The Libyan Investment Authority v –(4) Societe Generale SA and Others and Others

Hearing dates: 10 – 12 February 2016

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Whilst a bloody civil war rages in Libya the Claimant, the Libyan Investment Authority ("the LIA"), has commenced proceedings alleging that certain trades, which involved the payment of US$2.1 billion by the LIA to Societe Generale SA ("SocGen") and its affiliates, the First to Fourth Defendants, were part of a fraudulent and corrupt scheme involving the payment of US$58.4 million by SocGen to Mr. Al-Giahmi, the Fifth Defendant, via Leinada Inc. (the Sixth Defendant), a Panamanian company owned and controlled by the Fifth Defendant. It is alleged that certain employees and officers of the LIA were influenced by the payment of bribes and the making of intimidatory threats to cause the LIA to enter the disputed trades. It is said that the Fifth Defendant was able to effect this scheme through his links with the Gaddafi regime. These allegations are denied by all of the Defendants.

In the course of disclosure by the Fifth Defendant the names of more than 50 individuals who received part of the proceeds of the Leinada payments or other sums have been identified. The Fifth Defendant was willing to disclose those names on terms that the names were only provided to those within a Confidentiality Club. Accordingly they are known outside the Confidentiality Club not by their actual names but by letters of the alphabet (hence, "the Alphabet Individuals"). It is the Fifth Defendant's case that wider disclosure of the names of the Alphabet Individuals would expose them, their families in Libya and their property in Libya to violence. It is common ground that Libya is "a dangerous place".

The Confidentiality Club has been in existence since early 2015. Its terms provide by paragraph 2 that "Confidential Material is received, held, accessed and communicated between Relevant Persons only on or by means of a Secure System". Confidential Material is defined by Part C of the Schedule as "unredacted versions of those documents which the Fifth Defendant has been ordered to provide to the Claimant". Relevant Persons are listed by name in Part A of the Schedule (they include solicitors, counsel, forensic accountants and IT and data management teams) who will have given an undertaking in the form prescribed by Part B of the Schedule. A Secure System is defined by Part D of the Schedule and includes a secure online e-disclosure platform, provision for one hard copy set to be kept in one office, email communications to be encrypted and restrictions on oral communications. A party to whom Confidential Material is disclosed will procure (see paragraph 6) that it will not be disclosed to persons who are not "Relevant Persons".

The LIA has now applied for an order that the Confidentiality Club be set aside and replaced by a Restricted Information Regime ("the RIR") on the grounds that the Confidentiality Club seriously interferes with the ability of the LIA to prepare its case for trial, in particular, by taking statements from possible witnesses. The Confidentiality Club prevents the LIA from disclosing the names of the Alphabet Individuals to possible witnesses. The RIR suggested by the LIA will not have this effect but will give what the LIA says is a reasonable and proportionate degree of protection to the Alphabet Individuals.

The terms of the suggested RIR define Restricted Information as "information derived from the Fifth Defendant's disclosure which is not already in the public domain". Relevant Persons are defined as including those named as Relevant Persons under the Confidentiality Club order but include additional named persons. Paragraph 4 of the proposed order provides that no Relevant Person shall disclose any Restricted Information to any Professional Third Person (defined as professional teams out of the jurisdiction such as foreign lawyers) unless that Professional Third Person has given an undertaking in the terms set out in Part C of the Schedule (in essence to keep it confidential and to submit to the jurisdiction of this court). Paragraph 5 provides that Relevant Persons and Professional Third Persons may communicate Restricted Information amongst and between themselves without restriction provided that all written communications containing Restricted Information are marked as "Confidential and Restricted Information subject to the terms of this order". Paragraph 6 provides that no Relevant Person shall disclose any Restricted Information to any Third Person (defined as individuals who are not a Relevant Person or a Professional Third Person) unless that Third Person has given an undertaking in the terms set out in Part D to the Schedule (in essence to keep it confidential and to submit to the jurisdiction of this court).

The two principal differences between the Confidentiality Club order and the proposed RIR order appear to be these. First, under the former the confidential information cannot be disclosed by a recipient of it save to another Relevant Person. Under the latter the recipient may disclose it to third parties so long as the third person gives the required undertaking. Second, under the former the confidential information can only be communicated and discussed amongst Relevant Persons by means of the described "secure system". Under the latter it may be communicated and discussed provided that written communications are headed "Confidential and Restricted Information."

This application has given rise to the following main issues:

i) Is the LIA entitled to make this application? It is suggested that the LIA is not so entitled because of an earlier decision by Hamblen J. in February 2015 concerning the Confidentiality Club.

ii) Would disclosure of the names of the Alphabet Individuals give rise to a risk to life, limb or property?

iii) If so what are the reasonable and proportionate steps required to protect the Alphabet Individuals?

I have received submissions not only from leading counsel on behalf of the LIA, SocGen and the Fifth Defendant but also from leading counsel on behalf of Person B, one of the Alphabet Individuals, who is said to have received about US$24 million of the Leinada payments and against whom the LIA has now commenced separate proceedings (which have been consolidated with the proceedings against SocGen and the Fifth Defendant). The resolution of the LIA's application is a matter of considerable concern to all parties but for different reasons. The expressed concern of the LIA is that the Confidentiality Club unnecessarily, unreasonably and/or disproportionately interferes with its ability to prepare its case for trial. The expressed concern of the Fifth Defendant is that the proposed RIR will expose the Alphabet Individuals to a risk to life, limb and property. Person B says that the proposed RIR will expose him and his family to such risk. SocGen is also concerned that the Confidentiality Club inhibits its ability to defend itself against the claims of fraud which have been made against it.

The entitlement of the LIA to make this application

It was submitted by Mr. Girolami QC on behalf of the Fifth Defendant (supported by Mr. Hunter QC on behalf of Person B) that, in circumstances where Hamblen J. in February 2015 had considered whether four of the Alphabet Individuals should be covered by the Confidentiality Club and had determined that two should be and two should not be, it was not open to the LIA, absent a change of circumstances, to put back in issue the "risk profile" which gave rise to the need for the Confidentiality Club or the engagement of the court's obligation to protect life, limb and property. Mr. Girolami supported his submission by reference to the statement of principle by Lord Neuberger in Thevarajah v Riordan [2015] UKSC 78 at paragraphs 15–18 to the effect that an application to vary or revoke a previous interlocutory order requires a material change of circumstances.

Mr. Girolami took me through the events leading up to the hearing before Hamblen J. and to the written submissions of counsel for the LIA which were made to Hamblen J. It is not necessary to set all of that out in detail. There is no doubt that there was a prospect that Hamblen J. would be asked to determine whether in principle there was a need for the Confidentiality Club. That would have involved an assessment of the question whether there was a risk to life, limb and property and if so whether the scheme of the Confidentiality Club was necessary to protect life, limb and property, notwithstanding the effect it would have on the LIA's preparation for trial.

However, when the matter...