Hotel Portfolio II UK Limited (in liquidation) & Anor v Andrew Joseph Ruhan & Anor

An English court deciding whether to require disclosure which may contravene foreign criminal law applies English procedural law and retains a discretion to order production. A real, rather than fanciful, risk of prosecution in the foreign state is relevant but is not decisive. The court balances that risk, comity and any safeguards against the importance of the documents to the fair disposal or enforcement of the English proceedings.

Where there is no real risk of prosecution, and the foreign offences are not shown to apply, there is no counterweight to the importance of enforcing the English judgment. Disclosure for enforcement purposes may be at least as important as pre-trial disclosure.

The claimant judgment creditor sought to enforce a substantial judgment against the second defendant through proceedings under Civil Procedure Rules 1998 Part 71. Master McCloud ordered forensic imaging and searching of the defendant’s computer and mobile phone, while preventing access to the files pending further order.

The defendant applied to discharge or stay that order. He relied on expert evidence that compliance could expose him and the consultant to criminal liability in Italy under Articles 615-ter and 622 of the Italian Criminal Code. The central issues were whether compliance would constitute either offence and whether there was a real risk of prosecution sufficient to justify restricting disclosure.

1. Application dismissed. There was no basis in Italian criminal law or otherwise to discharge or stay the McCloud Order.
2. Disclosure and inspection are matters of English procedure governed by the lex fori. The court has jurisdiction to order production even where compliance may breach foreign criminal law, but exercises a discretion informed by comity. The relevant foreign-law risk is the actual risk of prosecution, not merely the existence of a possible offence. That risk is balanced against the importance of the documents to the fair disposal and enforcement of the English proceedings. Safeguards may be fashioned where appropriate.
3. There was no evidence of any real risk of prosecution in Italy. Neither expert knew of a comparable prosecution. The documents were important to enforcement, and the Part 71 process was directed to ensuring that the judgment did not remain unsatisfied. The absence of a real risk left no substantial counterweight to compliance.
4. Compliance would not constitute an offence under Article 615-ter. The provision protects the owner’s right to exclude others from a protected computer or telematic system, including a password-protected virtual space. It does not treat confidential data stored on an owner’s computer as a separate protected system. Mr Stevens was the owner of the relevant machines and there was no evidence that the companies could exclude him from them.
5. Nor would compliance constitute an offence under Article 622. The concept of just cause was sufficiently broad to include a legitimate right to comply with an English court order. Recognition and enforcement in Italy was at least strongly arguable under Article 67(2) of the Withdrawal Agreement, because the proceedings began before the end of the transition period. A balancing of public enforcement interests and private secrecy interests also supported just cause.
6. The court found strong circumstantial evidence that Mr Stevens remained a de facto director of the companies, but made no final determination on that interlocutory issue. The abuse of process argument was unnecessary and would probably not have succeeded: resisting enforcement is not itself abusive, even if the factual case supporting the application is rejected.