Marlwood Commercial Incorporated v Kozeny & Ors

A notice issued under section 2 of the Criminal Justice Act 1987 must generally be obeyed. Confidentiality arising from litigation disclosure, residence abroad, or the implied undertaking under CPR rule 31.22 does not ordinarily provide a reasonable excuse. Public policy may exceptionally justify withholding material, but such cases are rare and depend on the circumstances. A solicitor holding copies obtained through disclosure must obtain the court’s permission before providing them to a third party for an unrelated purpose. Permission should ordinarily be granted where the statutory notice is valid and no exceptional public policy ground is shown.

Two related commercial actions concerned alleged fraud arising from the privatisation of Azerbaijan’s state-owned oil and gas industry. The defendants disclosed documents in the proceedings. Following a request from the United States authorities, the Secretary of State asked the Serious Fraud Office to obtain evidence under the Criminal Justice (International Co-operation) Act 1990 and the Criminal Justice Act 1987.

The SFO served notices on the defendants’ solicitor and the claimants’ solicitor requiring production of disclosed documents. The defendants sought to restrain compliance, while the claimants’ solicitor sought permission under CPR rule 31.22(1)(b). The central issues were whether confidentiality, the disclosure regime, or public policy supplied a reasonable excuse, and whether permission should be granted.

1. The applications were determined in favour of the SFO. Ms Bailey, who held the original documents for the defendants, had no reasonable excuse for failing to comply with the notices. The fact that the documents had been brought to England by foreign defendants for disclosure did not alter that conclusion.

2. Section 3(3) of the Criminal Justice Act 1987 overrides statutory obligations of secrecy and, by implication, the common-law privilege against self-incrimination. It does not necessarily exclude every public policy ground for withholding information. The statutory scheme gives priority to the investigation of serious fraud over private confidentiality and the public interest in ensuring compliance with disclosure obligations.

3. The implied undertaking governing documents disclosed in litigation protects against collateral use because compulsory disclosure infringes privacy. The principle remains important, but it does not create a special protection for foreign litigants. The courts possess adequate powers to deal with non-compliance with disclosure obligations.

4. CPR rule 31.22 limits use of disclosed documents and includes allowing a third party access for an unrelated purpose. Such access is a use of the documents. The rule does not merely impose secrecy, and unauthorised use remains a contempt of court. Accordingly, Mr Lloyd correctly sought permission before complying with the SFO notice.

5. Permission should be withheld only in rare cases where production can properly be resisted on public policy grounds. No such circumstances existed. Mr Lloyd was therefore permitted to disclose the documents to the SFO in compliance with the notice.