Bilta (UK) Ltd v Nazir & Ors

A party will be denied a trial because of disclosure misconduct only where the conduct makes a fair trial impossible, or creates a substantial risk that it cannot fairly occur. Deliberate destruction or falsification intended to prevent a fair trial may justify striking out proceedings, but routine or inadvertent destruction does not automatically do so.

Standard disclosure does not invariably require expensive forensic recovery of wiped hard drives. The obligation is governed by proportionality. A renewed pre-trial application is not necessarily barred by an earlier refusal, but summary judgment should not be granted where the issue depends on disputed credibility and the new material has not conclusively resolved it. Disclosure must remain confined to what is proportionate and necessary for the issue ordered to be tried.

The claimant company, acting through its liquidator, brought claims against alleged participants in a VAT fraud. The sixth defendant, Jetivia SA, applied under section 9 of the Arbitration Act 1996 for a stay, asserting that the claims were covered by an arbitration agreement.

A preliminary issue had been directed concerning whether the alleged framework agreement, including its arbitration clause, became binding. Before trial, the claimant sought to strike out the stay application, obtain summary judgment, or secure further disclosure. It relied on the destruction or non-preservation of electronic documents and challenged the evidence that the framework agreement had been sent and accepted. The central issues were whether a fair trial remained possible, whether the renewed summary judgment application was permissible and appropriate, and what disclosure was proportionate to the preliminary issue.

1. Strike out for disclosure misconduct. The court refused to strike out Jetivia’s stay application. The authorities, including LogicRose Ltd v Southend United Football Club Ltd and Arrow Nominees Inc v Blackledge [2002] 2 BCLC 167, established that striking out is justified where a party’s conduct places the fairness of the trial in jeopardy, makes any judgment unsafe, or amounts to an abuse of process preventing the court from doing justice. The critical concern was deliberate destruction or falsification directed at preventing a fair trial, not mere non-compliance or routine destruction.
2. On the evidence, the court could not yet conclude that Jetivia had deliberately destroyed relevant documents after proceedings began. The witnesses had not been cross-examined. Nor was it shown that wiping the hard drives made a fair trial impossible or created a substantial risk that it could not occur.
3. Electronic disclosure. Although the applicable practice direction treated deleted emails and metadata as electronic documents, standard disclosure did not automatically require expensive forensic recovery of hard drives. The question was one of proportionality. The claimant’s proposed examination of the old computer and file server was also refused because the material was likely to be largely irrelevant and confidential.
4. Renewed summary judgment. The earlier refusal of summary judgment was not res judicata. Following Woodhouse v Consignia plc [2002] 1 WLR 2558, successive pre-trial applications may be considered less strictly than final decisions. Nevertheless, the renewed application failed because the central issue remained whether Mr Cardinale was credible. The additional evidence did not categorically demonstrate that his account was false. Any adverse inference from the missing email was a matter for trial.
5. Further disclosure. Disclosure had to be restricted to what was proportionate and necessary to determine whether the arbitration agreement existed. Samples of standard framework agreements were sufficient. Documents concerning later trading, third-party payments, bank statements and alleged tape recordings were not relevant to that narrow issue, and specific disclosure was refused.

First-instance decision. The judgment records an earlier interlocutory decision by Sales J on 17 May 2010 directing preliminary issues, but no appellate decision.