Byers & Ors v Samba Financial Group

An English court may enforce disclosure notwithstanding a real risk that compliance will expose a foreign litigant to prosecution abroad. Foreign law does not displace the court’s procedural jurisdiction. The court must balance the actual risk, the demands of international comity, available safeguards, and the importance of the documents to a fair trial.

A late application to revoke disclosure will ordinarily require a material change of circumstances. A party’s own incomplete engagement with its regulator will not justify relief. Deliberate non-disclosure may justify debarring the party from issues affected by the missing documents. The sanction must nevertheless be just and proportionate, and may preserve discrete issues of law or valuation that can fairly be tried without disclosure.

The liquidators of Saad Investments Company Limited alleged that the Bank received Saudi bank shares held on trust for the company, with sufficient knowledge to make it liable as a constructive trustee. They sought equitable compensation for the value of the shares.

The Bank had been ordered to give standard disclosure but did not provide its second tranche. It contended that consent from its Saudi regulator, SAMA, was required and that disclosure without consent risked criminal and regulatory sanctions in Saudi Arabia. It sought revocation of the disclosure and SAMA-correspondence orders, a diplomatic letter of request, or a split trial of preliminary issues.

The proceedings followed earlier litigation, including Akers v Samba Financial Group [2017] UKSC 6 and the decision of Birss J, [2017] EWHC 3106 (Ch). The central question was what proportionate sanction should follow the Bank’s continuing non-compliance, and which issues, if any, could fairly be tried without its disclosure.

1. The Bank’s applications to revoke the SAMA-disclosure order and the standard disclosure order were refused. Under Civil Procedure Rules 1998, r 3.1(7), a material change of circumstances will normally be needed to vary an interlocutory order. The alleged change was not material. The Bank had long known that SAMA approval might be required and had not adequately engaged with SAMA or placed the full position before the court.

2. Applying Bank Mellat v HM Treasury [2019] EWCA Civ 449, the court retained jurisdiction to order disclosure despite foreign criminal law. There was a real but unquantifiable risk of prosecution if the Bank disclosed without SAMA approval. The Bank had overstated the risk of severe punishment, and a fine was the most likely consequence. The documents were of the highest importance to a fair trial and their importance significantly outweighed the risk.

3. The court declined to issue a letter of request to the Saudi Ministry of Foreign Affairs. The inherent jurisdiction described in Panayiotou v Sony Music Entertainment UK Ltd [1994] Ch 142 concerns requests to a foreign court for evidence. It does not authorise diplomatic intervention to remove an obstacle to a party’s compliance with an English disclosure order.

4. A split trial or trial of preliminary issues was refused. Such an order would not further the overriding objective. It would create a serious risk of two trials, delay and further expense, and would improperly postpone the consequence of the Bank’s disclosure default.

5. In principle, the Defence would be struck out and the Bank debarred, save for limited issues. The breach was serious, deliberate and culpable, but not contumacious. Following Summers v Fairclough Homes Ltd [2012] UKSC 26, the sanction had to be just and proportionate. The Bank could not contest any fact-sensitive issue, or challenge the Claimants’ factual case or legal conclusions based on their evidence, where its withheld documents might give it a forensic advantage.

6. The Bank could in principle defend only the governing law and effect of the September Transfer, the two assumed-facts questions of Saudi, English or Cayman Islands law, and valuation. The court would hear further submissions on whether trying those issues would serve a useful purpose and on the consequential directions.

This was a first-instance case-management decision and was not an appeal.

• Supreme Court: In earlier proceedings between the parties, Akers v Samba Financial Group [2017] UKSC 6 held that the proprietary claim under section 127 could not succeed as pleaded, and the stay was reinstated.
• High Court (Chancery Division): Birss J held that the governing-law issues in the 2017 claim required trial and dismissed the Bank’s stay and strike-out application: [2017] EWHC 3106 (Ch).
• Court of Appeal: The Bank’s appeal concerning permission to amend the 2013 claim succeeded on limitation grounds. The 2013 proceedings ended, leaving the 2017 claim to proceed.