The English courts frequently receive Letters of Request from foreign courts, seeking evidence that will assist in determination of foreign proceedings. The principle of comity requires that the English courts will usually give effect to such requests unless there is good reason not to. In Rio Tinto v Vale the High Court considered whether it was appropriate to modify or refuse a request which included revealing the identities of whistleblowers in an alleged fraud.
The New York Proceedings
In the underlying New York proceedings, Rio Tinto alleges that it lost significant iron ore concessions as a consequence of a fraudulent conspiracy between Vale and its joint venture partner. Vale denies the fraudulent conspiracy on substantive grounds, but also contends that the claim is in any event time barred.
This limitation defence is made on the basis of certain reports obtained by Vale through the discovery process. These reports, which were commissioned by Rio Tinto, include confidential business intelligence on the political and commercial situation in Guinea. Vale asserts that these documents impute sufficient knowledge of the alleged fraud to Rio Tinto more than four years prior to the issue of proceedings, thus falling foul of the local statute of limitations.
Rio Tinto refutes this by relying on an “equitable tolling” defence which is comparable to the concealment provisions under English law (s.32 Limitations Act 1980); essentially, the limitation clock does not start running until the injured party is on notice that he has a potential claim, or could have discovered the same upon a reasonably diligent investigation. This protects the injured party in the event that the facts giving rise to a potential claim are concealed by the defendant.
In order to determine the outcome of the limitation argument, the New York court issued a Letter of Request to the English High Court for examination of the authors of the reports.
The High Court considers the Letter of Request
The principle of comity means that the English courts will endeavour to assist foreign courts in obtaining evidence for the purposes of the foreign proceedings so far as is proper and practicable, and to the extent permissible under English law. The English courts will generally rely on the judgement of the foreign court as to what evidence is relevant. As a result, Letters of Request will usually be given effect unless there is good reason not to.
That does not mean, however, that the outcome is binary – the court does not need to accept or reject the Letter of Request entirely. The court can apply the metaphorical “blue pencil” to edit a Letter of Request by deleting aspects of it that are objectionable, so long as it does not make significant amendments that amount to a rewriting of the Request.
The business intelligence firms who produced the reports therefore sought to vary the Letters of Request in order not to have to reveal the identities of their sources.
Confidentiality: balancing competing public interests
The respondents emphasised the importance of maintaining confidentiality of their sources (many of whom were journalists), especially where there had been assertions or implications of official corruption in the reports. Specific undertakings to preserve confidentiality had been given to the sources by the intelligence agents, who considered that there was a significant risk that they would suffer damage to their business if the court were to “disgorge the identities of their sources of information“, even into a confidentiality ring. (paragraph 24 of the judgment)
The High Court acknowledged this concern, but made clear it would not be minded to refuse disclosure for this reason alone. What carried more persuasive weight was the asserted risks posed to the whistleblowers themselves. Vale cautioned against taking a “stereotypical” view of the jurisdiction in question, which arguably overstated the real risks to the sources if revealed. Vale contended that a confidentiality ring would suffice.
In deciding how to balance the competing public interests at play, the court reflected on the importance of protecting whistleblowers, even in democratic societies when freedom to speak out ought to be commended without the risk of castigation or prejudice. Just as journalists have statutory protections to safeguard the confidentiality of their sources, “it is in the public interest that [intelligence sources in commercial spheres] should not be discouraged from speaking out or from providing intelligence of this nature.”
The court noted that even in spite of this, it might have been minded to permit the disclosure if the information in question was of central importance to the issues in the underlying case. The court noted that “banks have regularly been required to disgorge confidential information about their clients when that information is of central importance […] for example, where it is necessary to have that information in order to trace the proceeds of a fraud.” However here, ultimately it was found that the identities of the sources were “of peripheral relevance to the matters in issue in the US proceedings, and the court in that jurisdiction will not be materially impeded or disadvantaged in determining the issues between the parties if that information is not provided.”
The judgment in this case emphasises the ability of respondents to foreign letters of request to challenge the scope of those requests, which can at times be overly broad or burdensome (especially when they originate in jurisdictions with cultures of wide disclosure such as the US). Each challenge will come down to a balancing exercise between the utility of the evidence and the damage that giving it will cause.
Careful thought also needs to be given by parties seeking information through letters of request so that they restrict their demands to what is truly necessary, since otherwise they risk having the request struck out in its entirety if the receiving court does not feel that its limited power to amend goes far enough to protect the respondents or other interested parties from unacceptable levels of harm.