High Court orders defendant to provide disclosure in jurisdiction dispute

A High Court Master has partially allowed a claimant's application for the defendant to disclose certain documents in the context of a jurisdiction dispute: Alesayi v Bank Audi SAL [2024] EWHC 1975 (KB).

As a Master's decision, this will not bind other courts, but it illustrates the court's approach to determining when and to what extent a defendant may be ordered to provide disclosure where the court's jurisdiction to hear the case is itself at issue. The decision suggests that, while disclosure will be ordered only exceptionally, such an order may be made when necessary to do justice between the parties and to ensure a level playing field – particularly where there is significant "information asymmetry" between the parties on matters relevant to the question of jurisdiction. But even then, any such disclosure will be limited to what is proportionate.

Although this decision considers disclosure under CPR 31, as the claim was issued in the King's Bench Division, the same approach is likely to apply where the court is considering an application for disclosure under Practice Direction 57AD which applies to cases in the Business and Property Courts.

The decision is also of interest for the court's comments on when a document has been sufficiently "mentioned" in (for example) a statement of case or witness statement that a party may be required to disclose it on that basis. In the present case, the court held that broad references to a bank's records in relation to particular customers were sufficient for those documents to have been mentioned, in circumstances where the bank said it had checked records and relied on that check to support its position. References to the bank's "customer facing materials" at a particular date were also sufficient. However, in the Master's view, a reference to an opponent's assertion that a party has failed to disclose a class of documents does not constitute a sufficient reference for these purposes. Otherwise any discussion in evidence of documents an opponent asserted to exist would trigger the rule.

Background

In the 1990s, the claimant individual ("Sheikh Alesayi") opened accounts with the defendant Lebanese bank. The contract between the parties is said to be governed by Lebanese law and subject to a jurisdiction agreement in favour of the Lebanese courts.

In 2022, Sheikh Alesayi instructed the bank to transfer his funds out of Lebanon into an account in Switzerland. The bank refused to comply with the transfer request, in the context of the Lebanese banking crisis which had resulted in banks in Lebanon refusing to make international transfers of sums held by their customers.

Sheikh Alesayi commenced proceedings against the bank in the English courts, seeking a mandatory order that the bank perform the transfer request. He relied on section 15B of the Civil Jurisdiction and Judgments Act 1982 which allows a consumer domiciled in the UK to bring a claim in the English court against a business that pursues commercial activities in the UK or directs such activities to the UK, regardless of the presence of a foreign jurisdiction clause in the contract between them. The bank contested jurisdiction, denying that it directs commercial activities to the UK.

Sheikh Alesayi applied for disclosure of certain categories of documents, relying on CPR 31.12 (which allows the court to order specific disclosure or inspection of documents) and/or CPR 31.14 (which allows a party to inspect a document mentioned in a witness statement, among other documents). He said he could not provide a full pleading on the jurisdiction point until the bank provided disclosure of various documents, particularly relating to the question of whether the bank directed its activities to the UK, which went wider than just activities directed at the claimant himself.

The bank challenged the disclosure application, arguing that: there is no right to "interrogate" a party in relation to documents which may establish jurisdiction; there is a general rule that disclosure should not be made in the context of a Part 11 challenge and that such an order required genuinely "exceptional circumstances"; and the documents sought were not within the scope of disclosure under the relevant rules.

Decision

The High Court (Master McCloud) allowed Sheikh Alesayi's application in relation to some documents, but rejected other requests.

Court's approach to disclosure in a jurisdiction dispute

The Master said it was clear that specific disclosure in a jurisdiction dispute is not the norm and is in that sense exceptional. It should however be ordered when necessary to do justice between the parties, but even then should be limited to what is proportionate given the overriding objective and the approach set out in Kaefer Aislamientos SA De CV v AMS Drilling Mexico SA De CV [2019] EWCA Civ 10, which was summarised in Kalo v Sal [2023] EWHC 2606 (Comm).

Under that approach, as summarised by the Master, the court's task on a jurisdiction question is to ask whether the claimant has the better argument on the material before the court, that forensic (evidential) limitations may well not prevent the court performing that task where the court using common sense can reach a view even if there is conflicting evidence, and lastly that if the court is simply unable to decide who has the better argument it is sufficient to find that "there is a 'plausible (albeit contested) evidential basis' for the application of the gateway".

That "broad brush" approach tended to limit the need for disclosure, and the court should also take into consideration the need to avoid a "mini-trial" on jurisdiction disputes and the risk of forum shopping merely to obtain documents if the court were to allow wide documentary disclosure before determining jurisdiction.

However, the Master noted, the approach in Kaefer and Kalo still placed emphasis on evidence, and so the court must consider at least adequate material in applying that approach, bearing in mind the requirement of the overriding objective that the court must deal with cases justly.

A classic case was where, as here, there was information asymmetry between the parties, as the issue of jurisdiction related to matters within the bank's knowledge (as to whether it directed its activities to the UK) or where the bank held the best evidence (as to the contractual terms applicable to its relationship with the claimant).

The Master noted that Sheikh Alesayi had a prima facie, partially evidenced case for jurisdiction based on information in the public domain, so the court had to consider whether disclosure was reasonably necessary to reach a just determination of the jurisdiction issue beyond the material already in hand. Given the highly asymmetric evidential position, it would be unjust to require Sheik Alesayi to proceed without a level playing field, and so disclosure should be ordered sufficient to enable the issue to be decided justly, so long as it was proportionate to do so.

Taking the above into account, the Master approached the categories of documents requested by Sheikh Alesayi under CPR 31.12 and CPR 31.14 on a case by case basis.

Documents sought under CPR 31.12

The Master ordered disclosure of some documents (such as certain customer records and standard terms and conditions), where she considered disclosure to be necessary for the just disposal of the application. Where appropriate, the Master imposed some conditions on disclosure, such as date ranges, with a view to keeping disclosure proportionate.

However, the Master rejected other disclosure requests (such as for the bank's marketing policies and materials, and minutes of certain committee meetings) on the basis that they amounted to a fishing expedition.

Documents sought under CPR 31.14

The Master found that some of the documents requested had been sufficiently mentioned in the bank's witness statements to warrant disclosure under CPR 31.14. She underlined that, as per Hoegh v Taylor Wessing LLP [2022] EWHC 856 (Ch), the test is whether a reference in evidence or a pleading is a reference to documents or classes thereof, or whether instead it is merely a reference to something which gives rise to an inference there are documents in which case it does not suffice.

For example, the Master said that while a generic reference to "the data available" would not amount to mentioning a document, where a party purports to have checked records at a certain time and (as in the present case) relies on that check for the purposes of asserting an absence of relevant activity directed to the UK, then the document has indeed been "mentioned".

Similarly, the Master found that, in stating that the customer facing materials produced by the bank as at a particular date were not published in English, the bank's witness had mentioned those materials. They were relied on by the defendant and should be disclosed. The Master rejected the bank's argument that the expression "customer-facing materials" was not clear, as that was the expression it had used in evidence.

However, the Master found that certain other documents requested by Sheikh Alesayi had not been sufficiently mentioned in the bank's witness statements to warrant disclosure under CPR 31.14. For example, a reference to an assertion by Sheikh Alesayi that the bank had failed to disclose a class of documents would not be a reference by the bank to that class for the purposes of CPR 31.14.