Walter Tzvi Soriano v Forensic News LLC
| Jurisdiction | England & Wales |
| Judge | Sir Geoffrey Vos MR,Lady Justice Carr,Lord Justice Warby |
| Judgment Date | 01 March 2023 |
| Neutral Citation | [2023] EWCA Civ 223 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2023-000292 |
[2023] EWCA Civ 223
Sir Geoffrey Vos, MASTER OF THE ROLLS
Lady Justice Carr
and
Lord Justice Warby
Case No: CA-2023-000292
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
MEDIA AND COMMUNICATIONS LIST
MR JUSTICE MURRAY
Royal Courts of Justice
Strand, London, WC2A 2LL
Andrew Fulton KC (instructed by Rechtschaffen Law) for the claimant/appellant (Mr Soriano)
Lord Falconer of Thoroton KC (instructed by Gibson, Dunn & Crutcher UK LLP) for the respondents (the defendants)
Hearing date: 21 February 2023
Sir Geoffrey Vos MR, Lady Justice Carr, and
Introduction
This case has been brought on quickly as a rolled-up hearing for permission to appeal and, if permission is granted, the substantive hearing of that appeal. It raises one important issue as to this court's proper approach to defendants, who seek to use foreign court procedures to gather evidence to support their defence to litigation here. This is a defamation case, but it is for consideration whether the same principles apply to all types of litigation.
Mr Soriano, an Anglo-Israeli claimant, has sued the two US based defendants claiming that they libelled Mr Soriano in 8 online publications (the publications). The defendants contested the jurisdiction of the English court, but Jay J and the Court of Appeal ( [2021] EWCA Civ 1952) held that Mr Soriano had shown that the English court was clearly the most suitable forum in which to bring the claim (see section 9 of the Defamation Act 2013).
The defendants filed a defence to Mr Soriano's claim on 22 March 2022, but disclosure has not yet occurred. This hearing was urgent because a preliminary hearing was fixed for 2 and 3 March 2023 to determine the meaning of the words complained of and to deal with Mr Soriano's application to strike out the defence contending that what was said was true and in the public interest.
In the build up to the preliminary hearing, the defendants applied to the District Court for the Southern District of New York (the DCSDNY) on 6 December 2022 for an order requiring HSBC Bank USA NA (HSBC USA) to produce two very broad categories of banking documents relating to Mr Soriano's companies in reliance on 28 USC §1782 (the 1782 application). That is a provision allowing a US court to provide assistance to an applicant in gathering evidence in support of legal proceedings in a foreign court. It provides that: “[t]he district court … may order [a person] to … produce a document or other thing for use in a proceeding in a foreign … tribunal”, and “[t]he order may be made … upon the application of any interested person”.
Once Mr Soriano had found out about the 1782 application: (i) he applied on 19 January 2023 in this jurisdiction for an anti-suit injunction on the grounds that it was vexatious, oppressive and unconscionable and would interfere with the efficient conduct of these proceedings, and (ii) on 20 January 2023, he sought to intervene before the DCSDNY in the 1782 application.
Murray J (the judge) dismissed Mr Soriano's application for an anti-suit injunction on 9 February 2023. He held, in essence, that the defendants were not guilty of “conduct which [was] oppressive or vexatious or which [interfered] with the due process of the court” (in reliance on Lord Brandon at page 41C-D in South Carolina Insurance Co v. Assurantie Maatschappij “De Zeven Provincien” NV [1987] 1 AC 24 ( South Carolina)).
Mr Soriano raised five grounds of appeal. He contended that the 1782 application:
i) Was an inherently abusive fishing expedition which sought to circumvent English disclosure rules in general and Yorkshire Provident Life Assurance Co v. Gilbert [1895] 2 QB 148 ( Yorkshire Provident) in particular. Lindley LJ had held at page 152 in Yorkshire Provident that the defendant to a libel action was only entitled to discovery “of all matters relating to the questions in issue as narrowed by the particulars” (the abusive ground).
ii) Involved abusive re-litigation in the DCSDNY of an issue already decided against the defendants in relation to jurisdiction, namely whether Mr Soriano was engaging in “libel tourism” (the libel tourism ground).
iii) Was vexatious and oppressive insofar as it caused the parties to run up costs when a substantial costs award was overdue from the defendants to Mr Soriano (the costs ground).
iv) Was an interference with due process in this jurisdiction as a matter of fact (the due process ground).
v) Should have allowed the judge to provide “helpful instructions” to the DCSDNY (as referred to in Bankers Trust International Plc v. PT Dharmala Sakti Sejahtera [1996] CLC 252 ( Bankers Trust) at page 273) to the effect that the nature and scope of what was sought by way of discovery was oppressive (the helpful instructions ground).
