Disclosure from foreign parties


Author:


Two recent cases have involved foreign parties trying to resist orders for the disclosure of documents on the ground that it would be contrary to their local law.

In National Grid Electricity v ABB Limited and 22 others [2013] EWHC 822 (Ch) French companies were required to provide specific disclosure in connection with a claim that they operated an illegal cartel. They claimed that French law (no.68-678, art 1 bis) prohibited the disclosure of any documents or information of an economic, commercial, industrial, financial or technical nature for the purposes of establishing evidence in view of foreign judicial proceedings.

The Chancery Division adopted a pragmatic approach to the problem. Whilst proceeding on the basis that French law would be infringed, it considered that the critical question was the likelihood of any prosecution. An expert called by the French parties failed to impress the court because he did not address the frequency with which such prosecutions occurred and admitted that he did not know of any. The French law had been introduced with a view to providing grounds for resisting abusive discovery requests, particularly from the United States, but even where French companies complied with US disclosure orders, it appeared that they were not prosecuted.

The English court was seised of the proceedings pursuant to the Brussels Regulation and the court took the view that it would be virtually inconceivable for a member state to exercise discretion to institute criminal proceedings against a company for complying with the procedural rules of the courts of another member state.

The last ground also formed the basis of a decision of a Registrar at the Chancery Division in the matter of Hellas Communications (Luxembourg) Sub Nom Hosking & Bonney v Nautadutilh Avocats Luxembourg & others.

That case involved an application by the liquidators of a company incorporated in Luxembourg. The English court was seised of the matter and pursuant to European Regulation 1346/2000 the "main insolvency proceedings" were in England, so English law applied to the conduct of the proceedings.

Orders for disclosure were made against various Luxembourg lawyers and their firms. Certain documents "belonging to" the company had been disclosed, but the remainder were withheld on the ground that Luxembourg rules of professional conduct and secrecy prevented disclosure.

The court considered that the liquidators were entitled to know what had happened in the affairs of the company, leading to the loss of substantial sums of money, and that the order sought was neither unnecessary nor oppressive. Whilst Luxembourg law was relevant to the exercise of the court’s discretion, the order for production was made.

Paul Howcroft, Partner, Fladgate LLP (phowcroft@fladgate.com)

Would you like to hear more?


View by author: