Eurasian Natural Resources Corporation Ltd v Judge

A summary judgment application is not a summary trial. The court asks whether the claim has a real, rather than fanciful, prospect of success and must avoid resolving disputed facts except so far as necessary for that assessment.

An implied contractual term requiring a former director to deliver up confidential documents will not be inferred merely because it might reduce the risk of misuse. The contract, read as a whole, must make the term necessary for business efficacy or reflect the parties’ obvious intention. Where the contract expressly regulates confidentiality after termination, the general law ordinarily adds no wider obligation of confidence.

Injunctive relief and discretionary delivery-up orders may nevertheless be available where there is a real or arguable risk of future disclosure.

The claimant company brought proceedings against its former non-executive director alleging breaches of contractual, fiduciary, statutory and equitable duties of confidence. It sought delivery up of confidential documents and injunctive relief. The claims for damages and equitable compensation were later abandoned.

The defendant applied for summary judgment and/or strike out. The dispute concerned whether his contract contained an implied delivery-up term, whether a wider delivery-up obligation arose from his fiduciary duties, and whether the pleaded evidence disclosed a real prospect of establishing past breaches and a future risk of disclosure. The proceedings also arose against the background of an ongoing Serious Fraud Office investigation and statutory notices requiring preservation and production of documents.

1. Applications dismissed in part. The defendant’s applications for summary judgment and strike out were dismissed, except in relation to the claim for delivery up founded on an alleged implied contractual term or fiduciary duty.
2. Under CPR 24, the question was whether the claimant had a real prospect of success, not whether success was probable. The application was not a summary trial. Disputed factual issues could not be determined at this stage except insofar as necessary to assess whether the claim had sufficient merit to proceed. The same approach applied to strike out under CPR 3.4.
3. No implied contractual term requiring delivery up of confidential documents after termination could properly be inferred. The alleged term was not necessary to give the contract business efficacy or to reflect an obvious but unexpressed intention. The practical burden would be substantial, particularly for directors holding documents across multiple electronic accounts, and there was no evidence that such a delivery-up obligation was usual for directorships.
4. Clause 8.1 of the Letter of Appointment was capable of applying after termination to documentary information as well as information retained in memory. The claimant’s contractual protection required confidentiality, but did not itself impose a delivery-up obligation. Consistently with Vercoe v Rutland Fund Management, where the parties had agreed contractual terms governing confidential information, the general law ordinarily imposed no wider obligation of confidence. The court could, however, order delivery up in its discretion as part of or in addition to a permanent injunction.
5. The allegations that the defendant had disclosed confidential information in meetings with a purported journalist and had leaked an email were sufficiently arguable to proceed to trial. The evidence was not so speculative as to make the claim fanciful. Whether the defendant’s conduct created a future risk of disclosure depended on evidence, including the ongoing SFO investigation, possible future proceedings and the reliability of his assurances. The trial judge could decide whether an injunction or delivery-up order was justified and could impose conditions allowing necessary future access to documents.