PJSC Tatneft v Gennadiy Bogolyubov
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Moulder |
| Judgment Date | 24 November 2020 |
| Neutral Citation | [2020] EWHC 3225 (Comm) |
| Docket Number | Case No: CL-2016-000172 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 3225 (Comm)
Mrs Justice Moulder
Case No: CL-2016-000172
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (COMMERCIAL COURT)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
David Railton QC, Henry King QC and James Sheehan (instructed by Debevoise & Plimpton LLP) for the Claimant
Ewan McQuater QC and Matthew Parker (instructed by Enyo Law) for the First Defendant
Mark Howard QC, Ruth den Besten and Tom Ford (instructed by Fieldfisher) for the Second Defendant
Ken MacLean QC and Owain Draper (instructed by Mischon de Reya) for the Third Defendant
Marcus Staff (instructed by Sherrards) for the Fourth Defendant
Hearing dates: 24 th November 2020
Tuesday, 24 November 2020
Judgment by Mrs Justice Moulder
This is the court's judgment on the application by the second defendant dated 9 November 2020 as to:
(i) whether or not there has been a waiver of privilege in respect of matters identified and, if so, the scope of such waivers;
(ii) if there has been a waiver of privilege, the second defendant seeks a declaration to that effect and, in respect of certain of the matters identified, an order for inspection of documents withheld.
Background
This is an application which has been made partway through this ten-week trial, the trial having commenced on 12 October 2020. The trial is being held remotely and the application was therefore also heard remotely, but the court had the benefit of full written and oral submissions from leading counsel over the course of an entire day.
It is not necessary to set out the background to the proceedings. To the extent that it is necessary to refer to what is an issue in the proceedings, this is dealt with at the appropriate section of the judgment below.
In this judgment I shall refer to the submissions on behalf of the second defendant as “the defendant” for convenience, but references more broadly to the defendants are to the four defendants in these proceedings.
Timing of Application
As a preliminary point it is worth noting why the application is said to have arisen at this stage.
The defendant's explanation as to why this application has only been made at this stage is that it is asserted that it is only during the course of the trial that a lack of clarity has emerged as to where Tatneft has drawn the lines as to the waivers of privilege. It was submitted for the defendant that in some instances Tatneft has accepted that privilege has been waived, but the defendant asserts that the actual waiver is broader in scope. The defendant therefore seeks rulings from the court as to whether the privilege has been waived and, if so, the scope of the waiver.
In correspondence Tatneft has confirmed that in relation to the first category of documents in issue, an alleged waiver of prejudice in all communications between S-K and Tatneft in the period October 2007 to March 2012, no documents have been withheld from inspection on the basis of privilege in respect of the period October 2007 to December 2010.
The defendant nevertheless seeks a declaration from the court which, it submits, will then entitle it in closing submissions to ask the court to draw adverse inferences from the failure to produce such documents.
The claimant submits that the application is inexplicably late because it depends primarily on evidence which was served and deployed in interlocutory proceedings in 2016 and that it was clear by the PTR that Tatneft intended to call the relevant witnesses at trial: for example, one of the issues at the PTR was that the defendants challenged the length of Tatneft's witness statements as exceeding the permitted limits.
It was accepted for the claimant that the timing of the application is not a reason to dismiss the application. However, it was submitted that the court is entitled to view “with considerable scepticism” the arguments now made that privilege has been waived in documentation covering extensive periods when inspection of such documentation had never previously been sought on this basis.
Notwithstanding the reliance which is now sought to be placed by the defendant on certain paragraphs of the claimant's opening submissions, both written and oral, for trial, I am surprised that this application alleging wide-ranging waiver arising out of statements in witness statements, some dating back to 2016, was only made during the trial. Privilege is a topic which had clearly been considered by the defendant in the lead-up to the trial, as is evident from the application which was heard at the PTR and for which I gave judgment in September, albeit that I accept that the legal basis for asserting that privilege, namely that privilege did not attach to communications between Tatneft and members of its legal department, was different.
