Maroil Trading, Inc & Anor v Cally Shipholdings, Inc & Ors

On an application for summary judgment or strike out, a defence need not be likely to succeed. It must be realistic, carrying some degree of conviction and more than merely arguable. The court should hesitate before finally determining difficult or developing questions of law, particularly where a full trial involving evidence is required or where the issue depends on factual context.

Questions concerning confidentiality, contractual construction and public policy may be mixed questions of law and fact. Where competing constructions and public-policy arguments are properly arguable, and fuller evidence may affect the outcome, the safer course is to leave them for trial.

The claim arose from a 2016 settlement agreement containing confidentiality obligations concerning information obtained during earlier enforcement proceedings. The Claimants alleged that the Defendants were liable for disclosure of a payment agreement concerning payments by PDVSA.

The Claimants sought summary judgment or strike out of three pleaded points: whether the payment agreement had entered the public domain; whether disclosure by an investigator who was no longer acting for the Defendants could breach the agreement; and whether public policy concerning disclosure of wrongdoing prevented enforcement of the confidentiality obligation. The Defendants sought permission to re-amend their defence.

1. Summary judgment principles. The court applied the approach in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and the further caution stated in TFL Management Services v Lloyds TSB Bank plc [2014] 1 WLR 2006. A realistic defence carries some conviction and is more than merely arguable. The court should be cautious about deciding a single issue summarily where a full trial will involve evidence and cross-examination, or where the issue is difficult, developing or better decided against actual facts.
2. Public-domain point. The payment agreement had been referred to in open court and was before the judge. A non-party could apply for access under rule 5.4C(2) of the Civil Procedure Rules 1998, and such an application had a realistic prospect of success. There was therefore a real prospect that the agreement would be found no longer private or confidential. The issue was nevertheless fact-sensitive, particularly as to the surrounding circumstances and Latin American’s knowledge, and was unsuitable for final determination on a summary application.
3. Capacity point. The meaning of the confidentiality clause depended on its wording, the contract as a whole, the relevant background and commercial consequences. Applying the interpretative approach in Wood v Capita Insurance Services Ltd [2017] AC 1173, as summarised in Ark Shipping Company LLC v Silverburn Shipping (IOM) Ltd [2019] EWCA Civ 1161, both constructions were properly arguable. The issue should be determined at trial after the relevant evidence had been heard.
4. Public-policy point. The authorities on the iniquity exception supported the Defendants’ contention that the law will not recognise an enforceable obligation of confidence in respect of serious wrongdoing. However, Weld-Blundell v Stephens [1919] 1 KB 520 and the discussion of the limiting principle in Attorney-General v Observer Limited [1990] 1 AC 109 indicated that competing public interests may require a balancing exercise. The court declined to decide finally whether completed wrongdoing should be treated differently from contemplated wrongdoing, or whether disclosure was protected, until trial.
5. Permission was granted to re-amend the defence on all three issues. The Claimants’ application for summary judgment or strike out was dismissed.