UK High Court refuses Meng Wanzhou disclosure application

The High Court has refused an application made on behalf of Huawei CFO Meng Wanzhou for disclosure of HSBC records for use in her ongoing legal battle against extradition from Canada to the US, where she faces charges of bank and wire fraud and violation of US sanctions. In the judgment, handed down on 19 February 2021, the court held that it had no jurisdiction to make such an order.

The documents sought, under section 7 of the Bankers’ Books Evidence Act 1879 (‘the 1879 Act’), include a wide array of records of HSBC’s dealings with Huawei and Ms Meng, in addition to records maintained by the bank for the purpose of its regulatory compliance.  The documents, which are in the possession of US prosecutors are subject to a US Protective Order and as such are not ‘discoverable’ (subject to disclosure) in either the US or the Canadian proceedings. Ms Meng’s lawyers argued in the instant proceedings that the documents should be disclosed by HSBC as they are necessary to support her claim that the US authorities’ case amounts to an abuse of process, a line of argument which the Canadian court has ruled is open to her. The US charges against Ms Meng are founded on an allegation that she misled HSBC executives in respect of Huawei’s relationship with a subsidiary operating in Iran. Lawyers for Ms Meng argue that this allegation is manifestly unreliable, in that it is not supported by sufficient evidence, and deliberately misleading, by reason of evidence against her being deliberately withheld.

Section 7 of the 1879 Act enables the court, on the application of any party to legal proceedings, to order the inspection of any entries in a bankers’ book for the purposes of those proceedings. The first question for the court was whether the term ‘legal proceedings’ in the 1879 Act was limited to legal proceedings in the UK or, as was submitted by Ms Meng’s legal team, extended to cover legal proceedings anywhere in the world. Analysing the term in the context of the statutory language as a whole, the court concluded that Parliament’s intention was clear. There was no reason to think that Parliament intended the term ‘legal proceedings’ in section 7 to have a wider scope than the necessarily implied UK-limited scope seen elsewhere in the Act.

This analysis was reinforced by the existence of a UK statutory framework for the provision of evidence in aid of proceedings in foreign courts, inter alia, the Evidence (Proceedings in Other Jurisdictions) Act 1975 and the Crime (International Cooperation) Act 2003. These Acts make express provision for mutual assistance in foreign proceedings. If the wider interpretation, encompassing legal proceedings wherever situated, was correct, it would circumvent the statutory framework for mutual legal assistance. This would create an anomalous situation whereby evidence relating to bankers’ books sought for use in foreign proceedings could be obtained directly through the UK courts while other types of evidence remained to be sought by mutual legal assistance. Thus, rejecting the applicant’s interpretation of the term ‘legal proceedings’, the court held it had no jurisdiction to make the order sought.

Despite this jurisdictional finding, the court went on to address the second issue of interpretation raised in the application, namely, whether the term ‘entries in’ bankers’ books should be interpreted as meaning transactional records alone or, as was submitted on behalf of Ms Meng, both transactional records and non-transactional records maintained for regulatory compliance. The court relied on the history of the legislation in its analysis. The 1879 Act has always been concerned with facilitating the proof in evidence of concrete banking action. The purpose of the legislation was to enable this proof by reliance upon a verified copy of a bankers’ book, thereby keeping bankers and bankers’ books in the banks and not tied up in the courtroom.

It was well established that the focus of ‘entries’ has always been transactional, and the Act was never concerned to cover everything that a bank has, or does, or writes down, in the course of its ordinary business as a bank. There was no authority in support of extending the meaning to include records maintained for regulatory compliance. Therefore, the court concluded that had it not found against Ms Meng’s application on the issue of jurisdiction, it would have found against it on the interpretation of the scope of the term ‘entries in’ bankers’ books.

Having found it had no jurisdiction, the court dismissed Ms Meng’s application for disclosure. The decision of the court is not open to appeal.