On 5 December 2025, the Court of Appeal dismissed Standard Chartered PLC's ("SC") appeal of an order requiring it to disclose certain documents in civil litigation, notwithstanding confidentiality obligations owed to foreign regulators.
Background
Claims have been brought pursuant to sections 90 and 90A of the Financial Services and Markets Act 2000 (FSMA) against SC. These sections impose liability for compensation in circumstances where there have been material misstatements or omissions in prospectuses or other published information relating to securities.
SC appealed against the decision at first instance dismissing its application to withhold certain documents from disclosure unless and until foreign regulators grant the necessary permissions. These documents included US Suspicious Activity Reports and other confidential supervisory information. SC contended that unauthorised disclosure of some of these documents constitutes a criminal offence and may attract civil or regulatory sanctions under US law.
Decision
The court reviewed the legal principles governing disclosure where compliance would entail a breach of foreign law. It emphasised that whilst an order will not lightly be made where compliance would breach foreign criminal law, the court must conduct a balancing exercise weighing the actual risk of prosecution against the importance of the documents to the fair disposal of the proceedings.
The court concluded that the High Court judge had properly applied the test of "real or actual risk" of prosecution and that there was ample material upon which he could rationally conclude that the risk of prosecution or other action was remote, having regard to the fact that the documents were of a historic nature, there had been full cooperation by SC, and disclosure would only be into a confidentiality ring with a view to maintaining confidentiality.
The court further emphasised that disclosure serves to promote fairness in litigation and facilitates the resolution of disputes. Thus, the party seeking to withhold disclosure carries a substantial burden of persuasion.
SC submitted that the interests of the US regulators should be given special or enhanced weight in the balancing exercise. This submission was rejected on the basis that there was no evidence adduced by the US regulators as to the importance of maintaining confidentiality in the relevant material, and the regulators did not seek to intervene or even submit evidence. The court concluded that having the documents placed in a confidentiality ring was sufficient protection for the regulators.
Comment
This judgment reaffirms the importance of document disclosure in the English legal system as a means of promoting fairness and facilitating settlements. The Court of Appeal confirmed that although confidentiality obligations owed to foreign regulators will be taken into account in considering whether to withhold disclosure, the party resisting disclosure carries a substantial burden of persuasion and where alternative measures exist to safeguard such confidentiality, disclosure will not readily be withheld. For instance, a confidentiality ring is found to be an effective middle ground.
Parties seeking to withhold disclosure must persuade the court that there is a real or actual risk of serious consequences such as criminal prosecution or regulatory sanctions in foreign jurisdictions, rather than a mere possibility.
Multinational financial institutions should be aware that legal frameworks governing confidentiality, privilege and disclosure vary significantly across jurisdictions and may give rise to conflicting requirements. Accordingly, parties involved in the preparation or disclosure of documents should exercise caution and avoid placing undue reliance on domestic legal protections, which may not extend extraterritorially.