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Court Of Appeal Confirms Narrow Jurisdiction To Serve Third Party Disclosure Applications Abroad – Trials & Appeals & Compensation

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Introduction. The Court of Appeal in
Gorbachev v Guriev & Ors [2022] EWCA Civ 1270 has
narrowly affirmed Jacobs J’s decision in Gorbachev v Guriev
& Ors
[2022] EWHC 1907 (Comm) (considered here), which disagreed with the view taken
earlier this year by Cockerill J in Nix v Emerdata Ltd
[2022] EWHC 718 (Comm) (considered here).

Jacobs J in the High Court had held that: (i) the court has
jurisdiction to permit service of a third-party disclosure
application abroad pursuant to gateway (20)(a) of Practice
Direction 6B; and (ii) in appropriate cases (such as the present
where the documents were located in England, but the relevant
respondents were not), the Court will be inclined to exercise its
discretion to grant such permission.

The Judgment. The principle issue addressed by
the Court of Appeal was whether section 34 of the Senior Courts Act
1981 is an enactment which allows proceedings to be brought against
persons not within the jurisdiction. This was a key issue because
it must be answered affirmatively for a third-party disclosure
application to be served outside the jurisdiction under gateway
20(a).

Males LJ (with whom the other members of the Court of Appeal
agreed) considered that the answer to this question turned on the
application of the principle of territoriality. The principle (or
presumption) of territoriality (or the presumption against
extra-territoriality) provides that UK legislation is generally not
intended to have extra-territorial effect.

Males LJ found that where a party seeks to obtain documents held
abroad from a person abroad, the principle of territoriality
will have an important role to play in considering the
scope of s. 34 SCA 1981. Further, Males LJ considered that if
wide-ranging disclosure of documents held by third parties abroad
could be too readily obtained by means of an application under s.
34 SCA 1981 and CPR 31.17 then: (i) international comity might be
infringed; and (ii) the letter of request procedure would be
circumvented.

However, Males LJ considered that legislation which affects
foreign nationals who have done something to render themselves
subject to the jurisdiction of the UK does not, or at least may
not, infringe the principle of territoriality.

Thus, the Court of Appeal held that the principle of
territoriality had little or no application in circumstances where
the documents whose production was sought were located in England,
even though the relevant respondents to the application were
located outside the jurisdiction. By sending the documents to
England, the Court found that the respondents had made the
documents subject to the jurisdiction of the English courts, and
that to require the production of such documents would not involve
any illegitimate interference with the sovereignty of the state
where the owners of the documents were located. Additionally, the
Court of Appeal considered that it was not clear whether documents
located within the jurisdiction could even be obtained via the
letter of request procedure, as foreign courts may take the view
that production of such documents was a matter for English
courts.

Accordingly, Males LJ held that s. 34 SCA allows for an
application to be brought against a third party outside the
jurisdiction for an order to produce documents which are located
within England; and, as a result, that the court has the
jurisdiction to make such an order and to serve the same outside
the jurisdiction.

Commentary. The Court of Appeal has confirmed
that the courts have the power to permit service of a third-party
disclosure application outside the jurisdiction for an order to
produce documents that are located within England.

However, the Court of Appeal has left undecided the issue of
whether the court would have jurisdiction to make such an order,
and thus permit service out of the jurisdiction, where documents
are located abroad. Nonetheless, the Court of Appeal noted that in
such a case the availability of jurisdiction (if it exists) would
likely be curtailed by the availability of the letter of request
procedure.

The present decision illustrates that any presumption against
extra-territoriality has less force where the matter with which the
court is concerned can be regarded as within the jurisdiction, even
if the relevant persons are outside the jurisdiction. It also
demonstrates just how narrow the scope of permitted service out of
third-party disclosure applications may be, for now confining it to
a situation where the applicant satisfies the court that the
documents themselves (whether electronic or hardcopy) are within
jurisdiction even if the respondent is not. Applicants must
consider the evidence available to them in order to satisfy that
evidentiary hurdle.

It is also worth noting that since 1 October 2022, Practice
Direction 6B para. 3.1 (i.e. the ‘jurisdictional gateways’)
includes a new gateway (25) providing for service out of the
jurisdiction of claims or applications seeking the disclosure of
information from non-parties. However, gateway (25) will only be
useful for claims seeking the disclosure of (i) the identity of the
defendant or potential defendant or (ii) what has become of the
property of the claimant (similar to applications for Norwich
Pharmacal
and Bankers Trust orders). Thus, it is
likely gateway (20) will remain useful for service outside the
jurisdiction of applications seeking broader third-party disclosure
of documents—at least where those documents sought are
located within England and Wales.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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