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Claim No: CFI 008/2022

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE
ON APPEAL FROM THE FINANCIAL MARKETS TRIBUNAL

BETWEEN

KPMG LLP

Appellant

and

THE DUBAI FINANCIAL SERVICES AUTHORITY

Respondent

Claim No: CFI 007/2022

BETWEEN

MILIND AJIT NAVALKAR

Appellant

and

THE DUBAI FINANCIAL SERVICES AUTHORITY

Respondent

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AMENDED JUDGMENT OF JUSTICE ROBERT FRENCH

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UPON Claim No. CFI-007-2022 and Claim No. CFI-008-2022 (together the “Claims”) seeking permission to appeal a decision of the Dubai Financial Markets Tribunal (“FMT”)

ND UPON Athe parties agreeing to consolidate the Claims by way of a Consent Order dated 28 January 2022

AND UPON the Order of Justice Wayne Martin dated 16 June 2022 allowing the permission to appeal

AND UPON hearing Counsel for the Appellants and the Respondent at the hearing on 22 July 2022

AND UPON reading the submissions and relevant documents on the Court file

AND UPON reading an application to correct accidental slips/errors in the Order dated 16 September 2022 pursuant to RDC 36.41-36.46 and amending the Order according,

IT IS HEREBY ORDERED THAT:

1. The Appeal in CFI-008-2022 is dismissed.

2. The Appellant is to pay the Respondent’s costs of the Appeal to be assessed if not agreed and assessed as one set of costs with the costs in CFI-007-2022.

3. The Appeal in CFI-007-2022 is dismissed.

4. The Appellant is to pay the Respondent’s costs of the Appeal to be assessed if not

5. agreed and assessed as one set of costs with the costs in CFI-008-2022.

Issued by:
Ayesha Bin Kalban
Acting Registrar
Date of issue: 16 September 2022
Date of re-issue: 29 September 2022
At: 10am

SCHEDULE OF REASONS

1. These are appeals from decisions of the Dubai Financial Markets Tribunal (“FMT refusing applications for orders that pending hearings by the Tribunal be conducted in private and, that the subject of the hearings, Decision Notices issued by the Respondent, the Dubai Financial Services Authority (“DFSA”), not be published pending the outcome of the hearings. The Appellants are a firm which is a registered auditor under the DFSA (the “Firm”) and an Audit Principal (the “Principal”), employed by the Firm and involved in the conduct of the audits which were the subject of the Decision Notices.

2. The Decision Notices set out findings by the Respondent that the Firm, which is the Appellant in CFI-008-2022, had failed to comply with its obligations as a registered auditor and that the Principal, the Appellant in CFI-007-2022, was knowingly involved in the Firm’s breaches of the DFSA Administrative Rules and Laws. The Decision Notices set out adverse findings by the DFSA and recorded the imposition of penalties upon the Appellants.

3. The Appellants referred the Decision Notices to the FMT for hearings on the merits. Their applications for private hearings and prohibition pro tempore of publication of the Decision Notices were refused by the FMT in a written decision delivered on 14 December 2021.

4. Permissions to appeal against those decision were granted by Justice Wayne Martin, after a contested hearing, on 15 June 2022, the order being issued on 16 June 2022.

5. The reasons for the judgment were issued to the parties on 16 September 2022. The parties subsequently made an application for the correction of certain accidental slips/errors in the reasons pursuant to RDC 36.14–36.46. The reasons are reissued to reflect minor proofing changes not affecting the substance of the reasons or the conclusions.

Factual Background

6. The factual background to the applications, briefly stated, is as follows:

7. Before turning to the decision of the FMT and the contentions on the appeal, it is necessary to set out the relevant parts of the statutory framework.

Statutory Framework — The Regulatory Law

8. The Regulatory Law 2004 is a law made by the Ruler of Dubai (Article 2) and is applicable in the jurisdiction of the Dubai International Financial Centre (Article 3).

9. The DFSA is established under Dubai Law (Article 7(1)). It has its own constitutional provisions (Article 7(2)). It is required, in exercising its powers and performing its functions, to “act in an independent manner, notwithstanding that it is an agency of the Government of the Emirate of Dubai (Article 7(3)).

10. The powers, functions and objectives of the DFSA are set out in Article 8. In performing its functions and exercising its powers the DFSA is required to pursue the following objectives, set out in Article 8(3):

11. In exercising its powers and performing its functions, the DFSA is required, under Article 8(4) to take into consideration guiding principles which are set out and which include:

12. Article 9 is significant because it indicates the relationship of the FMT to the DFSA. Article 9 provides:

13. As appears, the FMT is a component of the DFSA and is appointed by the DFSA Board of Directors. Being part of the DFSA it is not, in a constitutional sense, independent of it. Within the framework of the specific functions conferred on it, the FMT is subject to the objectives of the DFSA set out in Article 8.

14. The Board of Directors has what are referred to in Article 20(2) as “legislative powers and functions”. They include, under Article 20(2)(b), the power, “to review and, where appropriate, approve and make Rules”. Under Article 20(2)(c) they may also “review and, where appropriate, approve and issue standards and codes of practice of the DFSA”.

15. Further, under Article 23, the DFSA Board of Directors is empowered to make Rules in respect of any matters related to the objectives, powers or functions of the DFSA or which facilitate the administration of, or further the purpose of, any law administered by the DFSA.

16. Chapter 4 of the Regulatory Law deals with the constitution, powers, and functions of the FMT and relevantly provides:

17. Article 27 sets out the powers and functions of the FMT. Relevantly it provides:

18. Chapter 5 of the Regulatory Law deals with proceedings in the FMT. The term “proceeding” is defined in Article 28(b) as a reference, regulatory proceeding or an application by the DFSA for the payment or reimbursement of costs and expenses of an investigation under Article 79. The term “reference” is defined as “a proceeding before the FMT to review a decision of the DFSA under this Article”.

19. Article 29, which deals with references, provides as follows:

20. Article 31 deals with the conduct of proceedings. It provides in Article 31(4) for the consolidation of proceedings where there are common parties or a common question of law or fact and the president of the FMT is satisfied that it is in the interests of justice and efficiency and in the interests of the DIFC to make a direction under that Article.

