Court allows without prejudice letters into evidence due to improper pressure and unambiguous threats.

THE HIGH COURT

COMMERCIAL

[2025] IEHC 474

[Record No. 2024/1209P]

BETWEEN

QPQ LIMITED

PLAINTIFF

AND

GERARDUS HENRICUS MICHEL MARIA SCHUTE

(OTHERWISE KNOWN AS GEERT SCHUTE)

DEFENDANT

JUDGMENT of Mr. Justice Mark Sanfey delivered on the 1st day of September, 2025.

Introduction

1. This judgment concerns an application by the defendant that the court permit certain correspondence exchanged between the parties’ solicitors (Ogier (Ireland) LLP (‘Ogier’) for the plaintiff, Arthur Cox for the defendant) to be admitted into evidence. There are seven letters in the sequence, which are identified in an appendix to the notice of motion; the first letter is from the plaintiff’s solicitors and is headed “without prejudice save as to costs” (‘WPSATC’), and all four of the letters in the sequence from those solicitors bear this heading.

2. The defendant argues that the wording of the first letter in the sequence of 24 October 2024 (‘the WPSATC letter’) from the plaintiff’s solicitors and the circumstances surrounding the correspondence generally justify a finding by the court that the correspondence should be admitted into evidence, and that the plaintiff should not be entitled to the normal benefit of without prejudice communications of having the relevant correspondence excluded from evidence. The plaintiff opposes the application, contending that the wording of the correspondence and the general context do not warrant the removal of the benefit of the WPSATC heading.

3. The defendant’s application is grounded on the affidavit of 25 March 2025 of the defendant (or ‘Mr. Schute’), and an affidavit of Dr. Claudio Bazzani, also sworn on 25 March 2025. Dr. Bazzani is an attorney-at-law based in Zürich, Switzerland, and his affidavit is for the purpose of adducing expert evidence in relation to Swiss law, and in particular the nature and effect of certain criminal proceedings initiated in Switzerland against certain individuals – of which the defendant is not one – reference to which is made in the correspondence.

4. The plaintiff responded to the application by means of two affidavits from Laurence Fenelon, the principal of Fenecas Law (‘Fenecas’), the firm of solicitors currently on record for the plaintiff. It is important to note however that the letters in the sequence of correspondence written on behalf of the plaintiff emanated from a different firm, Ogier, which was replaced as solicitor for the plaintiff by Fenecas. While Mr. Fenelon was in fact a partner in Ogier at the time of the issue of the correspondence, it was not suggested that he was the author of the letters or had any part in their composition.

5. Both parties proffered detailed written legal submissions, and supplemented these with further submissions from counsel at the hearing of the application before me on 20 June 2025.

The Proceedings

6. The proceedings were commenced by plenary summons on 6 March 2024. In its statement of claim delivered on 29 April 2024, the plaintiff seeks declaratory relief against the defendant that he has acted in breach of a shareholders’ agreement “…and that the Plaintiff is the sole author, owner and party entitled to the use and benefit of the intellectual property known as ‘1DLT’” [para. 3]. The plaintiff also seeks damages and/or disgorgement of profits “on grounds of breach of duty including intentional interference with the Plaintiff’s commercial interests; conversion; and/or misrepresentation…” [para. 3].

7. The plaintiff contends that it spent “approximately three years” developing a “blockchain solution” known as 1DLT. It is alleged that the defendant founded and/or promoted the incorporation of RunTime Machines AG (‘RunTime’) in Switzerland, and that he copied the plaintiff’s technology and used it for the development by RunTime of a rival product called Wowen. It is further claimed that the defendant reneged on a commitment to provide further funding to the plaintiff to develop 1DLT, and solicited members of the plaintiff’s research and development team to join RunTime.

8. The plaintiff contends that it has suffered a “near total loss in value of its undertaking and enterprise value of the business” [para. 36] due to the actions of the defendant, which the WPSATC letter quantifies at €106,666,667.

