ENRC v Qajygeldin: Disclosure on Disclosure

The path of disclosure rarely, if ever, runs smoothly. The process can be time consuming, costly, and an area ripe for skirmishes and protracted correspondence regarding scope and proportionality. This particular skirmish, in the case of Eurasian Natural Resources Corporation Limited v Ake-Jean Qajygeldin [2021] EWHC 462 (Ch), arose out of an application by the Claimant for disclosure by the Defendant in respect of his compliance with his disclosure obligations, in particular relating to his ability to recover documents and data from certain document repositories.

The application raised the following interesting points:

whether the court has power to order disclosure pertaining to whether the disclosing party has fulfilled their disclosure duties;
if so, the principles governing the exercise of that power; and
whether the power should be exercised in the circumstances of this case.

It was governed by the relatively new Disclosure Pilot Scheme (the "DPS") concerning disclosure in the Business and Property Courts, as set out in CPR Practice Direction 51U ("PD51U"). Parties and practitioners are continuing to familiarise themselves with the DPS and, to that end, decisions relating to the interpretation and application of the DPS provide welcome clarification.

Background

The Claimant, Eurasian Natural Resources Corporation Limited ("ENRC"), is the parent company of a mining conglomerate with significant business interests in Kazakhstan. The Defendant, Ake-Jean Qajygeldin ("Mr Qajygeldin"), is a former Prime Minister of Kazakhstan.

The case itself relates to allegations made by ENRC that Mr Qajygeldin obtained confidential information belonging to ENRC and breached obligations of confidentiality in respect of that information. This judgment did not make any findings in relation to the underlying claim, but addressed the question of whether the court could, and should, make an order for disclosure regarding elements of Mr Qajygeldin's compliance with an order for Extended Disclosure.

The issues at hand related to (i) two Gmail email accounts that Mr Qajygeldin stated were no longer accessible as either being unrecognised by Gmail and/or for which Mr Qajygeldin had forgotten the password, and (ii) a number of electronic devices including a laptop which Mr Qajygeldin stated were stolen from him in Germany.

In this application, ENRC sought orders that Mr Qajygeldin contact:

Google in relation to the Gmail accounts, seeking information on, among other things, the status of the accounts and attempts to log into them; and
Mr Qajygeldin's German legal counsel and the German police, seeking information on the circumstances of the purported theft of the relevant devices and any ensuing investigation,

and to copy ENRC to those contacts and any responses received.

Although Mr Qajygeldin had agreed to make the contacts requested (having already made some attempts to do so but ENRC had challenged whether the appropriate entities at Google had been contacted and whether they had understood Mr Qajygeldin's enquiries) and to inform ENRC of the outcome of those enquiries as necessary to comply with his disclosure obligations, he had not agreed to provide a copy of responses received to ENRC. This was the crux of the application.

Judgment

Master Clark handed down his judgment on 8 March 2021, dismissing ENRC's application.

The judgment held that, while a party is obliged to provide information as to any documents that are irretrievable under paragraph 10.3 of PD51U, it is not obliged to provide evidence of steps taken to recover those documents and why they remain irretrievable. The court considered that, as a result, it does not have jurisdiction under this provision to order the disclosure of such evidence.

The court also held that, until the date by which Extended Disclosure must be given has passed (which it had not in this case), the court does not have jurisdiction to make an order requiring a party to take certain steps as a result of its failure to comply with an order for Extended Disclosure under paragraph 17.1 of PD51U.

The court went on to consider its broader inherent jurisdiction to make the order sought, taking into consideration paragraph 2.4 of PD51U which states that:

"The court will be concerned to ensure that disclosure is directed to the issues in the proceedings and that the scope of disclosure is not wider than is reasonable and proportionate… in order fairly to resolve those issues, and specifically the Issues for Disclosure…."

"Issues for Disclosure" refers to:

"…key issues in dispute, which the parties consider will need to be determined by the court with some reference to contemporaneous documents in order for there to be a fair resolution of the proceedings…" (paragraph 7.3 PD51U)

The court observed that the authorities showed the court to have jurisdiction to order disclosure relating to issues that do not arise in the statements of case, but such jurisdiction is "very sparingly exercised". While there were inconsistencies in Mr Qajygeldin's evidence and the reliability of his instructions to his solicitors was, at times, "concerning", the court held that Mr Qajygeldin had taken appropriate steps and these inconsistencies were not sufficiently exceptional to justify the order sought.

The court held that, to order Mr Qajygeldin to disclose documents received in response to his further enquiries in relation to the email accounts and devices, in circumstances where he had agreed to inform ENRC of the outcome of those enquiries in compliance with his disclosure obligations, would be disproportionate.

Conclusion

The provisions of PD51U encourage the courts to focus their energies on the fair determination of the dispute at hand. Whilst parties and practitioners can likely empathise with an element of frustration, if not suspicion, as to the level of a counterparty's compliance with its disclosure obligations, this decision helps to make clear that, save in exceptional circumstances, the court may be unlikely to make orders requiring a party to provide disclosure on its compliance with its disclosure obligations.