21. Article 31(5) deals, inter alia, with the reception of evidence by the FMT as follows:

22. Central to the present application, was Article 31(6):

23. For completeness, reference should be made to Article 116, which is referred to in Article 29(7) and specifically to Article 116(2) which provides:

Rules of Procedure of the FMT

24. The Rules of Procedure of the FMT are made under Article 27(6) of the Regulatory Law. The Rules describe procedures that apply generally to the conduct of proceedings brought before the FMT (Rule 3). The FMT has, however, a discretion to adopt different procedures to ensure the “just, expeditious and economical resolution of proceedings brought before the FMT” (Rule 4). Rule 5 provides:

Rule 7 provides:

25. Under the heading “Public Proceedings”, Rule 16 provides:

26. Rules 17 to 20 are grouped under the heading “Confidential Treatment”. It has been suggested that they have some implications for the discretion of the FMT under Article 31(6) of the Regulatory Law. They provide:

27. The preceding provisions are all found in Part 1 of the FMT Rules. Part 2 deals with proceedings by way of a reference which is commenced by a “reference notice” containing information required by Rule 24. That includes “a concise statement of the facts”³ and “a copy of the disputed decision and all material referred to in the decision.”⁴

28. The DFSA Executive must file an answer to the reference notice containing, inter alia, a summary of the facts and law upon which the DFSA Executive relies.⁵ The applicant may file a reply identifying all matters in the answer which are disputed by the applicant.⁶

The Jurisdiction of the CFI

29. The jurisdiction of the CFI to hear appeals from the FMT is conferred by Article 33 of the Regulatory Law, which provides:

30. Jurisdiction is also conferred by Article 28 of the DIFC Court Law, DIFC Law No 10 of 2004, which appears in Chapter 3 headed “Administrative Appeals”. Article 28 provides:

31. The jurisdiction is concurrently conferred by Article 5(A) of the Judicial Authority Law No 12 of 2004. That Article relevantly provides:

The term “DIFC Bodies” is defined in Article 2 of the Judicial Authority Law and includes bodies established pursuant to the DIFC Laws or pursuant to approval of the president. The FMT is clearly a body established pursuant to a DIFC Law, the Regulatory Law. It does not appear to have a corporate existence separate from the DFSA.

The Nature of the Appeal

32. Article 33 of the Regulatory Law limits the right of appeal from the FMT to this Court to appeals on “a point of law”. Article 28 of the DIFC Law No 10 of 2004 confers an ambulatory jurisdiction on the CFI to hear and determine:

The appeal from the FMT to the CFI falls into that category. By reason of Article 5A(1)(d) the jurisdiction conferred on the CFI in relation to such appeals is exclusive.

33. The ordinary concept of an “appeal” involves an appeal from one judicial body to another, e.g., an appeal from a decision of the CFI to the Court of Appeal. However, the term is commonly used, as in this case, to denote review by a court of the decision of an administrative tribunal. Where the review is limited, as in this case, to a point of law, it is a species of judicial review of administrative action.

34. The distinction between questions of law and questions of fact is not always an easy one to make. As Lord Reed observed extra-curially:

35. The limitation of this Court’s jurisdiction to an appeal on “a point of law” where review of a discretionary power is involved, precludes the Court from revisiting the merits of the exercise of that power. Nor is the Court authorised to substitute its own evaluative opinions for the findings of the FMT even though on the facts of a particular case it might have thought a different decision to be preferable. Rather, in order for the appeal to succeed, it must be shown that the FMT has made a legal error. That does not encompass a review of the weight which the FMT might have attached to particular circumstances or the range of factual considerations to which it had regard.

36. In this case, the Appellants allege that the FMT failed to take into account relevant considerations and took into account irrelevant considerations. These are common grounds in applications for judicial review. They have a long history⁸. As the authors of a leading Australian text, Judicial Review of Administrative Action and Government Liability have observed, the relevancy grounds are not to be read literally “[v]ery few decisions would ever be so flawless as to pass a test read so literally⁹.” Characterising decisions of the High Court of Australia on the relevancy grounds they observe:

37. In the leading case of Minister for Aboriginal Affairs v Peko-Wallsend Ltd¹¹, Mason J cited Associated Provincial Picture Houses Ltd v Wednesbury Corporation¹² and observed:

As the authors of the text observed:

The question of relevancy is to be answered by construction of the statute conferring the power, the exercise of which is under review:

The Nature of the FMT

38. The FMT can properly be regarded as a regulatory tribunal. It is also an administrative body — a component of the DFSA. It is not part of the DIFC Courts’ structure. In this respect it differs from the United Kingdom’s Upper Tribunal, a number of whose decisions in relation to prohibition of publication of regulatory decision notices were referred to by the parties. The Upper Tribunal, by statute, is a Superior Court of Record.¹⁵

39. The members of the FMT panel which made the decision under appeal comprised a retired Judge and two members with extensive commercial and regulatory practice experience. They enjoy decisional independence from the DFSA whose Decision Notices they have been asked to review. The FMT also enjoys statutory support for a degree of institutional independence, reflected in Article 26(3) of the Regulatory Law — that is to say no member of the DFSA Board nor any officer of the DFSA can be a member of the FMT. These circumstances, however, do not affect the character of the FMT as an administrative body which is a decision-making organ of the DFSA. The question arises — what relevance does the principle of “open justice” applicable to courts have to the proceedings of the FMT? Authorities relevant to that principle were cited in submissions lodged in these appeals.

The Open Justice Principle

40. It is an essential ¹⁶. The common law rationales for the open justice principle include the benefits that flow from subjecting court proceedings to public and professional scrutiny and the maintenance of public confidence in courts. ¹⁷. Non-judicial bodies set up as independent and impartial tribunals will, subject to their statutes, attract similar public policy considerations to their modes of operation.

41. The principle as applied to courts is not absolute. Its application may be qualified by the inherent jurisdiction of superior courts and the implied powers of inferior courts. When it is necessary to the proper administration of justice, a court may treat part of its proceedings or evidence before it as confidential. Examples include proceedings involving secret technical processes,¹⁸ anticipated breach of confidence or blackmail.¹⁹ The categories are not closed.

42. The nature of the jurisdiction being exercised by the court may also qualify the principle, for example, jurisdiction in relation to wards of the state and the mentally ill.²⁰

43. Subject to constitutional limits on legislative power, where they exist, the common law principle is subject to qualification or abrogation by statute. As a general proposition, however, a statute which affects the open justice principle by providing for a discretion qualifying its application in particular cases should be interpreted narrowly where a narrow interpretation is open. This is just a particular exercise of the “principle of legality” applied to the interpretations affecting fundamental common law principles.

The FMT and Administrative Justice

44. The FMT is not a court. As a component of the DFSA, it exercises executive or administrative rather than judicial power.

45. It is inherent in the character of the FMT and basic elements of the rule of law underpinning administrative decision-making, that its decision-making be:

46. The three requirements reflect a thin concept of administrative justice applicable to all statutory decision-makers exercising powers which may affect the rights, duties, reputations or livelihoods of persons, albeit subject to statutory modification in the case of procedural fairness. Other elements such as efficiency, expedition and accessibility may be imported explicitly or impliedly by the statute under which the administrative decision-maker operates.

47. There is no overarching common law principle that, subject to statutory abrogation, the process of administrative decision-making will be conducted under the public gaze. That is particularly so of first line decisions whether by an officer or an authority. That proposition also applies where an internal review body is created administratively by a government department or authority without express statutory support. However, as appears below, where the decision-maker is a statutory review body with public regulatory functions, transparency is generally essential to the effective discharge of those functions.