9. These claims are strenuously opposed by the defendant, who contends that he did not invest in the plaintiff or enter into any shareholders’ agreement in his personal capacity at any stage and did not represent that he would fund the plaintiff company. He denies in the defence that he copied the 1DLT code or that he solicited the employees of the plaintiff to work for RunTime. The defendant admits that he represented that RunTime was a consulting company, provided research and development services and was engaged in the development of Wowen [para. 40, defence], and that RunTime subsequently “went into liquidation” [para. 47]. All claims by the plaintiff of damage or loss are denied by the defendant.

10. The pleadings in the matter are closed and motions for discovery are pending before the court.

The Correspondence

11. The letters which form a sequence, and which the defendant seeks to have admitted into evidence, are set out in the appendix as follows:

APPENDIX

1. Letter from Ogier to Arthur Cox 24 October 2024

2. Letter from Arthur Cox to Ogier 8 November 2024

3. Letter from Ogier to Arthur Cox 12 November 2024

4. Letter from Arthur Cox to Ogier 26 November 2024

5. Letter from Ogier to Arthur Cox 6 December 2024

6. Letter from Arthur Cox to Ogier 20 December 2024

7. Letter from Ogier to Arthur Cox 13 January 2025

12. Before examining each of the letters in the sequence, it is instructive to examine the correspondence between Ogier and Arthur Cox prior to the commencement of the sequence.

13. By letter of 18 October 2024, Ogier wrote to Arthur Cox in the following terms: “…At the close of pleadings, and at the outset of the parties’ discovery processes, our client now invites yours to consider mediation as a means of attempting to resolve the dispute the subject of the within proceedings.

We note that your client has previously complained about our client’s decision to issue these proceedings without first entering into a mediation process. Our client maintains that your client had refused to engage meaningfully with the substance of the Letter Before Action, and that it was fully justified in issuing proceedings. In any case, the pleadings will undoubtedly have served to focus the parties on the issues in dispute, which now provides conditions suitable for a productive mediation process. Furthermore, we understand proceedings are now underway in at least one other jurisdiction which relate to the subject matter of this dispute.

If your client is agreeable to enter into a process of mediation, please confirm by return and we will revert with the names of three proposed mediators. In default of any or any satisfactory response, we reserve our client’s rights to apply to the High Court pursuant to section 16 of the Mediation Act 2017 and/or to later rely on this letter to support or resist an application for costs” [Emphasis added].

14. Arthur Cox on behalf of the defendant responded to this letter on 23 October 2024. It was pointed out that the parties were due to exchange discovery shortly, and that the plaintiff “confirmed as far back as May 2024 that it had commenced the process of preparing for discovery”. The letter went on to state as follows: “In light of the above, and where our client’s focus is now on vindicating his position, good name and reputation in light of the very serious allegations which the Plaintiff saw fit to make against him, he does not wish to engage in mediation and is progressing the case in accordance with the Court’s directions”.

15. The net position of the parties after this exchange of correspondence was that the plaintiff had made an overture concerning mediation, which the defendant had firmly rejected. It is against this background that the correspondence in the Appendix requires to be assessed. The WPSATC Letter (24 October 2024)

16. Ogier replied to Arthur Cox’s letter of 23 October 2024 by a letter of the following day, which was headed “WITHOUT PREJUDICE SAVE AS TO COSTS”. The letter is five pages long. It begins by referring to the exchange of correspondence which had just taken place between the respective solicitors, and states as follows: “On 18 October 2024, we wrote on an open basis encouraging your client to consider mediation at this point in the proceedings. On 23 October 2024, you wrote to explain that your client does not wish to engage in mediation and was focused “now on vindicating his position, good name and reputation”. This letter is written strictly without prejudice save as to costs, in order to urge your client to do precisely that.

Upon review of the contents of this letter, and having regard to your client’s concerns regarding his reputation and good name, your client might well see fit to take steps to compensate our client for the breach of the Shareholders’ Agreement in the interest of resolving this matter appropriately…in this letter, our client frequently takes your client’s pleaded case at its maximum height. Wherever that is done, it is done without prejudice to our client’s pleaded case, and is done only to highlight the inescapable reality that your client ought to take steps to compensate our client in respect of his breach of the Shareholder’s Agreement”.

