Fiona Trust Holding Corporation & Ors v Privalov & Ors

Interlocutory disclosure is ordered only where the documents are necessary for the fair disposal of the application. The court should exercise that power sparingly and avoid allowing an interlocutory application to become a mini-trial. Alleged illegality in the obtaining of evidence does not automatically prevent relief or require extensive disclosure. The relevant question is whether the alleged misconduct has an immediate and necessary relation to the equitable relief sought. Evidence obtained unlawfully may still be admitted where its admission does not itself condone the unlawful conduct. Relevance of redacted material may, for an interlocutory application, be assessed by the party disclosing it unless a proper basis for wider disclosure is shown.

The claimants, companies in the Sovcomflot group, brought substantial conspiracy and bribery claims against various defendants. They sought freezing relief in relation to additional claims. The defendants applied for extensive further disclosure concerning private investigations into their financial affairs, alleging that information had been obtained unlawfully and that the claimants’ evidence lacked frankness.

The application sought disclosure of instructions, reports, investigator identities and related explanations, together with an adjournment of the freezing-order applications. Earlier proceedings had resulted in freezing relief against one defendant and orders concerning other claims. The central issue was whether the alleged illegality and the contents of the investigation reports justified the far-reaching interlocutory disclosure sought.

1. The application was refused. The court’s power to order disclosure before the usual procedural stage, including for an interlocutory application, should be exercised sparingly. Disclosure should be ordered only for documents shown to be necessary for the fair disposal of the application.
2. The defendants’ proposed inquiry would improperly turn the disclosure application into a mini-trial, potentially involving cross-examination and allegations under the Perjury Act and Data Protection Act 1998. The defendants could deploy their case that prima facie unlawful activity had occurred, and that this was relevant to the court’s discretion, without the extensive investigation sought.
3. Even if unlawful activity had occurred and had been deliberately concealed, that would not automatically preclude equitable relief. The misconduct must have an immediate and necessary relation to the equity sued for. The investigation material was not central to the enlarged freezing-order application: the claimants did not rely on it as affirmative evidence of foreign assets or bribery.
4. The admission of evidence did not, of itself, condone unlawful activity. The issue could be revisited if particular evidence was later relied upon and a specific objection arose.
5. The claimants’ redactions were accepted for the purposes of the application. Material concerning other targets, possible investigative overlap, subcontracting, other solicitors or meetings did not establish relevance to the present application. The further disclosure and explanatory relief sought was therefore refused.