48. There was a view reflected in the Franks Committee Report to the United Kingdom Government in 1957 that tribunals dealing with cases involving professional capacity and reputation should conduct their hearings in private. For context, the relevant passages from the Franks Committee Report are as follows:

49. The Committee looked at three classes of case in which tribunals would be justified in sitting in private first. They were:

50. The Committee recommended that where a tribunal was of a class which almost exclusively dealt with any of those three types of case the hearing should be in private. All other tribunals should sit in public “subject to a discretionary power in the chairman to exclude the public should he think that a particular case involves any of these considerations.”²² These general observations might be thought to have less contemporary relevance with the rise of public regulation across a variety of sectors which involve the delivery of professional services. The application of an open justice principle and the scope and content of discretions to depart from that principle, depend upon the particular statutory scheme under consideration.

51. In the decision under appeal the FMT quoted a general observation by Nicklin J in Taveta Investments Ltd v The Financial Reporting Council & Others²³ (“Taveta”) in which it was said:

As appears below, the reference to Taveta was said to reflect an error of law on the part of the FMT because of the particular questions in issue in that case which differed markedly from those in issue in this case. As appears below, however, that submission is not accepted.

52. The FMT also quoted Swift J in R (On the Application of T) v FCA where the Court said:

53. In the case of a statutory regulatory tribunal, the question whether, and in what circumstances, it is required to conduct its proceedings in public will depend upon its nature, function and purposes to be derived by reference to the statute under which it is established. The FMT is a statutory regulatory tribunal and it is now necessary to turn back to the statute.

The Application of Open Justice to the FMT

54. The governing provision debated in this case was Article 31(6) of the Regulatory Law which provides that proceedings and decisions of the FMT shall be heard and given in public unless the FMT orders otherwise, or its Rules of Procedure provide otherwise.

55. The FMT is empowered by its Rules of Procedure to determine the range of circumstances in which “information” is to be treated confidentially. Although Rule 17 refers to “part or all of a proceeding” the context in which that term appears indicates that the Rule is concerned with “specific information” to be treated as confidential, applying one or more of the criteria set out in Rule 19.

56. As noted above, as a general proposition, regulatory enforcement action by a statutory public authority has protective and preventative purposes, and public and industry educational purposes. Regulatory action conducted in public underpins confidence in and support for the rule of law in its application to the area of commercial or professional conduct being regulated. As the Privy Council said in Meerabux v Attorney-General of Belize:

57. That case was, in a sense, the obverse of the present. It concerned a complaint by a person the subject of inquiry — a judge — that the inquiry had been conducted in private. The passage quoted nevertheless illustrates the importance of the general principle of open justice in relation to administrative tribunals.

58. The purposes of transparency applicable to regulatory action generally, are reflected in the specific objectives of the DFSA set out in Article 8(3) above. They apply to the FMT as a part of the DFSA. Confidence in the financial services industry — see Article 8(3)(b) — is difficult to promote if the decisions of the DFSA are confidential and the proceedings of the FMT are conducted, as a general rule, behind closed doors. Maintenance of the reputation of the DIFC and the financial services industry, which is the objective referred to in Article 8(3)(d) is likewise an objective which militates in favour of the open conduct of DFSA’s enforcement actions and, particularly, the open conduct of referral hearings and decisions by the FMT. Further, the promotion of public understanding of the regulation of the financial services industry in the DIFC, which is the objective set out in Article 8(3)(f), militates in favour of public decision-making by the DIFC and open hearings by the FMT.

59. The partial institutional independence of the FMT, reflected in its composition, is designed to signal that an independent review mechanism has been put in place to ensure the quality of DFSA decision-making in this important regulatory area.

60. The FMT’s Rules of Procedure, and particularly Rule 16, reflect a presumption in favour of public hearings and decisions derived from consideration of Article 31(6) and the objectives of the Regulatory Law. The Confidential Treatment carve-outs for which Rules 17 to 20 provide, do not detract from the general presumption in favour of public hearings and decisions. Rather, they tend to vindicate the FMT’s understanding that departure from an open justice model should be exceptional.

The Arqaam Decision

61. A previous decision of this Court relating to the discretion of the FMT to make privacy and non-publication orders was Arqaam Capital Ltd v DFSA²⁷ (“Arqaam”) delivered by Justice Sir John Chadwick on 4 September 2012.

62. The FMT had made an order in that case that a pending proceeding in the FMT should be heard in public and no order be made for the confidential treatment of information.

63. The pending proceedings were brought by the DFSA against the Appellant, Arqaam, for failing to comply with International Financial Reporting Standards in the treatment of the revaluation of a certain artwork in its 2009 accounts. The DFSA sought declaratory relief and imposition of a fine and restatement of the 2009 accounts.

64. The equivalent of Article 31(6) of the Regulatory Law applicable at the time the Arqaam decision was made was Article 32(3). It is not necessary to descend into the factual detail of the case. The FMT had adopted a general approach that there was a presumption in favour of public proceedings contained in Article 32(3) of the Regulatory Law. It stated that the Law gave it “an unfettered discretion” in the matter and that its Rules of Procedure did not give any guidance as to how the discretion was to be exercised.

65. The characterisation of any statutory discretion as “unfettered” is not to be taken literally. Indeed, it is a logical impossibility. A discretion conferred by statute without any specified criteria for its exercise is nevertheless to be exercised having regard to the scope, purposes, and subject matter of the statute generally and the inferred purposes of the particular discretion.

66. Justice Chadwick held in Arqaam that the FMT was correct in its view that it required some good reason to depart from the principles stated in the opening words of Rule 15 (see now Rule 16 of the Rules of Procedure of ²⁸It was also correct in its view that subject to the case in which all parties requested that the hearing be in public, it had a discretionary power to order that part or all of a hearing be non-public. Further, according to Justice Chadwick, the FMT was “plainly correct” to take the view that there was nothing in Rules 15 and 16 (see now 16 and 17) which gave guidance as to the circumstances in which the discretionary power should be exercised, other than that (i) there was a need to find good reason to depart from the principle stated in the opening words in the first sentence of Rule 15 and (ii) there was a need to observe the restriction imposed by the proviso in the second sentence of that Rule.²⁹ The Hearing Panel was also said to have been correct in appreciating that there were two distinct powers in Rule 16 (see now Rule 17), namely the power to order that part or all of the proceeding is non-public and the power to order that “information is treated confidentially and not disclosed publicly”.³⁰

67. Justice Chadwick supported the FMT’s observation that the rules do not give any direct guidance as to how the discretion [in relation to the power to order a non-public hearing] was to be exercised. It was also correct to recognise that the factors set out in Rule 18 (now Rule 19) give “some indirect guidance as to mattes which may be taken into account in deciding whether proceedings should be heard in private”.³¹

68. Having regard to those observations, His Honour rejected criticisms that the FMT had failed to apply the correct legal test.³²

Some United Kingdom authorities

69. A number of decisions from the United Kingdom were referred to by the parties and it is useful to make brief reference to them. Some of those decisions concerned an analogous regulatory scheme and must be considered in the light of that scheme.