17. The defendant lays considerable emphasis on these excerpts. He considers that they make clear that the purpose of the letter is to cause the defendant to consider that he has no alternative, “upon review of the contents of this letter”, but to make an offer of compensation to the plaintiff, with an implicit threat that a failure to do so will gravely damage his “position, good name and reputation”. The defendant in his submissions draws attention to the repeated reference to “compensation” in this regard.

18. The letter proceeds with a section under the heading “Our client’s claim”, and then a section entitled “Your client’s Defence” in which the plaintiff’s solicitors set out their position in relation to those topics. There is then a section entitled “Directions Timetable” in which it is alleged that the defendant has made a number of attempts to delay the proceedings which have been unsuccessful, and that “[o]ur client hopes that your client might now apply the appropriate level of focus on the substantive matters at play in these proceedings, and seek to deal with them appropriately.”

19. There follows a heading “Loss and Damage”, in which it is stated that the plaintiff “is still quantifying the full extent of the loss and damage caused by the Defendant’s actions…”. This section goes on to state however that “…our client is firmly of the view that the Defendant’s actions have caused the near total loss of the Plaintiff’s undertaking and enterprise value which on the basis of the investment that the Defendant himself negotiated in November 2021, was €106,666,667…Without prejudice to our client’s pleaded position, which is that your client invested at a valuation of €106,666,667, even on your client’s own re-telling, he must have at least valued the Company at €67,000,000 at a certain point in time…”.

20. The final substantive section of the letter – before the “Conclusion” section – is entitled “Criminal proceedings in Switzerland”. This section is central to the present dispute between the parties, and I quote this section in full, save that I shall redact some names to which reference is made in the section which are linked in the letter to criminal proceedings in Switzerland:

“Criminal proceedings in Switzerland

Your client should also be aware of the implications for him of his relationship with former members of the Company’s R&D team, including but not limited to ER and SD, in light of ongoing criminal proceedings against those individuals in Switzerland relating to various alleged criminal offences perpetrated against QPQ group entities.

The Zurich District Attorney has evaluated at least three criminal complaints against Mr R and Mr D (and are [sic] also considering whether other persons and/or legal entities are involved) and authorised the Swiss Police to progress investigations into the complaints relating to theft of QPQ intellectual property and other alleged criminal offenses. The investigation of these crimes requires considerable resources for the law enforcement authorities, given the complexity of the underlying technology and know-how required. In an environment where white-collar crime is not a hot-button political issue, the prioritisation of these investigations, in and of itself, [is] quite telling.

Most recently, on Wednesday 2 October 2024, we understand that the Swiss police conducted searches of the house of Mr D and another at a conference where Mr D and Mr R were scheduled to appear. The Swiss police have confirmed that the searches resulted in seizure of computers, phones and hardcopy materials relevant to their investigations.

Furthermore, following RunTime’s failure, Messrs. D and R, along with other associates of your client, Messrs RI, B, O and T, apparently continue to exploit misappropriated IP of the Company through their new venture Provably Technologies Ltd (incorporated in England and Wales), thereby continuing the wrong against the Plaintiff which was commenced by your client’s actions.

It may be prudent for your client to now look to limit the potential reputational damage that will result from having his dealings with these individuals, which relate directly to QPQ intellectual property, poured [sic] over in open court. This is a matter which has already generated press coverage based solely upon the relatively dull motion for entry into the Commercial List. Our client suggests your client ought to consider his position to these matters holistically and seek to engage with our client on a proposal to deal with the Proceedings and the Swiss criminal complaints, which may potentially have an upside for both parties” [Emphasis added].

21. In the “Conclusion” to the letter, the plaintiff’s solicitors invited the defendant’s solicitors “…to confirm, by return, that your client will engage meaningfully on the quantification of compensation due to ours arising from your clients’ [sic] breach of the Shareholders’ Agreement in order to resolve this matter in an appropriate manner.” Letter - Arthur Cox to Ogier (8 November 2024)

22. The defendant’s solicitors’ reply firstly takes issue with the WPSATC letter being written on a “without prejudice save as to costs” basis. It is pointed out that that letter “does not contain any offer of settlement and therefore does not have “without prejudice save as to costs” status, within the meaning of Order 99(3) or otherwise. In any event, even if your letter had such status, this status has been lost for the reasons outlined below.”

