Landmark Decision on Cross-Border Document Recovery via Hague Chapter II in Group Proceedings

Introduction

The judgment in Iain Urquhart v Stellantis Auto SAS and others by the Scottish Court of Session ([2025] CSOH 30) presents a significant turning point in the administration of evidence recovery in complex, cross-border group proceedings. In this case, the representative party – Iain Urquhart – sought disclosure of extensive documentary evidence believed to be relevant to allegations that prohibited defeat devices were used in certain Peugeot and Citroën diesel vehicles. The central issues involve the proper scope and method for obtaining vital documents from defendants domiciled in France, subject to the French Blocking Statute (Law No 68-678 of 26 July 1968), and the appropriate application of international evidence recovery mechanisms under the Hague Convention.

The parties in the litigation include multiple corporate defendants involved in the design, manufacture, and sale or lease of affected vehicles, with the case intersecting issues of document disclosure, international comity, and the balancing of procedural fairness against the risk of contravening foreign criminal law. The dispute raised complex questions regarding the scope of disclosure orders in group proceedings and the employment of alternative recovery processes to prevent defendants from breaching their domestic obligations.

Summary of the Judgment

The court’s judgment, delivered by Lord Sandison, primarily addressed two distinct groups of defendants: those not subject to the French blocking statute and those who are. For defendants not subject to the statute, the court ruled for a direct order of document production, with a rolling disclosure schedule designed to monitor compliance over successive 28‐day periods.

In contrast, for defendants subject to Law No 68-678 of 26 July 1968, the court declined a direct order that might require the defendants to breach French criminal law. Instead, the court favored the use of the Hague Convention’s Chapter II process, authorizing the appointment of a commissioner (potentially a French avocat or a Scottish lawyer with local assistance) to recover the documents in a manner that respects French domestic restrictions on disclosure. The judgment carefully balanced concerns of cross-border comity, practical difficulties, cost, and delay against the right to a fair discovery process.

Analysis

Precedents Cited

The judgment extensively referred to earlier decisions which shape the current landscape of document recovery:

Batchelor v Opel Automobile GmbH [2025] CSOH 18 – This decision underscored the broad, albeit measured, discretion available to the court in ordering disclosure in group proceedings. It emphasized that the court’s powers may extend far beyond the rigid confines of traditional common law commission and diligence procedures.
Joshua v Renault SA [2024] EWHC 1424 (KB) – Though originating in an English context, Joshua was instrumental in informing the Scottish approach. It dealt with the risks associated with ordering production where there was potential breach of foreign law. Critics in the current case argued that its approach to a “real risk of prosecution” should not automatically preclude the exercise of discovery powers.
Several other English and international authorities including Bank Mellat v HM Treasury [2019] EWCA Civ 449, King of the Two Sicilies v Willcox (1851), and Morris v Banque Arabe et Internationale d’Investissement SA [2000] CP 65 were invoked to illustrate that foreign law concerns must be balanced against the need for comprehensive and fair evidence recovery.

Collectively, these precedents have served to reinforce the principle that while respect for foreign law is critical, especially in cross-border litigation, it should not unduly hinder the discovery process in domestic proceedings.

Legal Reasoning

The court’s reasoning can be broken down into several key components:

Proportionality and Direct Relevance: Lord Sandison emphasized that the direct link between the documents sought and the matters in dispute was central. The court weighed the relevance and specificity of the witness and document disclosure requests, noting that any failure to comply could compromise the transparency and fairness required in group proceedings.
Balancing Domestic and Foreign Legal Obligations: The primary challenge was to reconcile the Scottish court’s power to order disclosure with the constraints imposed by the French Blocking Statute. The judgment navigated this impasse by invoking the Hague Convention’s provisions as a viable alternative. By doing so, the court acknowledged that while a direct production order might force a breach of French law, the appointment of a commissioner under Chapter II would facilitate evidence recovery without compromising the legal obligations of French domiciled defendants.
Risk of Prosecution and Comity: A significant part of the analysis involved assessing the “real risk of prosecution” under French law. While previous decisions had given weight to that risk in an English context, Lord Sandison argued for a more rounded analysis. Instead of letting the threat of prosecutorial action dominate the balancing exercise, the court opted for a holistic consideration of procedural fairness, practical alternatives, and the tenets of comity.
Administrative Efficiency and Practical Considerations: The court compared both the Chapter I and Chapter II routes under the Hague Convention. Noting that the Chapter I procedure could incur considerable delays, the judgment favored the Chapter II process, which, albeit involving additional administrative steps and costs, provided a more expedient and cooperative method for securing disclosure.

Impact

This judgment is poised to have a substantial and far-reaching impact:

Procedural Guidance in Group Proceedings: The decision clarifies the role of international evidence recovery mechanisms in complex litigation, particularly in the context of group proceedings where cross-border legal conflicts are inevitable.
Reconciliation of Conflicting Legal Obligations: By favoring the Hague Convention’s Chapter II route, the court offers a model for courts internationally on how to balance domestic discovery responsibilities with international legal commitments, especially where direct disclosure orders could result in a breach of foreign criminal law.
Enhanced Judicial Discretion: The ruling underscores the need for a nuanced, proportionate, and context-specific application of discovery orders rather than an inflexible adherence to rigid criteria (such as an unyielding application of the “real risk of prosecution” test). This is likely to influence future litigation where similar jurisdictional conflicts occur.
Promotion of Judicial Comity: Emphasizing mutual respect between national legal systems, the decision reinforces the principle that domestic courts should not overstep to the extent that they force a party to violate the laws of another country—a stance that promotes international legal cooperation.

Complex Concepts Simplified

Given the technical nature of the issues, several legal concepts merit clarification:

Document Recovery in Group Proceedings: This involves obtaining a wide range of evidence from multiple parties in cases where similar factual issues affect a group. The court has broad discretion in specifying which documents are essential.
French Blocking Statute (Law No 68-678 of 26 July 1968): This law restricts the transmission of sensitive economic, commercial, and technical information to foreign authorities. In the present case, it prevents certain defenders from directly complying with a domestic order for disclosure.
Hague Convention Chapter I vs. Chapter II:
- Chapter I: Allows a judicial authority to request evidence from another jurisdiction via a formal letter of request. However, it may be slower due to bureaucratic delays.
- Chapter II: Permits the appointment of a commissioner who can, with the cooperation of local authorities, facilitate the discovery process. This approach is often more expedient in situations where direct disclosure might breach local law.
Real Risk of Prosecution: This term refers to the likelihood that a party could be prosecuted under its domestic law if it complies with a foreign court’s disclosure order. The court here debates whether this risk should serve as a threshold barrier or merely a factor to balance against other considerations.

Conclusion

The decision in Iain Urquhart v Stellantis Auto SAS establishes a landmark precedent by articulating a balanced and pragmatic approach to cross-border document recovery in group proceedings. Rather than allowing the rigid application of a “real risk of prosecution” standard to override the necessity of fair disclosure, the court has endorsed the use of the Hague Convention’s Chapter II process as an effective alternative. This not only promotes judicial comity between Scotland and France but also provides litigious parties with a clear framework to navigate the complexities arising from conflicting national laws.

Ultimately, the judgment enhances the judicial toolkit for handling discovery in international litigation and underscores the principle that achieving a fair, proportionate, and efficient resolution of disputes remains paramount even in a multi-jurisdictional context.