Commercial Court rejects claim to litigation privilege, orders Model E disclosure

02/08/21

The State of Qatar sues Banque Havilland, a Luxembourg-based private bank, and one of its employees.  Qatar alleges a conspiracy between the defendants and several other banks based in the Gulf to manipulate markets – in the Qatari Riyal and USD Qatari bonds – in 2017, following the imposition of a blockade on Qatar by Saudi Arabia, the UAE, Bahrain, and other States.  Qatar relies on, among other things, a presentation prepared within Banque Havilland, published by the news website The Intercept.  The presentation refers to ‘crossing transactions’ in bonds between affiliated parties, and proposals to place ‘pressure’ on the USD/QAR currency peg.  Qatar alleges that the acts of market manipulation caused it very substantial loss.

Following the publication of the presentation in November 2017, Banque Havilland commissioned an investigation to be conducted by external advisers at PwC.   The Defendants have resisted providing disclosure of the investigation report and related documents, on the basis that they are subject to litigation privilege.  The Defendants say that the report was prepared for the sole purpose of reasonably contemplated litigation by its regulators, and/or the State of Qatar.  Qatar challenged that claim to privilege.

Mr David Edwards QC, sitting as a Deputy Judge, upheld Qatar’s challenge to the claim to privilege.  The Deputy Judge found that while the witness statement of the Defendant’s solicitor explaining the basis for the claim of privilege was to be afforded some deference, there was a proper basis for going behind that claim in this case.  On analysis, it was not shown that the sole or dominant purpose for the commissioning of the investigation was litigation in reasonable contemplation.  Moreover, the bank was motivated by other purposes: to ascertain how a copy of the presentation had been obtained by The Intercept, and to put the bank in a position to answer its regulator’s questions.

The Deputy Judge also granted Qatar’s application for a range of further disclosure to be undertaken, beyond the Extended Disclosure already given.  This included a requirement for the Defendants to review transcripts of telephone calls between various bank employees on a Model E basis.  The Deputy Judge was concerned that a particular transcript had initially not been disclosed when it clearly should have been, and also noted that other important sources of evidence were not available.  He also noted that in a conspiracy case, it will frequently be difficult to identify a ‘smoking gun’ and that a search on a Model E basis may provide other leads.

The judgment is here.