23. The letter refers to the “extensive references” in the WPSATC letter to the “criminal investigation in Switzerland against individuals who are former members of [the plaintiff’s] R&D team, which investigation it appears was commenced on foot of complaints made by your client or parties connected with your client.” The letter refers to the reference in the WPSATC letter to the exhortation that the plaintiff should “now look to limit the potential reputational damage that will result from having [the defendant’s] dealings with these individuals…poured [sic] over in open court…”. The letter goes on then to state as follows:

“Most strikingly of all, your client goes on to suggest that our client “ought…to engage with [y]our client on a proposal to deal with the Proceedings and the Swiss criminal complaints, which may potentially have an upside for both parties.” [emphasis added in 8 November 2024 letter]. In short, your client seeks to solicit a payment from our client which would not just resolve the Proceedings but would also “deal with” a criminal investigation which was instigated by your client against certain other individuals, but which apparently could be expanded to target “other persons and/or legal entities”. The unambiguous impropriety of your client’s actions hardly needs to be spelled out and it is abundantly clear that any without prejudice status that may have applied to your letter has been lost. To the extent that your client had hoped that the contents of your letter would pressure our client into making a settlement proposal, it has had no such effect. On the contrary, the contents of your letter have only served to highlight your client’s true motivation in choosing to bring the Proceedings and to strengthen our client’s resolve to fully vindicate his position and to hold all those connected with the Plaintiff including those funding this litigation fully to account. In so doing, our client will rely on the contents of your letter…”. Letter - Ogier to Arthur Cox (12 November 2024)

24. Ogier replied by letter of 12 November 2024 to the letter from Arthur Cox of 8 November 2024. The Ogier letter disputed that the WPSATC letter had lost its “without prejudice status”, stating that it was a “bona fide attempt to invite or engage in settlement discussions with the express intention that the communication would not be disclosed save in respect of the issue of costs”. The letter referred to Order 99(3) of the Rules of the Superior Courts and section 169 of the Legal Services Regulation Act 2015 (‘the 2015 Act’), contending that neither of these provisions prevented the legitimate use of the phrase “without prejudice save as to costs” in the current circumstances.

25. Under the heading “Criminal Proceedings in Switzerland”, Ogier responded to the allegations made in the Arthur Cox letter of 8 November 2024: “To be clear, the passages quoted in your letter were in no way intended to suggest the criminal proceedings could be “resolved” by a “payment” by your client. Swiss criminal proceedings, regardless of the original complainant, are not within the gift or control of any private entity once the relevant public authorities have proceeded with the investigation. There is nothing our client could offer vis-a-vis “resolving” the Swiss criminal proceedings, and our client never would offer to do so improperly. The intention of the WPSATC Letter, in light of the within proceedings and the advanced status of the criminal investigations into his former associates, was to encourage your client to now take steps to co-operate and to mitigate the damage caused by him by engaging on a commercial resolution to these Proceedings, which concern his dealings with the same individuals in respect of at least partially common subject matter. That suggestion is in no way improper, let alone “unambiguously improper” such as to have the effect of eroding the without prejudice privilege in the correspondence… …The fundamental point of the WPSATC letter was to explain that our client is open to a mutually beneficial commercial resolution to the Proceedings, even where such an agreement might potentially have an upside for your client. That, again, was not to suggest our client could in any way intercede in respect of the Swiss criminal proceedings as a result of any agreement that could have been reached. All of the above would have, in any case, become clear had your client engaged in such discussions…”. Letter – Arthur Cox to Ogier (26 November 2024)

26. In its letter of reply of 26 November 2024 to the Ogier letter of 12 November 2024, Arthur Cox took further issue with the use of “without prejudice save as to costs”, contending that the WPSATC letter was “not a settlement offer that the Court should take into account in considering the issue of costs at the appropriate time.”