70. An authority of general importance to the application of the open justice principle in the judicial system to disclosure of documents necessary for an understanding of judicial proceedings was a decision of the Court of Appeal: R (Guardian News & Media Ltd) v City of Westminster Magistrates’ Court³³ (“Guardian News & Media”). In the judgment of Lord Justice Toulson, with which Lord Neuberger MR and Hooper LJ agreed, he said:

71. That default position is of relevance to disclosure of DFSA decision notices under reference to the FMT, as those notices will identify the subject matter of the proceedings and ordinarily would be important to understanding the proceedings. A non-publication of such notices where the proceedings themselves are open, compromises in a practical way the transparency of the proceedings.

72. The decision of the Court of Appeal in Guardian News & Media was referred to in Arch Financial Products LLP and Others v The Financial Services Authority³⁵ (“Arch”). That was a decision of the Upper Tribunal Tax and Chancery Chamber, a Chamber of the Upper Tribunal established by the Tribunals Courts and Enforcement Act 2007 (UK). It is created by section 3(5) of that Act as a Superior Court of Record. It has jurisdiction to hear appeals from first tier tribunals on a point of law.³⁶

73. In the Arch case, the Upper Tribunal considered whether, in an appeal to it from a decision of the Financial Services Authority under the Financial Services Act 2010 (UK), the Tribunal should exercise its powers under Rule 14 of the applicable Rules to prohibit publication of the relevant decision notices of the Financial Services Authority. In the course of his judgment, Judge Herrington of the Upper Tribunal noted that there were no specific conditions to be observed before the power conferred by the Rule could be exercised. The test applied by the Tribunal, which was not in contention in that case was whether refusal to prohibit publication would cause the applicant “serious harm”. Also relevant was a provision in a schedule to the Rules empowering the Tribunal to direct that its Register was not to include publication of a reference if it were necessary having regard “in particular to any unfairness to the Applicant or prejudice to the interests of consumers that might otherwise result”.³⁸

74. It was submitted to the Upper Tribunal in that case that it was clear that the question of publication or prohibition of publication of the decision notices went hand in hand with the question of what was consistent with the open justice principle. The Tribunal accepted, by reference to the reasoning of Sir Stephen Oliver QC in Canada Inc and Peter Beck v FSA and Toulson LJ in the Guardian News & Media decision, that:

75. The Tribunal undertook a balancing exercise which started with “… the scales heavily weighted in favour of publication with the burden on the Applicants to produce cogent evidence of how unfairness may arise and how they could suffer a disproportionate level of damage if publication were not prohibited.”⁴¹

76. The Upper Tribunal’s decision was made within a particular statutory framework. Strongly in favour of the application of the open justice principle was the status of the Tribunal as a Superior Court of Record. As already observed, the FMT is not a judicial body. Nevertheless, as already noted, there is a strong statutory principle reflected in Article 31(6) of the Regulatory Law, in favour of open hearings. That carries with it a presumption in favour of the publication of Decision Notices when they are the subject of a reference in a hearing to be conducted in public. The FMT Rules relating to Confidential Treatment have a rather specific focus on “information” and do not identify the metes and bounds upon the exercise of the discretion conferred by Article 31(6).

77. It must also be borne in mind that the Upper Tribunal in Arch was concerned with the exercise of its own discretion. It was not concerned with judicial review of the discretion of an administrative tribunal or decision-maker confined by consideration of whether the tribunal or decision-maker had erred in law. The latter is the necessary focus of this Court in reviewing the decision of the FMT.

78. In Burns v The Financial Conduct Authority⁴² (“Burns”) the Upper Tribunal was asked to exercise its discretion to direct that its Register not contain particulars of a reference in relation to a decision notice issued by the FSA. The adverse impact of publication on the livelihood of the applicant was advanced in argument in that case. An interesting observation made by the Tribunal, again comprising Judge Timothy Herrington, was:

79. That was the case in which the significance of an apprehended destruction of or severe damage to a person’s livelihood was raised. The Upper Tribunal said:

A disproportionate loss of income or livelihood was damage of a different and more serious kind than damage to reputation alone. The Tribunal further said:

80. As in Arch, the Upper Tribunal was not undertaking judicial review of the exercise of an administrative discretion by another body. It was exercising its own discretion. In so doing it applied general principles and principles derived from the particular statutory framework within which it was operating.

81. In Foley v The Financial Conduct Authority,⁴⁶ (“Foley”) Judge Herrington referred to “the now well-established approach” to a balancing exercise when considering privacy applications under the relevant statutory provisions and Rules analysed in Arch. The balancing exercise was evidently informed by the overriding objective in Rule 2 of the Upper Tribunal’s Rules that required it to deal with cases “fairly and justly”. At paragraph 21 of the decision in Foley the Tribunal observed:

Unfairness is not a statutory criterion for the FMT in the exercise of the discretion under Article 31(6), albeit it is set out in the FMT’s own decision in Al Masah Capital Limited and Others v The Dubai Financial Services Authority⁴⁸ (“Al Masah”) as a matter to be demonstrated by the applicant for a privacy order.

82. The Upper Tribunal in Foley also observed that the fact that some information concerning the subject matter of a reference is already in the public domain is a factor tending in favour of publication.⁴⁹

83. The decisions of the Upper Tribunal were made in the context of a specific statutory scheme. The FMT appears, if anything, to have a broader discretion, consistent with the scope and purposes of the Regulatory Law, in determining whether to hear applications in private and in determining whether to prohibit publication of decision notices pending the outcome of reference proceedings. That said, the Upper Tribunal decisions are a useful point of contrast and comparison.

84. Taveta, was cited by the FMT in the decisions under appeal. It was a decision of Nicklin J in the Administrative Court of the Queens Bench Division of the High Court of Justice. The case concerned an application for judicial review of a decision by the Financial Reporting Council to publish details of a settlement agreement and associated particulars relating to the imposition of sanctions on an accounting firm and one of its employees in relation to the audit and financial statements of a public company. The applicants were parties who were not the subject of the sanctions, but were referred to adversely in the documents to be published.

85. In the course of his judgment, Nicklin J set out some observations about the particular regulatory context with which he was dealing. He prefaced those observations with the general remarks quoted by the FMT set out above.

86. It can be accepted that the Taveta decision does not have direct relevance to these appeals because it was, as the Firm contended, concerned with publication of particulars of a settlement with the regulator which included reflections on a third party not the subject of any sanctions. Nevertheless, as appears below, the reference to the general observation quoted by the FMT, did not involve any error of law.

87. Against that background it is now appropriate to refer to the FMT’s decision.

The FMT’s Decision

88. The FMT identified three issues which it had to determine:

The FMT took the view that if the hearing were to be in private, that would be determinative of the publication issues concerning the Decisions Notices.⁵⁰

89. The FMT referred to evidence before it and specifically the evidence of the Head of Risk Management at the Firm tendered in support of its Privacy Application. He described the importance of reputation to auditors in the DIFC and specifically to the Firm. The audit profession was said to be unique in that audit firms generate almost no external work product able to be assessed by potential clients when attempting to generate new business. Reputation was particularly important when competing for work in the DIFC. Unlike other jurisdictions, the DIFC does not impose mandatory rotation requirements on the appointment of audit firms by corporations within its jurisdiction. Thus, audit firms in the DIFC do not have the same expectation of a regular pipeline of new clients as would be the case in jurisdictions with mandatory rotation. Attracting new business is therefore harder and the consequences of losing existing clients more serious. He referred to evidence of the significance of reputational issues in the decisions of prospective clients to appoint or not appoint the Firm as an auditor. He stated his belief that publication of the Decision Notice would almost certainly cause the Firm to lose a significant number of clients. He made an estimate of likely financial damage which would result from publication of the Decision Notice before the Firm had had an opportunity to challenge it. He also made the point that only a limited number of employees of the Firm have ever done any work for Abraaj. Publishing the Decision Notice at this stage would damage the reputation of a large group of people who were, on any view, entirely blameless.

