Isle of Man: Isle Of Man Court Confirms Support For International Judicial Co-Operation

In the recent case of US Securities and Exchange Commission v Samuel E Wyly and others ORD 2012/24, the Isle of Man's Chief Justice, His Honour Deemster Doyle confirmed that in matters which require evidence to be provided to foreign Courts, such Courts should be "afforded the fullest help it is possible to give."

In this case, which is likely to be viewed as highly authoritative in other sophisticated offshore jurisdictions, the US Securities and Exchange Commission (the "SEC") undertook an investigation into seventeen trusts which created and owned over thirty Manx companies. It was alleged that these trusts and subsidiary companies, owned and directed by the defendants, were part of an elaborate system which enabled the defendants to engage in a thirteen year fraudulent scheme involving the trade of tens of millions of securities. As part of the investigation, a Letter of Request was sent by the Honourable Shira A. Scheindlin, asking for the High Court of Justice of the Isle of Man (the "Isle of Man Court") to grant an Order requiring certain respondents to attend and give testimony in the Isle of Man for use in the civil proceedings against Samuel E Wyly and others in the US District Court.

In his consideration of the request, Deemster Doyle had regard to his judgment in Impex Services Worldwide 2003-05 MLR 115, wherein he emphasised the Island's need to "recognise our international as well as our local responsibilities". Should any "friendly and sophisticated jurisdictions, which respect the rule of law and human rights" request assistance, the Isle of Man Court shall "answer the call positively and provide the necessary co-operation and assistance". Deemster Doyle added, as per Secilpar 2003-05 MLR 352, that where there was a "greater public interest...in ordering disclosure than in preserving such confidentiality as may exist", then the Isle of Man Court would "assist the administration of justice".

Such an assertion further confirmed the Isle of Man Court's position on judicial co-operation, recognising the international need for justice over the protection of information held on the Isle of Man. As Deemster Doyle stated in Tomlinson (Deceased) and Yerrill CP 2006/35; "in the modern global community there is no room for an insular approach."

The Evidence (Proceedings in Other Jurisdictions) Act 1975 (the "1975 Act") supports and further facilitates the Isle of Man Court's view, stipulating that when "a request issued by or on behalf of a court or tribunal...for the purposes of civil proceedings" is received, then the Isle of Man Court should "make such provision for obtaining evidence". Additionally, as deemed necessary by the Rules of the High Court of Justice of the Isle of Man 2009 (the "2009 Rules"), such applications must be "supported by written evidence and accompanied by the request as a result of which the application is made". In regulating the form and formality of the request, the existing legislation not only enables judicial co-operation, but also ensures the procedural integrity of any application made to the Isle of Man Court is upheld.

Safeguards Put In Place

With regard to the content of the request, Deemster Doyle distilled seven general principles which are to be considered in matters of co-operation with international jurisdictions:

  • The Isle of Man Court will assist "so far as is proper and practicable and to the extent that is permissible" under Isle of Man Law ensuring that no procedure is undertaken, or evidence obtained which undermines the supremacy of national law.
  • The Isle of Man Court should decide whether it has the jurisdiction to give effect to the request, and whether it ought to accept or refuse to make such an offer.
  • The Letter of Request should be examined objectively, and the substance of the matter be regarded in each case. If there is any reasonable doubt, the Isle of Man Court may allow the parties to refer back to the issuing Court.
  • The Isle of Man Court should normally use its discretion unless the application is regarded as "frivolous, vexatious or an abuse of the process of the Court."
  • The Isle of Man Court can accept the request in whole or in part; subject to Isle of Man Law, the Court can delete parts of the request that are "excessive". However, the Isle of Man Court should not restructure, recast or rephrase the request.
  • Requests should not be denied on the grounds of "fishing", where there is reason to believe that the witness could give relevant evidence. It is necessary, however, to protect witnesses from oppressive requirements.
  • The foreign Court should be afforded the fullest help it is possible to give, with effect given to that Court's rules of evidence. If not, any questions should be admitted which may be expected to throw light on the matters in issue.

