The Republic of Mozambique v Credit Suisse International & Ors

Strike-out or debarring orders for disclosure failures are sanctions of last resort. The court must impose the sanction that is just and proportionate, having regard to the seriousness and excusability of the breach, its consequences, the need for a fair trial and the overriding objective.

Serious non-compliance does not automatically require immediate strike-out. The court must assess whether the present state of disclosure creates a substantial risk of an unfair trial. Where the position may improve before trial, the court may retain all sanctions, including partial or complete strike-out and adverse inferences, for consideration at trial. A limited search result does not alone prove non-compliance where plausible explanations remain and the disclosure exercise is continuing.

The Republic of Mozambique brought extensive commercial proceedings against Credit Suisse International and other defendants. Related immunity proceedings and applications under section 9 of the Arbitration Act 1996 were being managed alongside the main proceedings.

The defendants applied to strike out the Republic’s claims and to debar it from defending preliminary issues. They relied principally on alleged failures to provide disclosure from the Office of the President and the state security service, SISE, and on breaches of disclosure orders. Earlier rulings had declared non-compliance and required a remedial plan.

The central question was whether the Republic’s continuing breaches had made a fair trial substantially at risk, so that immediate strike-out or debarring orders were just, proportionate and necessary.

1. The applications to strike out the Republic’s statements of case and claims, and to debar it from defending, were refused. Immediate strike-out was not just, proportionate or necessary at that stage.

2. The governing approach was that strike-out or debarring is an ultimate sanction and must be calibrated to the breach. The court had to consider the seriousness of the non-compliance, whether it was excusable, its consequences, the overriding objective and the requirement that the sanction be just and proportionate. The approach in Byers v Samba Financial Group [2020] EWHC 853 (Ch), drawing on Summers v Fairclough Homes Ltd [2012] UKSC 26, was treated as valuable guidance.

3. The Republic remained in breach of the order requiring a remedial disclosure plan for the Office of the President. Although that breach was regrettable, the Republic had in practice undertaken further searches and the breach, considered alone, did not justify strike-out.

4. The limited number of documents found did not establish by itself that disclosure duties had not been performed. The Republic had provided explanations capable of accounting for the results, although those explanations remained open to challenge. Further work, including searches of electronic accounts and personal devices, remained necessary.

5. At the hearing stage the court was not in a sufficient position to determine the evidential consequences of the disclosure position across the many issues in the litigation. It could not properly assess whether a fair trial was jeopardised or begin deciding individual allegations without risking unfairness and fragmentation of the forthcoming trial.

6. The court therefore retained all possible responses for trial, including complete or partial strike-out, debarring orders and adverse inferences. The Republic’s disclosure duties remained continuing obligations, and the court would maintain particular vigilance against unfairness.

7. Section 13(1) of the State Immunity Act 1978 did not assist the Republic. Strike-out was not a penalty by way of committal or fine.

The judgment records that the litigation had been case-managed through earlier rulings, including the combined-trial order of 21 July 2021, reported as [2021] EWHC 2749 (Comm), and the disclosure judgment of 3 March 2023, reported as [2023] EWHC 514 (Comm). This was a first-instance decision on the applications to strike out and debar.