Fiesta Hotels and Resorts SL & Ors vs Deutsche Bank AG & Ors

This case concerned a dispute over the disclosure of audio recordings in a commercial litigation context, involving allegations of fraud and misrepresentation by Deutsche Bank.

TLDR:

• Fiesta Hotels and Resorts SL, along with other claimants, filed a lawsuit against Deutsche Bank AG and its London Branch.
• The claimants sought additional disclosure of audio recordings from Deutsche Bank.
• The court had to determine whether the claimants had practical control over the recordings and whether further disclosure was necessary and proportionate.
• The court found that the claimants did not have practical control over the recordings and dismissed the application for further disclosure.
• The court also refused the third-party disclosure application against Saranac Partners Limited.

The claimants, Fiesta Hotels and Resorts SL, Residencial Marina SL, Residencial Es Vive SA, and Dominican Entertainment (Luxembourg) SARL, collectively known as Palladium Hotel Group (PHG), entered into a trading relationship with Deutsche Bank AG in late 2012. This relationship involved a set of transactions referred to as the Haven transactions, entered into in January 2013, and a large number of derivative transactions between 2014 and 2019.

In November 2020, the claimants issued a claim form, and the original Particulars of Claim were served in September 2021. The claimants alleged that Deutsche Bank fraudulently, alternatively negligently, misled them regarding its fees for the Haven Transactions and the restructurings of the derivative transactions.

Deutsche Bank sought additional disclosure from the claimants or third-party disclosure from Saranac Partners Limited, aiming to obtain all audio recordings and calls between representatives of the claimants and Saranac from January 2018 to March 2020. The claimants opposed this application, arguing that they did not have practical control over the recordings.

The court examined the evidence, including witness statements from both parties and Saranac. It was found that Saranac had voluntarily provided recordings in the spirit of cooperation, but there was no arrangement or understanding that the claimants had practical control over the recordings.

The court also considered whether the further disclosure was necessary and proportionate. Despite the complexity and importance of the case, the court found that extensive searches had already been conducted, and further searches would not likely yield additional relevant documents.

In conclusion, the court dismissed the application for further disclosure, finding that the claimants did not have practical control over the recordings. The third-party disclosure application against Saranac Partners Limited was also refused, as the documents sought did not meet the threshold conditions for third-party disclosure.

Legal representatives: Edward Levey KC and Max Evans (Instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) appeared on behalf of the Claimants/First Respondents. Patrick Dunn-Walsh (Instructed by Proskauer Rose (UK) LLP) appeared on behalf of the Second Respondent. Alexander Polley KC and Henry Hoskins (Instructed by Herbert Smith Freehills LLP) appeared on behalf of the Defendants/Applicants.

Judicial Panel: Dame Clare Moulder DBE

Case Citation Reference: [2024] EWHC 1422 (Comm)