Joint Stock Company 'Aeroflot-Russian Airlines' & Ors v Gudavadze & Ors

Where confidential information is potentially material to an application, fairness does not require unrestricted disclosure. The court may permit its use subject to carefully tailored restrictions. It may also limit evidence to an independent court-appointed receiver’s valuation where that proportionately balances confidentiality and privacy against fair-hearing rights. On appeal, subsequent developments may make it unnecessary to decide an unsettled issue, such as whether solvency is relevant to the appointment of an estate administrator. The appellate court may instead make a practical case-management order which fairly disposes of the appeal while preserving the issue for determination at trial.

Following the death of Boris Berezovsky, proceedings concerned the administration of his estate and whether a confidential settlement affected its solvency. His daughter, Ekaterina Berezovskaya, wished to rely on confidential information concerning the settlement. The AP Family opposed disclosure. Morgan J permitted use of the information subject to restrictions, including limited disclosure to specified persons.

The AP Family appealed. After the first-instance decision, the receivers revised their valuation of the settlement and the parties’ positions changed. The central questions were whether the confidential information should remain available and whether the Court of Appeal should determine the relevance of solvency to the appointment issue.

1. Disposition. The appeal was allowed in part by varying the evidential and confidentiality arrangements. The Court of Appeal did not decide whether solvency was relevant to the substantive issue of who should administer the estate.
2. The first-instance judge had applied the necessity approach identified in Science Research Council v Nasse [1980] AC 1028, permitting confidential information to be used where necessary for the fair disposal of the substantive applications, subject to suitable restrictions consistent with natural justice. The Court of Appeal did not need to revisit that approach.
3. In light of subsequent developments, it was proportionate and appropriate to dispose of the appeal without resolving the unsettled solvency question. The Court of Appeal had power to make the necessary case-management order, and the first-instance judge had not determined the solvency issue.
4. Evidence concerning the value of the AP Settlement was limited to the figure attributed to it by the independent court-appointed receivers. This was justified because the valuation would necessarily be broad-brush, the locus standi of Aeroflot and Samara remained unresolved, and the restriction provided a practical balance between the AP Family’s Article 8 rights and the Article 6 rights of those involved in resolving the substantive issue.
5. The order therefore preserved the ability to rely on the confidential material subject to safeguards, while preventing wider valuation evidence from being deployed. The issue of solvency remained for the judge hearing the substantive applications.

• Court of Appeal (Civil Division): On 4 March 2014, varied the evidential and confidentiality arrangements and disposed of the appeal without determining whether solvency was relevant to the administration issue.
• High Court, Chancery Division: Morgan J permitted reliance on confidential settlement information subject to restrictions in judgments dated 23 January 2014 and 29 January 2014.