September 5, 2018 / 11:00 AM / in 16 days

ENRC wins appeal in legal privilege battle against UK's Serious Fraud Office

LONDON (Reuters) - Mining company ENRC won a landmark appeal in a London court on Wednesday to keep the majority of documents generated during an internal investigation out of the hands of authorities.

FILE PHOTO - A sign is displayed in an unmarked Serious Fraud Office vehicle parked outside a building, in Mayfair, central London March 9, 2011. REUTERS/Andrew Winning

Britain’s Serious Fraud Office (SFO) opened a criminal investigation into ENRC in 2013 over allegations of fraud, bribery and corruption surrounding the acquisition of mineral assets in Kazakhstan and Africa. The company has denied any wrongdoing.

Wednesday’s judgment, which overturned a lower court decision from last year, follows a dispute between ENRC and the SFO about which documents are protected by legal professional privilege, which ensures advice lawyers give clients remains confidential, and can be protected from investigators.

Judith Seddon, a partner at Ropes & Gray, said the judgment acknowledged that legal professional privilege was a substantive and fundamental right and an important check on the power of the state.

“As a result of today’s decision, individuals and companies, no matter how large or small, can once again be assured that when dealing with complex issues of alleged corporate wrongdoing they are able to engage freely and frankly with their legal counsel and other advisors,” she said.

The documents at the heart of the case were generated during an internal investigation by ENRC’s former lawyers, Dechert, after a whistleblower email.

ENRC said the Court of Appeal had upheld its claim to privilege for “the overwhelming majority of the documents”, including witness interview notes prepared by Dechert as well as a “books and records” review undertaken by forensic accountants.

Michael Roberts, a lawyer at Hogan Lovells who represented ENRC (Eurasian National Resources Corporation), called it an “historic ruling” for companies launching internal investigations after whistleblower or other allegations of wrongdoing.

The SFO said the facts of the case were complex, that it was studying the judgment and considering its implications. It would continue to assess “very thoroughly” and challenge any ill-founded legal privilege claims in the future, it added.

Asked whether it would appeal the ruling at the Supreme Court, a spokeswoman said: “We are exploring this as part of the process of considering the judgment.”

ENRC was taken private by its three founders and the Kazakh government in 2013 in a $4.5 billion (3.5 billion pounds) buyout, six years after listing on the London Stock Exchange and following a series of boardroom battles.

The miner has been renamed ERG (Eurasian Resources Group), which is registered in Luxembourg and has ferrochrome, aluminium, iron ore and energy operations in Kazakhstan, copper and cobalt assets in Africa and iron ore mines in Brazil.

Reporting by Kirstin Ridley, editing by Sinead Cruise and Elaine Hardcastle

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