27. In relation to the alleged “unambiguous impropriety” of the WPSATC letter, Arthur Cox drew attention to the “clear statement” made in that letter that “…[o]ur client suggests your client ought to consider his position to these matters holistically and seek to engage with our client on a proposal to deal with the Proceedings and the Swiss criminal complaints, which may potentially have an upside for both parties” [Emphasis added by Arthur Cox in letter]. Arthur Cox went on to state as follows: “The import of this statement remains clear on its face: your client sought to solicit a payment from our client which would not only resolve the Proceedings but also an apparent Swiss criminal investigation into individuals other than our client. The unambiguous impropriety of your client’s conduct is clear and none of the various assertions and denials in your letter of 12 November address or provide any explanation for the above statement.” Letter – Ogier to Arthur Cox (6 December 2024)

28. Ogier replied to the Arthur Cox letter of 26 November 2024 by letter of 6 December 2024. As with all Ogier letters in the sequence, the letter was headed “Without Prejudice Save as to Costs”. The letter took issue with the interpretation of the paragraph quoted at para. 27 above, relying on the explanation of the meaning of this statement in “our previous letter”, i.e., that of 12 November 2024. Ogier commented that “…it appears that your client is seeking to deliberately misconstrue the intention and import of the WPSATC letter…”.

29. Under the heading “Unambiguous Impropriety”, Ogier stated as follows: “The relevant case law establishes that without prejudice privilege will only be lost where the stringent test of “unambiguous impropriety” is made out. It appears that exception has never been successfully invoked in a reported case in Ireland. The latest English law position (in the UK Court of Appeal decision in Motorola v Hytera [2021] EWCA Civ 11) is that where there is a “credible dispute over what was said (or what was meant by what was said)” in without prejudice communications, a court cannot be satisfied that there has been “unambiguous impropriety”.”

30. The letter went on to say that the WPSATC letter “was never intended to be read by your client as an improper solicitation of any sort … [t]he very fact that your client has apparently interpreted the above-quoted statement to have a different meaning to the intended meaning (which was further clarified on 12 November 2024) proves it was not “unambiguous” as per the test in Motorola”. Letter – Arthur Cox to Ogier (20 December 2024)

31. On 20 December 2024, Arthur Cox, in a three-page letter, set out what it considered to be the legal position regarding whether or not there was an “unambiguous impropriety” in the WPSATC letter. It reiterated that, to the extent that the letter suggested that the defendant “ought to consider his position to these matters holistically and seek to engage with our client on a proposal to deal with the Proceedings and the Swiss criminal complaints, which may potentially have an upside for both parties…”, the “impropriety of this statement remains clear on its face” on a “reading of the plain English meaning” of this excerpt.

32. It was contended by Arthur Cox that the contention by Ogier in the letter of 12 November 2024 that “…there is nothing our client could offer vis-a-vis “resolving” the Swiss criminal proceedings” was incorrect “as a complainant can take steps to seek to have Swiss criminal proceedings expanded in scope or, alternatively, to have the proceedings discontinued…”. In a paragraph which expresses the defendants’ net position in relation to the present application, Arthur Cox stated as follows: “It appears to our client that, on any objective view, the above sentence in your letter of 24 October 2024 can only be interpreted as a solicitation for a settlement payment with a view to bringing the Swiss criminal investigation to an end. In the circumstances, our client can only conclude that your client initiated a Swiss criminal investigation nearly one year ago (as it has acknowledged doing) as part of a broader litigation strategy aimed at exerting pressure on our client to obtain a settlement payment. It appears that the improper proposal set out in your 24 October 2024 letter was the attempted culmination of that strategy.”

33. The letter went on to offer its comments on Motorola v. Hytera, contending that the meaning of the words used in the WPSATC letter was “quite clear”. It then referred to the decision in Ferster v. Ferster [2016] EWCA Civ 717 as being of more relevance; it was contended that, in that case, the Court of Appeal of England and Wales “upheld a finding of unambiguous impropriety in respect of an email sent in a mediation which included a threat of a separate criminal action against an individual with the aim of obtaining an increased payment for shares which were the subject of a civil dispute.”

