Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L.

The French blocking statute, the Hague Convention and the UK-France Convention 6 There were some differences in the translations of the relevant articles in the French blocking statute. However, it was not suggested that they had any impact on the opinions expressed by the experts. I accept the following as a correct English translation of the relevant articles in the French blocking statute: Article 1 Without prejudice to international treaties or agreements, it is forbidden to any French natural person or any natural person with habitual residence on the French territory, and to any representative, officer, agent or employee of a legal entity having its seat or any business tenancy in France, to communicate in writing, orally or in any other form, in any place whatsoever, to foreign public authorities, documents or information of an economic, commercial, industrial, financial or technical nature, the disclosure of which is likely to prejudice the sovereignty, security, essential economic interests of France or public order, eventually specified, whenever necessary, by the administrative authorities. Article 1bis Without prejudice to international treaties or agreements and laws and regulations in force, it is prohibited for any person to request, search for or communicate, in writing, orally or in any other form, documents or information of an economic, commercial, industrial, financial or technical nature for the purposes of establishing evidence in view of foreign judicial or administrative proceedings or in relation thereto. Article 2 The persons referred to in Articles 1 and 1bis shall inform the competent Minister without delay, upon the receipt of any request concerning such communications. Article 3 Without prejudice to harsher penalties provided for by law, any breach of the provisions of Articles 1 and 1bis of the present law shall be punished by a six month imprisonment and a fine of 18,000 Euros or either one of these penalties only. 7 The critical article is Article 1bis. 8 Judge BÉraudo said, and I accept, that since 2005 Article 3 applies to legal entities such as companies as well as individuals and that companies can be fined up to a maximum of five times the amount of the fine mentioned in Article 3. 9 Articles 1, 3 and 23 of the Hague Convention are in the following terms: Article 1 In civil or commercial matters a judicial authority of a Contracting State may, in accordance with the provisions of the law of that State, request the competent authority of another Contracting State, by means of a Letter of Request, to obtain evidence, or to perform some other judicial act. A Letter shall not be used to obtain evidence which is not intended for use in judicial proceedings, commenced or contemplated. The expression "other judicial act" does not cover the service of judicial documents or the issuance of any process by which judgments or orders are executed or enforced, or orders for provisional or protective measures. Article 3 A Letter of Request shall specify - a) the authority requesting its execution and the authority requested to execute it, if known to the requesting authority; b) the names and addresses of the parties to the proceedings and their representatives, if any; c) the nature of the proceedings for which the evidence is required, giving all necessary information in regard thereto; d) the evidence to be obtained or other judicial act to be performed. Where appropriate, the Letter shall specify, inter alia - e) the names and addresses of the persons to be examined; f) the questions to be put to the persons to be examined or a statement of the subject-matter about which they are to be examined; g) the documents or other property, real or personal, to be inspected; h) any requirement that the evidence is to be given on oath or affirmation, and any special form to be used; i) any special method or procedure to be followed under Article 9. A letter may also mention any information necessary for the application of Article 11. No legislation or other like formality may be required. Article 23 A Contracting State may at the time of signature, ratification or accession, declare that it will not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents as known in Common Law countries. 10 In relation to Article 23, it is worth recording at this point that Mtre Lalance said, and I accept, that when ratifying the Hague Convention in 1974 France declared that it would apply the reservation in Article 23 concerning the enforcement of Letters of Request issued for the purpose of obtaining pre-trial discovery of documents. Mtre Lalance said that in 1986, France limited the reservation made in 1974 so that pre-trial discovery of documents could be obtained by execution of a Letter of Request "when the requested documents are limitatively listed in the letter of request and are directly and specifically connected with the subject matter of the dispute". Mtre Lalance also drew attention to the fact that on 18 September 2003 the Paris Court of Appeal in connection with the case the experts referred to as the "Executive Life" case limited the scope of the reservation previously made by ruling that "documents are limitatively listed when such documents are identified with a reasonable degree of specificity such as their date, nature or author". The Court allowed for the production of documents covering a period of 13 years. Mtre Lalance said that the Court took into account the fact that the party requesting the documents did not have possession of them and could not be asked to provide an accurate description of such documents. 11 I note that the authors of Nygh's Conflict of Laws in Australia (8th ed, LexisNexis Australia, 2010) Davies, Bell and Brereton, at [11.38] take a narrow view of the effectiveness of a letter of request for the production of documents in France. I will proceed having regard to the evidence of Mtre Lalance. 12 Like the Hague Convention, the UK-France Convention only applies to civil and commercial matters. Very little was said by the experts to suggest that the UK-France Convention added anything to the Hague Convention.