At the end of Mr Soriano's opening argument, we indicated that, subject to further argument, we were minded to grant permission to appeal on all grounds except the libel tourism ground. We confirm that indication in this judgment.
Mr Andrew Fulton KC, leading counsel for Mr Soriano, argued orally that the cardinal principle was that English law regarded it as wrong for a libel defendant to be given the opportunity to scour the books and records of the person he has defamed before particularising a defence. The order sought from the DCSDNY was too broad and sought oppressively to penetrate a confidential banker customer relationship. This was a case just like Yorkshire Provident, where A.L. Smith LJ had said at page 155 that “the defendants want … to go roving through the whole of the [claimant's] books to find out something if they can”. As Lindley LJ said also in that case at page 152: “it would be a very bad precedent to suggest that a person can simply by libelling another obtain access to all his books and see whether he can justify what he has said or not”. The defendants support the judge's decision.
For the reasons that appear below, we have decided to dismiss the appeal. In the broadest outline, the principles applicable to a 1782 application made by a defendant to English proceedings were clearly stated in South Carolina, where Lord Brandon explained at page 40D that the court could grant an injunction restraining foreign proceedings where “one party to an action has behaved, or threatens to behave, in a manner which is unconscionable”. Lord Brandon did not, however, (at page 42) think that the defendants had so behaved, nor did he think that they had in any way departed from, or interfered with, the procedure of the English court “by seeking to exercise a right potentially available to them under the Federal law of the United States”. All they had done was “what any party preparing his case in the High Court here [was] entitled to do, namely to try to obtain in a foreign country, by means lawful in that country, documentary evidence which they believe that they need in order to prepare and present their case”. It seems to us that the judge was entitled to reach the same conclusion here. The principles applicable to libel proceedings in this context are no different from those applicable to other civil proceedings; of course, the burden of proving truth is on the defendant in a libel action, but that should not mean that the defendant is disabled from evidence gathering in any lawful manner. The apparently undesirable breadth of the order sought is a matter for the DCSDNY applying its own principles. It will, however, realise from this judgment that such a broad order would be unlikely to be granted here.
We shall now proceed to provide a brief summary of the factual background and of the judge's reasoning, before addressing each of the 5 grounds of appeal in turn.
Factual background
Mr Soriano's business interests include involvement with a company called USG Security Limited (USG). The first defendant (founded by the second defendant) is a Californian company which operates an online news platform.
Mr Soriano's case, in summary, is that the publications alleged that he was guilty of corrupt dealings: (a) with the Russian state in connection with security at Sochi airport at the time of the 2014 Olympics, (b) with the Israeli President, Benjamin Netanyahu, and (c) in Monaco. They also alleged that Mr Soriano was guilty of multiple homicide, of money laundering, and of being the middleman for a network of illegal Israeli hackers. The publications further alleged that there were grounds for thinking that Mr Soriano was involved in a conspiracy to interfere with the 2016 US presidential election, involved with the Russian mafia, and in the embezzlement of Russian state funds.
The defendants rely, amongst other things, on substantive defences of truth and public interest. The meanings defended as true include that there are “grounds to investigate whether the relationship between the [c]laimant and his firm [USG] on the one hand and Deripaska-Sberbank LLC on the other, in respect of services provided to Sochi Airport involved any corrupt payments”, and that there are “grounds to investigate whether the [c]laimant had knowledge of improper foreign interference into US politics”. These meanings do not, as is obvious, cover the whole subject-area of Mr Soriano's claims nor do they reach the same level of gravity as the meanings which Mr Soriano places on the words complained of.
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Court Of Appeal Allows Party To Gather Documentary Evidence From Abroad
...v Forensic News LLC & Ors[2023] EWCA Civ 223, the Court of Appeal upheld a decision refusing to grant an anti-suit injunction to restrain a US discovery application. The Defendants had applied to a US court to obtain documents held by a bank in the US, which they intended to use in their de......