Letter - Ogier to Arthur Cox (13 January 2025)

34. Ogier replied on 13 January 2025, the letter once again bearing the legend “Without Prejudice Save as to Costs”. This letter is five pages long, and deals in particular with the relationship of the quoted text of the WPSATC letter to the criminal proceedings in Switzerland, and the issue of “unambiguous impropriety”. It reiterates explanations given in previous letters from Ogier, and in particular takes issue with the suggestion that the alleged impropriety “remains clear on its face”. The letter then goes on to say: “We consider your client’s interpretation of the Quoted Text to be wrong. That being said our client accepts alternative phrasing may have precluded such a misinterpretation. In any case we consider that the matter was fully addressed and clarified in our letter of 12 November 2024 (quoted above). Even on the basis of your interpretation, it is far from an “unambiguously improper” offer …”.

35. The letter goes on to address the decision of the District Attorney in Zürich to authorise the Swiss Police to progress investigations in the criminal complaint, and states that “…[p]utting your client on notice of those developments is not remotely improper given [the defendant’s] association with the individuals and the Plaintiff’s position that those wrongs were commenced and/or facilitated by your client’s actions”. The letter then states as follows: “On one interpretation of events which was generous to your client, it was possible that he was unaware of the full extent of the damage visited upon the Plaintiff by these individuals (and their ongoing activities through Provably Technologies Ltd.) or the progress of the criminal investigations. In those circumstances, your client may have reconsidered the matters which led to the Proceedings. Your client may well have also seen an opportunity to mitigate the damage to our client within the context of these Proceedings. Such steps would have been welcomed and would have been entirely proper. For the avoidance of all doubt, the Swiss criminal proceedings were commenced for the purpose of holding to account those individuals for the theft of intellectual property from the Plaintiff (and/or related companies). Those actions continue, quite apart from any dispute between your client and the Plaintiff.”

36. The letter states that “[a]t no point was your client asked to “make” any proposal or was any proposal made by our client. At most, your client was asked to engage with ours…”. In a significant paragraph that encapsulates the plaintiff’s position, the letter stated as follows: “The WPSATC letter (and Quoted Text) constituted no more than an invitation for your client to consider inter alia the latest developments in the Swiss criminal proceedings (and his own involvement with the parties to that criminal action) and to engage with the Plaintiff on a resolution to these Proceedings. Such a resolution may have had the additional benefit to your client of avoiding negative implications arising from his involvement with the individuals subject to the advancing Swiss criminal proceedings, which your client may not have been aware of prior to the WPSATC Letter. It required a very particular misinterpretation of one sentence (centring apparently on the phrase “deal with”) to be read as a solicitation for payment in return for the resolution of separate Swiss criminal proceedings. It was certainly not an “unambiguously improper” offer, as explained in full below.”

37. Under a section entitled “Unambiguous Impropriety” the letter takes issue with the applicability of the decision in Ferster v. Ferster; it is contended that the text from the WPSATC letter quoted at para. 27 above “is not remotely comparable to the impugned communication in that case”.

38. In the “Conclusion” section, Ogier states as follows: “The fundamental point of the WPSATC letter was to explain on a without prejudice basis that our client was open to a commercial resolution to the Proceedings, which our client considered would be sensible for the parties, for reasons which were set out in great detail and which go far beyond the existence of the Swiss criminal proceedings…[Y]our client is perfectly entitled to rebuff our client’s invitation to explore without prejudice talks. However, he is absolutely not entitled to take an unrealistic and dubious interpretation of the Quoted Text and base serious allegations of impropriety against our client upon that interpretation.”

Affidavit Evidence

39. The present application is grounded upon a 24-page affidavit from Mr. Schute, which sets out at length the background to the matter and analyses in detail the sequence of correspondence at issue. He points out, that in response to queries raised by McDonald J. at the hearing of the application for entry into the commercial list, two further affidavits were filed in support of that application. These were the second affidavit of Gregory Chew and the affidavit of Benno K. Raeber, both sworn on 11 April 2024. Mr. Chew is a director of the plaintiff. Mr. Raeber is a Swiss lawyer and chief legal officer of QPQ AG, which he states is the majority shareholder of the plaintiff.

