EX PARTE PETITION OF SIMETRA GLOBAL ASSETS LIMITED AND RICHCROFT INVESTMENTS LIMITED FOR RELIEF PURSUANT TO 28 U.S.C. 1782
Filing
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OPINION AND ORDER granting Petitioners' application for discovery pursuant to 28 U.S.C. § 1782; Petitioners may serve Mr. Jagganath with copies of the subpoenas attached to their application as ECF Nos. 1-1 and 1-2, etc. Signed by Magistrate Judge Joseph A. Dickson on 5/25/2016. (nr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
·------------------------------------------------------------------------------------------------1
Civil Action No. 16-2389 (JLL) (JAD)
In the Matter of an ex parte Petition for
Judicial Assistance Pursuant to 28 U.S.C. §
1782,by
SIMETRA GLOBAL ASSETS LIMITED
AND RICHCROFT INVESTMENTS
LIMITED,
OPINION AND ORDER ON EX PARTE
PETITION FOR RELIEF PURSUANT
TO 28U.S.C.§1782
Petitioners,
In support of legal proceedings pending in the
High Court of Justice, Queen's Bench
Division, Commercial Court, Royal Courts of
Justice, London, England.
JOSEPH A. DICKSON, U.S.M.J.
This matter comes before the Court upon an ex parte petition by Simetra Global Assets
Limited and Richcroft Investments Limited ("Petitioners") for an Order, pursuant to 28 U.S.C. §
1782, authorizing the issuance of subpoenas, directed to New Jersey resident Diwakar Jagganath,
"for the collection of evidence to be used in the prosecution of a lawsuit currently pending before
the High Court of Justice, Queen's Bench Division, Commercial Court, Royal Courts of Justice,
London, England [(the "London Action")]." (Petitioner's Br. at 1, ECF No. 1-6). Both petitioners
are Plaintiffs in the London Action, and Mr. Jagganath is a defendant in that proceeding. For the
reasons set forth below, Petitioners' application is GRANTED. 1
Given the ex parte nature of Petitioners' application, the Court makes no explicit ruling with
respect to whether Petitioners' request is reasonable in scope. The Court notes, however, that ex
parte applications are frequently granted under 28 U.S.C. § 1782 "where the application is for the
issuance of subpoenas and the substantial rights of the subpoenaed person are not implicated by
1
L
I.
RELEVANT BACKGROUND
Petitioners are private closed currency funds with their principal places of business in the
British Virgin Islands. (Deel. of Linos Choo ("Choo Deel.") ,-r1[ 5-6, ECF No. 1-3). Their
"investment objective is to make money by trading in the foreign exchange markets." (Id. ~ 16).
Petitioners represent that "[a]t all material times, [their] assets were under the control of Daskaleas,
whose companies Simetra Management and Richcroft Management were appointed as Investment
Managers to the Petitioners, and/or GStar, which acted as broker to the Petitioners." (Id. ,-i 17).
Daskaleas and Gstar were also "trustees and in possession or control of certain of Petitioners'
assets and property." (Id. ,-i 18). Daskaleas and GStar are both defendants in the London Action.
(Id. ,-i,-r 11-12). Petitioners claim that Defendant Daskaleas advised them that the Petitioners'
money contained in accounts operated by GStar was actually held by Defendant Ikon Finance,
"which provided GStar with back office functions." (Id. ,-i 21).
Petitioners claim that "[i]n the summer of 2014, [they] asked for an accounting of the
money held under the control of Daskaleas and GS tar", (id. ,-r 22), and that those entities arranged
for an audit. (Id.). Ikon Atlantic (another defendant in the London Action), through letters signed
by Defendant Yikilmazaoglu, provided the auditors with certain information regarding Petitioners'
accounts. (Id.). Petitioners contend that the information contained in those letters was false. (Id.
i!23).
Petitioners further represent that "[o]n February 26, 2015, in response to Petitioners'
request to withdraw the funds they had entrusted to GStar[,] Ikon Finance, and other entities
the application." In re Application of Mesa Power Group, LLC, No. 11-MC-280 (ES), 2012 WL
6060941 at *4 (D.N.J. Nov. 20, 2012). Moreover, once Petitioners serve the subpoenas, Mr.
