When can you provide a foreign authority with documents disclosed in English proceedings?

In JSC Commercial Bank Privatbank v Kolomoisky & Ors [2024] EWHC 1837 (Ch), a claimant bank was granted permission to provide documents disclosed to it in English proceedings to the Ukrainian Bureau of Economic Security for use in separate Ukrainian criminal proceedings against the first defendant. The documents were protected by a collateral use undertaking from the bank, which meant that without an order from the court they could only be used in the English proceedings.

This case is a useful reminder that when a foreign authority or court seeks to compel a party to English litigation to provide documents disclosed to it in that litigation, the party must consider the English Civil Procedure Rules (CPR), the terms of any undertakings and the position of the English court before complying. The judgment also provides insight into factors that may persuade an English court to grant a party permission to provide documents subject to collateral use restrictions. These include enabling a party to comply with foreign legal obligations, to support foreign criminal investigations and where the documents have already lost their confidentiality.

Background

The CPR provides that a party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed – known as a collateral use restriction. The restriction applies to both the document and the information contained within it. There are exceptions to this rule where: (a) the document has been read to or by the court, or referred to at a public hearing, (b) the court gives permission, or (c) the parties agree (see CPR 31.22). Parties may be required to provide similar collateral use undertakings where documents are disclosed to them in relation to a freezing order.

Facts

The claimant bank had previously obtained asset disclosure from the defendants as part of a worldwide freezing order. This information was included in two schedules to the bank’s particulars of claim, but its use was protected by a collateral use undertaking. Although these schedules had been made public during the trial, a subsequent court order meant that the usual exception for documents referred to at a public hearing did not apply. Consequently, the bank had to seek permission from the court to disclose the documents in response to a Ukrainian court order supporting a fraud investigation being conducted by the Ukrainian Bureau of Economic Security.

Court's decision

The High Court granted the bank permission to disclose the schedules. The Court applied the test established in Crest v Holmes [1987] AC 829, whereby an applicant must establish cogent and persuasive reasons to justify the release of a collateral use restriction. There must be special circumstances warranting such release, and it should not result in injustice to the party who originally disclosed the information. The test is a high bar as there are important policy reasons for collateral use restrictions: protecting a person’s private right to keep their own documents to themselves, and encouraging those with documents to make full and frank disclosure for the purposes of the proceedings.

In reaching its decision that this test was satisfied and granting permission to provide the documents, the Court was influenced by several key considerations:

1. Foreign legal obligations: The Court considered the “double risk” faced by the bank of either being held in contempt of court in England if it provided the documents without permission, or facing sanctions in Ukraine for failing to disclose in response to a Ukrainian court order. This "double risk" was deemed a special circumstance, which formed part of the reason for allowing disclosure.
2. Public interest: The court recognised the importance of investigating fraud in the Ukrainian criminal proceedings, which supported the decision to allow disclosure.
3. Loss of confidentiality: Unusually in this case, although collateral use restrictions were still in place, the schedules had already been discussed during a public trial and so, with a few minor exceptions, the information was already in the public domain. This alone was a strong reason why permission should be granted as the confidentiality of the schedules, and by extension the public policy arguments in favour of upholding the collateral use undertaking, was already largely diminished.
4. No specific prejudice or injustice: Given that the information was already in the public domain, the court found that while there was some limited prejudice to the disclosing party, there was no injustice by further disclosing the documents to the Ukrainian Bureau of Economic Security.

Key takeaways

• English courts require strong, persuasive reasons to permit the disclosure of documents covered by collateral use restrictions.
• Where a party is facing legal obligations in foreign jurisdictions, particularly in the context of criminal investigations conducted by state entities, this can help to demonstrate special circumstances to justify the release of protected information. This is particularly helpful for entities that might otherwise have found themselves caught between a ‘rock and hard place’ of breaching their legal obligations in one jurisdiction or the other.
• Once documents have been referred to at a public hearing, collateral use restrictions usually no longer apply. Even if such documents are still covered by collateral use undertakings, their diminished confidentiality weighs in favour of allowing disclosure, in particular because the public policy considerations against collateral use have much less significance. In such a situation, the court is also likely to consider that, while the party whose documents will be disclosed may suffer some prejudice, this is unlikely to amount to injustice.

With thanks to Kathy Williams for her assistance in preparing this post.