Eronat v Tabbah

An undertaking restricting the use of documents obtained through compulsory disclosure may be varied only in special circumstances and where release will not cause injustice to the person protected by it. An overriding public interest in investigating and prosecuting crime, including foreign crime, may amount to such a circumstance, but the court must decide whether it outweighs the public interest in preserving the undertaking.

Express undertakings given to secure a consensual settlement require particular care. Where a proposed release would permit secret foreign testimony by a witness posing a strong risk of malicious and misleading evidence, and a fairer lawful route for obtaining the evidence is available, the court should refuse the variation.

The respondent had given implied and express undertakings not to use or disclose confidential information obtained during litigation with the appellant. The express undertakings formed part of a settlement of the parties’ civil disputes.

Moore-Bick J varied the undertakings so that the respondent could give evidence and produce documents before a United States Grand Jury investigating alleged trading with Iran. The appellant appealed, contending that Grand Jury secrecy would prevent him from knowing of, challenging, or answering potentially malicious evidence.

The central issue was whether the public interest in assisting the United States investigation justified releasing the respondent from the undertakings, despite the risk of injustice and the availability of an English procedure for taking evidence.

1. Appeal allowed unanimously. Mance LJ, with whom Aldous LJ and Sir Christopher Slade agreed, held that the judge’s exercise of discretion was wrong. The applications to vary the implied and express undertakings to permit oral evidence before the United States Grand Jury were refused.

2. The governing position for an implied disclosure undertaking was that release requires special circumstances and no resulting injustice. The public interest in investigating and prosecuting crime can override the interest in preserving confidentiality, including where the investigation concerns foreign offences. But the court itself must decide whether that overriding interest exists in the circumstances.

3. The express undertakings required greater caution. They had been given to settle contentious litigation involving alleged misuse of confidential material and were intended to protect against its future use. The public interest in upholding consensual settlements reinforced, rather than displaced, the need for special circumstances.

4. The respondent bore the burden of showing special reasons for the releases. The judge gave excessive weight to allowing the United States authorities to use their ordinary procedure. The relevant comparison was between secret, untested Grand Jury testimony and evidence taken in England under the Treaty and Criminal Justice (International Co-operation) Act 1990, where the appellant could be informed, represented and able to seek cross-examination.

5. The Court concluded that the evidence disclosed a very strong risk that the respondent would use secret testimony maliciously and give inaccurate or misleading evidence. The judge had materially underestimated that risk, including the significance of misleading prior disclosures, unexplained conduct, false allegations and the continuing hostility between the parties. That risk of injustice outweighed the case for release.

6. The Court recorded that the appellant would not oppose a properly made English application to take the respondent’s evidence before a magistrate or judge in circumstances permitting awareness of, and response to, that evidence.

• Court of Appeal (Civil Division) Allowed the appeal in [2002] EWCA Civ 950 and refused the applications to vary the undertakings for evidence before a United States Grand Jury.
• Commercial Court (Moore-Bick J) On 13 December 2001, varied the respondent’s express and implied undertakings to permit production of documents and testimony before the Grand Jury. That order was displaced on appeal.