause a substantially greater problem in respect of enforcement of that order, than if the same plea was sought to be raised before a court within the EU or EEA.
58. In that regard, Mr. Marshall accepts that enforcement can be refused on public policy grounds within the EU and EEA, but submits that pursuant to Article 52 of Council Regulation (EC) 1215/2012, under no circumstances may a judgment given in a Member State be reviewed as to its substance.
59. As to whether fraud can be raised as an objection to enforcement in the EU, on public policy grounds, and as to how, if so, that interacts with Article 52, he accepts, in accordance with Dicey, Morris and Collins at paragraph 14/227, that in a civil law country a judgment procured by fraud may be refused recognition on grounds of public policy and that, in theory, in practice with difficulty, the same might apply in the context of EU/EEA enforcement, albeit only in exceptional circumstances and only when the judgment in question could not be challenged in the court in which the judgment was given.
60. The submission of the RAK entities shifts the emphasis. Relying on Garb on Enforcement of Foreign Judgments, 2015 edition, they submit that even in what they term Regulation States and even where Article 52 is applicable, fraud is seen as an element of public policy. Therefore, taking Germany, Poland and Portugal, by way of example, a judgment obtained by fraud may be unenforceable as violating public policy. In this regard, the court would not, as I understand it, be revisiting the substance of a decision, contrary to Article 52; but would be asking itself the question, not asked by the court giving the judgment, as to whether that court had been misled into giving that judgment.
61. Taking the first two of the three points I have adumbrated together, I am not satisfied that there is in this case a likelihood or, indeed, a serious risk of non-recognition, or delay in recognition, arising out of Article 68(2)(g). I have, as already stated, no evidence at all that the Georgian court would treat an assertion by a party resisting recognition of a foreign judgment, that that judgment had been procured by fraud, as properly falling within the matters the Georgian court would regard as precluding recognition as being in contradiction of the basic legal principles of Georgia.
62. Assuming that the Georgian court would take that stance, I am in any event simply not persuaded, given the undertaking which has been proffered to the court and assuming that that undertaking remains available, that there is any likelihood that recognition of any costs order in favour of the LLPs in respect of the section 25 application will be challenged on the ground of fraud; or, therefore, that any point under Article 68(2)(g) will ever arise.
63. If it did arise, then moving to the third point, it is undoubtedly the case, as I have read the submissions of both parties, that an equivalent dispute as to recognition could arise in the event of an attempt to enforce within the EU or EEA. The LLPs would limit such a dispute to exceptional circumstances, the RAK entities neither accept or deny that limitation. What, however, might, even on the LLPs submission, give rise to a serious challenge to recognition, or enforcement, on the grounds of fraud within the EU or EEA is where the challenge for fraud could not be made in the home court from which the judgment had arisen. This seems to me to be such a case.
64. In this case, were the court to refuse orders under section 25 and order costs in favour of the LLPs, it would do so in the knowledge that the section 25 applicants are alleging large-scale misconduct by Mr. Mekadze and his vehicles and that it is contended, as already expressed in correspondence by Decherts, who act for the RAK entities, that documentation relied upon by Mr. Mekadze and the LLPs is fabricated. In that context, as against the usual context where it is sought to set aside an order as being obtained by fraud, there can be no question of the court having been misled into making the order or of the order of the English court being set aside on that ground.
65. Accordingly, as it seems to me, the challenge as to recognition on the basis of fraud, which the LLPs postulate as arising in Georgia, is one which on the facts of this case could equally arise in the EU or EEA area and, thus, would not give rise to any difficulty of enforcement which would not also arise in the EU or EEA area. In those circumstances, and on the basis of Nasser, it would be wrong and discriminatory to order security.
66. In the result and for all the reasons set out in this judgment, I am not satisfied that grounds have been made out such as to warrant my ordering full security in this case.
67. I have considered whether I should nonetheless order tailored security in this case (to adopt the Nasser terminology). An argument could be sustained on the evidence that because there is a probable six-month time lag in securing recognition of a foreign judgment in Georgia and because some lawyers' costs would be involved, there is, or might be, a delay in enforcement which would not arise in enforcing in the EU or EEA.
68. I have decided not to make a tailored order. I asked Ms. Den Besten in the course of argument whether she was seeking such an order and she indicated she was not. Additionally, although I have no specific evidence, common sense and experience in this court, both indicate that enforcement in the EU and EEA is not achieved without cost and without delay. Taking all things together I think a tailored order is inappropriate.
69. In all these circumstances, the LLPs' application for security is dismissed.