High Court refuses anti-suit injunction to restrain US s.1782 discovery application in relation to English libel proceedings

A recent judgment highlights the circumstances in which the English court may, or may not, issue an anti-suit injunction to restrain an application under s.1782 of Title 28 of the US Code: Soriano v Forensic News LLC [2023] EWHC 262 (KB).

In broad terms, s.1782 allows a litigant in a non-US legal proceeding to ask a US District Court to order an individual or entity in the relevant federal district to provide testimony or documentary discovery (disclosure) for use in the foreign proceedings (see eg the article from our Cross-Border Litigation publication series “Section 1782 – A surprisingly underused tool in cross-border litigation“).

The English court has a well-established jurisdiction to issue an anti-suit injunction to restrain a party pursuing a s.1782 application, where such an application would be unconscionable. However, as this decision suggests, a s.1782 application is unlikely to be considered unconscionable simply because the US court may take a broader approach than the English court faced with an application for third party disclosure.

That applies equally in the libel context. Accordingly, a defendant to a libel claim in the English court may be able to use the s.1782 procedure to obtain evidence to support an additional or improved defence, which has not to date been particularised in the action, even though the English court might take a narrower approach in ordering disclosure - though of course each case will turn on its facts.

Background

The claimant, who was domiciled in the US, brought proceedings against various US-domiciled defendants in respect of certain publications which referred to the claimant in unflattering terms. The allegations included libel, misuse of private information and breaches of data protection law. The court gave permission to serve the proceedings on the defendants outside the jurisdiction.

The first two defendants (referred to in this post as "the defendants") applied to the US District Court for the Southern District of New York under s.1782 seeking permission to issue a subpoena for the production of documents against a US subsidiary of HSBC international banking group. The US subsidiary was understood to have acted as correspondent bank to clear US dollar payments to/from the claimant's accounts with HSBC in London.

The claimant applied to the English court for an anti-suit injunction to restrain the defendants' s.1782 application on the basis that the US proceedings initiated by that application would be unconscionable if allowed to proceed.

Decision

The High Court (Murray J) refused to grant the injunction sought.

It was common ground that the court has jurisdiction to restrain a s.1782 application by injunction. The relevant test is unconscionability, ie conduct which is oppressive or vexatious or which interferes with the due process of the court (see South Carolina Insurance Co v Assurantie Maatschappij “De Zeven Provincien” NV [1987] 1 AC 24 (HL)), and each case will turn on its specific facts.

There was also no dispute that, as held in Yorkshire Provident Life Assurance Co v Gilbert [1895] 2 QB 148, a defendant to a libel case is entitled to disclosure relating to the questions in issue as narrowed by the statements of case, and not more, on the basis that (as was said in that case) "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 claimant supported its application for injunctive relief with various submissions, including that the defendants’ stated purpose for the s.1782 application was to seek documents to support an additional and/or improved defence of the claim. This was impermissible, it said, given the principle in the Yorkshire Provident Life Assurance case that a party’s right to disclosure is limited to documents relevant to the pleaded case, and therefore the application was an interference with the due process of the court.

The claimant also argued that a number of other features of the s.1782 application rendered it oppressive or abusive, including for example the breadth of the application (which the claimant described as a "fishing expedition"), its potential impact on non-parties, and the manner in which the application was made.

Murray J rejected the claimant's submission that the Yorkshire Provident Life Assurance principle was a bar to the s.1782 application. That principle simply means that, in a libel claim, an English court will not order disclosure of documents that are not relevant to the case as pleaded. It does not prevent a party gathering evidence in any other way that is legitimately available to it, including by seeking the assistance of a foreign court which has power to provide such assistance. Such a court will be concerned only with evidence over which it has jurisdiction and, as a matter of comity, should be trusted to deal with issues of substantive and procedural fairness that may be raised by any application for its assistance. A s.1782 application was not to be considered unconscionable simply because the US principles relating to third party disclosure differ from the principles an English court would apply.

The judge also rejected the claimant's specific criticisms of the s.1782 application, including its breadth as to the scope of documents and timeframe and the confidential and potentially sensitive nature of the financial disclosure sought. Such objections could be raised in the s.1782 proceedings and would be addressed by the New York court.

The judge did not consider that the s.1782 application involved any unwarranted interference with the efficient case management of the English proceedings. There was no reason why the court could not proceed with the trial of preliminary issues and hearing of the claimant's application to strike out certain paragraphs of the defendant, which was scheduled for early March 2023. It was possible (though unlikely) that the application might result in relevant evidence becoming available before that hearing, which might justify an application to vacate the hearing, but that was not a reason to grant injunctive relief.

It was relevant that the s.1782 application was for documents only, and that the English proceedings were at a relatively early stage - in contrast to the cases which had been identified in which an injunction was granted, namely Bankers Trust International Plc v PT Dharmala Sakti Sejahtera [1996] CLC 252, where the trial had already ended and would effectively be reopened, and Omega Group Holdings Ltd v Kozeny [2002] CLC 132, where a witness from whom evidence was sought under the s.1782 application would have been subjected to unwarranted double cross-examination.