However, given the acceptance that the timing of the application is not a reason to dismiss the application, it seems to me to be unnecessary to consider the authorities to which I was referred in this regard. I propose therefore to concentrate on the substantive issues.
Matters in issue
The alleged waiver of privilege is asserted in respect of the following communications:
(i) (a) all communications between S-K and Tatneft in the period October 2007 to March 2012;
(b) all communications between S-K's legal advisers and Tatneft's legal representatives or Ukrainian counsel in the period 1 June 2009 to 31 March 2010 in connection with the recovery of the oil monies from S-K's contractual debtors or from third parties;
(ii) legal advice received by Tatneft in relation to the purpose, entry and/or approach of the second criminal complaint;
(iii) in the analyses, reporting and advice provided to Tatneft up to August 2012 by its legal representatives concerning (a) the products of the first and second criminal complaint, (b) more generally concerning the scheme or the persons responsible for it as to what and when was learnt in relation to the Oil Payment Siphoning Scheme and/or the defendants' involvement;
(iv) in the legal advice prior to S-K's liquidation in May 2015 as to the reasons for and/or scope of the assignment of claims by S-K to Tatneft.
Relevant legal principles,
Although both counsel refer to there being common ground in relation to the relevant legal principles, it was apparent that there was a significant difference in the approach of the parties and it is necessary to resolve that difference in order to establish the relevant principles which govern the determination of this application.
It was submitted for the claimant that the principles set out by Mr Justice Waksman in PCP Capital Partners v Barclays Bank [2020] EWHC 1393 (Comm) provided a “useful recent summary”, whereas it was submitted for the defendant that the matter was “comprehensively considered” in that case.
Although the claimant referred the court to various authorities for the principles underlying legal professional privilege, it seems to me that the statement by Mr Justice Waksman of what he described as “overarching points” adequately set out the relevant context. At paragraph 47 of his judgment:
“ I begin with a number of overarching points.
(1) Legal professional privilege is regarded as a fundamental right of the client whose privilege it is. The loss of that right through waiver is therefore to be carefully controlled;
(2) Generally, privileged documents cannot be ordered to be provided in litigation by the party whose privilege it is unless this is as a result of a waiver;
(3) Absent waiver, the fact that such documents might be highly relevant does not entail their production;
(4) Applications for documents based on a waiver of privilege entail at least the two following fundamental questions:
(a) Has there been a waiver of privilege?
(b) If so, is it appropriate to order production of privileged documents other than those to which reference has been made which was the foundation for the waiver?
(5) The concept of fairness underpins the rationale for having a concept of waiver which can then entail the production of further privileged documents. This is because if the party waiving is, by the waiver thereby creating a partial picture only of the relevant legal advice, it is unfair to the other party to allow him to ‘cherry pick’ in this way.
(6) That said, it is also clear that the question of whether or not there has been a waiver is not to be decided simply by an appeal to broad considerations of fairness.”
Against that background, the court then has to determine when a waiver will arise and, as stated by Mr Justice Waksman at paragraph 48:
“… it is not easy to find a succinct and clear definition of when it arises, going beyond general statements to the effect, for example, that the party alleged to have waived them has deployed them in some way as part of its case”.
The cases are not easy to reconcile and I note the observation of Mr Justice Elias, as he then was, in Brennan v Sunderland City Council UKEAT 349/08 at 65, the case considered by Mr Justice Waksman in PCP:
“ It is an error to treat the earlier authorities as if the words falling from the judicial lips had the sanctity of statute.”
At [48] of his judgment Mr Justice Waksman stated that;
“… first the reference to the legal advice must be sufficient … and second, the party waiving must be relying on that reference in some way to support or advance his case on an issue that the court has to decide”.
At [49], Mr Justice Waksman stated that a purely narrative reference does not constitute a waiver as this would not involve reliance in relation to an issue in...
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