Maria Lazareva v. State of Kuwait

Case summary

At a glance

Parties: Maria (Marsha) Lazareva v. the State of Kuwait (arbitration); court applicant: Kuwait Ports Authority, opposed by Port Link GP Ltd and Maria Lazareva
Case no.: ICSID Case No. UNCT/19/1 (arbitration); Grand Court Cause No. FSD 118 of 2021 (RPJ)
Forum and rules: UNCITRAL Arbitration Rules 1976 (arbitration); Grand Court of the Cayman Islands, Financial Services Division (court applications)
Treaty: Russia–Kuwait BIT
Court: Grand Court of the Cayman Islands: Justice Raj Parker
Sector: Investment fund management (ports and infrastructure fund)
Outcome: On 8 March 2022 the Court allowed the Kuwait Ports Authority to pass 158 confidential fund documents to Kuwait for use in the arbitration. The arbitral tribunal issued its Final Award on 12 August 2022 and, as the Court reports, declined jurisdiction. In January 2024 the Court ordered that no disclosure be made and made no order as to costs.
Amount: No amounts stated. Costs: no order as to costs (28 March 2024).

The dispute

Maria Lazareva was a director of Port Link GP Ltd, the general partner of The Port Fund L.P., a Cayman Islands fund, from 8 March 2007 to 24 May 2018. She brought a claim against Kuwait under the Russia–Kuwait BIT and the 1976 UNCITRAL Rules, seeking substantial compensation for Kuwait's actions. The Kuwait Ports Authority (KPA), a Kuwaiti state entity and limited partner in the Fund, had obtained about 1,000 confidential Fund documents through Cayman court orders. It used them in fraud proceedings against Port Link. Kuwait asked KPA for these documents to use in its defence in the arbitration. KPA applied under the Confidential Information Disclosure Act 2016 (CIDA) for permission to share them. Lazareva and Port Link opposed the application. They argued that KPA would not "give evidence" within section 4, had no legitimate interest, and should not get the documents at such a late stage of the arbitration. They also argued that Kuwait should have used a letter of request instead.

Key holdings

Jurisdiction. Section 4(2) CIDA is to be read broadly. A person who intends to provide evidential material to another person, for use in proceedings to which it is not a party, can apply for directions. The definitions in section 4(1) do not exhaustively limit the forms of evidence covered. The Court rejected Lazareva's threshold objection to KPA's standing. Judgment of 8 March 2022, ¶¶ 120–125
KPA has a legitimate interest in having its duties of confidence set aside on a controlled basis, because Kuwait, of which it is an emanation, asked for the documents for use in an existing arbitration. The Court also rejected the arguments based on the Cayman Bill of Rights and the Data Protection Act. Judgment of 8 March 2022, ¶¶ 109–113, 128
The Court made an order under section 3(2) CIDA (the wrongdoing defence). KPA acts in good faith and reasonably believes that the information is substantially true and contains evidence of wrongdoing. Judgment of 8 March 2022, ¶¶ 134, 142
Under section 4(2), the Court directed disclosure of the 158 documents to Kuwait. Port Link was first to review them for privilege and data-protection redactions. The prejudice to Port Link, Lazareva and the other limited partners did not justify refusal. It is for the arbitral tribunal to decide whether to admit the documents. Judgment of 8 March 2022, ¶¶ 130–132, 143–145
After the Final Award of 12 August 2022, which the Court reports declined jurisdiction, the Court ordered on 25 January 2024 that no order for disclosure into the arbitration be made. Ruling of 28 March 2024, ¶¶ 8–9
Costs: no order. No party can fairly claim victory, because the documents were never disclosed, which was in substance what Lazareva and Port Link had argued for. CIDA proceedings are also a balancing exercise in which interested parties are invited to be heard, so ordinary 'winners and losers' analysis does not apply easily. Ruling of 28 March 2024, ¶¶ 28–31, 39–48

Procedural history

2018Lazareva commences the arbitration against Kuwait.
December 2020The arbitral tribunal refuses Kuwait's request to postpone the hearing so that it could try to obtain the Fund documents.
4–7 January 2021Main hearing in the arbitration. Post-hearing submissions follow on 12 April 2021, and a final hearing is held on 27 April 2021.
10 May 2021KPA files an ex parte originating summons under CIDA. On 27 May 2021 Smellie CJ rules that KPA has standing and orders service on Kuwait, the Fund and Port Link.
8 March 2022Grand Court judgment (Parker J): KPA may disclose 158 documents to Kuwait for use in the arbitration.
7 July 2022Supplementary ruling on the terms of the order: a confidentiality club is approved, and no indemnity from Kuwait or KPA is required.
12 August 2022The arbitral tribunal issues its Final Award, which the Court reports declined jurisdiction over Lazareva's claim.
10 November 2022Lazareva applies in Paris to annul the Final Award.
25 January 2024The Grand Court orders that no disclosure be made into the arbitration.
28 March 2024Grand Court costs ruling: no order as to costs.