9 June 2016
Following a multi-party hearing, the Upper Tribunal ordered that a stay should be lifted in one reference, but continued in another. Amongst the numerous parties who contributed to the hearing, there were two individuals who had standing and who made applications in respect of stays.
The background in relation to the Christian Bittar proceedings was:
- Bittar had made a reference in May 2015 on the identification issue (see our report on Macris in Enforcement Watch 16 "19 May 2015: Court of Appeal determines identification issue"). The reference was decided in his favour in November 2015.
- The FCA had applied for a stay of the reference, to last until both Macris had been decided by the Supreme Court and criminal proceedings had been concluded in which Bittar and Philippe Moryoussef had amongst others been charged.
- Separately, Bittar had received a Warning Notice in April 2015.
The background in relation to the Philippe Moryoussef proceedings was:
- Moryoussef had made a reference on the identification issue.
- The FCA wanted the Bittar and Moryoussef matters consolidated.
As for the question of a stay, the FCA wanted to stay the references. This was a position supported by both the SFO and by Deutsche Bank. The issue was more interesting as far as the two individuals were concerned, as they took opposing views:
- Moryoussef supported the stay. He had limited resources and did not want to have to fight on two fronts. He also shared the SFO's concern about there being a risk to the fairness of his trial if his reference was heard before the criminal proceedings had been concluded.
- Somewhat unusually, Bittar contested the stay. He wanted to exercise his statutory rights, appeared not to have the same limited resources as Moryoussef, and he had no concerns about prejudice where regulatory and criminal proceedings were being contested in parallel.
The Tribunal recognised that these were unusual circumstances. It recognised that it needed to be guided by the overriding objective and the need to balance the competing interests of the parties.
- In respect of Bittar, it decided that there should no further stay at this stage.
- In respect of Moryoussef, it decided that the stay would continue for the time being, until after the Supreme Court's judgment in Macris. However, it gave an indication of its view that, assuming the Court of Appeal decision was upheld, the reference should progress at that point, at least until the extent of determining the preliminary issue of identification.
In some senses, the decision of the Tribunal is somewhat unusual.
To start with, Bittar took the unusual position of opposing a stay. By contrast, most respondents facing parallel criminal and regulatory proceedings prefer to have the criminal case heard first because it is the more serious case and has more exacting standards. The authorities similarly routinely argue for a stay.
Further, the Tribunal came to opposite views in respect of two men facing criminal charges in the same case. The Tribunal stated that there was a strong presumption against a stay and that it was a power to be exercised with great care. In the case of Bittar, it gave strong weight to his desire to pursue his statutory rights as expeditiously as possible. However, in the case of Moryoussef, it gave strong weight to his desire to preserve his resources. On the principles governing a stay, interestingly for practitioners, it also added that it agreed with one of the SFO's concerns (but not the others), namely that the cases showed that there could be a risk of prejudice to a criminal trial through publicity that could flow from an adverse finding in prior regulatory proceedings, at least if heard shortly before the criminal trial.
In a sense, the Tribunal did not come to any final conclusion and the issue in both cases is still to an extent up for grabs. That is, in the case of Bittar, the Tribunal said that, as it was adopting staged case management, it did not need now to rule on whether the reference would not be heard until after the criminal proceedings were concluded. As for Moryoussef, the stay would be maintained for the time being, but reviewed after the Supreme Court's judgment in Macris.
You can read the decision here.