Banca Turco Romana SA v Cortuk & Ors

Banca Turco Romana SA v Cortuk & Ors

The freezing orders against the third to fifth defendants must be set aside and not continued due to substantial and deliberate breaches of the duty of full and frank disclosure by BTR on the ex parte application. The breaches included misrepresentation and omission regarding the scope of US and Swiss proceedings, the nature of the Swiss settlement, weaknesses in the Romanian Real Estate Fraud allegation, and the source of funds for Ms Gönen’s life insurance policy. The cumulative effect of these breaches undermined the integrity of the court’s process and justified the penal sanction of setting aside the orders, irrespective of the underlying merits of BTR’s claim for relief.

Parties
Claimant: Banca Turco Română S.A. (in liquidation) (acting through its liquidator Fondul de Garantare a Depozitelor Bancare); First Defendant: Kamuran Çörtük; Second Defendant: Serkan Çörtük; Third Defendant: Yesim Sakarya; Fourth Defendant: Haşim Bora Özerman; Fifth Defendant: Füsun Gönen
Jurisdiction
England and Wales
Judgment Date
28 March 2018
Procedural Posture
Commercial Court Application (freezing Orders) / Inter Partes Hearing on Continuation of Ex Parte Freezing Orders
Outcome
Freezing orders set aside and not continued
Legal Topics
Freezing Injunctions, Ancillary Relief Against Non Cause of Action Defendants (chabra Jurisdiction), Full and Frank Disclosure, Enforcement of Foreign Judgments, Jurisdiction and Forum Conveniens
Civil Procedure Insolvency Banking Law International Enforcement Freezing Injunctions Ancillary Relief Against Non Cause of Action Defendants (chabra Jurisdiction) Full and Frank Disclosure Enforcement of Foreign Judgments +1 more

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Parties

Banca Turco Română S.A. (in liquidation) (acting through its liquidator Fondul de Garantare a Depozitelor Bancare)

Claimant

Kamuran Çörtük

First Defendant

Serkan Çörtük

Second Defendant

Yesim Sakarya

Third Defendant

Haşim Bora Özerman

Fourth Defendant

Füsun Gönen

Fifth Defendant

Procedural Posture

Commercial Court Application (freezing Orders) / Inter Partes Hearing on Continuation of Ex Parte Freezing Orders

Legal Issues

  1. 1 Whether the freezing orders against the third to fifth defendants should be continued or set aside due to material non-disclosure and misrepresentation on the ex parte application
  2. 2 Whether the English court has jurisdiction and it is just and convenient or expedient to grant freezing relief against non-cause of action defendants in support of enforcement of a foreign judgment

Ratio Decidendi

The freezing orders against the third to fifth defendants must be set aside and not continued due to substantial and deliberate breaches of the duty of full and frank disclosure by BTR on the ex parte application. The breaches included misrepresentation and omission regarding the scope of US and Swiss proceedings, the nature of the Swiss settlement, weaknesses in the Romanian Real Estate Fraud allegation, and the source of funds for Ms Gönen’s life insurance policy. The cumulative effect of these breaches undermined the integrity of the court’s process and justified the penal sanction of setting aside the orders, irrespective of the underlying merits of BTR’s claim for relief.

Court Disposition

Freezing orders set aside and not continued

Orders

  • The freezing orders against the third to fifth defendants are discharged and will not be renewed.