English High Court sets aside letter of request for evidence from US Court

The English High Court has, unusually, set aside an order giving effect to a Hague Evidence Convention letter of request (LOR) from a US bankruptcy court for the production of evidence from a UK company and its officers in relation to a fraud claim in the US.

In Byju's Alpha Inc v OCI Ltd and others [2025] EWHC 271 (KB), the Court held that the LOR was oppressive in requiring third parties to give information ostensibly sought to make them defendants in the claim, and that this amounted to an illegitimate attempt to obtain pre-trial discovery type material rather than evidence for trial as required by the Evidence (Proceedings in Other Jurisdictions) Act 1975 (the 1975 Act). In particular, the LOR failed to specify documents as required by the 1975 Act and this could not be cured by striking out parts or rewriting it to reflect a narrower scope of disclosure offered by the respondents.

The judgment illustrates the limits of the UK courts’ approach in obtaining evidence requested by foreign courts for civil proceedings and highlights the importance of tailoring the LOR to the issues and evidence sought. This client alert provides a summary of why the LOR was effectively set aside and outlines the principles that can be derived from the judgment as to how LORs should be framed.

Background

The applicant, Byju’s Alpha, Inc. (Alpha), is the plaintiff in a fraud claim in the US Bankruptcy Court for the District of Delaware (the Delaware Claim). Alpha alleges that its former director and ultimate parent company fraudulently transferred USD 533 million of its assets to a “sham hedge fund”, Camshaft Capital Management LLC (Camshaft), and then to a non-US trust and a non-US subsidiary of the parent company, depriving Alpha and its creditors of access to the cash. In the Delaware Claim, Alpha seeks to recover the assets and losses arising from the fraudulent  transfers.   

The respondents to this application are not parties to the Delaware Claim and have denied any involvement in or knowledge of any wrongdoing. They are a UK-based company in the procurement industry and two individuals connected with it. However, Alpha has allegedly made discoveries relating to transactions and dealings between Camshaft and the respondents which it considered to be relevant to the Delaware Claim. Alpha indicated that it would not provide an undertaking not to bring substantive proceedings against the respondents at a later date.

The LOR and the Order

On 26 June 2024, pursuant to the Hague Convention for the Taking of Evidence in Civil and Commercial Matters 1970 (the Hague Evidence Convention), the Delaware Court issued a LOR to the English court for an order requiring the respondents to produce documents and/or give sworn testimony for the benefit of the Delaware Claim. The LOR stated that the requested information was relevant and significant for the Delaware Claim and that it would further the interests of justice. The LOR sought a response from the English court as soon as possible because there was believed to be a risk of dissipation of assets.

On 11 July 2024, Senior Master Cook made an order giving effect to the LOR (the 11 July Order). On 31 July 2024, the respondents applied to set aside the 11 July Order.

The Judgment

Pursuant to the principles and powers set out in the 1975 Act, HHJ Parfitt sitting in the High Court set aside the 11 July Order and dismissed Alpha’s application under CPR 34.17.

The Court accepted that the preconditions for the exercise of the powers under the 1975 Act in favour of granting the Delaware Court’s request had been satisfied: there was a request from the Delaware Court and the evidence was for the purpose of civil proceedings before that court.

However, the Court held that the terms of the LOR were not appropriate and were oppressive for the following reasons:

• The LOR was seeking information rather than evidence. The Court found that the LOR was not designed to seek evidence in relation to particular allegations made in the Delaware Claim, but instead to obtain information that might potentially lead to obtaining broader evidence in general support of Alpha’s case. The LOR had been drafted by Alpha's US lawyers and had not been the product of a contested hearing, its terms having not been amended by the Delaware Court. Importantly, the LOR contained no express, fact-specific consideration of the requirements of the 1975 Act. The materials sought under the LOR were therefore more akin to those sought in pre-trial discovery-type applications, which are not permissible under the 1975 Act. The Court distinguished the matters sought in the LOR from the matters in issue in the Delaware Claim, which were based on allegations of fraudulent transfers to and involving Camshaft. The Court observed that the LOR did not seek evidence about the impugned transactions nor was the evidence requested designed to establish bona fide allegations of fact which had been raised with adequate particulars in the Complaint, but about entirely separate alleged transactions which had not been pleaded or were not relevant to the Delaware Claim. The Court therefore concluded that the LOR amounted to a roving inquiry and a fishing expedition, and was outside the scope of the 1975 Act.
• The LOR was oppressive and would force the respondents to provide material that would be used to frame a potential case against them. The Court held that the predominant consequence of the 11 July Order would be to force the respondents, under threat of committal, to provide evidence that would be used by Alpha to consider and/or frame a fraud claim against them, but without knowing the actual claim that might be brought against them. The Court found that this would be oppressive and cited the decision in First American Corporation v Zayed [1999] 1 WLR 1154, where the court refused to give effect to a LOR on similar grounds. The Court rejected Alpha’s argument that the respondents would have to allege an improper purpose on Alpha's part to argue that the request was oppressive. The Court held that the question of oppression is assessed based on the objective consequences for the respondents, not the motivation of the applicant, though there was nothing improper in Alpha not undertaking not to use the information obtained for the purpose of pursuing claims against the respondents. The Court inferred from the circumstances that there was a “high likelihood” of the respondents being defendants in a further iteration of the Delaware Claim or in separate proceedings, as that was the obvious next step for a fraud claimant in these circumstances.
• The LOR failed to specify particular documents. While the Court noted that judicial comity required a high level of deference to the US bankruptcy court most acquainted with the facts of the Delaware Claim, comity, in itself, does not require a blanket acceptance of a LOR. Further, the relevance of the documents requested is by itself not enough to pass muster under the 1975 Act, as the requests underlying an LOR must be drafted with specificity to capture evidence underpinning allegations enumerated in a given Complaint and not to give rise to new potential causes of action. The Court agreed with the respondents that the document classes in the LOR were not drawn so as to capture specific documents individually or those which could be described as “a compendious description of several documents”, as required by the 1975 Act and the case law. The Court found the descriptions of documents in the LOR to be too general and vague, and would require the respondents to search and consider whether any particular document fell within a class or not. This is contrary to the 1975 Act, which permits the production rather than the disclosure of documents (in the English civil procedure sense). The Court observed that the problems with the document request were “extensive” and could not be solved by striking out parts or rewriting it to reflect a narrower scope of disclosure (the so-called “blue pencil approach”), as the Court’s role is to give effect to a LOR if proper, and not (as here) if it falls outside the 1975 Act or otherwise is improper.