Australian authorities 13 In Michael Wilson & Partners Ltd v Nicholls & Ors [2008] NSWSC 1230; (2008) 74 NSWLR 218, Brereton J considered an application for the production of files located in Kazakhstan for inspection. The files had been discovered, but the defendants objected to producing them on the ground that production would place them in contravention of the criminal or civil law of Kazakhstan or both. Brereton J said that the true nature of their objection was that to produce the documents would require the defendants to do an act which, in the place where it is to be done, namely Kazakhstan, would be illegal. Brereton J held that discovery was a matter of procedure and that the law of the forum governed matters of practice and procedure. Although the Court would have regard, in making orders and in framing regimes for the production of documents, to the circumstance that foreign law obligations of confidentiality may be involved, that circumstance did not provide an absolute objection to an order for production. His Honour said (at 222 [11]): … Where such foreign obligations of confidentiality are involved, the Court may limit or even dispense with discovery or production as a matter of discretion, taking into account whether the party seeking a limitation or dispensation is the plaintiff or the defendant, and the identity of the third parties whose confidentiality is at stake, but, in general, local notions will predominate because discovery is a part of the local procedure. It follows that, even if the law of Kazakhstan prohibits production of the relevant documents, that would not be an absolute objection to making the order sought here, though it would bear on the exercise of its Court's discretion in considering whether or not to make the order sought. 14 In Bank of Valletta PLC v National Crime Authority & Anor [1999] FCA 791; 164 ALR 45, a bank incorporated in Malta and having all of its records in Malta contended that it had a reasonable excuse within a provision in the National Crime Authority Act 1984 (Cth) for the non-production of documents sought by the National Crime Authority under that Act. Hely J, at first instance, considered whether the bank had a reasonable excuse for not producing the documents on the assumption that there was at least a real and appreciable risk that for the bank to produce the documents called for by the notice would involve it in the commission of an offence under Maltese law. Although, because of its statutory context the case is relevant by way of analogy only, two points have some significance. First, Hely J referred to the observations of Sackville J in Australian Securities Commission v Bank Leumi Le-Israel (1995) 134 ALR 101 at 148 to the effect that in general, Australian courts should strive, so far as is consistent with Australian legislation, to avoid a situation where an individual or corporation is caught between the conflicting requirements of Australian law and foreign law. Secondly, Hely J considered the weight to be placed on the availability of an alternative means of securing documents which does not put the party to whom the Australian order is directed at risk of contravention of a foreign law. At 60-61, [63] and [64], Hely J said: But the courts have treated the availability of alternative means of securing the information in question, which does not involve any risk of prosecution under foreign law, as relevant to the issue of whether the court's processes should be used to compel its production. And the weighing exercise to which the Privy Council referred to in Brannigan would be undertaken on a false basis if there was left out of account the fact (assuming it to be a fact) that the information sought could be obtained by another means which would not expose the recipient of the notice to the risk of prosecution, without materially adverse consequences to the inquiry. Accordingly, I would hold that if the NCA could obtain the documents called for by the notice by means of an investigation order under Maltese laws, without materially adverse consequences to its inquiry, then a real and appreciable risk of prosecution under Maltese law if the documents were produced to the NCA pursuant to the notice, would constitute a reasonable excuse for non-production of the documents in question.

