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Claim No: CFI 060/2019

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

ORIENT INSURANCE PJSC

Claimant

and

HAZEL MIDDLE EAST FZE

Defendant

JUDGMENT OF JUSTICE ROGER GILES

UPON the Order of Judicial Officer Maha Al Mehairi issued on 30 September 2020 (the “Order”)

AND UPON the Application filed by the Claimant on 15 October 2020 seeking a de novo review of the Order

AND UPON the Defendant’s submissions in response filed on 26 October 2020

AND UPON reviewing all documents recorded on the Court’s file

IT IS HERBY ORDERED THAT:

1. Set aside Order 1(a) made by the Judicial Officer, and in lieu thereof order –

2. Set aside Order 1(c) made by the Judicial Officer, and in lieu thereof order that the Defendant forthwith provide to the Claimant an undertaking that all documents disclosed in the folder titled “CONFIDENTIAL“ shall be treated with utmost confidentiality and shall not be used for any purpose other than these proceedings.

3. Set aside Order 2(b) made by the Judicial Officer, and in lieu thereof order –

4. Costs of the application to be costs in the proceedings.

Issued by:
Nour Hineidi
Registrar
Date of issue: 9 December 2020
Time: 1pm

Introduction

1. This is the Claimant’s application for reconsideration by de novo review, in accordance with PD 3/2015, of the decision of a Judicial Officer on objections to requests to produce documents. On such reconsideration, the decision of the Judicial Officer may be confirmed, or may be quashed and replaced (PD 3/2015, para 3). As described below, the requests for production of documents have changed following that decision, and I take the changes into account in the reconsideration.

2. The application is supported through the witness statement of Michael Morris dated 14 October 2020. It is opposed by the Defendant through the second witness statement of Khurram Khan dated 26 October 2020. Between them, well over 400 pages of materials were exhibited to the witness statements.

The Proceedings

3. The Claimant is an insurance company, its business including underwriting trade credit risks. The Defendant carries on business in the international trade of chemicals, petrochemicals, petroleum, papers and other commodities and goods.

4. The Defendant took out trade credit insurance with the Claimant for the period 1 June 2017 to 31 May 2018. In January 2018 it claimed under the policy for losses allegedly suffered under a contract with Vincom Commodities Ltd (“Vincom”) for the sale to Vincom of a bulk cargo of diesel, Vincom having gone into liquidation. It claimed US$5 milllion, the credit limit under the policy.

5. The Claimant declined cover in respect of the claim, and wrote avoiding the policy from inception. It brought these proceedings, claiming in substance declarations that it was entitled to, and had, avoided the policy, alternatively that it was entitled to decline the cover in respect of the claim. The Defendant counterclaimed in the proceedings, claiming in substance a declaration that it was entitled to recover under the policy and an order for payment of the US$5 million.

6. The Claimant’s claim as pleaded rested on the Defendant’s failure to provide information and breaches of a number of its obligations under the policy. The real contest, however, was the Claimant’s contention that the sale of the diesel to Vincom was not a genuine sale. This brought the Defendant’s relationship with Vincom and its other transactions with Vincom, as well as the particular transaction, into resolution of the dispute.

Relevant Rules

7. A reminder of some of the Rules relating to production of documents, so far as presently relevant, is appropriate.

8. By RDC 28.16, within the time ordered by the Court a party may submit a Request to Produce to the other party, containing the information set out in RDC 28.17 and substantially in the form of Schedule A to Part 28.

9. RDC 28.20 deals with the response for documents as to which no objection is made. The requested party must carry out a reasonable search for the documents, produce those identified by the search, and tell the requesting party about his document retention policy and the nature of the searches made and:

“(4) State that, to the best of his knowledge, he has produced copies of all documents in his possession, custody and control which have been requested and to which no objection is raised. Such statement should be supported by a statement of truth”

10. By RDC 28.26, if the responding party objects to production of some of the documents requested, within the time ordered by the Court he must state the objections in writing. By RDC 28.27, the objections must be recorded in a schedule substantially in the form of Schedule A. The reasons for objecting may be any of those in RDC 28.28.

11. It is then provided in RDC 28.36 that, if the requesting party considers that the responding party’s objection is not justified, or that the responding party has failed to carry out a reasonable search or has otherwise failed to produce documents to which no objection is taken, the requesting party may apply for a Document Production Order. By RDC 28.37, the application should be supported by a schedule substantially in the form of Schedule A.

12. RDC 28.38 provides that the Court may then make a Document Production Order, directing that specified documents or classes of documents be produced or that searches be made and the documents located be produced. By RDC 28.42, compliance with a Document Production Order must be verified by a Document Production Statement in the form set out in Schedule B to Part 28. By RDC 28.43, the Document Production Statement is a statement setting out the extent of the search made and certifying that the duty to disclose documents is understood and to the best of the certifier’s knowledge has been complied with: the form also certifies that “the above is a complete list of all documents which are or have been in my control and which I am obliged under the said order to produce”.

