Milsom & Ors v Ablyazov (Rev 1)

A receivership order may override rights of privacy and arbitration confidentiality where disclosure or use of information is reasonably considered expedient for the purposes of the receivership. Legal professional privilege is not overridden merely by such an order. Arbitration confidentiality is not absolute and may yield where the interests of justice require.

A general notice regime requiring receivers to notify the asset owner before disclosure is inappropriate where it would impede the speed and flexibility required for effective asset preservation. The court may instead give targeted directions requiring receivers to consider the expediency of each proposed disclosure and its effect on qualified confidentiality rights.

Court-appointed receivers sought documents used or produced in LCIA arbitration proceedings concerning interests in the Vitino Port. The documents had been produced pursuant to an interim order, subject to a temporary undertaking requiring notice before disclosure to third parties.

The respondent argued that the notice regime was necessary to protect arbitration confidentiality, privacy and privilege, and relied on the receivers’ disclosure of a transcript of a meeting concerning the arbitration. The receivers argued that the receivership order permitted use and disclosure for the purposes of the receivership and that a continuing notice regime would obstruct their functions.

1. Construction of the receivership order. Paragraphs 12 and 27, construed purposively and together, permitted the receivers to request, use and disclose information and documents for the purposes of the receivership, even where that material was subject to the respondent’s rights of privacy or arbitration confidentiality. A narrower construction would materially fetter the receivership.
2. Limits of confidentiality. Arbitration privacy and confidentiality are not absolute. Their scope depends on the context and the nature of the information. The applicable arbitration rules may qualify the obligation, and disclosure may be permissible by consent, court order or leave, or where reasonably necessary to protect legitimate interests or required by the interests of justice. The respondent’s own non-inherently-confidential information did not become confidential merely because it was used in the arbitration.
3. Privilege. The receivership order did not require disclosure of privileged material. The transcript of the meeting contained no privileged material, or privilege had been waived to the extent necessary.
4. Notice regime. A continuing requirement to notify the respondent, or to apply to the court, before each disclosure was impracticable. It would hamper receivers who needed to act quickly and flexibly, and would invite satellite litigation. The receivers were experienced officers of the court and could generally be trusted to exercise their powers without such micro-management.
5. Targeted direction and disposition. The disclosure of the transcript was careless and, in its effect, cavalier because its disclosure to the opposing parties was not shown to be necessary or expedient. That conduct justified a direction that, before future disclosure of originally private or confidential information, the receivers specifically consider the expediency of each part of the proposed disclosure and whether that expediency reasonably justified overriding the respondent’s qualified rights. The temporary notice undertakings were discharged for the future.

Not an appeal. The judgment concerned an adjourned application following an interim order made by Warren J.