Jagganath will have the opportunity to move to quash or modify the subpoenas under Federal Rule
of Civil Procedure 45.
affiliated with Ikon Group and Yikilmazaoglu, Defendant Jagganath wrote to the Petitioners
seeking to prevent any request to transfer money out of the accounts. In particular, Jagganath
wrote Petitioners' requests 'are not in line with the normal operations of a close end fund of your
size."' (Id. if 24). They claim that Mr. Jagganath wrote another letter on May 7, 2015, "falsely
purporting to confirm outstanding balances on" certain of Petitioners accounts, and making false
statements about the availability of funds in those accounts. (Id. if 26).
In late May 2015, Petitioners wrote letters to several of the defendants requesting, among
other things, that those defendants undertake certain specific actions with regard to Petitioners'
accounts. (Id. ifif 27-30). In response to one of those requests, Defendant Ikon Finance provided
a computer file purporting to contain information regarding certain of Petitioners' accounts, though
Petitioners question the authenticity of that information. (Id. if 32). Petitioners obtained other
information suggesting that their accounts had a "nil balance" or simply did not exist. (Id. 1if 3334). Petitioners allege that, "[t]o date, Defendants have refused to return Petitioners' money,
despite repeated requests to do so." (Id. if 35).
Based on the foregoing, Petitioners commenced the London Action, which they describe
as follows: "Petitioners' primary case in the [London Action] is that Ikon Finance and/or GStar
misappropriated Petitioners' funds that were held in accounts owned or controlled by Ikon
Finance, GS tar and/or Daskaleas. In addition, [Defendants provided written statements containing
false or misleading information]'', and have failed to honor requests to return Petitioners money.
(Id. il 39). Petitioners contend that "Diwakar Jagannath will most likely have information critical
to support Petitioners' allegations in the [London Action] because Mr. Jagannath has acted
variously for Ikon Finance, Ikon Group and Ftechnics and is likely to have knowledge and
documents with respect to the written information, confirmations and/or verifications provided to
Petitioners that were false and misleading. This information will enable Petitioners to prove their
allegations against the Defendants in the London Proceeding."
(Id.~
39).
Though Petitioners have named Mr. Jagganath as a defendant in the London Action, Mr.
Jagganath has proven elusive and difficult to find. (Id. iMf 41-42). Petitioners recently effectuated
service upon Mr. Jagganath with regard to the London Action, but fear he "may now leave the
jurisdiction and once again become untraceable for months."
(Id.~
42). Petitioners contend that,
though Mr. Jagganath would ordinarily be required to disclose documents in the context of the
London Action, the English Court's ability to compel him to do so hinges on Petitioners' ability
to locate and serve him in the future. (Id.
~
43). Petitioners therefore seek leave to serve Mr.
Jagganath with subpoenas compelling him to produce documents and provide testimony in
connection with the London Action.
(Id.~ 44).
Petitioners provided the Court with copies of their
proposed subpoenas as attachments to their application. (ECF Nos. 1-1, 1-2).
II.
LEGALSTANDARD
Under 28 U.S.C. § 1782(a), "[t]he district court in which a person resides or is found may
order him to give his testimony or statement or to produce a document or other thing for use in a
proceeding in a foreign or international tribunal ... [t]he order may be made ... upon the
application of any interested person and may direct that the testimony or statement be given, or
the document or other thing be produced before a person appointed by the court." A district court
is authorized to grant an application under § 1782 if the following three statutory requirements are
met:
(1) the person from whom discovery is sought resides or is found
within the district; (2) the discovery is for use in a proceeding before
a foreign or international tribunal; and (3) the application is made
by a foreign or international tribunal or any interested person.
In re Application of Microsoft Corp., 428 F. Supp. 2d 188, 192 (S.D.N.Y. 2006).