Comment

This judgment is a helpful, if rare, illustration of the limits of the UK courts’ willingness to compel respondents to comply with requests from foreign courts for civil proceedings, and demonstrates the importance of tailoring a LOR to the issues and evidence specifically relevant to the foreign proceedings. It is clear that UK courts are prepared to set aside altogether an order giving effect to a LOR if (i) it is oppressive or (ii) it amounts to an illegitimate attempt to obtain pre-trial discovery type material rather than evidence for trial, as required by the 1975 Act. The decision also highlights the need to specify documents with particularity in the LOR and not rely on broad or vague categories of documents, which may be seen as seeking disclosure beyond the remit of the 1975 Act.

The decision may be of particular relevance to parties involved in cross-border fraud or insolvency proceedings, where the tracing and recovery of assets may depend on obtaining evidence from third parties in different jurisdictions on an expedited basis. Parties seeking to obtain evidence in the UK should ensure that their LOR is prepared in accordance with the 1975 Act and subsequent case law, and that the LOR is not objectively oppressive or disproportionate, as judged by reference to the effects of the LOR on the respondents. Close attention should also be paid to how the requests are drafted, to ensure that (i) they do not—inappropriately—seek evidence intended to build a case out further, putting the LOR at risk of being deemed a fishing expedition, and (ii) they are capable of being amended in a way that might allow aspects to be struck out whilst maintaining other parts of the request, i.e. consistent with the blue pencil approach so as to make the result less likely to be an “all-or-nothing” outcome. On the latter point, it is of particular importance to narrowly tailor requests to those that would support allegations enumerated in the pleadings, and not to broadly request disclosures that would allow—in contravention of the 1975 Act—for a party to build out additional allegations that have not yet been adequately pleaded. Whilst certain jurisdictions may permit a “second bite of the apple” to request these types of disclosures, the time to amend a LOR may lead to heightened risks of asset dissipation and reduced traceability.

It is important to note that, although the Court set aside the Order giving effect to the LOR, this does not mean the applicant is unable obtain the information and documents sought altogether. There are a number of other procedural routes open to the applicant to obtaining that evidence (for example, an application for pre-action disclosure, or for Norwich Pharmacal relief). This judgment related to the LOR submitted pursuant to the Hague Evidence Convention and concerned the legal and procedural position under the 1975 Act, specifically noting that: “requests under the 1975 Act cannot seek relevant information in general but only information which will be evidence of material facts. The subject matter of the request must come after and be about the facts alleged” (paragraph 56). In this regard, the Court drew a distinction between the LOR process on the one hand, and pre-action disclosure on the other: “the predominate substantive effect of the LOR would be pre-trial discovery contrary to the limits imposed by Parliament in the 1975 Act” (paragraph 98).

Ultimately, the decision highlights the practical importance of seeking local counsel input from the jurisdiction where evidence is sought before finalising a LOR, so as to ensure that the request is compliant with any local rules, procedures, or restrictions. In general, applicants should anticipate that it will not be possible to request evidence to the extent that the production of such evidence would not be ordered in proceedings in the requested jurisdiction. For example, under section 2 of the 1975 Act, the English court may only order evidence to be taken that could be ordered in English civil proceedings, and not, as here, what would be permitted in discovery in US proceedings. The LOR procedure under the Hague Evidence Convention and the 1975 Act is not an equivalent of so-called 1782 applications in US civil procedure (under section 1782(a) of Title 28 of the US Code). Though they do bear superficial similarities, the 1782 procedure and jurisdiction are broader in scope in a number of respects. US attorneys should therefore take particular care to tailor any LORs to accommodate procedural and evidential restrictions that may exist in the jurisdiction where judicial assistance is requested, and not merely proceed on the assumption that the more expansive discovery permitted in the US will be permitted and granted. While broad requests for “all documents and communications” relevant to a case may be acceptable in the US, attorneys seeking evidence in other jurisdictions, particularly from third parties, must ensure that discovery requests are sufficiently targeted and limited in scope to include solely the evidence underpinning allegations within the pleadings (and not sweeping requests designed to build out or found new claims) to minimise the risk that such requests will be rejected by foreign courts.

[Postscript: shortly after this decision was handed down, the Delaware Court granted partial summary judgment in favour of Alpha against the defendants in the Delaware Claim. The Delaware Court found that the initial transfers of the Alpha funds to Camshaft were fraudulent, and that subsequent transfers of the Alpha funds were null and void. That the Delaware Court was able to grant summary judgment on liability without reference to the evidence sought in this LOR appears consistent with the English court's finding that the evidence sought in this LOR was at best of peripheral relevance to the Delaware Claim. An evidentiary hearing on damages is to follow in the Delaware Claim.]