(1) Minera Las Bambas SA v (1) Glencore Queensland Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Moulder |
| Judgment Date | 21 February 2018 |
| Neutral Citation | [2018] EWHC 286 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2016-000344 |
| Date | 21 February 2018 |
[2018] EWHC 286 (Comm)
Mrs Justice Moulder
Case No: CL-2016-000344
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Fionn Pilbrow (instructed by White & Case LLP) for the Claimants
Conall Patton (instructed by Linklaters LLP) for the Defendants
Hearing date: 9 February 2018
Judgment Approved
Introduction
This is the Claimants' application dated 10 January 2018 under CPR 31.19(5) for a determination as to whether the Defendants are entitled to assert litigation privilege in circumstances where the right is said to have arisen out of proceedings to which the Defendants are not a party. The Claimants are seeking an order for inspection of 25 documents.
In support of the Claimants' application I have two witness statements from Mr Hishon, partner at White & Case, acting for the Claimants, dated 10 January 2018 and 31 January 2018. In response the Defendants have filed a witness statement from Mr Carroll, partner of Linklaters, acting for the Defendants, dated 24 January 2018.
Background
By a Share Purchase Agreement dated 13 April 2014 (“SPA”), the Claimants purchased from the Defendants 100% of the shares in Xstrata Peru SA (“Xstrata”). At the time of the SPA, Xstrata indirectly owned the Las Bambas mining project in Southern-central Peru (“the Project”). The ownership of the Project has since been restructured. The First Claimant is now the direct owner of the Project.
The sale under the SPA closed on 31 July 2014. Following closing, the Peruvian tax authority, SUNAT, began an investigation into matters connected with the Project notably two VAT matters referred to as the “NFB VAT claim” and the “Third Party VAT claim”. This ultimately led the Peruvian tax authority to issue a Tax Assessment under which the First Claimant's tax liability was increased. The First Claimant then commenced proceedings against the Peruvian tax authority challenging the Tax Assessment (“the Peruvian Proceedings”). The Peruvian Proceedings are ongoing before the Tax Court in Peru.
The SPA contained a provision under which the Defendants were entitled to, and in fact did, assume control of one of two aspects of the Peruvian Proceedings, the NFB VAT claim. In the Peruvian Proceedings, the Defendants have only ever acted in the name of the First Claimant.
These proceedings (“the English Proceedings”) concern the question of whether, based on a correct interpretation of the SPA and a subsequent Deed of Indemnity dated 24 November 2014, the Defendants are obliged to indemnify the Claimants in respect of the NFB VAT and Third Party VAT liabilities that are the subject of the Peruvian Proceedings. The trial has been listed for five days commencing 23 April 2018.
Disclosure in the English Proceedings
Standard disclosure took place on 13 April 2017. The parties exchanged disclosure statements using Form N265(CC) and attaching lists of documents. The Defendants' Form N265 said the following under the heading “ Documents disclosed”:
“…there were 4,408 disclosable documents resulting from this review, of which 1,393 attracted legal professional privilege”.
This was followed, in Section B of the Defendants' Form N265, with the following wording (under the heading “ The Defendants object to being inspected:”):
“…2. Documents (or parts of documents) passing directly or indirectly between the Defendants and their internal or external legal advisers and other third parties (including, but not limited to, notes, memoranda, emails or other electronic documents evidencing telephone or other conversations and meetings between them, written advice and drafts of legal documents prepared for the purposes of giving legal advice or obtaining evidence), all of which are confidential and have been prepared in contemplation of litigation.”
There were two further rounds of disclosure by letter on 29 September 2017 and 20 October 2017. Attached to these letters were further lists of documents. However, no separate disclosure statement was served on these occasions.
Nowhere in the 13 April 2017 Form N265, or in the attached list of documents, was there any individual mention of any one of the 25 documents in respect of which this application is made. There was no individual mention of any of the 25 documents in any of the documentation relating to the further rounds of disclosure on 29 September 2017 and 20 October 2017.