English authorities 15 There are similarities between the facts in this case and the facts in National Grid Electricity Transmission PLC v ABB Limited & Ors [2013] EWHC 822 (Ch) ("National Grid). In National Grid the judge at first instance was Roth J. He referred to a number of English decisions including a decision of Henderson J in Secretary of State for Health v Servier Laboratories Ltd [2012] EWHC 2761 (Ch) ("Servier"). After I heard submissions on the present application, the Court of Appeal delivered one set of reasons in an appeal from the decision of Roth J and in an appeal from the decision of Henderson J: The Secretary of State for Health & Ors v Servier Laboratories Ltd & Ors; National Grid Electricity Transmission PLC v ABB Limited & Ors [2013] EWCA Civ 1234. 16 I start with the decision of Roth J in National Grid. 17 The European Commission decided that 20 companies had engaged in an extensive and sophisticated cartel regarding the supply of gas insulated switch gear, which is heavy electrical equipment which controls energy flow in electricity grids, and is therefore used as a major component in power stations. The Commission found that the cartel lasted with some variation over a period of some 16 years and it imposed fines in the total amount of €750 million. National Grid Electricity Transmission claimed that it had suffered substantial losses by reason of overcharges resulting from the illegal cartel. It brought what Roth J described as a large scale follow-on damages action for breach of the Competition Rules in Article 101 of the Treaty on the Functioning of the European Union. There were 22 defendants to the claim and some of them were French companies. The plaintiff sought disclosure against the French companies and they resisted disclosure on the basis that, as French companies, disclosure would put them in breach of the French blocking statute which attracted criminal penalties. The French companies also contended that such a potential could be avoided by the Court making a request to the French authorities to permit the disclosure to be conducted in France pursuant to Council Regulation (EC) No. 1206/2001 (" the EU Evidence Regulation"). There were two possible routes under that regulation; the first described as "the court-to-court route" and the other described as "the direct route". Initially the plaintiff did not press its application for disclosure, but rather proceeded under the direct route in the EU Evidence Regulation. That failed and the plaintiff pressed its application for a disclosure order. Evidence from the same experts as gave evidence before me - Judge BÉraudo and Mtre FeugÈre - was put before Roth J. Neither side sought to cross-examine the other side's expert. 18 Roth J set out the terms of the French blocking statute and then proceeded to consider the approach of the English courts to that statute. He referred extensively to various authorities, including the decision of Henderson J in Servier. 19 Roth J said it was unnecessary for him to determine all of the matters on which the experts were divided. He assumed, without deciding, that production of the documents by the French defendants would infringe Article 1bis. He considered that the critical question was the likelihood of any prosecution being brought against the French defendants at all. His Lordship said that he considered it virtually inconceivable that the French authorities would prosecute the French companies for complying with disclosure orders. In reaching that conclusion he relied on three matters. First, he relied on the fact that there had been only one instance of a successful prosecution under the French blocking statute and that arose on very exceptional facts where the disclosure was not made pursuant to a Court order and had been procured by fraud. Secondly, he relied on what he described as the context of the French blocking statute. That context was the concern in France at what was seen as abusive discovery requests being made of French companies facing litigation, in particular in the United States. That was not the case before him. Thirdly, he relied on the fact that the proceedings followed an established and serious violation of a fundamental provision of EU law. He put this third point in the following way (at [47]): I find it virtually inconceivable that where jurisdiction over a company is exercised pursuant to an EU regulation to make it a defendant to proceedings in another EU Member State, for damages alleged to result from an established and serious violation of a fundamental provision of EU law, which proceedings serve an objective of EU policy, the public authorities of one EU Member State would in the exercise of their discretion institute criminal proceedings against that company for complying with the procedural rules of the courts of the Member State where the proceedings are brought. … 20 Roth J then turned to consider whether the existence of the EU Evidence Regulation changed his provisional conclusion that he should exercise his discretion to order that the French companies provide disclosure. He reached the conclusion that there was a real risk that the French Courts might reject a further request under the regulation (i.e., the court-to-court route) as inappropriate because they were not being asked to take evidence but, in effect, to order documentary disclosure. Furthermore, his Lordship noted that further and repeated requests may similarly be needed whenever additional information or clarification was sought from any of the French companies if resort to a request under the regulation was found to be appropriate for the present disclosure by reason only of the French blocking statute. His Lordship said that he could see no sound basis for taking a course that involved further delay and uncertainty given his conclusion regarding the risk of prosecution under the French blocking statute. His Lordship made the order for disclosure sought by the plaintiff. 