Alphasteel Ltd v Shirkhani & Anor

This appeal raises the question whether the court should give permission, pursuant to CPR 31.22(1)(b), for the use of disclosed documents other than for the purpose of the proceedings in which they were disclosed, in circumstances where those proceedings have been settled before trial, the documents have not been read to or by the court or referred to at a hearing which has been held in public, and where the party who disclosed the documents and to whom they belong does not agree to their use in this manner. As so often, the question for decision turns upon the true construction of a detailed settlement agreement into which the parties entered when they agreed to compromise their dispute. It is the contention of the Appellants that the agreement precludes use of the documents in the manner sought by the Respondent. Andrew Smith J, sitting in the Commercial Court, disagreed and granted to the Respondents permission to use the documents for the purpose of intended legal proceedings in Switzerland against third party interests whom it is unnecessary for present purposes to identify. The judge stayed his order pending any appeal for the bringing of which permission might be granted. This appeal is brought with leave of Longmore LJ.

Pursuant to his own order, the judge’s judgment, [2012] EWHC 2407 (Comm), remains confidential pending the outcome of this appeal, and if the appeal is successful we shall have to decide whether it should nonetheless remain confidential. The underlying proceedings between the parties were settled pursuant to a “Settlement Agreement” dated 7 October 2011 which contained a term as to the confidentiality of that agreement and the substance of all negotiations in connection with it. The sensitivity of the judgment below arises out of the judge’s description of the claim which the Respondent wishes to bring against the third parties, of the Appellants’ alleged involvement therewith and of the documents disclosed by the Appellants which the Respondent wishes to use in connection with the proposed Swiss proceedings. It is possible to dispose of this appeal without reference to the detail, which it was nonetheless necessary for the judge to set out as demonstrating why he considered it appropriate to exercise his discretion as he did.

The Respondent, Alphasteel, once carried on a steel processing business in South Wales. It is now in liquidation and acts by its liquidators, Mr Christopher Morris and Mr Mark Fry. Alphasteel brought the underlying proceedings against its former finance director, Mr Shahram Shirkhani, and a Dubai registered company, Summit Development General Trading LLC (“Summit”), which was controlled by Mr Shirkhani. Mr Shirkhani and Summit are the Appellants.

Alphasteel’s action against Mr Shirkhani and Summit was compromised by the Settlement Agreement of 7 October 2011 to which I have already referred. The parties to that agreement were Alphasteel, the two liquidators, Mr Shirkhani and Summit. By it the parties thereto instructed their solicitors to seek an order of the court in the terms of that subsequently made by Beatson J on 10 October 2011. That order included the following:-

“4.

This action be stayed save for the purposes of carrying the terms of the Agreement dated 7 October 2011 between Alphasteel Limited (in Liquidation) (1); Christopher Morris and Mark Fry of Begbies Traynor (Central) LLP (2); Shahram Shirkhani (3); and Summit Development General Trading LLC (4) (the Settlement Agreement”) into effect for which purpose the parties have permission to apply.

5.

Any claim for breach of contract arising from the alleged breach of the terms set out in the Settlement Agreement may (unless the court order otherwise) be dealt with by way of application to the court without the need to start a new claim.”

The Settlement Agreement included the following terms:-

“INTERPRETATION

In this Agreement each of the following words and expressions shall have the following meanings:

. . .

1.11

“Dispute” means the subject matter of the Proceedings.

. . .

1.21.

“Proceedings” means Claim No: 2009 Folio No: 814 in the High Court Queen’s Bench Division Commercial Court Royal Courts of Justice between Alphasteel as Claimant; and Shirkhani (1) and Summit (2) as Defendants.

. . .