13. RDC 28.28 sets out the reasons for excluding a document from production. They include relevance, loss or destruction of the document that has reasonably been shown to have occurred, unreasonable burden to produce the document, and “considerations of procedural economy, proportionality, fairness or equality of the parties that the Court determines to be compelling”.

The Judicial Officer’s Decision

14. At a CMC on 11 May 2020, the parties were ordered to file and serve Requests to Produce, if any, by a stated date and objections thereto by another stated date. The dates were later extended by consent. It was ordered that where there were no objections to a particular request the documents should be produced within 21 days, and that where objections were made “the Court shall determine those objections and shall make any disclosure order within the following 14 days…“ (Order 5) and “[t]he parties shall comply with the terms of any Disclosure Order and file a Document Production Statement within 14 days thereafter…” (Order 6).

15. Each party requested the production of documents by the other. In broad terms, the Claimant sought documents bearing on the genuineness of the sale of the diesel to Vincom, and the Defendant sought documents concerned with the terms of the policy and the Claimant’s decision to decline and avoid.

16. The Claimant’s request and the Defendant’s objections were compiled in a Redfern Schedule dated 24 September 2020, occupying over 120 pages. A great many documents were requested under fifty-two heads. The Defendant’s request and the Claimant’s objections were compiled in an undated Redfern Schedule of a more modest 16 pages. The Redfern Schedules fulfilled the requirements of the form in Schedule A.

17. It does not appear that a formal application for a Document Production Order was made: Order 5 took it for granted. However, where it was said in Order 5 that the Court would “make any disclosure order”, the order would necessarily be a Document Production Order – see also Order 6 using terms appropriate to that.

18. The Judicial Officer ruled on the requests on the papers. On 30 September 2020, she made the orders:

Order 1(a): Production by the Claimant in Answer to the Defendant’s Request No. 1

19. Request No. 1 in the Defendant’s Redfern Schedule was for the Claimant’s underwriting file for the Defendant’s trade credit insurance for the policy years 1 June 2014 to 31 May 2018. While objecting to the extent of the request, the Claimant produced some documents in response to it.

20. Mr Morris says that the order was excessive, and that it should be amended to exclude any further documents from production. Mr Khan says, by reference to a letter to the Claimant dated 14 October 2020, that save for documents requested in a letter of 11 October 2020 the Defendant is satisfied with the documents produced, being documents described in the letter (the “Described Documents”), in answer to the request. He asks only that the Claimant be ordered to confirm that the Described Documents are all documents of that description in the Claimant’s possession, custody and control.

21. The original request was too wide, but has been effectively superseded by a request for the documents in the letter of 11 October 2020 and the Described Documents. The Described Documents have been produced, and an order is unnecessary. The requests in the letter of 11 October 2020 are for documents clarifying documents already produced, and the documents should be produced: but (b), (e) and (f) of request 2 are not requests for production of documents and need not be complied with. The Defendant is entitled to verification that all documents have been produced by a Document Production Statement in accordance with RDC 28.42 and 28.43, as has already been ordered by Order 6 of the CMC orders, and this should be done.

Order 1(b): Statement of Truth by the Claimant

22. In subsequent correspondence with the Defendant, the Claimant said that it understood the like order made as Order 2(b) to require that it “state that, to the best of its knowledge, it has produced copies of all documents in its possession”. The Claimant did not seek to vary the order; nor did the Defendant. The Claimant did not raise the complaint made in relation to Order 2(b), being a complaint that the Judicial Officer had failed to determine the objections to production, notwithstanding that the complaint was equally applicable to Order 1(b). I will return to this after consideration of Order 2(b).

Order 1(c): The Confidentiality Undertaking

23. The documents in the folder titled “CONFIDENTIAL” were disclosed by the Claimant in response to the Defendant’s requests 1, 2 and 3. When making disclosure, the Claimant asked that they be given confidentiality.

24. The parties agreed that the order was wrongly addressed to the Claimant, and that the undertaking was to be provided by the Defendant. The Defendant should provide it forthwith.

Order 2(a): Production by the Defendant in Answer to the Claimant’s Request No. 1

25. Request No. 1 in the Claimant’s Redfern Schedule was for the Defendant’s “Vincom sales and purchase ledger for the period 1 April 2014 to 31 March 2015“. The Defendant’s objection to production was not accepted by the Judicial Officer, and following her decision as recorded in the order the ledger for the period was produced.

26. The Claimant then advised the Defendant that the period was stated in error and should have been 1 April 2015 to 31 March 2016, and requested production of the ledger for the additional year. There was no response from the Defendant. The Claimant revised the Redfern Schedule to include the ledger for the additional year.

27. In conformity with the Judicial Officer’s decision, the ledger for the additional year should be produced. According to Mr Khan, it has been. No order is required.

Order 2(b): Statement of Truth by the Defendant

28. In correspondence following the Judicial Officer’s orders, the parties differed on the effect of this order.

29. The Claimant considered that it meant that the Defendant should search for the documents to which no objection had been made, produce the documents found, and (as noted above) “state that, to the best of its knowledge, it had produced copies of all documents in its possession“. Its position was that the Judicial Officer had not ruled on the documents to which objection had been taken, hence this application.