21 The Court of Appeal dismissed the appeals from the respective decisions of Roth J and Henderson J. 22 Rimer LJ said that orders for disclosure were orders of a procedural nature and were governed by the lex fori. The authorities established that the fact that compliance with an order for disclosure might render a party subject to the risk of prosecution under foreign law provided no reason of itself not to make the order. It is relevant to the Court's discretion whether to make the order. Rimer LJ said that there was nothing to suggest that Roth J had committed any error of principle in his approach to the exercise of discretion. His Lordship said (at [104]): In my judgment, there is nothing in those submissions. It is obvious that as between (i) obtaining disclosure by a direct order against the parties, and (ii) by a 'court to court' request under the regulation, the former is plainly the more appropriate course. The latter is likely to be a slow, cumbersome and inadequate alternative, which may well, as Roth J noted, spawn follow up applications under the regulation if, as is likely to happen in practice, National Grid considers that yet further disclosure needs to be given. It is obvious that the just and efficient disposal of National Grid's disclosure application required a conventional order directly against the French defendants, and no judge would have contemplated the use of the regulation unless compelled to do so. Roth J, having decided that it would be appropriate to make a disclosure order, concluded that the existence of the regulation did not require any different course. He was not only entitled to come to that view, it was, I consider, one that was manifestly correct. 23 Beatson LJ said that he rejected the appeal for a number of reasons. First, the application of the EU Evidence Regulation was by no means straightforward. The use of the regulation was not mandatory and it was aimed at increasing not reducing options in such a context. Secondly, the Court was not bound to refuse an order for disclosure on the basis that the contravention of foreign law may be involved in the disclosure process. The ordinary process of disclosure in civil proceedings was governed by the lex fori. It was appropriate to take into account the real risk of prosecution. The matters that Roth J had taken into account in considering that issue involved no error in the exercise of his Lordship's discretion. 24 Laws LJ agreed with both judgments.

THE EXPERT WITNESSES 25 Foreign law is a question of fact and is generally proved by an expert. Some matters of foreign law do not require an expert (see s 174 Evidence Act 1995 (Cth)). 26 The experts in this case addressed a large number of issues, many of which I do not need resolve. I will not go into the detail of evidence relevant to issues which I do not need to resolve. On the issues which form the basis of my decision, I find no material difference in the qualifications of the expert witnesses. 27 The second respondent asked Judge BÉraudo to address four matters. 28 The first matter Judge BÉraudo was asked to address was whether it was a breach of the French blocking statute for the second respondent by its officers to request or search for relevant documents and provide a list of documents in compliance with the Australian discovery order. Judge BÉraudo answered that question in the affirmative. He expresses the opinion that the act of an employee of the second respondent requesting another employee of the second respondent to search for documents for the purpose of complying with the Australian discovery order would be a breach of the French blocking statute as would the act of an employee of the second respondent searching for the documents pursuant to such a request. Provision of a list of documents would also be a contravention. 29 The second matter Judge BÉraudo was asked to address is whether it would be a contravention of the French blocking statute for a relevant document to be identified in a list of documents even though the second respondent maintained an objection to the production of the documents. Judge BÉraudo expresses the view that it would be a breach because the identification of the documents in the list would be a communication of the documents, or information about the documents. There would be no defence of what he calls strength, duress or the order of a legitimate authority. 