40. As the defendant points out, Mr. Chew’s affidavit points out at para. 8 that “[c]riminal proceedings in Switzerland can be privately prosecuted”. Mr. Raeber confirms at para.8 of his affidavit that, in assessing its options regarding the alleged similarities between the 1DLT product and Wowen, “…QPQ AG on its behalf and on behalf of the Plaintiff began considering legal options available to it to protect its position, including Swiss civil and criminal law avenues.” He goes on to state that “[o]n 9 November 2023, work commenced on Swiss criminal complaints and on 19 December 2023, a complaint was filed against former employees of [the] Plaintiff and QPG AG and parties associated with RunTime who were not the Defendant…” [para. 15]. The defendant points out that Mr. Raeber averred that it was envisaged that the Swiss litigation would assist with the relevant Irish litigation: “16. I say that throughout Q4 2023, the efforts to pursue avenues under Swiss criminal law served an additional purpose of helping the Plaintiff identify information about the wrongdoers, which would aid litigation in Ireland. Details about ownership and management of Swiss companies are not publicly available as they would be in Ireland, consequently the pursuit of criminal complaints has been advised by Swiss litigation counsel.”

41. Mr. Schute avers at para. 112 of his affidavit that he “felt personally threatened by the discussion [in the WPSATC letter] relating to the Swiss Criminal Proceedings”, and that the terms of that letter were “specifically designed to threaten and intimidate me insofar as the Swiss Criminal Proceedings are concerned…”. He goes on to aver as follows: “114. I found the 24 October Letter to be distressing on a personal level. In my view, the letter starkly indicated that unless I make an acceptable payment, the Plaintiff will do everything in its power to assist in or support the prosecution of the Swiss Criminal Proceedings and possibly to engineer the expansion of those proceedings to include a criminal complaint against me.

115. I believe that the Plaintiff’s menacing attempt to intimidate me into making such a payment in light of the spectre of the Swiss Criminal Proceedings was part of a broader litigation strategy aimed at exerting maximum pressure on me. It is evident that this strategy was devised several months before these Proceedings were instituted, as reflected in Mr Chew’s Second Affidavit and Mr Raeber’s affidavit which are addressed above. One can easily infer that this strategy is centred around the fact that the Plaintiff and the people behind it are acutely aware that I am a high net worth individual and presumably have access to far greater funds as compared to the former members of the Plaintiff’s technology team, including those individuals against whom complaints are made in the Swiss Criminal Proceedings.”

Dr. Bazzani’s Affidavit

42. Dr. Bazzani swore his affidavit on 25 March 2025. He was requested to give an expert opinion on Swiss law in relation to a number of queries regarding the conduct of the Swiss criminal proceedings, and in particular, the extent to which a complainant might participate in or influence those proceedings.

43. In a comprehensive report exhibited to his affidavit, Dr. Bazzani confirmed inter alia, a number of matters, including the following: “11. Provided that criminal complainants constitute themselves as a private claimant, they obtain party status, allowing them to actively participate in the criminal proceedings, including accessing the case file…criminal complainants may use any information or documentation accessed, for example, in civil proceedings…

12. Criminal complainants may substantially influence the course of criminal proceedings, including the expansion or discontinuation of such proceedings…

14. Criminal complainants may achieve the discontinuation or stay of an ongoing criminal investigation in several ways, including (i) by withdrawing their complaint (in the case of offences prosecuted upon complaint…), and (ii)

by submitting a statement or declaration of disinterest…

15. …the Plaintiff and/or QPQ AG may persuade the Zurich District Attorney to broaden the scope of the criminal proceedings to target additional individuals or entities, or to prosecute further offences, by filing supplementary criminal complaints or criminal reports, or by submitting new information or documentation.