90. The Principal gave evidence of his personal circumstances, both family and financial. He referred to the real risk of adverse impacts upon him if the proceedings were heard in public.

91. The DFSA relied upon evidence from Mrs Keenan, Associate Manager in the Corporate Communications Team within the DFSA. Mrs Keenan compiled media coverage referencing the Firm’s role in relation to Abraaj and public statements by the DFSA about the importance of the reputation of the DFSA and, in particular, the reputation of the DIFC as a well-regulated financial centre, focussing on the importance of having high standards among auditors of DFSA authorised firms.

92. Mrs Keenan exhibited copies of relevant media coverage and DFSA public statements about the importance of the reputation of the DFSA and the DIFC.

93. Since April 2018 there had been a large amount of media coverage concerning the Firm’s connection to Abraaj. Mrs Keenan identified 22 such articles, referencing open source Google searches. She also referenced speeches, publications and interviews emanating from the DFSA about the importance of the reputation of the DFSA and the role of auditors.

94. The FMT also referred to a judgment given by Justice Wayne Martin on 3 November 2021 in relation to proceedings brought by the liquidators of AIML and ACLD against the Firm. His decision concerned an appeal from an order of Justice Sir Jeremy Cooke dated 19 May 2021. The DIFC Courts dismissed a jurisdictional challenge to a claim in professional negligence brought against the Firm and others by the liquidators of AIML and ACLD. The decision gave significant detail about the subject matter of the dispute and what was alleged against the Firm. It referred to the International Standards on Auditing and set out allegations of breach of duty in respect of matters the subject of the current References to the FMT. The Firm however, made a number of submissions to the FMT, the general effect of which was that the limited degree of disclosure in the liquidation proceedings did not reduce the calculus of reputational loss flowing from the publication of the Decision Notices and conduct of the reference hearings in public. The decision relating to a jurisdictional matter had set out nothing more than the allegations of one party against the other. Unlike a Decision Notice, it did not derive from those allegations any concluded findings. There was no specific reference to the Principal’s position as registered Audit Principal. There was nothing in the decision which alluded to the existence of regulatory proceedings against the Principal.

95. Against that background, the FMT considered the relevant legislative and regulatory framework. It referred to the Regulatory Law and, in particular, Article 31(6) and the objectives of the Regulatory Law listed in Article 8(3). It also referred to Rules 16 and 19 of the FMT Rules. Rule 19 was said to have been held to have “an indirect application to the issue of public hearings even though its direct application is to the issue of confidential treatment of specific information.” The decision in Arqaam was cited. Rule 19 was said to “give the FMT a broad discretion to order that hearings should take place in private.”

96. The FMT identified its approach to privacy applications as that set out in its decision in Al Masah. There it had derived, as a test from the Arqaam decision, that it was required to “weigh the harm that would be caused to Arqaam’s legitimate business interests if the proceedings were held in public against [the] public interest in publicity.”⁵¹

97. It took its summary of applicable principles from paragraph 130 of its own decision in Al Masah, which it is useful to set out as follows:

98. It may be noted that the FMT was not bound to apply all or any of the principles set out in Al Masah. They were not rules of procedure under Article 31(6). A departure from the principles could not, on that account constitute an error of law. That said, the FMT saw no need to revisit the principles in Al Masah but made four points. The first of those were set out at paragraph 62 of its decision which was the subject of some contention in these appeals. That read:

The other three points set out in paragraphs 63 to 65, may be summarised thus:

99. At paragraph 66 of its decision, the FMT said, referring to what it had held in Al Masah:

100. The FMT then discussed the position of the Firm, finding that it had strong and valid reasons for the hearing to be private. It accepted that a public hearing would give rise to reputational issues and loss of potential and existing clients. However, as stated in Al Masah, the real possibility of reputational damage is a feature of open justice⁵². There was nothing exceptional or uncommon in the evidence of reputational damage put before it. In the Audit Negligence Claim, allegations of breach of duty had been made against the Firm by its former client.⁵³

101. At a hearing the Firm would be able to defend itself. In the meantime it was reasonable to suppose that the sophisticated clients of the firm would inquire whether the Firm was subject to regulatory action. The contention that loss of clients would result in loss of jobs by innocent staff, was regarded as speculative.⁵⁴ Further, the FMT did not consider that auditors should be in a different position from other professionals when it came to conducting open hearings.

102. As noted earlier, the FMT quoted from the judgment of Nicklin J in Taveta supportive of “the importance of regulators operating with transparency and openness …”.⁵⁵

103. The FMT acknowledged the argument that, in deciding whether a hearing should be in public or in private, it should take account of the fact that transcripts could be made public after the event together with any element of the Decision Notice which had been upheld⁵⁶. The FMT however considered that reading transcripts after the hearing is no substitute for witnessing the proceedings as they take place, whether from the perspective of journalists or members of the regulated community seeking to draw lessons for future conduct. Nor would it be satisfactory to see only “elements” of the Decision Notices.

104. The FMT then concluded:

105. As to the Principal, the Hearing Panel also considered that a public hearing was appropriate in his case. His current employer was aware of the existence of the proceedings against him, albeit not that they are regulatory proceedings. There was no evidence that he would be at risk of dismissal from his current employment before the outcome of the proceedings. Moreover, there was no cogent evidence of how unfairness would arise. It was speculative that a public hearing would damage the reputation of his current employer or generate an apprehension that it would do so to the extent that the employer would dismiss him on that account. His current employment is not in a regulated industry and he is not serving in a regulated role.

106. In any event, given that the reference against the Firm was to be heard in public and the references were consolidated, it followed that the hearing concerning the Principal would also be in public.

107. As to the Decision Notices, the FMT considered that they should be published after 21 days of its Ruling. In paragraph 95 of its Reasons for Decision, which was the subject of Appeal Ground 4 by the Firm, the FMT said:

The starting point in its analysis was that it had decided that the references were to be heard in public. It followed that the Decision Notices had to be published in advance of the hearing because they would be considered at the hearing, and it would not be possible to follow the proceedings without them. Advance notice was required which would make clear what was and what was not alleged and the reasons for the sanctions imposed. That consideration applied to both the Firm and the Principal.