30 The third matter Judge BÉraudo was asked to address is the consequences of a breach of the French blocking statute and, in particular, the likelihood or risk of prosecution. Judge BÉraudo addresses a prosecution by the public prosecutor and the likelihood that a public prosecutor would prosecute. In the result, he concludes that the public prosecutor would request an investigating judge to continue the investigation. Judge BÉraudo expresses the view that an investigating judge has a duty to conduct an investigation and that this duty is subject to very limited exceptions which do not apply in this case. Judge BÉraudo concludes that the risk of prosecution would be very high. 31 The fourth matter Judge BÉraudo was asked to address is whether it is possible for the Australian discovery order to be served in France in a manner which would avoid a contravention of the French blocking statute. In this context, he considers the Hague Convention and a Convention concluded between Australia and France on 14 January 1993 on cooperation in criminal matters. The latter Convention may be put to one side as I find that the present proceeding is not a criminal matter and in any event it is not referred to in the second respondent's application. Judge BÉraudo concludes that the use of the Hague Convention is uncertain. He also refers to the UK-France Convention expressing the view that French and Australian governments could give the reference to civil and commercial matters a broader meaning than the Hague Conference experts. Judge BÉraudo also refers to the possible use of rogatory letters according to ordinary French law and, in this context, he refers to Article 736 of the Code of Civil Procedure for commercial and civil matters and Article 694 of the Criminal Procedure Code. In view of the terms of the application, I put to one side alternatives other than the Hague Convention and the UK-France Convention. 32 Mtre FeugÈre disagrees with Judge BÉraudo. He does not think that the second respondent will contravene the French blocking statute if, by its officers, it requests or searches for relevant documents in compliance with the Australian discovery order, or identifies and describes those documents in a list of documents to be filed in the Court and provided to the other parties to the proceeding, or produces the documents identified in such a list of documents to the parties to the Australian proceeding. He refers to the purpose for the French blocking statute and the judicial decisions (such as they are) as to its scope. Mtre FeugÈre also expresses the view that even if there was a possible breach of the French blocking statute involved in compliance with the Australian discovery order there would be no prosecution or conviction of the second respondent. He expresses the opinion that it is extremely unlikely that the public prosecutor would take any action to launch an investigation, refer the case to an investigating judge or refer it to a criminal court. He expresses the opinion that in the unlikely event that the case was transferred to an investigating judge it is unlikely he or she would take any action either. He expresses the opinion that a Court would not consider convicting the second respondent in such a case. 33 Mtre FeugÈre refers to the only two criminal cases of which he is aware under the French blocking statute. Both were referred to the criminal chamber of the Court of Cassation and he refers to the first as the "Executive Life" case (also sometimes referred as the "Christopher X" case or the "MAAF" case) and the "Taitbout" case. The only case resulting in a conviction was the "Executive Life" case. He refers to the facts of that case and says that it cannot be regarded as a precedent because the criminal proceedings were initiated by the company who held and provided the information, the company whose documents were provided was not aware that its own documents had been obtained and supplied, and the documents had been obtained by deception. 34 Mtre FeugÈre considers the Hague Convention and the UK-France Convention. He states that he is not aware of any other Convention which could apply and that the Convention concluded between France and Australia on 14 January 1993 on cooperation in criminal matters is irrelevant because the Australian proceeding is not a criminal procedure. Mtre FeugÈre expresses the opinion that both Conventions imply that judicial acts must be performed in the territory of the requested State, for instance, a judicial search for documents. He expresses the opinion that a Letter of Request would be "perfectly useless" since no judge is required in France to perform or supervise any act. He expresses the opinion that the Ministry of Justice in France would consider that requesting that the route provided by the Conventions be followed would be an abuse of process, since in reality no taking of evidence is required to achieve the results sought by the Australian discovery order. 35 Mtre FeugÈre expresses the following conclusions: … the offence of the Blocking Statute, which criminalises abusive searches for evidence in support of foreign proceedings, where it undermines French companies' interests, is not intended to apply in the context of disclosure by a company in proceedings such as those currently underway in the present case, and a fortiori a list of documents. The risk of criminal prosecution and conviction of a French company is in such case non-existent. 36 I have already referred to the major conclusions of Mtre Lalance (at [10]).

