{"id":7411,"date":"2022-04-05T10:40:30","date_gmt":"2022-04-05T15:40:30","guid":{"rendered":"https:\/\/www.campbellslegal.com\/?p=7411"},"modified":"2022-04-05T10:40:30","modified_gmt":"2022-04-05T15:40:30","slug":"cayman-grand-court-authorises-disclosure-of-confidential-documents-to-a-related-party","status":"publish","type":"post","link":"https:\/\/www.campbellslegal.com\/client-advisory\/cayman-grand-court-authorises-disclosure-of-confidential-documents-to-a-related-party-7411\/","title":{"rendered":"Cayman Grand Court authorises disclosure of confidential documents to a related party"},"content":{"rendered":"
In the recent judgment of In The Matter of the Kuwait Ports Authority<\/em> (FSD 118 of 2021, unreported, 8 March 2022, Parker J), the Cayman Grand Court considered the scope of its jurisdiction under the Confidential Information Disclosure Act, 2016 (the \u201cCIDA<\/strong>\u201d) to permit the disclosure of certain confidential documents to a related third party for use in foreign arbitral proceedings.<\/p>\n The court permitted the disclosure of confidential documents obtained by the Kuwait Ports Authority (\u201cKPA<\/strong>\u201d), in its capacity as a limited partner in The Port Fund L.P. (\u201cTPF<\/strong>\u201d), to the State of Kuwait (\u201cKuwait<\/strong>\u201d), of which KPA is an emanation. KPA is a party to various proceedings before the Grand Court in connection with its investment in TPF and Kuwait is the defendant to an ICSID arbitration concerning TPF brought by Maria (Marsha) Lazareva (the \u201cArbitration<\/strong>\u201d), a former director of the general partner of TPF (\u201cPort Link<\/strong>\u201d). Kuwait had requested the documents from KPA with a view to deploying them in the Arbitration.<\/p>\n The judgment confirms that the Grand Court will take a broad approach to the exercise of its discretion under the CIDA to further what it considers to be the interests of justice.<\/p>\n While the CIDA has been the subject of several reported judgments in the Cayman Islands since its enactment in 2016, its application has largely been procedural and uncontroversial. However, this decision provides helpful guidance as to the circumstances in which the court will permit the disclosure of confidential information to third parties.<\/p>\n Section 3(1) of the CIDA prescribes the situations in which the disclosure of confidential information belonging to another will not<\/em> constitute an actionable breach of the duty of confidence.\u00a0 Section 3(2) provides a defence to otherwise actionable breaches of confidence if the person disclosing the information acted in good faith and in the reasonable belief both that the information was substantially true and that (among other circumstances) it disclosed evidence of wrongdoing.<\/p>\n Section 4(2) gives the court jurisdiction to permit the disclosure of confidential information where a person intends to or is required to \u201cgive evidence in, or in connection with, any proceeding\u201d<\/em> and the evidence consists of or contains confidential information. Section 4(2) is intended to provide a gateway for the release of confidential information to promote the public interest in the administration of justice (in both Cayman and abroad).<\/p>\n KPA is a Kuwaiti state-owned entity, and a limited partner in TPF. KPA obtained a significant number of documents from Port Link by exercise of its statutory rights under section 22 of the Exempted Limited Partnerships Act (which provides limited partners a statutory right to information regarding the condition of the partnership). Those documents were relied upon by KPA to commence proceedings in the Cayman Islands against Port Link and, subsequently, other related defendants. Kuwait requested certain of those documents from KPA with a view to Kuwait deploying them in the Arbitration. KPA applied to the court under section 4 of the CIDA for permission to release the confidential documents to Kuwait. The application was supported by Kuwait and opposed by Port Link and Ms Lazareva (all of whom were separately represented).<\/p>\n This case was novel in that the applicant, KPA, was not itself the entity intending to give evidence, nor is it even a party to the Arbitration. Rather, as Parker J observed, KPA \u201cis not under any legal obligation or compulsion to share the documents with Kuwait. It has been requested to share them by [Kuwait], understandably wishes to comply if it can lawfully do so, and intends to share them for the purposes of section 4 CIDA<\/em>\u201d.<\/p>\n Port Link and Ms Lazareva objected to KPA producing the confidential documents to Kuwait for several reasons, including that:<\/p>\n In granting the relief sought by KPA, Parker J held that section 4(2) \u201cprovides an in-built discretionary filter for the Court to balance competing rights and interests in the exercise of its discretion<\/em>\u201d and is to be construed broadly.<\/p>\n The court rejected the submission that if KPA was intending simply to share the confidential documents with Kuwait it could not avail itself of section 4(2) because it was not \u201cgiving evidence\u201d<\/em>. This, Parker J said, would lead to an \u201canomalous outcome<\/em>\u201d which cannot have been the legislative intention. Parker J held that it would not be appropriate to constrain the meaning of the words in section 4(2) so as to limit their application only to those parties who themselves intend to \u201cgive evidence\u201d<\/em>, or to only doing so in the Cayman Islands; the relevant foreign proceedings may establish different routes by which evidence can be received than those under the Grand Court Rules, and the words \u201cor in connection with<\/em>\u201d imply a wide variety of circumstances in which evidence can be provided ([122]-[123]). Parker J further held that the definitions in section 4(1) should not be read so at to define exhaustively the particular types of evidential material that may be provided.