As matters progressed, the Claimants' solicitors (White & Case) came to understand from the Defendants' solicitors (Linklaters) that, in relation to certain documents, the Defendants were seeking to assert litigation privilege arising from legal proceedings in Peru. On 13 September 2017, White & Case wrote to Linklaters asking to which proceedings Linklaters were referring. Linklaters responded on 2 November 2017 by confirming that they were referring to the Peruvian Proceedings.
Meanwhile, on 20 October 2017, the Defendants had made an application for specific disclosure of documents held by one of the Claimants' third-party advisers relating to the purchase of the Project. That application came before Cockerill J on 1 December 2017. Cockerill J observed that the parties had previously adopted a broader test for standard disclosure than was necessary under CPR 31.6. The Defendants' application was refused on the basis that the documents in question did not meet the proper test for disclosure as set out in the CPR.
White & Case wrote to Linklaters on 11 December 2017 making clear that they did not accept that the Defendants were entitled to assert (against the Claimants) litigation privilege arising out of the Peruvian Proceedings. This, and the observations of Cockerill J at the hearing on 1 December 2017, prompted Linklaters to carry out a re-review of those documents over which they had asserted litigation privilege arising out of the Peruvian Proceedings. Upon that re-review, Linklaters formed the view that the 25 documents to which this application relates (amongst others) did not meet the test for standard disclosure. This application was made on 10 January 2018.
The parties continued to engage in correspondence concerning disclosure issues until the beginning of the week in which the hearing of this application took place. On 30 January 2018, Linklaters confirmed that there were only 25 documents in relation to which the Defendants were seeking to assert litigation privilege arising out of the Peruvian Proceedings. On 5 February 2018, Linklaters confirmed that some of the 1,393 privileged documents referred to in the Defendants' Form N265 were documents over which they were seeking to assert litigation privilege arising out of the Peruvian Proceedings.
During the hearing of this application, counsel for the Defendants confirmed (seemingly for the first time) that only some of the 25 documents to which this application relates were included within the 1,393 privileged documents referred to in the Defendants' Form N265. It remains unclear how many of the 25 documents were so included.
Submissions
The Defendants resist this application on four grounds:
i. The 25 documents have not been disclosed, therefore the Claimants have erred in making an application for inspection; they ought to have made an application for specific disclosure under CPR 31.12.
ii. Even if the 25 documents have been disclosed, they do not in fact meet the test for standard disclosure. Therefore, inspection should be refused under the Court's inherent jurisdiction. The Defendants rely on the decisions in Ward Hadaway v DB (UK) Bank [2013] EWHC 4538 (Ch) at paragraphs 36 to 40 and National Crime Agency v Abacha [2016] EWCA Civ 760 at paragraphs 30 to 32.
iii. In any event, inspection should be refused because the 25 documents were produced for the dominant purpose of the Peruvian Proceedings and are, therefore, covered by litigation privilege.
iv. Even if the Court is not satisfied that the Defendants are entitled to assert privilege over the 25 documents, the Court should refuse the application for inspection under its inherent jurisdiction on account of the timing of the Claimants' application. The Defendants say that this application should, at the very latest, have been made at the same time as the Defendants' application for specific disclosure. The Defendants rely on the decision in National Crime Agency v Abacha [2016] EWCA Civ 760 at paragraph 28.
The Claimants maintain that this is a straightforward application for inspection in respect of which the only issue for the Court to determine is whether the Defendants are entitled to assert privilege over the 25 documents (i.e. the Defendants' third ground of resistance). In relation to this issue, the Claimants say:
i. Any right to assert litigation privilege over documents generated for the dominant purpose of the Peruvian Proceedings belongs to the First Claimant and therefore it is not open to the Defendants to assert that privilege against the First Claimant.
ii. Even if the Defendants can establish their own independent right to assert privilege over the 25 documents, the First Claimant is entitled to demand inspection of those documents on the basis of the parties' joint or common interest. The Claimants rely on CIA Barca de Panama v George Wimpey & Co [1980] 1 Lloyd's Rep 598 for this proposition.
In response, the Defendant says:
i. The decision of the Court of Appeal in Guinness Peat Properties Ltd and another v Fitzroy Robinson Partnership [1987] 1 WLR 1027 is authority...
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