Cde v Nop
| Jurisdiction | England & Wales |
| Judge | Lord Justice Males,Lord Justice Popplewell,Lord Justice Warby |
| Judgment Date | 14 December 2021 |
| Neutral Citation | [2021] EWCA Civ 1908 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A4/2021/1466 |
[2021] EWCA Civ 1908
Lord Justice Males
Lord Justice Popplewell
and
Lord Justice Warby
Case No: A4/2021/1466
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice Robin Knowles CBE
[2021] EWHC 2720 (Comm)
Royal Courts of Justice
Strand, London, WC2A 2LL
Nathan Pillow QC & David Davies QC (instructed by Steptoe & Johnson UK LLP) for the Appellants
Lawrence Rabinowitz QC & Simon Paul (instructed by Simmons & Simmons LLP) for the Respondents
Hearing date: 2 nd December 2021
Approved Judgment
Introduction
This appeal is concerned with the tension between open justice and arbitral confidentiality.
It is not possible in this judgment to say much about the facts of the case or anything about the identity of the parties.
The defendants in this action proceeding in the Commercial Court are accused of having orchestrated a fraud. The allegations against them have received some publicity.
Those same allegations were the subject of an arbitration against companies who are said to have some connection with the defendants. Arbitrators were appointed who held a hearing, heard witnesses including individuals who are defendants in this action and produced a lengthy award.
Although we have not seen the award itself, the claimants say and the defendants do not deny that the arbitrators found that the claimants' allegations were well-founded and that the defendants had given false evidence.
Now the question arises whether the arbitrators' award is binding on the defendants in this action. The claimants say that it is, because there is privity between the individual defendants in this case and the companies who were parties to the arbitration. Even if there is no such privity, the claimants say that it would be an abuse of process for the defendants to insist on litigating the same issues all over again. The defendants say on the other hand that the award is not binding on them: there is no privity and it is not an abuse of process for them to defend themselves in this action against the allegations made against them. They say that if the award is not binding on them, it will not be admissible at all as evidence against them in this action in accordance with the rule in Hollington v Hewthorn [1943] 1 KB 587, considered more recently in Rogers v Hoyle [2014] EWCA Civ 257, [2015] QB 265 and Ward v Savill [2021] EWCA Civ 1378. Who is right about this is due to be determined at a hearing in February 2022 at which the claimants will apply for summary judgment. I will refer to this as “the privity application”, without distinguishing between the privity arguments and the arguments about abuse of process.
The claimants would like the award to be made public. They wish the world to know what the arbitrators have decided and say, among other things, that there is a public interest in the award's principal findings entering the public domain. They point out that the defendants have said publicly, in response to the allegations made against them, that they would be vindicated in the arbitration; and say that, now that they have not been vindicated, this should be publicly known. The defendants and the company against which the award was made (which I will call “X Co”) would prefer that the award, which is confidential, does not become public, at any rate until after the privity application has been determined. They say, therefore, that it should not enter the public domain at this stage; and that if the claimants' privity application fails, there will be no need (and it will not be permissible) to refer to it again in this action, and no justification for making the award public.
The defendants and X Co accept that the claimants must be permitted to use the award for the purpose of preparing for the privity application, to adduce it in evidence before the judge hearing that application, and to make whatever submissions about it they wish to make. There is, therefore, no doubt that the judge hearing the privity application will have all the relevant evidence on which to make a decision. The defendants' and X Co's position, however, is that all this should be done in such a way that the award does not become public if they succeed in resisting the privity application, which in practice (they say) can only be done by conducting that application in private.
I should record that it has been agreed that all of the documents disclosed in the arbitration should form part of the disclosure in this action, as also should documents produced in the course of the arbitration such as witness statements and transcripts of evidence. Indeed the pleadings in the action include numerous references to evidence given in the arbitration. It is therefore likely that material which would in the ordinary course be subject to arbitral confidentiality will in due course become public as this action proceeds. But that does not in itself mean that the arbitrators' decision or findings will become public.
The broad issue argued on this appeal concerns the extent to which the proceedings in this action which involve reference to the contents of the award – and in particular the privity application – should be heard in public. But as I shall explain, the issue which the judge actually decided is much narrower.
The CMC
A case management conference took place before Mr Justice Robin Knowles in July 2021. This was shortly after the publication of the arbitrators' award. It appears that X Co was present, represented by the same legal team as represented the defendants. In addition to the usual matters arising to be dealt with at such a hearing, the claimants had indicated that they proposed to apply for permission to amend their Particulars of Claim, a draft of which was supplied, to rely on the arbitrators' findings, and to issue an application for summary judgment accordingly. The application was not issued at that stage, but in due course it became what I have referred to as the privity application.
Accordingly a question arose whether the case management conference should be heard in public or in private and whether an order should be made ensuring that documents such as the draft Amended Particulars of Claim and the claimants' skeleton argument should not become publicly available. The claimants submitted that the hearing should be in public in the usual way in accordance with the important principle that court proceedings are conducted in public. The defendants resisted this: a public hearing in which the confidentiality of the award was debated would inevitably reveal what the arbitrators had decided.
The judge decided that the hearing should at least begin in private, while the issue was debated. In the event the whole hearing took place in private. It appears that when the debate about the award was concluded, nobody raised the question whether it should then continue in public. The parties' submissions extended not only to the question of how the case management conference should be conducted, but also to the question whether the as yet unissued privity application should be in public or in private.
The judgment
At the conclusion of the argument about the award, the judge gave an ex tempore judgment. He said that he had no hesitation in concluding that “at this point in this case the partial award should retain the confidentiality that it attracts by virtue of the arbitration itself, and the respect for arbitral confidentiality seen in CPR 62 and the LCIA Rules”. But he also made clear that this was only a view “for now”, or as he described it “holding the ring”, and that “nothing that I say today can or is intended to bind the judge who will consider the summary judgment application and decide it”.
Despite this, there are passages in the judgment which call into question the extent to which the judge intended to determine that, in the absence of any change of circumstances in the meanwhile, the privity application should be heard in private. Some passages do appear to say this. It appears that the parties were under the impression that the judge had decided this, at any rate until they saw the approved transcript of his judgment and the order which he made which, in some respects, differed from the agreed draft which the parties had submitted to him. It is not surprising that the parties were under this impression as, in the course of argument, the judge had indicated in clear terms that he proposed to deal with the issue whether the proceedings up to the proposed summary judgment application should be heard in private. It appears, however, that the judge had thought better of this by the time he came to approve the draft order submitted by the parties.
The order
What the judge decided must be determined by reference to the order which he made. A judge is entitled to revise the transcript of a judgment delivered ex tempore and is not bound by the terms of a draft order submitted by the parties. The contrary was not suggested.
The order which the judge made recorded that the claimants had indicated their intention to apply for permission to amend their claim to rely on the award and for summary judgment in respect of the proposed amendments. It referred to this as the “Intended Privity Application”.
The order then provided as follows:
“(1) This CMC, which refers to the contents of the Partial Final Award … (the ‘LCIA Award’), and any application heard today which...
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The Open Court Principle v. Confidentiality In Private Dispute Resolution: The Court Of Appeal Of England And Wales Weighs In
...handed down a decision addressing the competing principles of open justice and arbitral confidentiality. Background CDE v NOP ([2021] EWCA Civ 1908) ("CDE") concerns a dispute which is the subject of both a court action, and an arbitration involving companies said to be related to the defen......
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The Open Court Principle v. Confidentiality In Private Dispute Resolution: The Court Of Appeal Of England And Wales Weighs In
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