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THE APPLICABLE LEGAL PRINCIPLES
C.THE APPLICABLE LEGAL PRINCIPLES
The applicable legal principles are well established and were largely common ground before me subject to differences of emphasis between the Claimants on the one part, and Glencore and Mr Glasenberg, on the other. The leading case remains that of Bank Mellat. There is also a useful recent review of the relevant authorities by Henshaw J in the case of Public Institution for Social Security v Al Wazzan [2023] EWHC 1065 (Comm) (“PIFSS”) at [43]-[51].
Where permitting inspection would be an offence in England, the Court could not order inspection in any circumstances. The Court, whose function it is to enforce the law of England, will not order someone to do something which is, of itself, an offence in English law: Morris v Banque Arabe et Internationale d’Investissement SA [2001] I. L Pr. 37 (“Morris”), at [39].
However, obligations of confidentiality arising under foreign law do not provide an automatic basis to withhold disclosure and inspection. The right to inspect documents disclosed in litigation is not unqualified and the Court retains a discretion to order or withhold a document from inspection: National Crime Agency v Abacha [2016] EWCA Civ 760; [2016] 1 WLR 4375, at [30]–[31].
The relevant principles in the context of alleged foreign restrictions on providing inspection of documents are stated in the Court of Appeal’s decision in Bank Mellat at [63]. The following propositions can be identified:-
An order will not lightly be made where compliance would entail a party to English litigation breaching its own criminal law (not least with considerations of comity in mind), but the Court is not precluded from doing so (Bank Mellat at [16] and [63(i)–(iii)]).
When exercising this discretion, the Court will take account of the real – in the sense of the actual – risk of prosecution in the foreign state. A “real risk” is one that is more than “purely hypothetical”: Morris at [71] (Neuberger J), applied in Bank Mellat at [72].
The Court is concerned with the risk of prosecution, rather than the risk (or gravity) of subsequent sanction if prosecuted and convicted (Bank Mellat at [33], [64], [69]; Tugushev v Orlov [2021] EWHC 1514 (Comm) per Butcher J (“Tugushev”) at [32]).
The party must show that the criminal law relied on is not merely a “text, or an empty vessel” (Tugushev at [33]), but the past may or may not be a safe guide to future performance or risk (Joshua v Renault SA [2024] EWHC 1424 (KB) at [78]).
The smaller or less significant the risk (even if it surmounts the threshold of being a “real risk”), the less weight it will be given in the balance: Tugushev at [34].
The Applicant bears the burden of showing the reality of the risk of prosecution, and absence of evidence of any prosecution in the circumstances will weigh against the application: Tugushev at [49]. See also, in this regard what was said by Henshaw J in PIFSS at [44], “It is for the disclosing party to show that the foreign law is regularly enforced so that the threat to that party is real”.
A balancing exercise must be conducted, weighing (i) the actual risk of prosecution in the foreign state, and (ii) the importance of the documents of which inspection is ordered to the fair disposal of the English Proceedings. The existence of an actual risk of prosecution in the foreign state is not determinative of the balancing exercise but is a factor of which the Court would be very mindful (Bank Mellat at [63(iv)]).
Should inspection be ordered, the Court can fashion the order to reduce or minimise the concerns under the foreign law, for example, by imposing confidentiality restrictions in respect of the documents inspected (Bank Mellat at [63(v)]).
Where an order for inspection is made by the Court, considerations of comity may not unreasonably be expected to influence the foreign state in deciding whether or not to prosecute the foreign national for compliance with the order of this Court (Bank Mellat at [63(vi)]).
“Comity is capable of playing a free-standing part in the judicial decision-making process, and … does not arise for consideration solely when a real risk of prosecution has been shown” (PIFSS, per Henshaw J at [51]).
During the course of the hearing, I put to Mr Hill KC, that the following points are of relevance when assessing whether there is a real risk of prosecution, and I understood him to accept the same:-
If a defendant has, or may have, an actual, or a potential, defence to any criminal charge this is itself relevant (and I would have thought may be highly relevant) in relation to the decision whether the prosecuting authority will prosecute in the first place, so this factor goes to risk of prosecution as well as coming in again at stage 3 (the balancing exercise).
