Raiffeisen Bank International AG v Asia Coal Energy Ventures Ltd & Anor

Factual and Procedural Background

The Appellant Bank held security over shares and loans relating to a company listed on the London Stock Exchange. The Bank agreed to release its security to facilitate a transaction whereby a special purpose vehicle (the First Defendant) would purchase the shares and loans, financed by an Indonesian company represented by the Respondent solicitors ("Company A"). Company A provided a Solicitor's Confirmation to the Bank confirming receipt of at least US $85 million and irrevocable instructions to hold or transfer these funds into an escrow account as per the terms of the Sale and Purchase Agreement. The escrow agreement was not executed within 30 days, nor was any alternative arrangement agreed. Despite this, the transaction proceeded, the Bank released its security, and transferred shares to the Defendant. The Defendant failed to pay the outstanding purchase price, and the Bank commenced proceedings against both the Defendant and Company A, alleging breach of obligations and misrepresentations by Company A in issuing the Solicitor's Confirmation.

The Bank sought disclosure of documents relating to the instructions Company A had received from its client. The trial judge ordered disclosure only of the client account balances during the relevant period but refused other disclosure requests on grounds of privilege. The Bank appealed against this refusal.

Legal Issues Presented

1. Whether the instructions given to Company A by its client, underlying the Solicitor's Confirmation, are protected by legal advice privilege and thus not subject to disclosure.
2. The scope and effect of the Solicitor's Confirmation, specifically whether Company A undertook an obligation to continue holding the escrow funds absent a signed escrow agreement or an agreed alternative arrangement.
3. Whether privilege was waived by the client or by Company A's act of giving the Solicitor's Confirmation to the Bank.
4. The relevance and necessity of the documents sought by the Bank for disclosure in light of the issues in the case.

Arguments of the Parties

Appellant's Arguments

• The instructions given to Company A were not confidential as required for privilege because the client authorised Company A to make representations to the Bank about those instructions.
• By authorising Company A to enter into a legal relationship with the Bank and make statements about its instructions, the client impliedly waived confidentiality and privilege in the event of dispute.
• The instructions to make statements about holding money are not communications for legal advice but more akin to non-privileged instructions such as a solicitor collecting rent.
• Relied heavily on the precedent that communications authorising solicitors to communicate instructions to third parties are not privileged.

Respondent's Arguments

• A statement by a solicitor to a third party about the substance of instructions does not automatically remove confidentiality or privilege from the underlying communications.
• Confidentiality is only lost if the client expressly or impliedly agrees to waiver of privilege, which did not occur here.
• The instructions were given in a relevant legal context as part of continuous legal advice relating to the financing transaction and protection of the client's interests.
• The Solicitor's Confirmation constituted an independent legal commitment by Company A, distinct from simply conveying the client's instructions.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging that Company A undertook obligations towards the Bank by issuing the Solicitor's Confirmation, but the key dispute concerned the scope of those obligations and the disclosure of underlying instructions.

On disclosure, the court held that the documents containing or evidencing the instructions given to Company A by its client were confidential and protected by legal advice privilege. The court distinguished the precedent where privilege is lost because the client waives confidentiality by authorising the solicitor to disclose instructions in litigation contexts. Here, the client did not waive privilege; Company A provided an independent legal commitment rather than merely acting as an agent conveying instructions.

The court emphasized the broad and absolute nature of legal advice privilege, referencing authoritative decisions confirming that privilege applies to all communications made in the course of obtaining legal advice in a relevant legal context. The instructions to Company A were part of a continuum of communications related to the financing transaction and the provision of legal advice to protect the client's interests.

The court rejected the Bank's argument that the instructions were not confidential because the client authorised Company A to make statements to the Bank. It held that authorisation to provide the Solicitor's Confirmation did not equate to authorising disclosure of all underlying communications or waiver of privilege. The court also rejected the analogy that the instructions were akin to non-privileged instructions such as rent collection, noting the inherently legal context and Company A's role advising on complex financing arrangements.

Regarding relevance, the court found that the documents sought were not relevant to determining the true construction of the Solicitor's Confirmation, which is an objective question of contract interpretation. The instructions actually received could not affect the legal meaning of the Confirmation.

Consequently, the court upheld the trial judge's refusal to order disclosure beyond the client account balances, finding the documents privileged and not subject to disclosure.

Holding and Implications

The court DISMISSED THE APPEAL, confirming that the documents sought by the Bank relating to the instructions given to Company A are protected by legal advice privilege and need not be disclosed.

The direct effect of this decision is that Company A is not required to disclose the underlying instructions from its client, preserving the confidentiality of legal advice in the context of complex commercial financing transactions. No new legal precedent was established beyond affirming existing principles on legal advice privilege and its application in this context.