The Directions of the Hearing Panel

108. The Hearing Panel’s directions were as follows:

The Firm’s Grounds of Appeal and Arguments

109. The Firm relied upon skeleton arguments which it had filed in support of its Application for Permission to Appeal. In this appeal it also filed a Supplemental Skeleton Argument which was largely directed to the evidence of the Firm’s Head of Risk Management, which had been placed before the FMT. In its Supplemental Skeleton Argument, the Firm referred in particular to the impact of regulatory action by the Markets Authority in Oman on the business of a related firm as evidence of the effect of reputational damage on an audit firm’s client base. It referred to the decrease in the related firm’s audit revenue in the relevant period. By any measure this was said to be “serious harm”.⁶⁰

110. Reference was also made to the evidence of the Firm’s Head of Risk Management seeking to quantify financial damage likely to result from publication of the Decision Notice or publicity of the reference.⁶¹

111. The FMT’s refusal to grant the Application having regard to the evidence of apprehended loss and damage was said to place an unrealistic hurdle in the path of any privacy application. The Firm submitted that there was nothing more it could reasonably have done to prove the risk of future loss.

112. The risk of job losses to employees of the Firm unconnected with the Abraaj work undertaken by the Firm was also invoked.⁶²

113. The Principal’s own evidence of the impact of publicity on him and his family was relied upon.⁶³

114. The Firm contended that had the FMT adopted the correct approach to the Applications it ought to have found that the substantial risk of very significant harm to the Firm provided a sufficient basis to grant those applications.

115. Against that background it suffices now to set out the successive grounds of appeal relied upon by the Firm and to deal with each of them seriatim.

116. The Firm’s Ground 1 reads as follows:

117. The Firm submitted that the FMT focussed on the principle of open justice rather than on a comparison of the harm that the Firm might suffer and the size of the fine that the DFSA sought to impose. Rule 19 of the FMT Rules and the approach in Arqaam were said to be consistent with a balancing of harm to legitimate businesses and personal interests against the principle of open justice.

118. Various authorities were cited to the effect that in judicial proceedings open justice is not an absolute imperative “but rather a factor to be weighed in the balance”. The latter proposition may be rejected immediately. In curial proceedings open justice is not “a factor to be weighed in the balance”. It is an essential character of courts subject to exceptional qualifications. Also to be rejected is the proposition set out in paragraph 28 of the Firm’s skeleton argument that:

119. In the context of the open justice principle and its application to courts, the last sentence would relegate the open justice principle from an essential characteristic of courts, subject to qualification in particular circumstances, to a desirable but not essential feature of their operation. This case of course is concerned not with a court but with an administrative regulatory tribunal whose powers and procedures are governed by statute and rules made under statute. Nevertheless, it is apparent from Article 31(6) that proceedings of the FMT are to be heard in public unless, in its discretion, the FMT orders otherwise or its Rules of Procedure provide otherwise. That Article makes plain the open hearing preference which is clearly, not merely, a factor to be balanced against other factors. Quite apart from the statutory provision, the purpose of the Regulatory Law in which it appears, is the public regulation of the financial services industry. This is reflected in the guiding principle in Article 8(4)(g) that the DFSA, of which the FMT is a part, is to exercise its powers and perform its functions in a transparent manner.

120. Rules 16 to 20 are rules of procedure of the kind contemplated by Article 31(6). Rule 16 reflects the overarching preference for open hearings, which may be derived from Article 31(6). The focus of Articles 17 to 19 on “information” to be treated confidentially and the criteria in Rule 19 do not point unequivocally to the general reputational impact of an open hearing as a criterion for “ordering otherwise” in Article 31(6).

121. The primary criticism of the FMT decision advanced by the Firm is that it failed to balance the risk of significant damage to the Firm flowing from an open hearing against “the small derogation from open justice” flowing from a private hearing coupled with later publication of transcripts.

122. The Firm pointed to paragraph 62 of the FMT decision (set out above) and contended that the FMT was applying a test for the exercise of its discretion which would require the applicant for a private hearing to demonstrate a risk of “the destruction of businesses and careers”.

123. On its face, however, paragraph 62 sets out what might be regarded as a condition which the FMT would regard as sufficient to justify the exercise of its discretion to order a non-public hearing. It does not formulate a necessary condition. Nor does it mean that even if destruction of livelihood is likely, the FMT binds itself to ordering a non-public hearing. Circumstances may be imagined in which the FMT could conclude that a public hearing is required even though there is a risk of significant adverse effects amounting to severe damage to or destruction of livelihood.

124. In oral submissions, counsel for the Firm said that neither the Firm nor the Principal had argued before the FMT that they would suffer destruction of business.⁶⁴ The introduction of that example in the FMT’s reasoning was said to indicate that it thought, erroneously, that that was the question which it was being asked. That proposition, with respect, placed a construction on paragraph 62 of the FMT’s decision which was not warranted. The fact that the FMT stated what may be a sufficient condition to engage the discretion to make a privacy order did not mean that it was prescribing a necessary condition for the exercise of that discretion.

125. The Firm also referred to paragraph 66 of the FMT decision (set out above) and characterised it as another example of the FMT’s erroneous application of a destruction of business test. That paragraph referred to Al Masah and what was held on the facts of that case. It did not import a one-size fits all test.

126. Even if the FMT had required proof of a risk of destruction of business in this case, it would not necessarily be erring in law to do so. In undertaking any balancing exercise, the FMT could properly be expected to have regard not only to the impact on the party the subject of the Decision Notice and reference, but also to the seriousness of the contraventions which are alleged. Their impact on various interests within the commercial and consuming community would also be relevant. It is not simply a matter of open justice versus adverse impacts. If proportionality judgments are to be applied the character of the alleged contraventions may feed into assessment of the desirability of an open hearing.

127. The discretion afforded to the FMT under Article 31(6) is not constrained by reference to express criteria beyond the general requirement that the discretion must be exercised consistently with the purpose of the legislation.

128. The legislation favours public hearings and regulatory transparency, albeit it allows for the possibility that those considerations may be outweighed by other considerations. As the Court of Appeal of New South Wales observed in AB v Judicial Commission of New South Wales (Conduct Division):

129. The Firm has not disclosed any error of law on the part of the FMT under the first ground of appeal.

Ground 2 — Refusal of private hearing even where there was unfairness

130. The Firm’s Ground 2 reads as follows:

131. Paragraph 80 of the FMT’s decision was in the following terms:

132. The Firm contended that the FMT’s reference to “unfairness or prejudice [or] significant harm” must be read as a reference to the “destruction of business” test which it was said to have applied and which it was said to have found was not met. For reasons already set out, that test was not applied as a necessary condition of the exercise of the FMT’s discretion to make a privacy order.

133. The Firm’s submissions went on to contend that this paragraph compounded the unfairness of the FMT’s approach by concluding that even if risk of destruction of business could be shown, it would still have ordered a public hearing. That approach was said to have elevated the desirability of open justice and “transparency” to an absolute imperative. It was argued that applicants would have to accept any risk of irremediable harm even where a challenge to the DFSA’s action was successful in the interests of open justice.

134. Although it has the power to make rules under Article 31(6) the FMT is not authorised to fetter its general discretion by a priori non-statutory principles. Those set out in Al Masah recognise a base presumption in favour of open hearings which reflects the public policy of the statute. They also set out a methodology governing the approach to the exercise of the discretion to order a private hearing and to order non-publication of Decision Notices. They cannot and do not impose a legal constraint on the FMT’s exercise of its discretion.

