The English Court (Chancery Division) has again considered the
problem created for French companies that are parties to litigation
outside France by French Law No 68-678 of 26 July 1968 ("the
Law"). The Law prohibits the communication or disclosure (and
possibly even the search for) documents or information of an
economic, commercial, industrial, financial, or technical nature
for use as evidence in foreign judicial or administrative
proceedings without an order of the French Court. Breach of the Law
is a criminal offence exposing the company and individuals to up to
six months imprisonment and/or a fine. (National Grid
Electricity V ABB and Others, [2013] EWHC 822 (Ch), 11 April
2013).
The issue arose in the context of a large-scale follow-on damages
action by National Grid against various companies for breach of
European competition rules. The breach arose out of the supply of
Gas Insulated Switchgear over a period of 16 years where the
European Commission decided that 20 companies had engaged in a
sophisticated cartel and imposed fines of more than €750
million. The task of estimating the cartel overcharge and therefore
the damages to be awarded was a matter for expert evidence and
heavily dependent on documentary evidence. Disclosure was therefore
of great significance. Clearly, the French defendants did not wish
to expose themselves to criminal sanctions in France.
The English court was required to exercise its discretion in
deciding whether to order disclosure, taking into account, among
other things, the importance of the evidence and the degree of risk
of prosecution in France if the order for disclosure was made and
complied with. The court decided to order disclosure. The judge
considered it virtually inconceivable that, where another European
court had assumed jurisdiction over a French company in accordance
with the Brussels Regulation in order to determine a claim for
damages alleged to result from an established and serious violation
of a fundamental provision of EU law, the public authorities of
France would in the exercise of their discretion institute criminal
proceedings against that company for complying with the procedural
rules of the Member State where the proceedings had been brought.
This was particularly so where the proceedings served an objective
of EU policy.
In reaching this decision, the judge took into consideration that
there was only one known case of such a criminal prosecution having
been brought in France (the Christopher X/MAAF case in 2007).
However, this case arose on very exceptional facts. Christopher X
was a French lawyer who had attempted to obtain information in
France covered by the Law without an order of a foreign court and
by deception.
The judge also took into consideration the context in which the
Law had been passed, namely because of concern in France at what
were seen as abusive discovery requests being made of French
companies facing litigation, particularly in the United States.
However, the disclosure requests in these English proceedings were
made for an entirely legitimate and necessary purpose. Moreover,
where French companies had in the past complied with U.S.
disclosure orders, no criminal prosecutions had been brought (for
example, the extensive disclosure given by Air France in the
antitrust litigation arising from an air cargo cartel pursuant to
an order of the U.S. District Court for the Eastern District of New
York in 2010).
The French defendants in this case were not opposed to giving
disclosure. They simply found themselves in the invidious position
of potentially having to comply with an order of the English court
and thereby place themselves at risk of criminal prosecution in
France. The French defendants did obtain orders from the French
court that requests be issued for the taking of evidence in France
under the EU Evidence Regulation, but these were rejected by the
French Ministry of Justice (the implications of the grounds of
rejection—whether they would make criminal prosecution in
France more or less likely—were disputed). On the basis that
the English court does not generally regard its orders as abusive,
there are not likely to be many, if any, cases where it declines to
order disclosure simply on account of the risk posed by the
Law.
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.