With reference to his reasoning set out earlier in the case, Deemster Doyle was satisfied that the criteria set out in the 1975 Act were met, and that as the format and content of the request was not contrary to any of the principles set out above, he exercised his discretion in favour of granting the assistance. Attention was then turned to two matters concerning the execution of the procedure through which evidence would be obtained.

Use of Special Procedures

The SEC requested that as per the Letter of Request, the United States Federal Rules of Evidence and Federal Rules of Civil Procedures be followed during the examination, allowing for the videotaping of the examinations. In considering the request, Deemster Doyle regarded Article 9 of the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters, which provided that a request for a special mode or procedure to be followed should be complied with, unless incompatible with the law of the state of execution.

Deemster Doyle confirmed this position in stating that "the Court will accede" to such a request, unless it is "so contrary to Manx established procedures that it should not be permitted".

US Lawyers' Ability to Examine Witnesses

A request for an order that the witnesses be examined by relevant lawyers from the United States was opposed by several of the Respondents. They argued that section 9(1) of the Advocates Act 1976 applied to prevent US lawyers carrying out the examination of witnesses in "any cause or matter, civil or criminal", as it states that "no person shall act as an advocate...in any Court of civil or criminal jurisdiction...unless he holds an advocate's commission and has not been suspended from practice."

Deemster Doyle reasoned that the Claimant's application was not issued or commenced by a US lawyer but rather filed in the Isle of Man Court and presented by the US SEC's Isle of Man advocate, whilst the Claimant, First and Third Defendants and Respondents were all represented by Isle of Man advocates. Additionally, in the matter of Cromer Finance Limited CLA 2002/68, Deemster Cain stated that an "examination may be conducted with the American Counsel for the...parties present and participating and conducting the examination", a ruling which was subsequently supported further by the 2009 Rules, which state that the Isle of Man Court can appoint an examiner who is not a judge.

Deemster Doyle therefore held that whilst proceedings in the Isle of Man Court would be caught by section 9(1) of the Advocates Act 1976, the examination before an appointed examiner was "not a civil cause or matter requiring judicial determination". The proceedings before the Isle of Man Court, which section 9(1) were intended to protect, were "truly collateral to and entirely separate from" the examination of witnesses pursuant to the Federal Rules of Evidence and of Civil Procedure. Deemster Doyle reached the conclusion that section 9(1) was made with a "common sense and pragmatic approach", and that it would be an "affront to common sense and justice" to prevent those US lawyers who were more familiar with their respective cases, and who were more aware of the questions which needed to be asked of the witnesses, from conducting the examinations.

Through his judgment, Deemster Doyle not only confirmed the Island's willingness to be co-operative on international investigations, but took positive steps to ensure that assistance would be actively undertaken when adequately requested, whilst ensuring that the Isle of Man Court retains its discretion when it comes to each request. In facilitating the special procedures requested by the SEC, the Isle of Man Court has shown that not only will it co-operate in collecting evidence for use in foreign Courts, but that it will ensure that such evidence is of optimal use in such Courts. Additionally, through enabling US lawyers to examine the requested witnesses, Deemster Doyle has shown that the Island is willing to co-operate by allowing the foreign Courts to collect what evidence they require efficiently and accurately.

Summary

Overall, this judgment confirms the Island's reputation as a sophisticated co-operative jurisdiction. Deemster Doyle, as the Island's Chief Justice, has confirmed that the Courts here will encourage transparency and facilitate effective exchange of information but that they will rightly retain necessary safeguards to ensure that due process takes place.

In the last few months, the Isle of Man has concluded Double Tax Agreements with Qatar and Singapore and signed or brought into force Tax Information Exchange Agreements ("TIEAs") with the Czech Republic, Slovenia and Turkey. The Island has now signed a total of 32 agreements which meet OECD standards; 26 TIEAs and additionally 6 Double Taxation Agreements, including agreements with 7 out of the world's 10 major economies. More specifically, it has done so with all of the top 5 global economies – US, China, Japan, India and Germany.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions