CDE v NOP

Under CPR 39.2 of the Civil Procedure Rules 1998, a hearing must be public unless a specified ground applies and a private hearing is necessary to secure the proper administration of justice. The confidentiality of an arbitral award can satisfy the confidential-information ground, but confidentiality is not a trump card.

Necessity depends on the stage and nature of the hearing. An early case-management hearing may be held in private where the privacy issue cannot be debated publicly without disclosing the award and no lesser measure will work. A merits application must start from open justice. The party seeking privacy bears the burden of justifying it under CPR 39.2. Contractual arbitral confidentiality does not prevent use of an award in a state court to protect or pursue a legal right where the court’s procedural rules require a public hearing.

The claimants alleged fraud by the defendants in Commercial Court proceedings. Similar allegations had been determined in a confidential LCIA arbitration involving companies said to be connected with the defendants. The claimants proposed to rely on the award in a future summary-judgment application, advancing issue-estoppel, privity and abuse-of-process arguments.

At a case management conference, the Commercial Court sat in private and made temporary orders preventing public disclosure of documents referring to the award. It did not determine whether the future privity application should be public or private. The claimants appealed from that order, contending that it gave insufficient effect to open justice.

The central issue was whether the conference and the interim protective orders complied with CPR 39.2, and whether this court should decide now the mode of hearing for the future merits application.

1. The appeal was dismissed, subject to a variation of paragraph 2 of the order. Lord Justice Males gave the judgment, with which Lord Justice Popplewell and Lord Justice Warby agreed.

2. CPR 39.2 imposes a two-stage requirement. A hearing is public unless a ground in rule 39.2(3) applies and sitting in private is necessary to secure the proper administration of justice. The award was confidential information. Public discussion of it would damage that confidentiality, even without proof of further commercial harm. But arbitral confidentiality is not decisive. The court had to weigh it against the public purposes of open justice identified in Scott v Scott [1913] AC 417 and R v Legal Aid Board, ex parte Kaim Todner [1999] QB 966.

3. It was necessary to hear the part of the case management conference concerning the award in private. The debate over whether the award could be referred to publicly would itself have disclosed its contents, and no lesser measure was practicable. The judge should, however, have resumed the hearing in public once that debate ended. The Court of Appeal could not now correct that defect because doing so would risk identifying the parties and revealing the award’s outcome.

4. The judge was entitled to preserve confidentiality temporarily while the mode of hearing for the privity application remained undecided. However, paragraph 2 wrongly risked treating confidentiality as the starting point. The correct starting point is public hearing. If the defendants or X Co seek privacy for the privity application, they must apply to the judge hearing it and establish the requirements of CPR 39.2. The Court of Appeal declined to determine that future application on incomplete information. Its merits character meant that the considerations favouring privacy at the early conference would carry much less force.

5. Article 30.1 of the LCIA Rules was contractual. It permitted disclosure of the award in state-court proceedings to protect or pursue a legal right. Therefore, if CPR 39.2 required a public hearing of the privity application, use of the award there would not breach Article 30.1. Paragraph 2 was set aside and replaced; the claimants were ordered to pay the respondents’ appeal costs.

• Court of Appeal (Civil Division): Dismissed the appeal except that it set aside and replaced paragraph 2 of the Commercial Court order, confirming that any application for a private privity hearing must be determined under CPR 39.2.
• Commercial Court: In [2021] EWHC 2720 (Comm), the judge held the case management conference in private and made temporary orders protecting the confidentiality of the LCIA award. He did not decide whether the future privity application should be heard in public or private.