In a judgment of the Senior Master handed down on 30 January 2023 in Procuritas Partners AB & Anr v Blomfield and Mentzer  EWHC 167 (KB), which was followed by further written submissions and a final costs ruling on 1 March 2023, the High Court considered the principles and approach to be applied to a letter of request (“LOR”) seeking deposition evidence from two senior employees of a global investment bank which was to be deployed in proceedings before the Danish Maritime and Commercial High Court (the “Danish Court”).
KG Bidco APS, the claimant in the Danish proceedings (the “Claimant”) entered into a share sale and purchase agreement on 11 December 2017 for the purchase of GEH Invest ApS, its wholly owned operating company Gram Equipment A/S (“Gram”) and its subsidiaries (the “Gram Group”) from Green Magnum S.A (the “Seller”) with 29 January 2018 provided as the closing date. The Seller was (through its holding company) owned by Procuritas Capital Investor IV LP (PCI LP), and by Procuritas Capital Investors IV Co-Investment AB. PCI LP’s partner is Procuritas Capital Investor IV GP, together a Guernsey based private equity fund, which are advised by PPAB. Mr Theren was managing partner of PPAB until 2020 and a board member of Gram and GEH Invest ApS until the closing date.
On 20th September 2018, the Claimant commenced arbitration proceedings against the Seller claiming EUR 103.7 million for breach of warranties on a purchase price adjustment of approximately EUR 16.3 million. On 23 June 2020, the arbitral tribunal awarded the Claimant the sum of approximately EUR 70 million plus interest and costs, an aggregate amount of approximately EUR 87.5 million. The Seller did not have the financial means to comply with the arbitral award and filed for bankruptcy in July 2020.
On 20 December 2019, the Claimant commenced the proceedings against PPAB, Mr Theren and others in the Danish Court claiming that the defendants are liable on a joint and several basis to pay to it the sum of EUR 87.5 million plus interest, to satisfy the award in the arbitration proceedings (the “Danish Proceedings”). It is argued that in the planning and completion of the sale of the Gram Group, the Claimant and its owners were provided with misrepresented or misleading information about the Gram Group’s financial situation. The Claimant argues that it would not have proceeded with the transaction if true and fair information had been supplied to it. It is alleged that Mr Theren has incurred liability by organising and conducting the sales process in an actionable manner in his capacity as a partner without having regard for the Claimant’s interests, and fraudulently withholding material information.
The global investment bank, William Blair International Limited, was engaged as one of the sell-side advisers on the transaction. Exactly what was the division of responsibility as between the Procuritas entities and Mr Theren on the one hand, and William Blair and other professional advisers on the other, and the consequences of that as a matter of Danish law, is in dispute in the Danish Proceedings. The two witnesses, Mr Blomfield and Mr Mentzer, are both senior employees of William Blair at its London office and were key members of the William Blair deal team during the transaction.
Accordingly, PPAB and Mr Theren (the “Applicants”) sought their evidence for use in the Danish Proceedings pursuant to an LOR issued by the Danish Court in accordance with the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, the Evidence (Proceedings in other Jurisdictions) Act 1975 and CPR Part 34. However, one unusual feature of the case was that the Claimants had also persuaded the Danish Court to add a wide-ranging suite of further topics (Appendix B) to the LOR, in addition to those requested by the Applicants (Appendix A).
The Senior Master reviewed recent authority on the proper approach to an application to give effect to a LOR before the English Court (paras -), including in particular in this case:
- The circumstances in which it was appropriate to go behind a foreign Court’s assessment of relevance (which it was not here, where the Danish Court had expressed its conclusion in terms that “The Court also finds that the possibility that the evidence to be given … may be of relevance to these proceedings cannot be ruled out in advance”) (para -[16)];
- The proper scope of an objection of ‘fishing’, concluding that this did not: (a) prevent a witness being asked questions about a document or communication to which they were not party; (b) prevent a witness being asked about something where it was said (in advance) that a witness would have no evidence to give; or (c) prevent common topics being directed to both witnesses where it was clear that they had worked closely together and their internal responsibilities were not known (para -); and
- The type of tailoring which might be appropriate to protect witnesses from oppression, for example the volume of materials to be put to the witnesses (the Applicants and the Claimants were required to refine down the examination bundle) and their provision in advance of the deposition with an indication of the theme to which the documents were likely to relate (para -).
In considering other issues, the Senior Master:
- Rejected the submission made by the Claimant that if Appendix B was substantially cut down (which it was) then the application to give effect to the LOR as a whole should be dismissed (i.e. Appendix A as well) (para -);
- Noted a lack of certified translations as unsatisfactory, but took a pragmatic view that agreement between the foreign parties should be possible and any issue could be submitted to the Danish court (para );
- Confirmed that an order for cross examination (in the sense of closed and leading questions) is likely to be appropriate and upheld in England & Wales where the foreign Court has approved the request as being in accordance with foreign procedure (para -); and
- Concluded that a maximum of 7 hours of deposition time for each witness was appropriate even though that would be longer than a typical Court day (para ).
The judgment is available here.
Richard Hoyle appeared on behalf of the Applicants, Procuritas Partners AB and Mr Theren, instructed by Simon Kamstra and Tom Walmsley of Addleshaw Goddard (in London) and Kolja Staunstrup and Linnea Clara Klingberg-Jensen of Kromann Reumert (in Denmark).