Essar Global Fund and Essar Capital Ltd v ArcelorMittal USA Court of Appeal of the Cayman Islands Civil 15 of 2019 - Judgment - 3 May 2021
IN THE COURT OF APPEAL OF THE CAYMAN ISLANDS
ON APPEAL FROM THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
CICA (Civil) Appeal No 15 of 2019
(Formerly FSD 2 of 2019 (IKJ))
1. This is an appeal from an order dated 31 May 2019 of Kawaley J. By that order, made pursuant to what is known as the Norwich Pharmacal jurisdiction, the judge ordered the appellants, Essar Global Fund Limited ("EGFL") and its subsidiary Essar Capital Limited ("ECL"), to provide to the respondent ArcelorMittal USA LLC ("AMUSA") information and documentation relating to the assets and affairs of another of EGFL's subsidiaries, Essar Steel Limited ("ESL"). AMUSA is a creditor of ESL under an arbitral award, and the underlying allegation made by it is that EGFL and ECL are mixed up in steps wrongfully taken by ESL to avoid enforcement of the award.
2. EGFL is the principal holding company for the Essar group of companies, a substantial conglomerate with interests across a range of industrial sectors including steel production. ECL acts as the investment manager of EGFL. Both EGFL and ECL are Cayman companies. ESL is incorporated in Mauritius.
3. AMUSA is a company organised under the laws of the state of Delaware. It is part of the ArcelorMittal group of companies, one of the world's leading steel and mining businesses.
4. The ArcelorMittal group and the Essar group are substantial commercial competitors.
5. In December 2012, AMUSA entered into an agreement with two other companies in the Essar group, Essar Steel Minnesota LLC ("ESML") and Essar Resources Inc ("ER"), for the sale by ESML and ER and the purchase by AMUSA of iron ore pellets over a period of ten years. In January 2014 the agreement was amended to substitute ESL for ER as co-obligor with ESML.
The effect was to make ESL guarantor of ESML's obligations under the agreement. In May 2016, AMUSA terminated the agreement, asserting breaches by ESML. In July 2016, ESML filed a petition in the United States seeking Chapter 11 bankruptcy protection.
6. In August 2016, AMUSA commenced arbitration proceedings against ESL on the basis that ESL was jointly and severally liable with ESML. In December 2017, an ICC arbitral tribunal made an award ("the Award") in AMUSA's favour against ESL for US$1.38 billion plus interest.
7. ESL has not satisfied the award. AMUSA's case, as recorded by the judge, is that "since the ICC Award was made on December 19, 2017, [ESL has] made no attempts whatsoever to pay off even one cent of a debt now in excess of US$1.5 billion".
8. ESL was placed into administration in Mauritius by directors' resolution on 26 March 2019.
AMUSA has challenged the administration in Mauritius. It has obtained judgments recognising the Award in the state of Minnesota (the seat of the arbitration), in England and Wales and (subsequent to the first instance hearing) in this jurisdiction. A world-wide freezing order has been obtained in England and Wales in respect of ESL's assets. AMUSA has also obtained a provisional order enforcing the Award in Mauritius; but that has been challenged by ESL, and a decision on the challenge had not been given at the time this appeal was heard (nor have we subsequently been notified that one has been given).
9. These proceedings were commenced on 10 January 2019. The relief sought was an order requiring EGFL and ECL to provide information and documents in relation to ESL's financial affairs, AMUSA contending that it required such information in order to assist it in enforcing the Award and in identifying assets against which it could take enforcement action.
10. On 15 January 2019 Kawaley J made an interim order ex parte. A contested hearing of the application took place on 13 February 2019, following which (by ruling dated 29 March 2019) the judge dismissed an application by EGFL and ECL to set aside the ex parte order but reduced its ambit. The order dated 31 May 2019 which is the subject of this appeal gave effect to the judge's ruling.
11. The order prohibited the destruction, deletion or alteration of any document relating to certain matters concerning the disposal and whereabouts of ESL's assets, and required the preservation of such documents; required EGFL and ECL to provide copies of such documentation to AMUSA's attorneys; and required them to make affidavits providing full information relating to the matters. The matters to which the documentation and information related were set out in paragraph 4 of schedule B to the order, and were in the following terms: