Total E & P Soudan S.A. v Edmonds and Others

Friday, 22nd September 2006

This is a renewed application for permission to appeal an order of Tomlinson J, made on 22nd May this year, for pre-action disclosure. It seems the hearing was some weeks or even months before and that that was a reserved judgment. The Judge sets out in some detail the facts. I will try and put them shortly and I hope not too inaccurately.

The applicant for disclosure is Total, a company. It seems that a related Total company in 1980 signed an agreement with the Sudanese government, by which it was allegedly granted various oil rights over an area known as Block Ba. In 1984 civil war broke out in the Sudan and it is asserted that one of the major reasons for that war was the question of control over the oil fields. The Total company ceased or suspended activity in the region at that stage. In 2002 peace talks commenced. Various important agreements and understandings were reached between the regimes of the north and south of Sudan and agreements were signed, culminating in what was called the Comprehensive Peace Agreement, dated 9th January 2005, which formally, as I understand it, marked the end to the civil war. Prior to that time, during 2004, the regime ruling in southern Sudan had granted an oil concession to its wholly-owned state oil company, Nilepet, over the block Ba and other territories. That agreement was made, apparently, on 12th August 2004. On 21st December 2004 the Government of Northern Sudan allegedly entered into a revised agreement with Total (the applicant company) granting rights over Block Ba. Then in 2005 White Nile Ltd, the third respondent to the application for pre-action discovery, entered into an agreement with Nilepet and, as I understand it, the Government of Southern Sudan to exploit oil in Block Ba.

What was initially alleged by Total, as it seems, was that any grant to White Nile Ltd was invalid, and I am prepared to make the assumption for today's purposes that that is not an argument totally abandoned. But what they undoubtedly alleged before the Judge, as he records, is that the nature of their case was that the first and second respondents to the application, that is Mr Edmonds and Mr Groves, had knowledge of the fact that a Total company had exclusive rights to the exploration and development of Block Ba, and they, with that knowledge, entered into negotiations with the officials of the South Sudan Government in order to obtain a grant of those rights from the South Sudan Government. As I understand their argument, it goes so far as to say that the South Sudan Government was either a delegate of or a part of the Government of Sudan itself which had granted the rights to Total. Thus the assertion is that by persuading the Southern Sudan Government to negotiate with it for the purpose of providing these rights, that was and would be an interference with Total's economic interest and rights and in particular an interference with the agreement that Total had for these rights. Particularly, it would be said that White Nile entered into an agreement with the Southern Sudanese regime and Nile Pet, called the Exploration and Production Licencing Agreement, and that was an agreement it made on 25th April 2005 and it is that ultimate agreement which is said to interfere with Total's economic interest and rights.

4. Once White Nile had been formed, it sought a listing on the Stock Exchange. The AIM rules for companies provided that the London Stock Exchange may make the admission of an applicant subject to a special condition and it may require a company to provide it with such information as it considers appropriate. Certain conditions were imposed upon White Nile. One was to obtain counsel's opinion and the second was that White Nile should make available for public inspection all documents on which it placed reliance in relation to the acquisition of the 60% interest in Block Ba, those documents obviously being required to be produced so that the members of the public could make their own investigation into the validity of such grant as had been made in favour of White Nile. Pursuant to that obligation, White Nile did make four documents available for public inspection. Those representing Total inspected those documents, but they were not allowed to take copies of them. So far as six further documents or categories of documents were concerned, Total argued before the Judge that they should have been made available for public inspection in accordance with the condition imposed, but that they were not. In relation to those six categories, the Judge expressed the view that it was not for him to express a view on the extent to which there had been compliance with the special condition imposed by the London Stock Exchange. However, he could see force in the argument that the six documents were ones upon which White Nile placed reliance in relation to the acquisition.

The application was then made for pre-action discovery. In the schedule to that application there were 11 categories of documents in relation to which pre-action discovery was being sought. Documents 2, 4, 6 and 7 were the documents which had been produced for public inspection. Documents 1, 5, 8, 9 and 10 were the documents that the Judge had found arguably should have been made available. Category 11 was in these terms:

"All other agreements, correspondence or notes of meetings between White Nile and/or the Southern Sudanese regime (whether under the title of the GOSS or the CANS) and/or Nilepet and/or ECL and/or Terra Seis relating to White Nile's purported rights to Block Ba and/or Total's rights to Block Ba."

The relevant rule in relation to pre-action discovery is CPR31.16 which provides as follows:

"31.16 (1) This rule applies where an application is made to the court under any Act for disclosure before proceedings have started.

(2) The application must be supported by evidence.

(3) The court may make an order under this rule only where—

(a) the Respondent is likely to be a party to subsequent proceedings;

(b) the applicant is also likely to be a party to those proceedings;

(c) if proceedings had started, the Respondent's duty by way of standard disclosure, set out in CPR 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and

(d) disclosure before proceedings have started is desirable in order to:

(i) dispose fairly of the anticipated proceedings;

(ii) assist the dispute to be resolved without proceedings; or

(iii) save costs."

The Judge bore in mind the judgment of Rix LJ in Black v Sumitomo, and in particular directed himself that it was important to consider the question of jurisdiction separate from the question of discretion, it being easy to allow the two to be intertwined. Rix LJ had warned against a court taking the view that because jurisdiction was satisfied, discretion automatically followed.

The Judge identified the key points taken by the respondents in paragraph 21 of his judgment:

"The Respondents' position is that the Applicant fails to satisfy the jurisdictional hurdles on five grounds:-

(a) The potential claim would not be justiciable in the English Court;

(b) The English courts would not be the appropriate forum;

(c) The Applicant has not put forward a case with reasonable prospect of success. It has no evidence of the requisite intention on the part of the Respondents.

(d) It would not be desirable for documents in categories 1–9 to be disclosed; they add nothing to the real issues, and will not assist in saving costs, resolving issues or otherwise disposing of the case; and

(e) The documents sought at category 11 extend beyond standard disclosure and the category is too wide.

The principal thrust of the Respondents' objection to the application is that the proposed claim has at its core issues which are not justiciable or at any rate not justiciable in this jurisdiction. This objection operates both at the jurisdiction stage and at the discretion stage of the inquiry. What is said is that the question of the legitimacy or otherwise of the grant of rights by either the Civil Administration of New Sudan or the GOSS is not a matter justiciable by this court. This is, submit the Respondents, plainly a case for the exercise of judicial restraint by the English court."

The Judge considered the question of jurisdiction over a number of paragraphs and was of the view that the court had the jurisdiction to make the order. He felt that the question which really arose was one which should be considered as a matter of discretion. Of course, many of the same points arise again when the question of discretion has to be considered as would arise when considering jurisdiction.

The respondents took a point on justiciability in the English court. What they were arguing was, certainly on the way that they understood the applicant to be putting the case, which was that such rights as White Nile had were not valid, that the question that was likely to arise and have to be considered by a court was whether land and oil rights in the Sudan had been validly transferred first to Total and/or to White Nile, and that, they were arguing, would not be justiciable in the English...