Problems faced by the Serious Fraud Office in disclosing more than 1m documents to Robert and Vincent Tchenguiz may render their £300m damages case against it “untriable”, the high court has heard.
If the SFO fail to meet a revised trial timetable that puts the ultimate hearing of the case back to October 2014, Eder J said that he may strike out its defence, which would effectively hand victory to the Tchenguiz brothers by default.
The judge ruled that the amended schedule was the “inevitable consequence” of the SFO’s difficulties in complying with a 1 August deadline for disclosure, partly as a result of issues with 42 third parties including Deutsche Bank, and material obtained from the Financial Services Authority, in respect of which the SFO considers disclosure is barred by the criminal law.
Out of more than 1m documents anticipated by the Tchenguiz brothers and their related interests, the court heard that the SFO has, so far, handed over only 298, despite being subject to a court order imposed in March that required rolling disclosure with a deadline of 1 August.
Though he said the delay was “very, very regrettable for a whole host of reasons”, the judge put the disclosure deadline back to 19 December, on request by the SFO, and delayed the eight week trial – which had been scheduled to start in May next year – by five months to October 2014.
However, he said that he could not confirm immediately whether he would be able to hear it in October 2014, which could potentially put it back even further.
And he said that it may fall to be decided before then “whether or not the case remains triable”.
He added: “It may be that I strike out the defence.”
The judge is to rule in the near future on whether the SFO can disclose certain third–party documents, after Deutsche Bank raised an objection to disclosure of documents provided by them pursuant to section 2 notices under the Criminal Justice Act 1987, which they consider to be confidential. The judge’s ultimate ruling could affect documents from the other third parties, including other banks.
Both the SFO and the Tchenguiz interests are seeking a declaration that the Criminal Justice Act 1987 does not prevent the SFO from giving disclosure of documents received from third parties in response to section 2 notices.
