Fiesta Hotels and Resorts SL & Ors v Saranac Partners Limited & Ors – High Court – [2024] EWHC 1422 (Comm) – Case Summary

Relevant for:

Commercial litigators, banking and finance lawyers, disclosure specialists

This case concerned an application by Deutsche Bank for additional disclosure from the claimants and third-party disclosure from Saranac Partners Limited, in a dispute involving allegations of fraud and negligence related to derivative transactions.

TLDR:

• Deutsche Bank sought additional disclosure of audio recordings between claimants and Saranac Partners.
• The court assessed whether the claimants had practical control over the recordings.
• The application for further disclosure was refused as not reasonable and proportionate.
• The third-party disclosure application against Saranac Partners was also refused.

The dispute arose from a trading relationship between the claimants, known as Palladium Hotel Group (PHG), and Deutsche Bank. The relationship began in late 2012, involving transactions referred to as the Haven transactions and subsequent derivative transactions. The claimants alleged that Deutsche Bank fraudulently or negligently misled them regarding fees for these transactions.

Deutsche Bank applied for additional disclosure of all audio recordings and calls between the claimants and Saranac Partners from January 2018 to March 2020. The bank argued that the claimants had practical control over these recordings, which was necessary for the just disposal of the proceedings.

The court considered the principles of control over documents, referencing previous cases such as Berkeley Square Holdings v Lancer Property Asset Management and The Public Institution for Social Security v Al-Wazzan. It was determined that practical control requires an arrangement or understanding that the third party will provide access to the documents.

In this case, the court found no such arrangement or understanding between the claimants and Saranac Partners. The cooperation by Saranac was voluntary and not indicative of practical control. Therefore, the application for further disclosure was refused as not reasonable and proportionate.

Regarding the third-party disclosure application, the court held that the documents sought must be likely to support the applicant's case or adversely affect the other party's case. The court found that not all documents in the requested class met this threshold, and the application was refused.

Keywords:

Commercial dispute, disclosure, fraud, negligence, derivative transactions

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

Judicial Panel: Dame Clare Moulder DBE

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