Monday, 15 June 2015

An IP Case from the DIFC at Last: Capital Healthcare Partners Ltd v Ali Akbar Hashemi

On 27 April 2011 I discussed the Dubai International Financial Centre's Law of Confidence. It is set out in art 37 of the DIFC Law of Obligations (DIFC Law No. 5 of 2005):
"37. Breach of confidence 
(1)  Subject to Article 37(4), a person has a duty not to misuse specific information which he has received from another (a "confidant"), directly or via an intermediary, and which can reasonably be regarded as confidential, where he knows or ought to know that the information is confidential.
(2) If a person breaches his duty as defined in Article 37(1), he is liable to the confidant.
(3) Unless non-confidentiality is otherwise expanded by agreement, information is not confidential if:
(a) it is in the public domain;
(b) it is trivial or useless; or
(c) it is in the public interest that the information should not be confidential. 
(4) Misuse of information includes, but is not limited to, its disclosure.
(5) A person may disclose confidential information where -
(a) the confidant has consented, expressly or by implication, to its disclosure;
(b) its disclosure is required by law;
(c) its disclosure is required in the interests of the confidant;
(d) it is no longer confidential; or
(e) it is disclosed to a person who has a legitimate interest in receiving it. 
(6) It is no defence that the defendant did not know that he was misusing the confidential information."
In CFI 045/2012 TVM Capital Healthcare Partners Limited v Ali Akbar Hashemi 22 May 2014 Justice Roger Giles QC held that the defendant Aki Akbar Hashemi owed the claimant a duty of confidence under a confidentiality agreement dated 24 Nov 2011 and art 37 (1) to use certain PowerPoint presentations that had been given to him in confidence for the sole purpose of evaluating a new healthcare investment on behalf of an undisclosed principal and that he had breached that obligation by disclosing the information to other investors. The judge awarded the claimants damages of AED 250,000 on the basis that that would have been the fee charged by the claimant for relaxing the obligation of confidence. In reaching his decision the learned judge relied on Mr Justice Brightman in Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 as it had been applied and extended in subsequent cases.

The defendant appealed against the finding of liability on the ground that the judge should have found that the case was res judicata and thus an abuse of the process of the court, that there was no evidence upon which the award of damages could have been founded and that the claimant should not have been awarded all its costs having regard to the fact that it had claimed US$29 million but had actually recovered only a small fraction of that sum. The appeal came on before Sir John Chadwick, Sir David Steel and HE Justice Omar Al in CA 006/2014 TVM Capital Healthcare Partners Ltd v Ali Akbar Hashemi 27 Jan 2015,

The Court rejected the res judicata and res judicata point on three grounds.  First, not all the parties to the present appeal had been before the court in the proceedings relied upon. These were in any case criminal proceedings rather than a claim for breach of confidence, Secondly, the defendants had been charged with an offence that covered some but not all the claims in the instant appeal. Thirdly, issue estoppel had not been pleaded in the court below.

As to damages, the judge had not erred in his approach and while the figure might have been higher than the appeal judges would have awarded there was no basis on which to interfere with the judge's decision.

The Court did disallow some of the claimants' costs but these were more than offset by his contribution to the costs of the appeal.

The interesting point from this case is that the DIFC courts seem to protect trade secrets by contract but also under the law of obligations as a statutory duty. Also, there seems to be no difference in the basis upon which damages under contract and the law of obligations. Justice Giles gave a very thorough judgment on the point which was not substantially challenged.  Although the DIFC Courts probably reached the same conclusion as would have been reached by an English court the route by which they arrived at it was different.

Should anyone require amplification or clarification of this case, or the DIFC law of confidence generally he or she should call me during office hours on +44 (0)20 7474 5252 or use my contact form.

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