Various Airfinance Leasing Companies v Saudia: when can an employer obtain disclosure from employees' personal devices?

The claim was commenced in September 2020 following a dispute arising between the parties as to, among other things, the aircraft rent and maintenance payments due to the claimants, various airfinance leasing companies, by the defendant, the national airline of Saudi Arabia (known as "Saudia"). The dispute arose following the disruption to global aviation caused by the Covid-19 pandemic and related to the long-term lease of 50 Airbus aircraft,^[2] originally ordered in 2015, with leases due to expire between 2027 and 2032.

The claimants^[3] applied for disclosure of documents held on personal mobile phones owned by two Saudia senior personnel and used non-exclusively for work purposes in their Saudia roles (the "custodians"). The first custodian, Mr Al Jasser, was the Director General at the relevant time and, at the time of judgment, a non-executive director of Saudia and a Minister in the Saudi Arabian Government. The second custodian, Mr Altayeb, was the Vice President of Fleet Management and Engineering at the relevant time and no longer employed by Saudia. As the issues in dispute included whether statements or assumptions which were communicated between the parties could give rise to certain estoppels, the claimants sought disclosure of email exchanges and instant messaging communications (such as WhatsApp messages) from Saudia. The two senior personnel were said by the claimants to be "critical figures" in the negotiation, execution and performance of the leases, and would hold potentially relevant documents on their mobile phones. Although Saudia resisted the application for disclosure, it accepted that the mobile phones may contain documents that were potentially relevant to the dispute.

Saudia resisted giving disclosure of documents on the two mobile phones on the basis that a document is only disclosable by a party to proceedings under both Part 31 of the Civil Procedure Rules ("CPR") and the Disclosure Pilot Scheme for the Business and Property Courts (set out in CPR Practice Direction 51U) where that document is or was "controlled" by the party in question. Saudia argued that it lacked the necessary "control" as it had no entitlement under Saudi Arabian law to "possess, inspect, or control or obtain access" to the documents held on the custodians' mobile phones. Saudia tendered expert evidence on Saudi Arabian employment law in support of its argument. On that basis, Saudia argued that documents on the mobile phones were not disclosable and it would be beyond the Court's powers to order Saudia to disclose documents that were not within its control.

In dismissing the claimants' disclosure application, the Court considered whether the documents on the custodians' mobile phones were in the control of Saudia, such that they could be disclosed, and if not, whether the Court nonetheless had jurisdiction and should exercise its discretion to order Saudia to use its best endeavours to request the senior personnel to produce the relevant documents on their mobile phones (the "Best Endeavours Order"). The Court answered "no" to each of the questions regarding control, jurisdiction and discretion.

3.1 Whether the documents were in Saudia's control

The Court received extensive primary and supplementary expert evidence regarding whether the documents on the custodians' mobile phones were within the control of Saudia under the laws of the Kingdom of Saudi Arabia. The parties' experts directly disagreed about whether Saudia was entitled to possess, inspect, or control or obtain access to the documents held on the mobile phones. The Court expressed that it was difficult to evaluate the conflicting evidence of two experts on the application and effect of foreign law. However, having set out ten relevant observations on the expert evidence and, in the absence of a sufficiently clear entitlement to the documents on the part of Saudia, the Court ultimately preferred the evidence of Saudia's expert that the documents were not within Saudia's control. Given that the element of control is the basis of disclosure orders under the Disclosure Pilot Scheme (and CPR 31), the documents were not disclosable in the proceedings and the claimants' application was refused.

3.2 The Best Endeavours Order

Having concluded that Saudia lacked control, the Court considered whether it nonetheless had jurisdiction and should order Saudia to use its "best endeavours" to request the senior personnel to produce the documents on their mobile phones to a nominated third-party IT consultant, akin to the order made in the Phones 4U case.

The Court concluded that, in the absence of an express power under the CPRs to make a Best Endeavours Order, it did not have jurisdiction to make such an order in the circumstances of this case. The Court noted that a similar power in the context of claims relating to a marine insurance policy^[4] was not of more general application. The Court noted, however, that it may have jurisdiction to make a Best Endeavours Order where the relevant party is in "control" of the underlying documents. 

Even if the Court did have jurisdiction to make the Best Endeavours Order, the Court considered that it would not have granted the order on the facts. The reasons for this included the fact that the emails sought from the senior personnel should have been available on Saudia's servers (and so should be disclosed during the ordinary course of the proceedings), and that it was relatively unlikely that the WhatsApp (or other) messages would be either substantial in quantity or highly pertinent. This may be contrasted with cases in which fraud or deliberate concealment is alleged, in which case documents such as instant messaging communications on personal or work mobile phones may have greater significance.

This decision is important for three reasons.

Firstly, the Court confirmed that it was a prerequisite to the disclosure regime under both CPR 31 and the Disclosure Pilot Scheme that, for a document to be disclosable, it must be within the control (or, at least, previously within the control) of a party to the dispute. Though the term "control" is infrequently used in the text of Practice Direction 51U, the Court considered that a party's disclosure obligations would be "uncontrollably wide" if a party were required to disclose documents that were outside of its control (not to mention the additional costs burden associated with such a requirement). This decision demonstrates that the concept of "control" is of foundational importance to the disclosure regime under the CPRs, irrespective of whether that disclosure is ordered to be made under CPR 31 or the Disclosure Pilot Scheme; with the newer Disclosure Pilot Scheme providing for continuity rather than change in this regard.  

Secondly, the Court confirmed that concept of control (under English law, at least), is quite broad in nature. A party controls a document not only where it possesses (or has previously possessed) the document but also where it has (or has previously had) a "right" to possess or inspect a document in the possession of a third party. The Court has previously interpreted the term "right" broadly, to encompass both legal rights to possession/inspection of documents and "practical arrangements " between a party to a dispute and a third party, where the third party in fact allows for the party to access the documents in some way. Further, the Court confirmed that English law presumes (in the absence of evidence to the contrary) that corporate employers control the documents produced by their employees and ex-employees where such documents relate to the employees' work.

It is therefore possible that, had the relevant law for determining whether the documents were in the control of Saudia been English law, the Court would have ordered for the disclosure to be made. Indeed, it was common ground in the Phones 4U case that the work-related documents held on the personal mobile phones of senior personnel were within their corporate employer's control, and accordingly the Court ordered the defendant to request its senior personnel to produce their mobile phones to an independent IT consultant to extract documents relevant to the underlying claim.

Thirdly, the Court concluded that, in the absence of an express power to do so, it did not have jurisdiction to make a Best Endeavours Order in circumstances where Saudia did not control the documents in question. This reflects the fact that, although the Court has a broad discretion under both CPR 31 and the Disclosure Pilot Scheme to make disclosure orders that the Court considers appropriate, there are important limitations to its powers.

In circumstances where a party does not control relevant documents that are in the possession of a third party, the best available route may therefore be an application for third party disclosure under CPR 31.17.  However, it is likely that such an application would not have been successful in this case, given that both senior personnel were located outside of the United Kingdom and, although the Court did not dwell on this fact, one of the custodians was a Minister in a foreign government and his mobile phone may be considered to contain state secrets.

Please speak either to us, your usual contact at Travers Smith, or a member of the Dispute Resolution team, for more information.