9

SETTLEMENT

9.1

Save in relation to those rights and obligations arising under or in respect of this Agreement, the Legal Charges and the Deed of Priority, this Agreement shall constitute:

(a)

full and final settlement of all or any claims or rights or complaints of whatever nature, whether in this jurisdiction or any other, whether known or unknown to the Parties or to law which Alphasteel and/or the Liquidators presently have or may have against Shirkhani and/or Summit or which may hereafter arise out of anything done or omitted to be done prior to the date hereof insofar as the same arise from or in connection with the Dispute and the Proceedings or in connection with Shirkhani’s employment with or directorship of Alphasteel.

(b)

full and final settlement of all or any claims or rights or complaints of whatever nature, whether in this jurisdiction or any other, whether known or unknown to the Parties or to law which Shirkhani and/or Summit presently have or may have against Aphasteel and/or the Liquidators or which may hereafter arise out of anything done or omitted to be done prior to the date hereof insofar as the same arise from or in connection with the Dispute and/or the Proceedings or in connection with Shirkhani’s employment with or directorship of Alphasteel.

10

AGREEMENT NOT TO SUE

10.1

Save for the purpose of enforcing the Legal Charges and this Agreement in respect of any breach thereof including seeking any damages for any such breach and subject to Completion having occurred:

(a)

Alphasteel and the Liquidators and each of them hereby covenant that they will not at any time in the future sue, commence, voluntarily aid in any way, prosecute or cause to be prosecuted and/or otherwise pursue Shirkhani and/or Summit in respect of all or any claims or rights or complaints of whatever nature, whether in this jurisdiction or any other, whether known or unknown to the Parties or to law which they or either of them presently have or may have against Shirkhani and/or Summit or which may hereafter arise out of anything done or omitted to be done prior to the date hereof insofar as the same arise from or in connection with the Dispute and/or the Proceedings or in connection with Shirkhani’s employment with or directorship of Alphasteel.

(b)

Shirkhani and Summit and each of them hereby covenant that they will not at any time in the future sue, commence, voluntarily aid in any way, prosecute or cause to be prosecuted and/or otherwise pursue Alphasteel and/or the Liquidators in respect of all or any claims or rights or complaints of whatever nature, whether in this jurisdiction or any other, whether known or unknown to the Parties or to law which they or either of them presently have or may have against Alphasteel and/or the Liquidators or which may hereafter arise out of anything done or omitted to be done prior to the date hereof insofar as the same arise from or in connection with the Dispute and/or the Proceedings or in connection with Shirkhani’s employment with or directorship of Alphasteel.

11

STAY OF PROCEEDINGS

11.1

The Parties irrevocably authorise and instruct their respective solicitors to lodge at Court a consent order (in substantially the form of the Order at Annex 1) within 2 business days of Completion whereby the Proceedings will be stayed by consent save for the purpose of enforcing this Agreement, the Legal Charges and the Deed of Priority for which purpose the Parties are at liberty to apply.

15

CONFIDENTIALITY

15.1

Except as provided in the confidentiality agreement between the Parties and the Members of the Liquidation Committee effective as at 13 April 2011 and except as set out in clauses 15.2, 15.3 and 15.4 below, the terms of this Agreement, and the substance of all negotiations in connection with it, are confidential to the Parties and their advisers and the Liquidators, who shall not disclose them to, or otherwise communicate them to, any third party without the written consent of the other parties other than:

(a)

to the Parties’ and the Liquidators respective auditors, insurers and lawyers on terms which preserve confidentiality; and/or

(b)

pursuant to an order of a court of competent jurisdiction, or pursuant to any proper order or demand made by any competent authority or body, or where they are under a legal or regulatory obligation to make such a disclosure; and/or

(c)

as far as necessary to implement and enforce any terms of this Agreement.

. . .”

CPR 31.22 provides, so far as relevant:-

“Subsequent use of disclosed documents and completed Electronic Documents questionnaires

31.22

(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where –

(a)

the document has been read to or by the court, or referred to, at a hearing which has been held in public;

(b)

the court gives permission; or

(c)

the party who discloses the document and the person to whom the document belongs agree.

(2)

The court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public.