30. The Defendant on, on the other hand, considered that the Judicial Officer had determined the objections so as to exclude from production any documents other than those already produced by the parties and those requested to be produced and the subject of Orders 1(a) and 2(a).

31. The order is difficult to understand. The Defendant’s understanding is perhaps supported by a statement of truth being part of voluntary production – for production under a Document Production Order, a Document Production Statement is made. But if that is so, wholesale rejection of production of the documents the subject of the other 51 requests without explicit statement or reasons is at the least unsatisfactory, and suggests a miscarriage of the adjudicative function and supports the Claimant’s understanding. It is not necessary to decide between the parties’ understandings. In this application, there must be fresh determination.

32. After the Judicial Officer’s decision, the Claimant revised the extent of the documents requested under the 51 heads. These reasons refer to the requests as revised. In his witness statement, Mr Morris explains why the documents are said to be relevant and required. In his witness statement, Mr Khan appears to submit that the original extent was excessive and the revised extent should not be entertained. If that was intended, I do not agree: the dispute over the revised extent will remain and should be resolved. Mr Khan otherwise responds to Mr Morris’ explanations, the thrust of his response being that production of the documents requested is unnecessary and disproportionate.

33. It is not practicable to reproduce, even in truncated form, Mr Morris’ explanations and Mr Khan’s responses, or the contentions for and against in the Redfern Schedule. I have had regard to them in detail.

34. In summary, the Claimant says that there are anomalies in the documentation for many other transactions between the Defendant and Vincom in a selected period of two years surrounding the transaction in question, including in the Defendant’s ledgers. It requests production of the documents as relevant to whether the transactions were genuine, the trading relationship between the Defendant and Vincom was legitimate, and the recording of the transactions in the ledgers was accurate and reliable. As well, request 52 is a specific request for production in relation to the onward sale of the diesel the subject of the transaction in question.

35. I am satisfied that the documents requested in relation to the other transactions are relevant. The genuineness of the transaction in question is informed by the wider relationship with Vincom and other transactions with it, and if the documents exist they are relevant to it; if they do not exist, that also may be relevant. Mr Khan did not object to the period selected for the other transactions, and the Defendant has produced a number of documents in relation to them.

36. Mr Khan says that there are explanations, and that the Defendant’s investigations “significantly call in question“ the basis on which the Claimant asserts the anomalies with the ledgers, but that is a matter for trial and serves only to underline relevance. He submits that production will be onerous and disproportionate, but does not properly take account of the more limited revised requests or explain in any detail the burden which would fall on the Defendant. The Claimant has taken a significant position in declining cover and avoiding the policy, a not insignificant amount is at stake, and subject to what follows I do not regard production in accordance with the requests as unreasonably burdensome or disproportionate. I add that I do not accept Mr Khan’s suggestion that the Claimant now accepts the genuineness of the transaction: it is plain that it does not.

37. The revisions of the requests in relation to the other transactions were of four kinds, and from their terms took into account prior disclosures of documents and the Defendant’s advices to the Claimant that it was searching for other documents and would produce them if found. The four kinds were –

38. So that there is verification of search or non-existence, production of documents in (a) and (b) will be ordered although they are not produced. A decision on the production of documents in (d) alone is required. With the exceptions next stated, the documents in (d) should be produced, or if they do not exist that should be stated.

39. The exceptions are documents 6(7), 7(7), 13(4), 14(4), 16(5), 17(4), 18(4), 19(3), 19(4), 21(4), 26(3), 26(5), 31(6), 36(8), 37(10), 38(4), and 40(11), being insufficiently precise through the terms “relating to” or “regarding” or similar; 5(9) being too wide; and 11, 12, 14(6), 19(5) and 20 being insufficiently precise through the criteria of providing reasons, proof or an explanation. (Requests such as 24, although by subject-matter, have a more closely described subject-matter so that the Defendant should be able to determine and search for documents responding to it.)

40. The documents the subject of request 52, except (c), should be produced.

41. In accordance with the Rules, production should be verified by a Document Production Statement. The list in the Statement should include all documents ordered to be produced and state where applicable that the document cannot be found or does not exist.

Return to Order 1(b): Statement of Truth by the Claimant

42. In principle, the same complaint as was made by the Claimant in relation to Order 2(b) must apply, and there must be fresh determination in relation to the Defendant’s requests 2 to 6. However, on examination of the Redfern Schedule it is not apparent that those requests were disputed: the Claimant appears to accept that the requested documents, with some appropriate refinement, should be produced. When the parties have not raised it in the application, I do not enter into production; and for clarity, since it is production of documents to which no objection is made, the Judicial Officer’s order that a statement of truth be provided should be understood as requiring verification in accordance with RDC 28.20(4).

Orders

43. Neither party is responsible for the need for this application. The Claimant’s revised requests were in part unsuccessful, but the Defendant’s global resistance was not warranted. Costs of the application should be costs in the proceedings.

44. I make the following orders –