What type of documents does the Competition Commission need to disclose to a respondent in an enforcement action and Competition Tribunal proceedings?

ONC Lawyers

6 years ago

Reading Time: 5 minutes

Introduction

As set out in our October 2017 Newsletter, the Competition Commission (the “Commission”) had commenced proceedings in the Competition Tribunal (the “Tribunal”) against five Respondents, all of which are information technology companies. Last month, the Tribunal handed down its judgment on the 3^rdRespondent’s application for orders of discovery against the Commission under CTEA 1/2017(the “Application”). Whilst the Application mostly dealt with various well-settled legal principles, the Tribunal clarified a number of aspects of the law regarding discovery, public interest immunity and without prejudice privilege as well as the distinctions between the discovery provisions under the Rules of the High Court Cap. 4A (“RHC”) and those under the Competition Tribunal Rules Cap 619D (“CTR”).

Background

Purpose of the Application

Based on a witness statement of a manager of the 3^rd Respondent (“Mr D”), the Commission alleged that, in gist, the arrangement between Mr D and the personnel of the 1^st Respondent was an anti-competitive vertical bilateral arrangement between the 3^rd Respondent and the 1^st Respondent which contravened the First Conduct Rule of the Competition Ordinance (Cap 619). In this regard, the 3^rdRespondent submitted that Mr D’s statements were obtained in highly questionable circumstances, challenged the facts as narrated in Mr D’s statements and contended that Mr D lacked authority and acted on a frolic of his own and in fraud of the 3^rd Respondent in doing what Mr D is said to have done.

The Application

Although the automatic general discovery provisions (under RHC Order 24 rule 2) do not apply to the actions before the Tribunal, an order for discovery by the Commission was made at the first case management conference and the Commission had subsequently filed four lists of documents with sections where various classes of documents were objected to be produced by the Commission on the ground of privilege or public interest immunity. Accordingly, pursuant to rule 24 of CTR and RHC Order 24 rule 7, the 3^rd Respondent took out the Application to request for, inter alia, the following documents to be disclosed by the Commission:

Without prejudice correspondence between the Commission and Respondents in relation to the Commission’s Leniency Policy (“Class 1”);
The complainant’s complaint form submitted to the Commission (“Class 3”);
Without prejudice correspondence between the Commission and any one of the five Respondents where an agreement has not been reached (“Class 5”);
Confidential internal reports relating to the Commission’s investigation (“Class 6”); and
Documents relating to Mr D (“Mr D documents”).

RHC or CTR?

The Tribunal’s discretion

The Tribunal may decide its own procedure or follow the practice and procedure of the Court of First Instance. Under CTR Rule 4(2)(a), it states that any provision of the RHC can be applied and it should be applied with any necessary modifications. Of note is that CTR rule 24(3) makes clear that discovery is in the discretion of the Tribunal to be exercised in the circumstances under the matters specified in the said rule.

The Commission’s grounds of opposition and the Tribunal’s findings

Class 1

The Commission objected the production of Class 1 documents on the grounds of without prejudice privilege and public interest immunity. The Tribunal found that they should be covered by informer privilege and without prejudice privilege as there is a strong public interest in encouraging parties to apply to the Commission for leniency and in facilitating free and frank communication during the process, which is treated with strict confidence. Thus the public interest in non-disclosure outweighs any contrary interest in disclosure (eg. that the 3^rd Respondent should have all relevant material to mount its defence).

Class 3

The Commission objected the production of Class 3 documents on the ground of public interest immunity. The Tribunal accepted that normally, the complaint form which contains the complainant’s name and details should be confidential and covered by informer privilege. However, since the complainant’s identity was revealed by the Commission of its own motion in the Originating Notice of Application, the Tribunal found that there is no further interest to protect the complaint form from being disclosed. Nevertheless, the Tribunal found that relevance is not denied and therefore Class 3 documents should be made available within a confidentiality ring (i.e. the individuals nominated by each of the Respondent e.g. counsel, solicitors, in-house representatives etc.).

Class 5

The Commission objected the production of Class 5 documents on the grounds of public interest immunity and without prejudice privilege. The Tribunal found that Class 5 documents are covered by without prejudice privilege as such communications were engaged in with a view to resolving the Commission’s concerns in respect of the parties or entering into an agreement for cooperation in exchange for favourable treatment, the foundation of which was based on the Commission’s Enforcement Policy.

Class 6

The Commission objected the production of Class 6 documents on the ground that the same are irrelevant or they are covered by public interest immunity or legal professional privilege.

The Tribunal found, and the 3^rd Respondent agreed, that the Commission is entitled to claim legal advice privilege provided that the documents are connected with seeking legal advice from a qualified lawyer. However, the Tribunal did not accept that all the documents are irrelevant on the basis that it originated and was destined within the Commission and that they are “internal”. As for the claim for immunity, the Tribunal refused to accept a sweeping proposition that every internal communication can rely on such general ground. Nonetheless, the Commission was satisfied that documents like the reports to the Commission concerning the results of investigation and internal communications relating to the execution of search warrants showing the methods, procedures and tactics of the Commission would be covered by public interest immunity.

Of interest is that the Tribunal found that working drafts of witness statements of informants, complainants and/or persons under investigation prepared by the Commission cannot attract public interest immunity as claimed by the Commission. This is because the fear of such drafts leaving to inaccurate representations of fact thereby prejudice the Commission’s overall investigation cannot constitute substantial harm or real damage to the public interest.

Mr D documents

The dominant focus of the 3^rd Respondent is indisputably Mr D documents. A list of specific documents sought by the 3^rdRespondent, which includes, inter alia, drafts of Mr D’s statement, records of how communication between Mr D and the Commission initiated and internal communication of the Commission relating to Mr D. The main argument for the disclosure of these documents is that Mr D is not only the witness but a party to the alleged wrongdoing who has been given immunity in exchange for evidence relied upon by the Commission against the 3^rdRespondent. In such circumstances, the Tribunal and the defence should be presented a “warts and all” account.

Although the Tribunal stated that “warts and all” does not mean everything under the sun, depending on the content, certain documents should be disclosed. For instance, the draft statements of Mr D should be disclosed as they reflect result of the conversations with Mr D where instructions or confirmations from Mr D regarding the drafts were sought. Furthermore, internal documents which were produced based on the factual information from Mr D relayed to the Commission should be disclosed.

Insights

The Tribunal has provided some helpful guidance on the tests to be applied when deciding whether the documents in question are to be disclosed by the Commission. Although this decision appears to be unsurprising as it has followed the established principles of various legal tests, it underlines what and who are protected under such enforcement actions which would effectively encourage participants to come forward to the Commission to report cartel conduct or to assist the Commission during the investigation. Undoubtedly, the impact of the decision is profound as it may affect the procedure and internal arrangement of the Commission when conducting investigatory work in the future.

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This article is written by ONC Lawyers and was first published on their website.

This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.