(3)

An application for such an order may be made –

(a)

by a party; or

(b)

by any person to whom the document belongs.”

Alphasteel’s application to “be released from its obligations to the court under CPR 31.22 in relation to the documents identified in the Schedule to this Application Notice being documents disclosed by the First and Second Defendants in these proceedings [Shirkhani and Summit] because such documents are relevant and material to claims Alphasteel intends to make in legal proceedings against third parties in Switzerland in connection with losses sustained by Alphasteel prior to its liquidation” was made on 10 May 2012. It was served on Mr Shirkhani and Summit who were named as Defendants thereto.

The claims which Alphasteel wishes to pursue in Switzerland are against a bank, now in liquidation, and its former Chief Operating Officer. Alphasteel gave notice of these claims to, at least, the liquidators of the bank, on 6 and 8 September 2011, i.e. about a month before the Settlement Agreement was concluded. The claims have been rejected by the liquidators of the bank. Alphasteel seeks permission to use some (but not all) of the documents disclosed by Mr Shirkhani and Summit in pursuit of proceedings which it proposes to bring in Geneva. It is right to say that the claims sought to be pursued in Switzerland involve allegations of dishonesty against both the personal third party and Mr Shirkhani. Essentially, the allegation is of a fraudulent scheme.

The judge accepted that Alphasteel knew of all, or substantially all, of the matters upon which it relies in support of its proposed claims against the third parties before the Settlement Agreement was made and the underlying action stayed. Alphasteel also accepts that it could bring and pursue the Swiss proceedings without using the disclosed documents, and it asserts that it could, if necessary, establish by other means the matters which, it asserts, are proved by the disclosed documents. Alphasteel can rely upon its own and other documents and the third parties might be ordered by the Swiss court to produce their own copies of some of the contentious documents. Nonetheless, Alphasteel submits that it would be unfair, inconvenient and artificial for it not to be able to deploy all the relevant material of which it is aware and to be forced to put to the Swiss court only a partial picture of its case. It also points to the difficulty it will face if forced to specify in the Swiss proceedings what categories of documents the third parties should disclose without reference to or reliance upon the information about what documents the third parties have (or at least had) which it has learned from the disclosure given by Mr Shirkhani and by Summit.

An initial issue with which the judge had to deal was whether it was necessary for the stay of proceedings to be lifted in order for the court to entertain Alphasteel’s application and, if so, whether the court had power to lift it. The judge decided that the court could entertain the request for permission made by Alphasteel without the stay being lifted, but he also concluded that the court had power to lift the stay and should lift it if necessary. Before this court Mr David Quest QC for the Respondent accepted that the question whether the stay could or could not and should or should not be lifted essentially stands or falls with the argument as to construction of the Settlement Agreement. The stay would be likely, as he put it, to be co-extensive with the protection secured by the agreement, and procedure could not be allowed to dictate substance. Mr Neil Kitchener QC for the Appellants submitted that even if the Settlement Agreement did not preclude the making of the application, still the stay should not be lifted. In my view Mr Quest’s approach is correct and I need express no view on the wider issues canvassed by the judge, including the question whether the court could in any event in separate proceedings grant to the Respondent the permission which it seeks, thereby circumventing the stay. I can then turn straight to the arguments arising out of the Settlement Agreement.

A settlement agreement such as the present is to be construed in exactly the same manner as any other contract – the House of Lords so confirmed in Bank of Credit and Commerce International v Ali [2002] 1 AC 251. The question therefore is what was the parties’ intention, ascertained objectively in the context of the circumstances in which the parties entered into the agreement. Lord Nicholls in BCCI v Ali at page 264, paragraph 23, pointed out that a general release such as that with which we are here concerned is often entered into when parties are settling a dispute which has arisen between them, and that typically the parties “want to wipe the slate clean”. The judge recognised this, but it is the contention of Mr Kitchener that he lost sight of it when he came to construe the agreement.

