Rent review arbitration — Comparables — Landlord seeking to rely upon recent letting the terms of which were subject to a confidentiality agreement — Witness summonses against parties to that letting — Whether witness summonses should be set aside — Application allowed
Premises in Alperton were the subject of a rent review arbitration, to determine the open market rent. The claimant landlord wished to cite as a comparable a recent agreement for an uncompleted lease relating to premises in Acton. The agreement was in favour of a company that was in competition with the defendant tenant in the DIY market, and which was also a rival bidder for the lease. It contained an agreement requiring parties to treat the financial terms as confidential “except as required to comply with any statutory, regulatory or Court requirement”. The landlord issued witness summonses pursuant to section 43(2) of the Arbitration Act 1996, requiring representatives of the lessor and lessee under the agreement to prduce at the arbitrator’s offices “the transaction documentation relating to the recent letting” of the Acton premises, “including any expert reports, Heads of Terms, lease and ancillary documentation in relation to the terms or rent.”
The representatives applied to set the summonses aside. They contended, inter alia, that the summonses were vague and amounted to a “fishing expedition”, and that the information sought was confidential and commercially sensitive.
Held: The applications were allowed.
Despite the court having power under CPR 34.3(4) to set aside or vary a witness summons, the CPR gave no guidance as to the approach to be adopted by the court, and, accordingly, regard was to be had to the authorities decided under the previous Rules of the Supreme Court: Harrison v Bloom Camillin (No 1) 12 May 1999, The Independent 28 June 1999 (CS) applied. In the present case, the witness summonses would be set aside in the exercise of the court’s discretion. The terms were manifestly unsatisfactory, since they amounted to a “fishing expedition” or a request for disclosure, and they failed to identify the specific documents to be produced. The recipient of a witness summons should not be required to exercise judgment in order to comply with it. Moreover, it could not be said that the documents relating to the Acton letting were necessary for the fair disposal of the arbitration. However, while they may be relevant and may improve the quality of the material before the arbitrator, other comparables and material were available to him, and the defendant’s own negotiations conducted in respect of the Acton premises would have provided useful guidance as to the final transaction. In the circumstances of the case, confidentiality was a factor entitled to very considerable weight. The documents pertaining to the rent of the Acton premises were acutely commercially sensitive, and the summonses would be set aside on that ground also: Re Dickinson [1992] 2 NZLR 43 applied.
Timothy Morshead (instructed by Nabarro Nathanson) appeared for the applicants; Katharine Holland (instructed by Mayer, Brown, Rowe & Maw LLP) appeared for the claimant; John Male QC (instructed by Wragge & Co LLP) appeared for B&Q plc, the lessee of the Acton premises.
Sally Dobson, barrister
