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Chancery Division, Mr Registrar Jones, 24 July 2013)
The joint liquidators of Hellas Telecommunications (Luxembourg) II S.C.A applied for orders under ss 234 and 236 of the IA 1986 for the production of documents relating to or belonging to Hellas II which had been generated in the context of three projects, known as Project Ulysses, Ionian and Mist. The first four Respondents to the application were a firm of Luxembourg lawyers and some of its members. Wind Telecom S.p.A., which was the fifth Respondent, claimed to be the true client of Nauta Dutilh, the Luxembourg firm. The application was heard over 3 days by Registrar Jones. The first four Respondents had contended that the law of Luxembourg (particularly the law on professional secrecy) prevented them from identifying the documents which they held, let alone disclosing or producing them to the liquidators of Hellas II. They also asserted that they had already delivered up all documents which were outwith the scope of the relevant Luxembourg law.
The Registrar was satisfied that (leaving aside the questions of privilege/secrecy) all of the documents and information sought by the liquidators properly came within the scope of ss 234 and 236: ie they were reasonably required. He concluded that, pursuant to the EC Regulation on Insolvency Proceedings, English law governed the liquidation of Hellas II, and therefore English law should be applied in determining what documents were privileged for the purposes of an application under ss 234 and 236.
However, because the law of Luxembourg was the law under which the advice was given by the first four Respondents (and because those Respondents also faced potential criminal sanctions in Luxembourg), that law was a matter which the Registrar could take into account in the exercise of his discretion as to whether the documents should be produced.
He concluded that the relevant Luxembourg law was to the effect that professional secrecy could be set aside provided that there were countervailing interests of sufficient weight to overcome the relevant client's trust in professional secrecy (such as, a liquidator's need to reconstitute the knowledge of a company). Moreover, the experts in the case agreed that, compliance by Luxembourg lawyers with a production order of the English Court which had been duly recognised (and against which no successful public policy challenge was mounted in Luxembourg) would not involve those lawyers in committing a civil or criminal offence. Moreover, and in broad terms, the policy of the EC Regulation was effectively to subject Luxembourg lawyers to production orders made by the Courts of other Member States which might apply less stringent professional secrecy laws. Therefore, as a matter of discretion, the order would not be refused on the basis of Luxembourg secrecy laws.
The outcome of the application was that the first to fourth Respondents could be ordered to produce documents in their possession which belonged to Hellas II or which related to Hellas II, subject to the fact that it was common ground that the first to fourth Respondents were not required to disclose documents which were privileged according to the English law of privilege. The Registrar expressly took into account the fact that the first to fourth Respondents had not engaged in a constructive dialogue in respect of categorisation of the relevant documents (meaning that a final order could not be made there and then); he described that view as misconceived and expressed the hope that, in the light of his decision a constructive dialogue would take place to enable the parties to identify the documents which would have to be disclosed. If no dialogue took place, or the dialogue was not constructive, then he would make a more detailed order.