The critical provision is clause 10.1(a), although that of course must be read in the light of clause 9, to which statement of intention clause 10 gives effect. It is Mr Kitchener’s essential contention that by this application Alphasteel pursues Mr Shirkhani and/or Summit in respect of a claim or right which it claims to have or to which it claims to be entitled against Mr Shirkhani or Summit, i.e. to use the documents other than for the purpose of the proceedings in which they were disclosed, and that such claim or right arises out of things done prior to the date of the agreement, i.e. out of disclosure, and arises from or in connection with the Dispute or the Proceedings as defined in the Interpretation clause, the disclosure having of course been given in the Proceedings.

The judge rejected this argument, essentially as I see it for two reasons, set out at paragraphs 23, 25 and 26 of his judgment. First, he did not consider that Alphasteel is making a claim that it is entitled to use the documents. It was the view of the judge that Alphasteel requests permission to use the documents precisely because it recognises that it is not entitled to use them in the manner it wishes. To the contention that, on that showing, Alphasteel is asserting a claim in order to use the documents, or in order to be permitted to use the documents, the judge’s answer was that this formulation fails to use the word “claim” in its ordinary or natural sense. The judge did not consider that in seeking permission from the court to use the documents in the proposed Swiss proceedings Alphasteel could be said to be making a “claim”. Secondly, even if Alphasteel is making a claim, the judge did not consider that it could be said to be a claim “against” Mr Shirkhani or Summit or indeed anyone else. The judge pointed out that the Application Notice seeks no relief against either of them, not even costs, and considered that that reflected the nature of the permission which Alphasteel seeks and the reason that it needs it, viz, the limitation as to use imposed by CPR 31.22. The purpose of CPR 31.22 is, reasoned the judge, to safeguard the public interest in the proper administration of justice and not only a private interest of the party making disclosure, and so the question is whether the court should allow use of the documents notwithstanding the public interest. In this regard the judge cited the observations of Lord Keith in Home Office v Harman [1983] AC 280 at 308H as follows:-

“The implied obligation not to make improper use of discovered documents is . . . independent of any obligation existing under the general law relating to confidentiality. It affords a particular protection accorded in the interests of the proper administration of justice. It is owed not to the owner of the documents but to the court, and the function of the court in seeing that the obligation is observed is directed to the maintenance of those interests, and not to the enforcement of the law relating to confidentiality.”

Home Office v Harman, to which I must return, was of course decided in the pre-CPR era when the limitation on the use to which disclosed documents could be put was derived from an implied obligation rather than from an explicit rule, but in Marlwood Commercial Inc v Kozeny & Ors [2005] 1 WLR 104 the Court of Appeal (Peter Gibson, Rix and Longmore LJJ) held (at [41]) that “the CPR r31.22 obligation, like the implied undertaking which it has replaced, is an obligation owed to the court rather than to the disclosing litigant. It is owed to the court because, as was made clear in Harman’s case . . . it protects not merely the confidentiality of the litigants’ documents but reflects the due administration of justice itself. We do not think that CPR r31.22’s overruling of the precise point in dispute in Harman’s case has changed that basic consideration, as the citations from the speeches, including that of Lord Scarman, demonstrate”.

The judge gave a third reason for rejecting Mr Kitchener’s argument, but I am not sure that on analysis it is any different from the first two. In fairness to the judge, he described it as similar. At paragraph 26 of his judgment the judge said this:-

“For similar reasons I also reject Mr Kitchener’s second argument, that, in requesting permission, Alphasteel are acting in breach of their covenant not to “prosecute or . . . otherwise pursue . . . any . . . rights . . . against Shirkhani and/or Summit”. They do not assert any right to use the documents or any right to be permitted to use them, still less any right “against” either Mr Shirkhani or Summit. Their concern is to avoid being in breach of CPR 32.11. It is true that Mr Shirkhani and Summit have an interest in the documents and an interest in whether the court permits Alphasteel to use the documents, but I am not able therefore to translate Alphasteel’s request into the assertion (or prosecution or pursuit) of a right (or rights) against Mr Shirkhani or Summit.”

