NMC Health Plc (in administration) v Ernst & Young LLP

A confidentiality ring is an exceptional departure from open justice and must be justified by clear and cogent evidence. Where disclosure may conflict with foreign law, the court must balance the actual risk of foreign prosecution against the importance of the documents to the fair disposal of the English proceedings. The existence of a foreign court order or a general concern about sanctions is insufficient. The party resisting open disclosure must identify a relevant foreign criminal provision and establish a real or actual risk of prosecution. Disclosure and inspection are procedural matters governed by the lex fori. Comity is important, but it does not displace open justice where the foreign-law risk is unsubstantiated.

NMC Health Plc, which was in administration, brought proceedings alleging that Ernst & Young LLP negligently failed to identify fraud in its audit of the NMC Group. EY sought disclosure and inspection of a settlement agreement involving NMC, entities in the NMC Group and the Bin Buttis, together with related bankruptcy documents. Disclosure had previously been permitted on a limited confidentiality-club basis following an approach to the Abu Dhabi Bankruptcy Court.

EY applied to discharge the English confidentiality undertakings before the forthcoming trial. NMC relied on orders and decisions of the Abu Dhabi Bankruptcy Court, the alleged confidentiality of the documents under UAE law, the risk of prosecution under Article 313(7) of the Federal Decree-Law No. 31/2021, and comity. The central issue was whether the documents should remain subject to restricted disclosure.

1. The application was granted. The confidentiality undertakings imposed in respect of the settlement agreement were discharged. The related Bin Butti Claim Documents were ordered to be disclosed and inspected without a confidentiality club.
2. The governing principles were those in Bank Mellat v HM Treasury [2019] EWCA Civ 449. Production and inspection are matters of procedural law governed by the lex fori. The court has jurisdiction to order disclosure notwithstanding possible foreign criminal-law consequences, but must exercise its discretion having regard to comity and the actual risk of prosecution.
3. The starting point was open justice. A confidentiality ring is exceptional and must be justified by clear and cogent evidence. The restriction must go no further than necessary. The documents were likely to be materially relevant to the alleged fraud, causation and mitigation, and unrestricted access was important to public understanding of the trial and to effective trial management.
4. NMC had not established that the Abu Dhabi Bankruptcy Court orders bound NMC in the relevant circumstances or extended to a settlement agreement held independently of the bankruptcy file. The January 2025 decision authorised limited disclosure but did not determine the scope of the earlier restrictions or the question of unrestricted disclosure.
5. NMC had also failed to show a real or actual risk of prosecution. Article 313(7) concerned publication of news relating to lawsuits heard in secret or whose publication had been prohibited. There was no clear and cogent evidence that disclosure to EY in English proceedings constituted publication within that provision, or that breach of the bankruptcy orders engaged Article 313(7) or another UAE criminal law. Evidence of a genuine concern about sanctions did not replace proof of the relevant criminal law and prosecution risk.
6. Comity did not require a further application to the Abu Dhabi Bankruptcy Court. The English court had to decide the issue under English procedural law, and comity cuts both ways.