Icon SE LLC v SE Shipping Lines PTE Ltd

For disclosure purposes, relevance is not confined to documents proving the precise words of a disputed conversation. Documents may be relevant where they illuminate the commercial background and the parties’ intentions, and thereby assist in assessing what was said and whether it amounted to repudiation. Under CPR Part 31.12, the court may order a proper search for such documents across coherent categories. A solicitor must engage personally in the disclosure exercise and should not simply delegate it to a witness. Concerns about burden, commercial sensitivity or a fishing expedition do not justify withholding relevant disclosure where the lower court ought to have ordered it.

Icon agreed to make available to SE a loan of up to US$18 million for vessel finance. The facility was never drawn, and Icon alleged that SE repudiated the agreement in a January 2011 telephone call by refusing to pay the commitment fee. Icon sought specific disclosure of documents concerning SE’s intentions about drawing down, paying the fee, obtaining alternative finance, and proceeding with construction.

His Honour Judge Mitchell held that categories (a), (b) and (d) were irrelevant, treated category (c) as relevant, and declined to order further disclosure. Icon appealed. The central issue was whether the documents could be relevant to assessing the disputed conversation as commercial background, and whether further searches should be ordered before the imminent trial.

1. Disposition. Rimer LJ, with whom Pill LJ agreed, allowed the appeal. The court ordered searches and disclosure in all four categories.
2. Relevance. Under CPR rule 31.6 and Part 31.12, documents may be relevant if they may support or adversely affect a pleaded issue. Relevance extends to documents providing a helpful understanding of the commercial background and the parties’ intentions against which a disputed conversation is assessed. It is not confined to documents recording the conversation itself or merely supplying material for cross-examination on credit and plausibility.
3. Application. Documents concerning intended drawdown, payment of the commitment fee, alternative finance, and the vessel’s acquisition and construction could collectively illuminate the circumstances of the telephone call. The judge was therefore wrong to treat categories (a), (b) and (d) as irrelevant. Although category (c) was correctly treated as relevant, the evidence did not demonstrate that a sufficient search had been made.
4. Conduct of disclosure. The solicitors should personally engage in the disclosure exercise rather than delegate it simply to a client witness, applying the approach explained by Ward LJ in Hedrich v Standard Bank London Limited [2009] PNLR 3. The evidence did not provide confidence that the searches had been properly undertaken.
5. Timing and burden. Commercial sensitivity, the possibility of a fishing expedition, and the burden of searches shortly before trial were relevant considerations but did not justify refusing disclosure where the orders should have been made. It would have been unjust to leave the error uncorrected.
6. Security. The court accepted jurisdiction to order security for the costs of the application and appeal under CPR Part 25.13(2) and Part 25.15. A solicitor’s undertaking to pay up to £10,000 in due and unpaid costs was accepted as satisfying the security order.

• Court of Appeal (Civil Division): Permission to appeal was granted urgently. The appeal was allowed and disclosure orders were directed in all four categories.
• High Court, Queen’s Bench Division: On 31 October 2012, His Honour Judge Mitchell refused the requested specific disclosure under CPR Part 31.12, treating only category (c) as relevant and declining further disclosure in that category.