Mr Quest sought to support this reasoning. CPR 31.22 is, he suggested, to be regarded as in some ways a codification replacing the old regime. The obligation to disclose overrides the right of confidentiality. Once inspected and copied, he suggested, a disclosed document, or at any rate the copy thereof, becomes the property of the receiving party, who may do with it what it wishes, subject to the restriction imposed by the rule. The restriction, however, recognises that the right of confidentiality has been overridden. At a general level therefore there are some similarities between the private equitable duty of confidence and the restriction imposed by CPR 31.22, but they are not the same. The right of confidence is overridden by the duty to disclose and replaced by a regime which puts the disclosed documents under the control of the court. A regime of permission has replaced a regime of rights. To the extent that the disclosing party might otherwise have had a right of confidence, he loses it when he has to give disclosure. He acquires instead the protection of CPR 31.22, but that gives him no legal right, indeed no right of any description save the right to be heard on the question whether the receiving party should be released from the restriction. Similarly the receiving party has no right to use the documents other than for the purpose of the proceedings in which they were disclosed, although it is given the ability to apply to the court for permission to use the documents other than for the purpose of those proceedings. Although the disclosing party has the right to permit the use of the documents for a purpose other than that of the proceedings in which they are disclosed, CPR 31.22 does not require the receiving party to obtain any relief from the disclosing party. It is therefore a regime which acts first by imposing a compulsion upon the disclosing party to disclose and then by imposing a compulsion or perhaps restriction upon the receiving party as to the purpose for which it may use the disclosed documents. It is not a regime to vindicate rights. It is a regime of permission. The judge was therefore correct to regard clause 10.1(a) of the Settlement Agreement as not engaged. That clause deals with legal rights.

Mr Quest also made the more general point that there was good commercial reason for the liquidators in particular not to have agreed to restrict their ability to make an application to the court with a view to using the disclosed documents for purposes other than the litigation in which they were disclosed, and he pointed out that they might, in other litigation, come under an obligation to disclose the documents of which they had received disclosure from Mr Shirkhani and Summit. The first of these points goes nowhere since there is obviously good commercial reason for Mr Shirkhani and Summit to safeguard the continued confidentiality of their documents, insofar as they could, and ultimately, as so often, the question resolves to what was in fact agreed. As to the second point, Mr Kitchener pointed out that there is nothing in the evidence to suggest that the liquidators either have or will come under a relevant disclosure obligation. Indeed, Alphasteel’s approach to the proposed Swiss litigation, as summarised at paragraph 8 above, seems to proceed upon the basis that no such disclosure obligation would arise. Looking at the matter more generally however, it seems to me that the possibility that the liquidators (or for that matter Mr Shirkhani or Summit) might, in some unspecified circumstances, come under an obligation to disclose to third parties documents disclosed to them in this litigation cannot be a decisive consideration in seeking to construe a clause which is plainly concerned with voluntary action by one or other of the parties.

