BNP Paribas v Ths Global Ltd & Ors

The Norwich Pharmacal jurisdiction may require disclosure where there is a reasonable basis for alleging wrongdoing, the information is needed to identify or pursue the wrongdoers, and the respondent was mixed up in the wrongdoing and can provide the information. The court retains a residual discretion and must assess the practical adequacy and proportionality of the proposed disclosure.

Document disclosure may be ordered even where the exercise is extensive and costly, particularly where the respondent’s earlier failure to provide information has contributed to the breadth of the application. A broad affidavit explaining the respondent’s knowledge and involvement is ordinarily inappropriate at the pre-action stage, although a narrower order may be considered later after disclosure.

BNP Paribas, a preference shareholder in TH Global Ltd, alleged that corporate restructurings had replaced substantial receivables owed by creditworthy companies in the Kvaerner group with receivables owed by Spinaker Ltd, a minimally capitalised company. BNP Paribas sought pre-action disclosure from TH Global Ltd, Spinaker Ltd and Kvaerner 2004 (No 2) Ltd under the Norwich Pharmacal jurisdiction.

The defendants initially resisted the claim but later proposed limited disclosure, including part of a BDO report and transactional bundles. The central issue was whether the court should limit relief to that proposal or order the wider documentary disclosure sought by BNP Paribas. BNP Paribas also sought affidavits describing the defendants’ knowledge and involvement.

1. Threshold requirements. Applying the principles stated in Mitsui & Co Ltd v Nexen Petroleum UK Ltd (2005) 3 All ER 511; EWHC625, the court held that BNP Paribas had shown a reasonable basis for concluding that it might have been the victim of wrongdoing. The defendants’ general explanation of the restructurings did not answer the central allegation. BNP Paribas also established a real need for information to identify the alleged wrongdoers and determine the form of any claim.
2. Adequacy of proposed disclosure. The factual section of the BDO report and the existing restructuring bundles were unlikely to explain the specific debt restructuring complained of. The defendants’ proposal was therefore inadequate to meet BNP Paribas’s reasonable requirements.
3. Discretion and proportionality. The estimated cost and scale of compliance did not justify refusing relief. BNP Paribas accepted that it would pay the defendants’ reasonable costs of compliance. The defendants’ earlier failure to provide information had also contributed to the breadth of the exercise. It was therefore appropriate in principle to order the documentary disclosure sought.
4. Affidavits. The court declined to order affidavits setting out each defendant’s knowledge of and involvement in the restructurings. Such an order was broad, unspecific and potentially oppressive, particularly before any substantive claim had been pleaded. The reasoning in Re British & Commonwealth Holdings plc [1992] Ch 342 (CA) and First American Corporation v Zayed [1999] 1 WLR 1154 supported that conclusion. A later application for a more focused order was not excluded.
5. Safeguards. The order would need to address third-party confidentiality, possible legal professional privilege, timing and BNP Paribas’s payment of reasonable compliance costs, consistently with CHC Software Care Ltd v Hopkins & Wood [1993] FSR 241.

Orders for disclosure of documents were made in principle. The applications for affidavits were refused.