ISSUES ON THE APPLICATION 37 As I have said, there are a number of disputes between the experts which I do not need to decide. 38 On the other hand, Mtre FeugÈre's fundamental proposition is that a teleological approach would be taken to the French blocking statute. The purpose of the statute was to deal with abusive searches or communications and not the type of disclosure involved in this case. The second respondent sought to counter that approach by arguing that the French blocking statute was a criminal statute and would be strictly construed and not by reference to general concepts such as the purposes or aims of the statute. Judge BÉraudo, on the other hand, states that one officer of the second respondent requesting another to search and that the other officer searching would constitute a breach of the French blocking statute. I do not need to decide which of these views is correct. It is sufficient and I think appropriate for me to proceed on the basis that the description of documents in a list of documents and a fortiori the production of documents by the second respondent may well fall within the terms of Article 1bis. 39 However, having regard to the whole of the evidence, it seems to me most unlikely that the second respondent would be prosecuted under the French blocking statute were it to comply with the Australian discovery order. There was evidence from Judge BÉraudo of how the investigation and prosecution systems work in France and the discretions in the public prosecutor (French Code of Criminal Procedure, Articles 31 and 40) and an investigating judge (French Code of Criminal Procedure, Articles 80, 86 and 179). Mtre FeugÈre referred to these matters and he referred to a statement concerning the Public Prosecutor's Office by Magistrate FranÇois Molins. Overall, I prefer the evidence of Mtre FeugÈre as to whether there is likely to be a prosecution. I accept his evidence about the evil Article 1bis was designed to combat and the absence of that evil were the second respondent to comply with the Australian discovery order. That makes a prosecution most unlikely. Furthermore, the most compelling matter as Henderson J said in Servier and Roth J noted in National Grid is the absence of successful prosecutions under the French blocking statute. In fact, I find that the first two matters identified by Roth J in National Grid apply with equal force in this case (see [19] above). 40 In my opinion, it is far from clear that the Hague Convention could be used to achieve what the ACCC seeks to achieve by the Australian discovery order. Again, I can make some assumptions which favour the second respondent. I assume this proceeding is a civil or commercial matter within the Convention and that an order for disclosure of documents is an order to obtain evidence or to perform some other judicial act within the Convention. However, the Hague Convention seems to require an applicant to limitatively list the requested documents in his or her Letter of Request. Even if there is a degree of flexibility in that requirement such that the degree of specificity involved relates to the date, nature or author of the document as Mtre Lalance said, that is a significant limitation when compared with the Australian discovery order. It places the onus on the ACCC to identify in some way the documents it seeks. The Hague Convention is not a reasonable substitute for the Australian discovery order. I see no reason to conclude on the evidence that the UK-France Convention would have a wider operation than the Hague Convention. 41 I would not exercise my discretion to discharge the Australian discovery order. It is an order for standard discovery and that concept has been framed with a view to striking a reasonable balance between the parties. Rule 20.14 is in the following terms: (1) If the Court orders a party to give standard discovery, the party must give discovery of documents: (a) that are directly relevant to the issues raised by the pleadings or in the affidavits; and (b) of which, after a reasonable search, the party is aware; and (c) that are, or have been, in the party's control. (2) For paragraph (1)(a), the documents must meet at least one of the following criteria: (a) the documents are those on which the party intends to rely; (b) the documents adversely affect the party's own case; (c) the documents support another party's case; (d) the documents adversely affect another party's case. (3) For paragraph (1)(b), in making a reasonable search, a party may take into account the following: (a) the nature and complexity of the proceeding; (b) the number of documents involved; (c) the ease and cost of retrieving a document; (d) the significance of any document likely to be found; (e) any other relevant matter. (4) In this rule, a reference to an affidavit is a reference to: (a) an affidavit accompanying an originating application; and (b) an affidavit in response to the affidavit accompanying the originating application. 42 Without, of course, forming any view about the merits of the case, it may be said that cartel conduct can be notoriously difficult to detect and that the ACCC's case is that a serious breach of Australia's competition laws has occurred. The risk of the second respondent being prosecuted under the French blocking statute is slight. Using the Hague Convention, if it can be used at all, is likely to be less effective and will involve further delay. The discretion should be exercised in favour of the Australian discovery order. 43 I should add that in reaching this conclusion I have not needed to rely on an argument put by the ACCC by reference to Mr Garey's affidavit. Mr Garey's evidence was to the effect that whether the second respondent should be ordered to make discovery was raised at a directions hearing on 14 March 2013 and at that time, its counsel referred to the French blocking statute. The second respondent was given time to file an affidavit but did it not do so and it consented to the making of the Australian discovery order on 5 April 2013. As I understood the ACCC's submission, it was that this conduct would be a reason to exercise the discretion against the second respondent.

CONCLUSION 44 For the reasons set out above, the second respondent's application should be dismissed. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.