Blue Sky One Ltd & Ors v Blue Airways LLC & Ors

An appellate court should be slow to interfere with a case-management decision, particularly a discretionary disclosure decision, made by a judge who has managed the case extensively. The court may refuse specific disclosure where the material is of marginal assistance compared with the evidence directly addressing the disputed issue, and where disclosure risks diverting the trial into collateral disputes. Statements made to a government agency for the purpose of protecting commercial arrangements may have limited evidential value when assessing whether an earlier oral agreement existed. Absent an error of law or other proper ground for intervention, the case-management decision should stand.

The applicants claimed that the respondents had failed to return three leased aircraft and sought delivery up under written leases and related agreements. The respondents alleged that the leases were shams and that the parties had instead made an oral agreement connected with the transfer of the aircraft to an Iranian carrier, contrary to United States sanctions.

The respondents sought specific disclosure of communications made by the applicants and related parties to the United States Bureau of Industry and Security during its investigation. Flaux J refused the application on 2 June 2009, following an earlier refusal of a broader request on 15 May 2009. The applicants sought permission to appeal. The central issue was whether the requested communications were sufficiently relevant to justify disclosure.

Application refused. Lord Justice Longmore gave the judgment, with Lord Justices Etherton and Patten agreeing.

1. The refusal of specific disclosure was a case-management decision made in the course of managing a complex commercial trial. The judge had managed the case through its interlocutory stages and necessarily knew more about the issues than the appellate court. There was no basis for concluding that he had ignored any legal principle governing disclosure.
2. The requested communications were of marginal assistance in deciding whether the alleged oral agreement had been made in 2006. The central evidence would be the parties’ direct evidence about what they had agreed. Statements made in 2007 to a government agency, particularly where intended to persuade the agency not to interfere with commercial arrangements, might not materially advance that inquiry.
3. Disclosure also carried a substantial risk that the trial would be diverted into collateral disputes about what had been said to the Bureau, whether statements were false, and what they meant. That risk was a legitimate case-management consideration and supported the judge’s conclusion that the material was unlikely to assist determination of the central issue.
4. The existence of representations about an Iran connection did not itself establish whether the alleged oral agreement existed. The respondents remained free to rely on matters apparent from the Temporary Denial Orders and other documents at trial.

The appellate court was therefore satisfied that the judge’s decision was both within his discretion and correct. The application for permission to appeal was refused.

• Court of Appeal (Civil Division): On 18 June 2009, the court refused the application for permission to appeal. [2009] EWCA Civ 749
• Queen’s Bench Division, Commercial Court: Flaux J refused a broad disclosure application on 15 May 2009 and a more focused application on 2 June 2009. The latter decision was the subject of the application before the Court of Appeal.