The extent of the possible sanction may itself be relevant (and again I would have thought may be highly relevant) in relation to the decision whether the prosecuting authority will prosecute in the first place, so this factor goes to risk of prosecution as well as coming in again at stage 3 (the balancing exercise).
The fact that a defendant is acting under compulsion of law by order of the English Court (and could face committal for contempt and sequestration of assets in case of disobedience thereof) may reduce the risk of a prosecution in the foreign court due to considerations of comity (see Bank Mellat at [63(vi)]) or reduced culpability by reason of the necessity of compliance with an English Court’s Order. Ditto if the defendant has done all it can to seek to persuade the English Court not to make such an order (by making an application such as the present) but has been unsuccessful in doing so.
The English Court can fashion its Order (a) to reduce or minimise the concerns under foreign law, for example by imposing confidentiality restrictions in respect of the documents inspected (see Bank Mellat at [63(v)]) and/or (b) make clear that the party is acting under compulsion, for example in the Recitals to the Order or by the endorsement of a Penal Notice (identifying and spelling out the consequence of non-compliance), either of which will be relevant in relation to the decision whether the prosecuting authority will prosecute in the first place and so go to the risk of prosecution as well as coming in again at stage 3 (the balancing exercise).
In O v C [2024] EWHC 2838 (Comm), Sir Nigel Teare at [22(iii)], reiterated that the burden of proving a real risk is on the applicant (as indeed it is at stage 1 as to whether a criminal offence has or may have been committed).
As to comity, Sir Nigel Teare added that:-
“The Court can fashion an order that reduces or minimises the concerns under the foreign law (Bank Mellat at [63(iv)]; and Tugushev at [35]), and considerations of comity may be expected to influence the foreign state in deciding whether or not to prosecute the foreign national for compliance with the Court’s order: “Comity cuts both ways” Bank Mellat at [63(vi)]; Tugushev at [36].”
In this regard, during the course of the hearing I invited the parties to serve either an agreed draft Order or their respective draft Orders, setting out those matters which they considered would show that Glencore and Mr Glasenberg were acting under compulsion in terms of an Order of the English Court if inspection was ordered, together with a proposed confidentiality club, in each case designed to reduce the risk that Glencore and Mr Glasenberg would be prosecuted. In this regard, it was also envisaged that the recitals would include a recital to the effect that the Court has had regard to the possible consequences of breach of an English Court Order (the possibility of sanction in the UK) and this being a matter that might be borne in mind by the DPPO in considering whether to prosecute.
The parties provided a draft Order on 11 July 2025 setting out the matters that they proposed be included in the Order in the above context, and thereafter provided draft confidentiality club wording on 23 July 2025.
So far as the balancing exercise is concerned, Glencore submits that many of the cases where disclosure has been ordered despite a real risk of prosecution are ones in which the risk of prosecution was nonetheless very low and documents were plainly important and voluminous, referring to Bank Mellat at [22], [26], [73] and [76]; Tugushev at [39], [55] and [56]; Byers v Samba Financial Group [2020] EWHC 853 (Ch) (“Byers”) at [102], [107(i)] and [107(iv)] and Morris at [68] and [71].
Of course, every case will turn on its own particular facts, and in LLC EuroChem North-West 2 v Société Générale SA [2025] 6 WLUK 298 (“EuroChem”), Bright J rejected a suggestion that the likelihood that the content of one exchange of messages would have any real effect on anything he had to decide was very low, as being an invitation for the court to speculate, which the court was not prepared to do (see at [5]). The Judge identified (in the context of the risk of prosecution) that he would have expected there to be examples of parties who were in possession of correspondence with the relevant administrative body, who had disclosed the same, being prosecuted – but none was cited to him.
Bright J ordered that the document concerned must be produced. In this regard he imposed a confidentiality regime so it would not be made public and thanked the objecting party’s counsel for arguing its case, “forcefully and with care and has taken every possible point” (at [21] and [22]). I confirm that such sentiments are equally true of the submissions of Mr Hill KC on behalf of Glencore and Mr Lodder on behalf of Mr Glasenberg. Such matters are, of course, relevant in relation to both any real risk of prosecution and when conducting the balancing exercise.