BANCO AMBEROSIANO ANDINO SA v. BANQUE NATIONALE DE PARIS

No. 4672 of 1984

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

____________

________________________

REASONS FOR JUDGMENT

________________________

1. On 11th July this years I made an far-reaching order against the Banque Nationale de Paris (B.N.P.) On 13th July, I made an order in similar terms against Pierson, Heldering and Pierson (H.K.)Ltd., also bankers.

2. In each case, the party asking for the order was the Banco Ambrosiano Andino S.A. In each case, the application was made or renewed ex-parte on notice. In each case, the bank was required to discover confidential information and restrained from informing its customer that it had done so. In each case, I ordered that the action be intituled with letters of the alphabet and the file kept confidential at the Registry. Only exceptional circumstances would warrant such measures at the interlocutory stage of an action and it would not be right that such proceedings should remain hidden. So, in making the orders, I reserved my reasons and indicated that they would be given in court when the time for secrecy was over.

3. Mr. Riberio for the Plaintiff did not dissent so at the hearing in Chambers yesterday on the motion of the court, I lifted the veil by restoring to each action its original title and by removing the seal of confidentiality from the files. I now proceed to give the reasons which persuaded me to make orders of such unusual width.

4. The Plaintiff is a Peruvian company. It is one of many subsidaries of the Banco Ambrosinao S.P.A. Milan (B.A.S.P.A.). This last is and has been under investigation. It is now in liquidation. Persons connected with the company are suspected of stealing from it large sums of money. One of them was Roberto Calvi, the Chairman. The sums involved are thought to be in the region of US$500 million. The money was chanelled through a Iuxemburg company and some of it found its way into the Plaintiff's bank account in Nassau held with yet another subsidiary of B.A.S.P.A.

5. On 30th April, 1981, US$95 million were transferred from the Plaintiff's Nassau account to Rothschild in Zurich. It was shown in the books as a loan to a company called Bellatrix but the money went into three separate accounts in the name of a Liberian company called Zirka Corporation, Monrovia. Bellatrix was nothing but a front. Its directors were very junior employees of the Nassau Bank. It had nominal capital only. No purpose or terms for the loan were ever expressed. The money never came into its hands. The suggestion is that it was providing a cover for fraud. What happened to the money after Zurich appears from the affidavit of Mr. Peters, an accountant with Touche Ross who with his colleagues has performed a considerable feat of detection. It is not necessary for me to reproduce from his affidavit the various trails leading across the world which have eventually, but not finally, bought him to Hong Kong. It is enough to say that at the date of the first application Mr. Peters had reason to believe that in excess of US$22 million had come into account's held at B.N.P. Whilst there has never been the slightest reflection upon either Defendant, the suggestion was made that the money was passing through Hong Kong as part of an attempt to launder the proceeds of the massive defalcation which had taken place.

6. I was satisfied that there was, at the very least, a strong prima facie case that the allegation was good. I made the order in the first action. Discovery revealed that over US$17 million had in fact passed through B.N.P. and had come to rest if not remain at the bank of the Defendant in the second action. Hence I made the second order. It is, of course, an extreme matter to require a bank to break its trust towards its customers: the more so when the bank is restrained for a period from notifying the  breach of confidence. There is an authority for the first part of the order in Bankers Trust Co. v. Shapira and another.⁽¹⁾ I cite from the judgment of the Master of Rolls at page 1282.

"This new jurisdiction must, of course, be carefully exercised. It is a strong thing to order a bank to disclose the state of its customer's accounts and the documents and correspondence relating to it. It should only be done when there is a good ground for thinking the money in the bank is the Plaintiff's money - as, for instance, when the customer has got the money by fraud or other wrong doing and paid it into his account of the bank. The Plaintiff who has been defrauded has a right in equity to follow the money. He is entitled, in Lord Atkin's words, "to lift the latch of the banker's door". see  Banque Belge Pour I'Etranger v. Hambrouck⁽²⁾ K.B. The customer who has prima facie been guilty of fraud cannot bolt the door against him. Owing to his fraud, he is disentitled title from relying on the confidential relationship between him and the bank: see Initial Services Ltd. v. Putterill⁽³⁾.

 

If the Plaintiff's equity is to be of any avail,he must be given access to the bank's books and documents - for that is the only way of tracing the money or of knowing what has happened to it: see Mediterranea Raffineria Siciliana Petroli v. Mabanaft and others.⁽⁴⁾ So the court, in order to give effect to equity, will be prepared in a proper case to make an order on the bank or their discovery. The Plaintiff must, of course, give an undertaking in damages to the bank and must pay all and arty expenses to which the bank is put in making the discovery and the documents, once seen, must be used solely for the purpose of following and tracing the money and not for any other purpose. With these safeguards, I think the new jurisdiction already exercised in the three unreported cases ought to be affirmed by this court."

                It seems to me that if the first part of the order is not to be nugatory the supposed wrong-doers must not discover that they are being pursued. The second part of the order would seem to follow. I am fortified by the knowledge that in a case in which the same Plaintiff together with Bollatix sought relief against Lloyds Bank International Ltd. and Lloyds Bank PLC. Mr. Justice Hobhouse sitting in the Commercial Court of the Queen's Bench Division made a similar order.

(1)     [1982] 1 W.L.R. page 1275 C.A.

(2)     [1921] 1 K.B. page 321

(3)     [1968] 1 Q.B. page 396

(4)    unreported - England Court of Appeal 1978 M No. 4019