<\/p>\n The court found that, having been asked by Kuwait to disclose the confidential documents, KPA had a legitimate interest in allowing the duties of confidence it owed to be set aside and to facilitating the administration of justice. Parker J held that, if the confidential materials were not provided, Kuwait and KPA<\/em> would suffer prejudice, although he did not clarify how KPA, as distinct from Kuwait, would be prejudiced in circumstances where it is not a party to the Arbitration.<\/p>\n In relation to the court\u2019s discretion, Parker J observed that (i) disclosure might avoid the possibility of inconsistent outcomes between the Arbitration and Cayman litigation involving KPA (despite none of the parties to the Arbitration and litigation being parties to the other), and (ii) even though the arbitral tribunal was disinclined to admit further documents, the court\u2019s jurisdiction was not affected by whether Kuwait actually proves able to use the documents in the Arbitration and the option should be kept open. The court also did not regard it as significant that Kuwait failed to seek documents within the Arbitration itself or via alternative means; KPA had not acted so unreasonably in failing to pursue other avenues that the court\u2019s discretion should not be exercised.<\/p>\n The court held further that section 3(2) of the CIDA was engaged, and that KPA was permitted to disclose \u201cconfidential information on wrongdoing<\/em>\u201d to Kuwait because it satisfied the threshold requirements of (i) acting in good faith and (ii) reasonably believing that the information is substantially true and discloses evidence of wrongdoing.<\/p>\n The court took a broad, arguably generous, approach to the interpretation of section 4 in this case. The definition of \u201cgive in evidence<\/em>\u201d in section 4(1) is prescriptive, without any clear language to suggest it is intended to be non-exhaustive, as Parker J found. Despite the prescriptive definition, Parker J held that the section was intended to cover a \u201cwide variety of circumstances where evidence can be provided<\/em>\u201d. Further, the court accepted KPA\u2019s argument that it could provide a written statement exhibiting the relevant documents in order to fall within the parameters of the \u201cgive in evidence<\/em>\u201d definition. This is despite that definition including the words \u201cproduce a document by way of discovery<\/u><\/em>\u201d, which on its natural reading is narrower than simply producing a document voluntarily.<\/p>\n Similarly, the words \u201cor in connection with<\/em>\u201d, as they appear in section 4(2), were interpreted broadly as applying not only to the \u201cproceeding\u201d <\/em>but also the defined term \u201cgive in evidence<\/em>\u201d.<\/p>\n It cannot be the case that every third party will have a legitimate interest in the administration of justice (being the justice of other litigants) which warrants it being authorised by the court to provide confidential information that would otherwise constitute a breach of a duty of confidence. Rather, it appears that KPA\u2019s legitimate interest in this case only arose because of the relationship between it and Kuwait, which suggests the relationship between the party holding the confidential information and the litigant seeking access to it will be relevant not only to the court\u2019s discretion but also to whether jurisdiction exists under section 4. It follows that outcomes may vary depending upon the nature of the relationship between the intended disclosing and receiving parties.<\/p>\n The application in this case arose in novel and fact-specific circumstances, however the judgment may open the door to further applications by parties wishing to disclose confidential documents and information to third parties, whether related or otherwise, for their use in legal proceedings in which the disclosing party is not involved.<\/p>\n Campbells represents three defendants in the Cayman litigation referred to above to which KPA is a party. The information provided above is of a general nature only; specific legal advice should be sought concerning your circumstances.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" This advisory discusses the recent judgment of the Kuwait Ports Authority, where the Cayman Grand Court considered the scope of its jurisdiction under the Confidential Information Disclosure Act, 2016.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"yst_prominent_words":[156,160],"class_list":["post-7411","post","type-post","status-publish","format-standard","hentry","category-client-advisory"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/posts\/7411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/comments?post=7411"}],"version-history":[{"count":3,"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/posts\/7411\/revisions"}],"predecessor-version":[{"id":7420,"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/posts\/7411\/revisions\/7420"}],"wp:attachment":[{"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/media?parent=7411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/categories?post=7411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/tags?post=7411"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.campbellslegal.com\/wp-json\/wp\/v2\/yst_prominent_words?post=7411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Relevant provisions of CIDA<\/strong><\/h3>\n
Background facts<\/strong><\/h3>\n
Why is this case relevant?<\/strong><\/h3>\n
\n
\n
The Judgment <\/strong><\/h3>\n
Analysis<\/strong><\/h3>\n