If the statutory requirements are met, a district court may, in its discretion, grant the
application. The Supreme Court has identified four discretionary factors that the district court may
consider when ruling on a§ l 782(a) request:
(1) whether the person from whom the discovery is sought is a
participant in the foreign proceeding; (2) the nature of the foreign
tribunal, the character or the proceedings underway abroad, and the
receptivity of the foreign government or the court or agency abroad
to U.S. federal-court judicial assistance; (3) whether the § 1782
request conceals an attempt to circumvent foreign proof-gathering
restrictions or other policies of a foreign county or the United States;
and (4) whether the§ 1782 application contains unduly intrusive or
burdensome discovery requests.
Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 (2004).
III.
LEGAL DISCUSSION
a.
Statutory Factors
The Court finds that Petitioner's application satisfies each of the statutory requirements set
forth in 28 U.S.C. § 1782. First, Petitioners' counsel has submitted a declaration stating, under
penalty of perjury, his understanding that Mr. Jagganath currently resides within this judicial
district. (Choo Deel. ,-i 13, ECF No. 1-3).
Second, Petitioners seek the discovery at issue for use in a civil proceeding "currently
pending before the High Court of Justice, Queen's Bench Division, Commercial Court, Royal
Courts of Justice" in London, England. (Id. ,-r 1). The Court finds that this satisfies§ 1782's
"foreign tribunal" requirement. See 28 U.S.C. § 1782 ("The district court of the district in which
a person resides or is found may order him to give his testimony or statement or to produce a
document or other thing for use in a proceeding in a foreign or international tribunal, including
criminal investigations conducted before formal accusation"); Intel Corp., 542 U.S. at 249
("Congress introduced the word 'tribunal' to ensure that 'assistance is not confined to proceedings
before conventional courts,' but extends also to 'administrative and quasi-judicial proceedings'").
Finally, Petitioners are plaintiffs in the London Action, and therefore qualify as interested
persons under 28 U.S.C. § 1782. See Intel Com., 542 U.S. at 256 ("No doubt litigants are included
among, and may be the most common example of, the 'interested person[ s]' who may invoke §
1782").
b.
Discretionary Factors
As Petitioners have established that their application satisfies each of the statutory factors
established in 28 U.S.C. § 1782, the Court will now tum to the four discretionary factors that the
Supreme Court discussed in Intel Corp., 542 U.S. at 247. The Court will consider each of those
factors in tum.
i.
Jurisdictional Reach of the Foreign Tribunal
The United States Supreme Court has recognized:
[W]hen the person from whom discovery is sought is a participant
in the foreign proceeding ... the need for§ 1782(a) aid generally is
not as apparent as it ordinarily is when evidence is sought from a
nonparticipant in the matter arising abroad. A foreign tribunal has
jurisdiction over those appearing before it, and can itself order them
to produce evidence. In contrast, nonparticipants in foreign
proceedings may be outside the foreign tribunal's jurisdictional
reach; thus, their evidence, available in the United States, may be
unobtainable absent§ 1782(a) aid.
Intel Corp., 542 U.S. at 244. Here, Petitioners acknowledge that they have named Mr. Jagganath
as a defendant in the London Action and that they recently effectuated service upon him with
regard to that case. (Choo Deel.
ifif 13, 42, ECF No. 1-3). Petitioners further acknowledge that,
as a party to the London Action, Mr. Jagganath would be required to disclose documents "in the
ordinary course of litigation" in that matter. (Id.
if 43). Petitioners contend, however, that Mr.
Jagganath is a "flight risk," and "given his conduct to date is likely to disappear making further
contact with him impossible and therefore rendering the powers of the English Court 'moot' in
circumstances of an unlocatable Defendant."
(Id~
43). It is not readily apparent, and Petitioners
have not explained, how that situation might be different if the United States District Court, as
opposed to the English Court, orders production. The Court finds that, based on the argument
Petitioners have articulated here, this discretionary factor weighs against granting their application.
ii.
