Flaux: Application should not be countenanced
The Court of Appeal has rejected a solicitor’s challenge to judicial criticism of his “indefensible” conduct, motivated by money, in using leaked privileged material to help win an arbitration.
Though Seamus Andrew was not a party to the case, he had given detailed evidence, been cross-examined and was “well aware of the allegations against him”, meaning a challenge based on his rights under the European Convention on Human Rights (ECHR) did not succeed.
In any event, there were procedural failures, including not obtaining permission to appeal from the Commercial Court, as required by the Arbitration Act 1996.
Sir Julian Flaux, Chancellor of the High Court, said: “If there were any force in his criticisms of the judge’s findings against him (which there is not) he could and should have raised those criticisms before the judge, either in submissions about the draft judgment before it was handed down or by making the appropriate written application for permission to appeal to the judge which he said that he required and then pursuing that application at a hearing before the judge.
“Whether for tactical reasons or otherwise, Mr Andrew did not pursue either course and, in my judgment, this application being made now to this court should not be countenanced.”
In October 2023, Mr Justice Robin Knowles overturned an $11bn arbitration award made against the Nigerian government for repudiatory breach of a gas supply and processing agreement with a company called Process & Industrial Developments Ltd (P&ID). Mr Andrew, managing partner of London firm Veltior, acted for P&ID.
Nigeria challenged the decision on multiple grounds, including that it was obtained by fraud. One of the grounds upheld by the judge was that P&ID used leaked privileged documents from Nigeria in the course of the arbitration.
Knowles J rejected as untrue Mr Andrew’s oral evidence that the documents were shared as part of settlement discussions and that he did not really look at them.
He held that the solicitor’s decision, and that of Trevor Burke KC of Three Raymond Buildings, “not to put a stop to it, at least by informing Nigeria or immediately returning the documents they knew were received, was indefensible”.
The reason they behaved in this way was “because of the money they hoped to make” – he found Mr Andrew was in line to receive up to $3bn in the event of a successful arbitration.
He referred both to their regulators. As we reported at the time, both rejected the findings against them. The judge refused P&ID permission to appeal in January 2024.
Mr Andrew sought to appeal on the basis that the judge should have warned him about the serious findings he was going to make and given him the chance to seek independent legal advice, and/or that the reasons provided were insufficient.
Having refused permission to appeal on procedural grounds, and refused relief from sanction, the court went on to say that the appeal would not have succeeded anyway.
The allegations of misconduct were “fairly and squarely pleaded and put in detail to Mr Andrew in cross-examination”, Sir Julian said.
“There is no basis under the ECHR for requiring the judge to warn Mr Andrew of the findings he might make… that the judge might make this finding must have been blindingly obvious to Mr Andrew.”
Indeed, on the basis of Mr Andrew’s own evidence, “a finding that his conduct was indefensible was inevitable”.
He continued: “Where a solicitor obtains from his client the other side’s privileged documents which he knows or suspects have been illicitly obtained without the consent of the other side, he cannot simply do nothing, let alone, as here, continue to use the documents.
“His duty is to ensure that these documents are returned to the party to whom they belong or, if his client refuses to return them, to cease to act. [John] Wardell KC’s contention [for Mr Andrew] that there was no basis for any conclusion that Mr Andrew used the FRN internal legal documents is without merit…
“Overall, the finding that Mr Andrew’s conduct was indefensible was plainly correct.”
Similarly, Mr Andrew was “well aware of the allegations of financial interest being made against him and had ample opportunity to deal with them. There is simply no question of the judge’s findings of motivation by greed requiring to be supported by more detailed reasons than the judge gave”.
If Mr Andrew had considered the reasons inadequate, he should have asked the judge to provide further reasons when he received the draft judgment.
“The litigation process overall was fair since Mr Andrew had the opportunity to ask for further reasons and the fact that he chose not to do so cannot make the process unfair.”
Mr Andrew also had an alternative remedy in the sense that if disciplinary proceedings were brought against him in the Solicitors Disciplinary Tribunal, he would be able to challenge the judge’s reasoning there.
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