Enforcement options in England & Wales – recent High Court judgment provides rare guidance on Orders for Questioning
Once the litigation or arbitration has been fought and you obtain a judgment in your favour, if your opponent does not pay up, a new process will begin in attempting to enforce that judgment.
Enforceability, including the ability of your opponent to pay, should be something that you consider at the outset as part of any case analysis and throughout a case so as to avoid throwing good money after bad in pursuing what may ultimately be a valueless claim if your opponent cannot pay.
If you’re in the dark about their assets, one option to consider, once you have your judgment or arbitral award, is to seek an Order for Questioning which will give you some information about your opponent’s assets. We consider a recent decision on such an order.
What is an “Order for Questioning”?
A debtor can, under the court rules, be required to attend court to provide information for the purpose of enabling a creditor to enforce a judgment or order against them. The information can be about the debtor’s financial means (for example, bank account details and other assets) and if an individual, their employment information. Where the debtor is a company, a director can be required to attend court to provide information on the company’s behalf.
The debtor will be required to answer questions on oath and produce documents in his control to the court. If the debtor does not attend court to be questioned, or attends but refuses to take an oath or answer questions, a judge can decide to commit the debtor to prison.
The recent case of Vale SA v BSG Resources Ltd and another  EWHC 2021 (Comm) involved two international mining companies. Vale is a Brazilian Company and BSGR is based in Guernsey and is associated with the billionaire entrepreneur, Benjamin Steinmetz.
Vale applied for an Order that the director of BSGR attend court to provide information for the purpose of enabling Vale to enforce an arbitral award worth approximately USD2.2bn. Vale’s application was made “without notice” (i.e. without serving a copy of the application on BSGR). The court granted the Order, without a hearing, on 13 February 2020. Pursuant to the Order, Mr Dags Lars Cramer, a director of BSGR, was ordered to:
- Attend court before a master for examination relating to BSGR’s means of paying the judgment debt owed to Vale and
- Produce all documents in his control relating to such matters, including certain specified categories of documents
On 6 March 2020, BSGR applied to set aside the Order on the basis that:
- The application should have been made on notice to BSGR
- Having been made without notice Vale failed to comply with its duty of full and frank disclosure and
- The Order was oppressive
Master Davison dismissed BSGR’s application to set aside the Order.
The master found it "surprising" that BSGR tried to argue that it was inappropriate for the application to be made without notice. The court rules expressly permit this type of application to be made without notice. The process of applying for an Order for Questioning was “intended to be a summary and straightforward process allowing the judgment creditor to obtain information”.
The master held that Vale had fully complied with its duty of full and frank disclosure. Since BSGR was a company, Vale simply had to identify:
- The name and address of the officer of the company
- The details of the judgment debt and
- The amount owing, to satisfy its duty of full and frank disclosure
Finally, the master held that there was no real risk of oppression to BSGR because a judge would be present at the questioning.
The case provides rarely seen guidance on orders for questioning and serves as a reminder of the ease of applications for obtaining information about judgment debtors to assist with the enforcement of judgment debts.