SIGNING DISCLOSURE STATEMENTS? REMEMBER YOU CAN GO TO PRISON: OTKRITIE CONSIDERED

In Oktritie International -v- Gersamia and Jemai [2014] EWHC 821 (Comm) a respondent to the action was sentenced to 20 months imprisonment.  Part of that committal was relating to forgery. However important observations were made about the disclosure statement.

THE SIGNIFICANCE OF THE  DISCLOSURE STATEMENT

Part of the motivation for this post relates to an action I was involved in recently where a solicitor stated that the fact that they had signed the disclosure statement, not their client, was a “technicality”.   This showed a fundamental misunderstanding of the nature of the rules, and the nature of the disclosure statement.  More significantly the signatory of a disclosure statement could go to jail (as we will see). This case highlights:-

(1) The lack of wisdom (indeed foolishness) of a solicitor purporting to sign a disclosure statement on behalf of their client.

(2) The need to explain the significance of the disclosure statement (and indeed any document containing a statement of truth) to the person signing the document.

(3) You can be in contempt of court for omitting to disclose relevant documents.

THE RULES

CPR 31.10(6) sets out the nature of the disclosure statement and the fact that it must be signed by a party.

(6) A disclosure statement is a statement made by the party disclosing the documents –

(a) setting out the extent of the search that has been made to locate documents which he is required to disclose;

(b) certifying that he understands the duty to disclose documents; and

(c) certifying that to the best of his knowledge he has carried out that duty.

(7) Where the party making the disclosure statement is a company, firm, association or other organisation, the statement must also–

(a) identify the person making the statement; and

(b) explain why he is considered an appropriate person to make the statement.

THE DECISION IN OTKRITIE

Several of the grounds for committal relating to the disclosure statement.

Ground 2

24. Ground 2 concerns disclosure statements. It is divided into two parts viz 2(a) which concerns making a positively misleading statement; and 2(b) which concerns failure to give disclosure. As to ground 2(a), Mr Stanley submitted and I accept that the following facts as detailed in his skeleton argument are beyond reasonable doubt (para 13):

i) On 31 January 2013, Mrs Jemai signed a disclosure statement on behalf of Jecot.

ii) In that statement she certified that she understood the duty of disclosure and that to the best of her knowledge Jecot had carried it out.

iii) That disclosure statement had attached to it a list of documents.

iv) Entry 65 on that list was described as ‘Loan Agreement between Sergey Kondratyuk and Jecot SA’, said to have a date of 20 March 2011.

v) In fact, for the reasons given at paragraph 509 of the Judgment, that agreement was a fake or a sham. Mrs Jemai has not put forward any evidence or argument in response to this application to the contrary.

vi) Entry 69 of that list was described as ‘Profit Sharing Agreement between Jecot SA and Sergey Kondratyuk’, said to have a date of 7 April 2011.

vii) In fact, for the reasons given in paragraphs 531–534 of the Judgment, that document was also a forgery. Mrs Jemai has not put forward any evidence or argument in response to this application to the contrary.

viii) Entry 70 of that list was described as ‘Profit Sharing Agreement between Jecot SA and FO Firmly Oceans Corporation’.

ix) Again, and for the reasons given in paragraphs 531–534 of the Judgment, that document was also a forgery. Mrs Jemai has not put forward any evidence or argument in response to this application to the contrary.

x) Entry 71 of that list was described as ‘Contract No: 011/CC-7’ and said to be dated 7 April 2011. In fact that was a reference to the Annex to the Profit Sharing Agreement dated 7 April 2011. Regardless of its exact title, it was plainly put forward as a genuine document.

xi) In fact, again for the reasons given in paragraph 531–534 of the Judgment, that document was also a forgery. Mrs Jemai has not put forward any evidence or argument in response to this application to the contrary.

xii) The disclosure statement asserted that Jecot ‘has control of the documents numbered and listed’ in part A of the list, as set out above.

In each of the cases set out above, the document in question was mis-described and mis-dated. I am satisfied so as to be sure that Mrs Jemai knew when she signed the disclosure statement that this was so.

  1. As to ground 2(b), Mr Stanley submitted and I accept that the following facts as detailed in his skeleton argument are beyond reasonable doubt (para 15):

i) Mrs Jemai signed the disclosure statement in which, as set out above, she certified that she believed Jecot had carried out its duty of disclosure and that the list she produced “is a complete list of all the documents which are or have been in [Jecot’s control] which it is obliged under the said order to disclose.

ii) There were three documents (in particular) that were not included on the list: the Hinduja bank account statements, the contract between Jecot and Carbones dated 1 March 2012, and the Jecot invoice for the pig iron.

iii) There can be no doubt that Mrs Jemai knew of the existence of those documents.

iv) Mrs Jemai has not put forward any evidence or argument to the Court in response to this application to explain the omission of those documents from the list.

v) Mrs Jemai must have known about the relevance of such documents because it was Jecot’s case that it had used money received from Firmly Oceans to purchase pig iron from Donetsksteel and that the said pig iron was in a warehouse in Ukraine, when in fact (as Mrs Jemai knew) it had been sold to Carbones in March 2012 for US$4.5 million and the proceeds paid to Jecot’s secret account at Hinduja bank: paragraph 41 of Jecot’s defence.

vi) Mrs Jemai purported to put forward an explanation as to the Carbones’ transactions in her sixth witness statement dated 21 November 2013 but as recorded in paragraph 529 of the Judgment, that statement was implausible and substantially and dishonestly untrue.

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