The analysis that the obligation imposed by CPR 31.22 is one owed to the court rather than to the disclosing litigant is binding on us. Even so, it is obvious that the obligation is qualified, in that release from it may be given by the disclosing litigant, who I will for present purposes assume is both the party who disclosed the document and the person to whom the document belongs. I note that in paragraph 56 of the judgment in Marlwood v Kozeny the court described CPR 31.22 as “a rule giving the documents to the court (or the parties) in support of the due administration of justice”. Furthermore, Mr Quest accepted that whilst CPR 31.22 embodies a regime imposed by the court to protect the proper administration of justice, its exercise involves taking into account the disclosing litigant’s expectation, or as I would prefer to put it, his interest, that his privacy in his documents will not be overridden except for good reason. As the citation from this court’s judgment in Marlwood v Kozeny, above, shows, the CPR31.22 regime recognises that the disclosing litigant still has an interest in the confidentiality of his documents to protect even after a limited inroad into that confidentiality has been brought about by compulsory disclosure. I also regard it as relevant to note, as Mr Kitchener pointed out, that the discussion in Marlwood v Kozeny at paragraph 41 was focussed on two competing public interests, the public interest in the investigation and prosecution of serious fraud and the public interest in the due administration of civil justice. In this debate the disclosing party relied not upon his interest in his documents remaining confidential but in the threat to the administration of justice if parties were deterred from making full and proper disclosure by the spectre of their documents being used for purposes other than the litigation in question. For my part therefore I regard it as inappropriate to regard the disclosing party as bereft of all rights to confidentiality, or privacy, in his documents once disclosure has been given. I find powerful support for this approach in the speech of Lord Scarman in Home Office v Harman, with which Lord Simon of Glaisdale agreed. At page 313 DE Lord Scarman said this:-

“Imposed by law the obligation is formulated as arising from an undertaking exacted by the court from the party and his solicitor to whom the documents are disclosed. It is the condition upon which discovery is ordered. The undertaking protects the confidentiality of the documents which the court of justice requires to be disclosed in the litigation. The obligation has been described by the courts in broad terms, e.g. by Jenkins J in Alterskye v Scott [1948] 1 All ER 469. 470, as a duty not to use the documents for any collateral or ulterior purpose. It limits the extent of the invasion of the privacy of the litigant who has to make the discovery. The private character and the confidentiality of his documents are maintained and safeguarded, save only that they may be used in the litigation.”

Although this was a dissenting speech, Lord Scarman and Lord Simon dissented only on the question how long the obligation or duty they had identified subsisted, taking the view that it did not survive the reading of the documents in open court. Their approach to the effect of the undertaking is in my view equally applicable to the CPR31.22 regime.

In my view the proper approach to clauses 9 and 10 of the Settlement Agreement does not require an analysis in terms of the strict legal and equitable rights of the parties. Clauses 9 and 10 adopt deliberately imprecise and all-embracing language in speaking of “all or any claims or rights or complaints of whatever nature . . . whether known or unknown to . . . law”. Mr Kitchener submitted that the proper approach is to regard Alphasteel’s application as involving a contest between two competing interests, in which Alphasteel is seeking a right at the expense of Mr Shirkhani and Summit. I accept that this is so, and in my judgment this approach is itself appropriate in the light of the obvious aim of the Settlement Agreement to wipe the slate clean as between Alphasteel and Mr Shirkhani and Summit. There is I consider great force in Mr Kitchener’s submission that what Alphasteel has done is to involve Mr Shirkhani and Summit in further litigation related to the underlying proceedings and that that is precisely what the Settlement Agreement was intended to prevent. Put bluntly, the aim of Alphasteel’s application is, I consider, as Mr Kitchener submitted, to deprive Mr Shirkhani and Summit of such rights to confidentiality or privacy in their documents as endure and to obtain for itself, at the expense of Mr Shirkhani and Summit, the right to use the documents for a purpose other than that for which they were disclosed.

I find further support in the speeches of their Lordships in Home Office v Harman for the notion that Alphasteel seeks to obtain a right which overrides or replaces that of Mr Shirkhani and Summit. Thus at page 300A Lord Diplock said this:-

“The use of discovery involves an inroad, in the interests of achieving justice, upon the right of the individual to keep his own documents to himself; it is an inroad that calls for safeguards against abuse, and these the English legal system provides, in its own distinctive fashion, through its rules about abuse of process and contempt of court.”