135. Prejudice to the applicants for a private hearing is properly accepted by the FMT as a consideration which it could consider in relation to the exercise of its discretion. The demonstrated existence of prejudice is, however, not determinative. The FMT held in paragraph 80 that even if the Firm faced unfairness or prejudice or significant loss flowing from an open hearing, it would still have found “in this particular case that a public hearing was appropriate”. The reference to “this particular case” brings into play the content and, perhaps, history of the findings set out in the Decision Notices. While reasonable minds may differ on whether the FMT took too hard a line in this case, the line it took does not disclose any error of law. It is true that they stated that “transparency is essential in this type of case”. This was a somewhat Delphic utterance but does not on that account disclose an error of law.

136. To be clear, the Regulatory Law leaves it to the FMT to determine the circumstances in which it will order a private hearing. It leaves it to the FMT to determine whether there should be any threshold and, if so, how high that threshold should be set. It leaves it to the FMT to determine whether private hearings will be restricted to a very small minority of cases.

137. Ground 2 does not disclose any error of law.

Ground 3 — Considerations taken into account by the FMT

138. In this ground it was said that the FMT had failed to take into account a relevant factor, specifically the effects of regulatory action in Oman and had taken into account the irrelevant fact that the loss incurred in that case post-dated the Oman appeal decision. This was a complaint about the FMT’s approach to the evidence and does not disclose an error of law.

139. Then it is said, under this ground, that the FMT took into account other irrelevant facts namely:

140. None of these considerations is prohibited, expressly or implicitly by the Regulatory Law. No error of law is disclosed. This ground reflects complaints about the way in which the FMT approached the evidence and weighed it in the balance. The exercise of its discretion was constrained ultimately only by the scope, purposes and subject matter of the Regulatory Law.

Ground 4 — Publication of the Decision Notices

141. The ground was as follows:

142. Article 29(8) has been set out earlier in these reasons. Article 29(8) sets out the necessary conditions which must be met before the FMT can make an order of the kind referred to in Article 29(5)(b) prohibiting publication of information about the DFSA decision under referral. The FMT cannot make such an order unless those conditions are satisfied. That does not mean it must make an order if those conditions are satisfied.

143. According to the Firm, the approach taken by the FMT to the publication of the Decision Notices as set out in paragraph 95 of its decision, demonstrated that it “failed to apply the test in Article 29(8).” The FMT treated the fact that the hearing would be in public as determinative. By taking that approach, it was said the FMT erred in law and appeared to have treated the two-stage test under Article 29(8) as limited to the question of timing.

144. The approach taken by the FMT in respect of the Decision Notices does not disclose an error of law. The FMT was only obliged to have regard to the criteria of prohibition of publication of the Decision Notices in Article 29(8) if it contemplated making such a decision. Before it could make such a decision those conditions would have to be met. However, it was entitled to take the view by reference to other considerations that it was not appropriate to make the prohibition sought. The Firm’s submission has treated the criteria in Article 29(8) as though they set out sufficient conditions for the making of a prohibition order.

Ground 5 — Erroneous interpretation of English authorities

145. Ground 5 reads as follows:

146. The Firm complained that the FMT had referred to Taveta in the context of the privacy applications but that it also infected its decision on the non-publication applications.

147. It referred to paragraphs 75, 76, 98 and 99 of the FMT decision as reflecting a misinterpretation of the Taveta case giving rise to error in the suggestion that transparency required publication of decision notices prior to adjudication by a relevant tribunal. It may be noted, however, that the passage from the judgment in the Taveta case was an observation of a general character in relation to regulatory proceedings, not limited in its application to the facts of that case or the statutory framework within which they arose.

148. In any event, whether or not the FMT misinterpreted the Taveta case is neither here nor there. The question is whether it proceeded on a line of reasoning which constituted an error of law by reference to the Regulatory Law and the Rules governing the exercise of its powers. A misreading of a decision of the court of another country in relation to the exercise of the powers of a tribunal under a statute of that country will not of itself require the conclusion that the FMT erred in law in the exercise of its powers under the Regulatory Law and the Rules which govern those powers. It was entitled to take the view that, consistently with transparency, decision notices should generally be published prior to adjudication by a relevant tribunal. It was entitled to take the view that non-publication of the Decision Notices would undermine the transparency of the DFSA’s functions. It was entitled to take that view on the basis that transparency is recognised as a statutory objective of the DFSA in Article 8(3)(a).

Ground 6 — Wrong test for “serious harm”

149. This ground reads as follows:

150. Paragraph 100 of the FMT’s decision stated that:

151. The Firm criticised the FMT for failing to consider separately the likelihood of serious harm for the purposes of Article 29(8) and instead relying on its earlier conclusion that the Firm had failed to meet the FMT’s “destruction of business” test. This was said to be the wrong test to apply for privacy applications and was also the wrong test under Article 29(8).

152. As already found, the FMT’s reasons do not indicate that it determined that its decision adverse to the private hearing application was determined by reason of the fact that the Firm had not shown that its business would be destroyed. And as already noted, Article 29(8) sets out necessary conditions for the prohibition of publication of information relating to a DFSA decision. It does not establish them as conditions under which such an order must be made. The FMT is not shown to have erred in law as alleged in Ground 6.

Ground 7 — Inclusion of a text box on the front of the Decision Notice

153. Ground 7 reads as follows:

154. In paragraph 102, the FMT stated “fifthly, any publication of the Decision Notices will include appropriate language to mitigate any potential unfairness to the Applicant of making disclosure.”

155. It suffices to say that this ground does not disclose any error of law on the part of the FMT. None of the Firm’s grounds of appeal succeed and its appeal is therefore dismissed.

The Principal’s Appeal

156. The Principal raised eight grounds in his appeal, which overlapped substantially with the grounds relied upon by the Firm. He began by setting out a number of relevant legal principles applicable to the exercise of FMT’s discretion. They were as follows:

157. The Principal also relied upon the principles set out in Al Masah at paragraph 130, which appear earlier in these Reasons. In that context it is important to re-emphasise that a statement of principles by the FMT in one case does not of itself have statutory effect conditioning the power of the FMT in another. No doubt it is desirable that the FMT exercises its discretion in a consistent way from case-to-case. However, a departure from any of those principles does not on that account alone constitute an error of law. In any event, the Principal submitted that the test in Arqaam (as applied in Al Masah) requires the FMT to undertake a balancing exercise which weighs the public interest in proceedings taking place in public, with the question of whether such publicity might significantly harm an individual applicant’s interests. Against that background it is appropriate to have regard to the specific grounds of appeal advanced by the Principal.

Ground 1 — The FMT erred in law by applying the wrong legal test in considering the privacy application.

158. This ground focussed upon paragraph 62 of the FMT’s decision. For the reasons already stated, there was no error in law disclosed in the approach by the FMT disclosed in paragraph 62.