Nature and Receptivity of the Foreign Tribunal
Under the second discretionary factor, "a court presented with a § 1782(a) request may
consider the nature of the foreign tribunal, the character of proceedings underway abroad, and the
receptivity of the foreign government, court, or agency to federal-court judicial assistance." Intel
Corp., 542 U.S. at 244. It appears that the London Action is a civil proceeding being litigated in
a traditional court. There is no evidence suggesting whether or not the English Court would be
receptive to the United States District Court's assistance in collecting evidence for use in the
London Action. The Court notes, however, that "[p ]arties that apply for discovery under § 1782
enjoy a presumption in favor of foreign tribunal receptivity that can only be offset by reliable
evidence that the tribunal would reject the evidence." Gov't of Ghana v. ProEnergy Servs. LLC,
No. 11-9002, 2011 WL 2652755, at *4 (W.D. Mo. June 6, 2011) (citing Euromepa S.A. v. R.
Esmerian, Inc., 51 F .3d 1095, 1099-1100 (2d. Cir.1995) ("[W]e believe that a district court's
inquiry into the discoverability of requested materials should consider only authoritative proof that
a foreign tribunal would reject evidence obtained with the aid of section 1782"). Based on the
evidence before this Court, there is no indication that the English Court would reject the evidence
that Petitioners seek to elicit from Mr. Jagganath. This discretionary factor therefore weighs in
favor of granting Petitioners' application.
iii.
Attempt to Circumvent Foreign Restrictions on Evidence Gathering
The third discretionary factor requires the Court to examine "whether the § 1782(a) request
conceals an attempt to circumvent foreign proof-gathering limits or other policies of a foreign
country or the United States." Intel, 542 U.S. at 244-45. There is nothing to suggest that
Petitioner's application herein is an attempt to circumvent any proof-gathering restrictions.
Indeed, Petitioners' London-based counsel has represented that he is ''unaware of any law or rule
of court in England that would prohibit Petitioners from seeking evidence in the United States or
elsewhere in support of their claim before the English Court." (Choo
Deel.~
37). Moreover,
Petitioners seek to require Mr. Jagganath to produce documents and appear for a deposition, and
both of those discovery mechanisms are expressly permitted under the Federal Rules of Civil
Procedure, so there is no danger that Petitioners' request might run afoul of the United States'
discovery policies.
The Court therefore finds that this factor weighs in favor of granting
Petitioner's application.
iv.
Whether the Requests Are Unduly Intrusive or Burdensome
Under the final discretionary factor, the Court must considerwhether the discovery sought
is unduly intrusive or burdensome. While the Court is not making a definitive finding on this
point, Petitioners' proposed subpoenas, (ECF Nos. 1-1 and 1-2), appear to be neither.
Nevertheless, because Petitioners made this application ex parte, the Court is without sufficient
information to evaluate whether the discovery they seek is unduly intrusive or burdensome to Mr.
Jagganath.
Once Petitioners serve the requested subpoenas, Mr. Jagganath will have the
opportunity to seek an Order from this Court modifying or quashing the subpoenas. The Court
therefore finds that this factor weighs in favor of granting Petitioners' application.
The Court further finds that, on balance, the discretionary factors that the Supreme Court
articulated in in Intel Corp., 542 U.S. at 247, weigh in favor of granting Petitioners' application.
IV.
CONCLUSION AND ORDER
Based on the foregoing findings that Petitioners' application satisfies both the relevant
statutory and discretionary factors;
~~
IT IS on this~ --day of May, 2016,
ORDERED that Petitioners' application for discovery pursuant to 28 U.S.C. § 1782, (ECF
No. 1), is GRANTED; and it is further
ORDERED that Petitioners may serve Mr. Jagganath with copies of the subpoenas
attached to their application as ECF Nos. 1-1 and 1-2 (with the dates of issuance and deadlines for
compliance adjusted as necessary), as well as a copy of this Opinion and Order; and it is further
ORDERED that nothing in this Opinion and Order shall be construed as limiting Mr.
Jagganath's right to challenge those subpoenas pursuant to Federal Rule of Civil Procedure 45.
SO ORDERED
cc:
Hon. Esther Salas, U.S.D.J.
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