It may be that the inroad has destroyed the original right, or caused it to be replaced with a right of a different and less extensive character, which may in turn have a different jurisprudential basis, but the disclosing party is, as I have already sought to suggest, not in my view bereft of all further rights of or allied to privacy or confidentiality once disclosure has been given. It is true that Lord Keith, at page 308 of Harman’s case, stressed that the obligation not to make improper use of disclosed documents is independent of confidentiality strictly so called and that it “affords a particular protection afforded in the interests of the proper administration of justice”. However the rest of their Lordships, like Lord Diplock, focus more upon the limited extent of the invasion of the disclosing litigant’s privacy. I have already referred to the speech of Lord Scarman and Lord Simon of Glaisdale. Lord Roskill too spoke in terms of the success of the argument that protection was lost merely by reason of disclosed documents being read in open court as involving “an undoubted erosion of the rights of the party giving discovery” – see at page 324B.

Mr Quest sought to rely upon certain passages in the judgment of the Court of Appeal, delivered by Lord Phillips of Worth Matravers, in Virgin Media Communications Ltd and Others v British Sky Broadcasting Group plc and Another [2008] 1 WLR 2854. However in my judgment that authority is of no assistance beyond emphasising that the duty not to make ulterior use of disclosed documents is not identical in principle to the obligation of confidentiality that exists between a solicitor and his own client. As I have already pointed out, I do not consider that it is necessary for present purposes to analyse the matter in terms of strict legal rights. The settlement agreement is concerned with claims or rights of whatever nature, whether known or unknown to law.

On close analysis in this court clause 10.1(a) of the Settlement Agreement proved to be ambiguously drafted in a respect not hitherto noticed. Thus it is unclear whether claims or rights or complaints, “which may hereafter arise out of anything done or omitted to be done prior to the date hereof” are required to be claims or rights “against Shirkhani and/or Summit” in order to be the subject of the prohibition on pursuit. Mr Quest accepted that as a matter of strict grammar it might have been better from his point of view had the sub-clause “against Shirkhani and/or Summit” been placed later in the clause in a manner which put the matter beyond argument. He submitted nonetheless that the clause as a whole should be regarded as dealing with two classes of claim, right or complaint: those which Alphasteel presently have or may have, i.e. existing claims, and those which may hereafter arise, i.e. future claims which may arise out of anything done or omitted to be done prior to the date hereof, and that just as the words “they or either of them” were plainly intended to attach to both limbs of the clause, so also should the qualification “against Shirkhani and/or Summit” be regarded as similarly so attached. I will assume that Mr Quest is right about this. His submission was therefore that an application for permission does not constitute pursuit of a claim or right, still less a claim or right against Mr Shirkhani and/or Summit. It is simply a request for Alphasteel to be released from an obligation imposed by the rules of court which apply to it and from which it wishes to be released. Alphasteel is not claiming a right, nor is it requiring Mr Shirkhani and/or Summit to do something or asking to be granted relief against either.

I do not accept that this is the proper approach to an agreement of this nature. It is in my judgment unrealistic. The obligation under CPR 31.22 has been imposed, in part, for the benefit of Mr Shirkhani and/or Summit. Until the court determines otherwise, Mr Shirkhani and Summit have a right that the privacy and confidentiality of their documents shall not be eroded further than is necessary for the purpose of the proceedings. Quite how that right is to be characterised in law may be open to question. It is probably enough to describe it as a right, subject to contrary order of the court, not to have the disclosed documents used for any purpose other than the proceedings in which they were disclosed, although it may be correct to call it a defeasible right of confidence, as Mr Kitchener did. I also do not overlook that in Prudential Assurance Co Ltd v Fountain Page Ltd and Others [1991] 3 All ER 878 Hobhouse J observed, at page 888:-

“It is clear that where documents are produced in the course of legal proceedings, or information provided, the further use of that material must be governed by the legal principles or rules of court which relate to the use of such material and not by any private law rights. It is of course an a fortiori position where there were no antecedent private law rights in respect of that material; the use of material in litigation cannot itself give rise to that class of right. The remedies that arise, if at all, arise from the duty owed by the relevant person to the court and the capacity of a person with an interest in the enforcement of those rights to obtain further orders from the court against persons directly or indirectly involved in breaches of that duty.”