Ground 2 — The FMT erred in law by applying the wrong legal test and/or taking into account irrelevant factors and/or failing to take into account relevant factors in concluding that there was no evidence of risk to the Principal’s employment.

159. In addition to the FMT’s alleged failure to apply the correct legal test asserted under Ground 1, it was said that a court or tribunal may also err in law by reaching a conclusion that was not reasonably open to it on the basis of the relevant facts. The FMT in this case was said to have taken into account considerations that were entirely irrelevant. These were matters going to the FMT’s assessment of the risk of unfair prejudice to the Principal in the event that the hearing was held in public. It suffices to say that this is in substance a complaint about the way in which the FMT approached the evidence before it and the inferences which it drew about risk from that evidence. It does not disclose legal error.

Ground 3 — The FMT erred in law by applying the wrong legal test and/or taking into account irrelevant factors and/or failing to take into account relevant factors in concluding that there was no cogent evidence of unfairness to the Principal.

160. Again, having regard to the submissions made on behalf of the Principal, this, in my opinion, reduces to a complaint about the FMT’s assessment of the evidence and the inferences it drew from it. It does not disclose an error of law.

Ground 4 — The FMT erred in law in concluding that proceedings against the Principal would need to take place in public because the FMT had decided that the Firm’s reference would be heard in public

161. The Principal referred to paragraph 85 of the FMT’s decision in which it held that:

162. This it was suggested, disclosed a fundamental error in law on the part of the FMT. It was incumbent upon the FMT to consider the Principal’s application on its own merits.

163. While it is right to say that the Principal’s application required consideration on its merits, it was relevant that it was inextricably linked to the Firm’s reference. The FMT was entitled to take that factor into account in assessing whether or not to accede to the Principal’s application. There was no error of law.

164. There was a further complaint that the FMT had failed to consider whether the public interest would have been further served by the Principal’s identity and involvement in the proceedings being made public, or whether an appropriate balance could have been struck by putting measures in place to mitigate those risks, including the use of redactions in published materials and holding some private sessions during the hearings. While it would have been open to the FMT to take such steps, it was not obliged to do so as a matter of law.

Ground 5 — The FMT erred in law by taking into account irrelevant factors in concluding that the existence of proceedings before the DIFC Courts against the Firm linked the subject matter of the reference to the Principal.

165. At paragraph 86 of its decision, the FMT held that:

166. The FMT was said to have erred in law by taking into account considerations entirely irrelevant for the purposes of the Principal’s privacy application. The audit negligence claim is a claim brought against the Firm by its former client, AIML. AIML’s liquidators have brought the claim against the Firm for professional negligence. While the FMT concluded that there was overlap between the issues in the audit negligence claim and the references, the Principal is not a party to the audit negligence claim. There has been no allegation of negligence or wrong doing on his part by the liquidators. His link to the audit negligence claim is limited to the fact that he provided a witness statement regarding the Firm’s working practices that were relevant to questions of jurisdiction. Moreover, he was also not the only employee referred to in Justice Sir Jeremy Cook’s judgment with respect to that issue.

167. It was submitted on behalf of the Principal that there is simply nothing in the audit negligence claim which states or implies that there are extant regulatory proceedings against him nor any indication that there are allegations of misconduct or breaches of law on his part. In the circumstances it was said that the audit negligence claim could not be a relevant consideration with respect to the determination of the Principal’s privacy application. I respectfully disagree. This is essentially a complaint about the FMT’s approach to assessment of the significance of the audit negligence claim against the Firm. While the link to the Principal may be indirect and arguably tenuous, its consideration by the FMT does not disclose an error of law.

Ground 6 — The FMT erred in law in stating that the Decision Notice was required to be published in advance of the reference being heard.

168. At paragraph 95, the FMT stated:

169. This approach was said to be wrong in law. The Principal referred to Article 29(5) of the Regulatory Law which provides that the DFSA is to publish such information about any decision as it considers appropriate. The question of whether or not publication is appropriate allows the DFSA a measure of discretion to delay publication in appropriate circumstances. This amounted to a submission that the FMT had wrongly fettered its discretion by asserting as an absolute proposition that Decision Notices have to be published in advance of the public hearing of a reference relating to them.

170. The DFSA in its Responding Submissions referred to Article 29 of the Regulatory Law dealing with the publication of information about its decisions following a reference to the FMT. This was said to provide an even stronger presumption in favour of open justice and transparency.

171. There is no doubt that the terms of Article 29(5) mandate publication of such information about a decision referred to the FMT as it considers appropriate unless publication would be prejudicial to the interests of the DIFC or the FMT has made an order under Article 31(5) preventing such publication. Rule 29 requires that information about a decision which has been referred must include a statement that the person has exercised their right to refer the matter to the FMT and that the decision is subject to review. Rule 29(8) has already been referred to.

172. The criteria for the exercise of the discretion under Article 29(8) are that:

173. The DFSA pointed to the publication of Decision Notices given to AIML and ACLD in July 2019, both of which were published on 30 July 2019 and have been in the public domain since that time. The same investigation which led to the issue of those Decision Notices has resulted in the issue of the Decision Notices in this case.

174. The DFSA pointed out that the decision-maker had imposed fines on both the Firm and the Principal but that these were lesser sanctions than restrictions, which could have been imposed, upon the acceptance of new audit clients and on the issue of audit reports to publicly listed companies or recognised persons under the Markets Law, without the prior written consent of the DFSA. The decision-maker had decided not to impose either of those restrictions for reasons given in the Decision Notices. The Decision Notices both record that there is no suggestion that the Firm committed any deliberate misconduct. The DFSA also pointed out that the Decision Notices did not contain the types of information that might classically be relied upon to support non-publication such as trade secrets, confidential commercial information, or private and sensitive information relating to an individual.

175. The Court does not accept that ground 6 discloses an error of law. It complains about an essentially evaluative decision made by the FMT essentially on the basis that comprehension of the hearing process would be compromised absent an understanding of the subject matter of the reference set out in the Decision Notices.

Ground 7 — No cogent evidence of serious harm.

176. This ground stated that the Tribunal erred in paragraph 100 in stating that “the Hearing Panel does not consider that the Applicants have adduced cogent evidence of serious harm sufficient to displace the statutory presumption in Article 29(5) for the Decision Notices to be published”. In support of that ground the Principal submitted that the need for transparency was something which the Tribunal was required to balance against the risk of harm that might arise from publication of the Decision Notices. The ground does not disclose an error of law.

Ground 8 — Publication of the Decision Notices in full.

177. This ground states that:

178. In elaboration of this ground the Principal referred to what was said in support of ground 4 and added:

179. It was contended that properly directed the FMT would have decided that the Decision Notice should not be published or taken suitable steps to ensure that risks to the Principal’s personal interests were adequately mitigated.

180. This ground invites the Court to substitute its own view of the merits of the application so far as it related to the Decision Notice for the view adopted by the FMT. It does not in doing so, disclose an error of law. This ground does not succeed.

Conclusion

181. For the preceding reasons both Appeals are dismissed. The Appellants will have to pay the costs of the Respondent, to be assessed if not agreed.