That decision follows that of Sir Nicholas Browne Wilkinson VC in Derby & Co v Weldon (2), incompletely reported only in The Times newspaper, 20 October 1988, to the effect that there can be no private duty of confidence wider than that imposed by the implied undertaking which arose on the giving of disclosure in the pre-CPR era. However as I observed above, I do not consider that it is necessary to analyse the matter in terms of the strict legal or equitable rights or duties of the parties. The limited right which the disclosing party continues to enjoy in respect of its disclosed documents after disclosure, reflecting the limited extent to which his privacy has been invaded by making compulsory disclosure, is nonetheless in my judgment a right of whatever nature, whether known or unknown to law, for the purposes of the agreement. Alphasteel for its part seeks the abrogation of that right. Alphasteel seeks the right, or makes a claim to be entitled, to use the documents for the purposes of the Swiss proceedings. It seeks therefore to deprive Mr Shirkhani and/or Summit of their right. In other words, it seeks its right or entitlement at the expense of the right of Mr Shirkhani and/or Summit. In my view it does not greatly matter whether Alphasteel is regarded as pursuing a claim or a right. At one point in his argument Mr Kitchener suggested that the language of claim is perhaps the more natural, and with that I agree. Alphasteel is, on any showing, pursuing a claim to be entitled, or to be permitted, to use the documents in a manner which is not currently open to it because of a restriction imposed by the court in part to protect the rights of Mr Shirkhani and/or Summit. It is not unlike a claim for costs, or a claim to enforce an undertaking in damages. In both of those cases there is no present or actual entitlement until the court has exercised its discretion in favour of the applicant party. But it is nonetheless a claim such as is comprehended within the meaning of the Settlement Agreement.

I cannot agree with the judge that this is not a claim “against” Mr Shirhkani and/or Summit. It is a claim served on Mr Shirkhani and/or Summit since an important part of the court’s consideration, albeit I accept not the only part, will be the question whether Alphasteel’s interest in making collateral use of the documents should outweigh the Appellants’ interest in maintaining their confidentiality and privacy so as to justify a further invasion of the Appellants’ rights. It is I consider nothing to the point that Mr Shirkhani and/or Summit are not being asked to do anything. That is often the case when for example there is a claim for declaratory relief, but that feature does not deprive the claim of its character of being brought “against” an opponent party. As Mr Kitchener submitted, the purpose of the application is to defeat the Appellants’ defeasible right to confidentiality and privacy in the documents and to give to Alphasteel an advantage at the expense of the Appellants. That is to my mind a claim “against” Mr Shirkhani and/or Summit. The judge’s conclusion to the contrary arose I think from his concentration on the public interest in the administration of justice as underpinning the restriction imposed by CPR 31.22, thereby failing to give effect to the private interest in the party giving disclosure which is equally engaged. It should also not be forgotten that the purpose of the application was to override the Appellants’ refusal to give their consent to the collateral use of the documents. Although on such an application the court would have to give its independent consideration to the question whether Alphasteel should be permitted to use the documents for the purpose of bringing or in support of Swiss proceedings, in reality no-one other than the Appellants had any interest in defending or enforcing the prohibition on the collateral use of the documents. I have no doubt that in making and pursuing its application Alphasteel should be regarded as having, for the purposes of the Settlement Agreement, pursued Mr Shirkhani and/or Summit in respect of a claim against them. Looking at the matter realistically, the effect of the application was to force the Appellants into defending it in order to try to maintain the private character and confidentiality of their documents, over and above the limited extent to which that had already been compromised. By their Settlement Agreement in my judgment Alphasteel agreed not voluntarily to do that.

For all these reasons therefore I would allow the appeal and set aside the judge’s order giving Alphasteel permission to use the documents for the purpose of intended legal proceedings in Switzerland. I would invite submissions in writing from counsel on the question whether the judge’s judgment should remain confidential to the parties and their legal advisers.

I agree.

I also agree.