16. On the other hand, as described above at para. 14, the Plaintiff and/or QPQ AG may prompt the Zurich District Attorney to discontinue the proceedings by withdrawing their criminal complaint (in the case of offences prosecuted upon complaint) or by submitting a statement or declaration of disinterest (in the case of offences prosecuted ex officio)…

18. In the case of offences prosecuted ex officio, a statement or declaration of disinterest confirms that the injured person is no longer interested in the criminal prosecution of the accused person. This statement or declaration indicates that the conditions to terminate the criminal proceedings (e.g., no need for penalty, reparation made by the offender) are met. Particularly in two-party offences (such as the betrayal of manufacturing or trade secrets), the criminal authorities are generally inclined to discontinue the proceedings based on considerations of opportunity (such as the avoidance of cost and effort, and the possibility of reallocating resources to cases where the injured party insists on the continuation of the criminal proceedings; see below at para. 170 et seq.) when a statement or declaration of disinterest has been submitted by the injured person.”

44. No expert evidence as to Swiss law was proffered on behalf of the plaintiff.

Mr. Fenelon

45. Mr. Fenelon swore an affidavit on 23 April 2025 on behalf of the plaintiff by way of reply. As I have noted, Mr. Fenelon was not the author of the Ogier letters, and is constrained in his affidavit to offer justification for letters he did not write. Mr. Fenelon accepts that the comments by Dr. Bazzani at para. 18 of his report as set out above “are basically correct”, and goes on to aver that “…[i]t is the accepted position of the Plaintiff that a private claimant in Switzerland may exert influence in open criminal proceedings but that this falls far short of any notion that they can “exert control” over the course of Swiss criminal proceedings…” [para. 19]. Mr. Fenelon however goes on to offer some interpretations of Swiss law for which he offers no evidence, and which are accordingly inadmissible.

46. Mr. Schute swore a replying affidavit of 9 May 2025, with Mr. Fenelon swearing a further brief affidavit on 10 June 2025. Neither affidavit added much to the debate concerning the central issue. Both sides proffered written submissions at the hearing, and accepted that the resolution of the issue as to whether the without prejudice protection should be lifted was a matter for legal submissions, and ultimately the court’s decision, rather than for evidence.

Legal Principles

47. At the hearing, the parties argued for their respective interpretations much as they had in the correspondence set out above. Before considering these different perspectives, it is appropriate to say something about the law governing the without prejudice designation.

48. In Ryan v. Connolly [2001] 1 IR 627, the Supreme Court looked at the rationale underpinning without prejudice communications, and the circumstances in which a court might be entitled to examine such correspondence and take it into account.

49. In that case, the plaintiff instituted proceedings seeking damages for personal injuries against the defendants more than three years after the date of the accident in question. The defendants pleaded inter alia that the proceedings were statute-barred pursuant to the Statute of Limitations 1957 (as amended). The plaintiff claimed in reply that the defendants’ conduct and representations had induced the plaintiff to refrain from issuing proceedings within the limitation period and that the defendants were estopped from raising the plea. The plaintiff sought to rely in this regard on statements made by the defendants in without prejudice correspondence exchanged between the parties.

50. Keane C.J., delivering the judgment of the Supreme Court, stated as follows: “…[T]he law is thus stated in Halsbury's Laws of England (4th ed., vol. 17, para. 212):- “Letters written and oral communications made during a dispute between the parties, which are written or made for the purpose of settling the dispute and which are expressed or otherwise proved to have been made ‘without prejudice’ cannot generally be admitted in evidence.” It is clear that this rule has evolved because it is in the public interest that parties should be encouraged, so far as possible, to settle their disputes without resort to litigation. If parties were in the position that anything they said or wrote in the course of negotiations, even when expressly stated to be “without prejudice” could subsequently be used against them, they would undoubtedly be seriously inhibited in pursuing such negotiations. That is how the rule was explained in Cutts v. Head [1984] 1 Ch. 290, and it is clear from that and other authorities that the presence of the heading “without prejudice” does not automatically render the document privileged. In any case where the privilege is claimed but challenged, the court is entitled to look at the document in order to determine whether it is of such a nature as to attract privilege” [at p.631].

51. Keane C.J. went on to say as follows: “The rule, however, although firmly based on considerations of public policy, should not be applied in so inflexible a manner as to produce injustice. Thus, where a party invites the court to look at “without prejudice” correspondence, not for the purpose of holding his opponent to admissions made in the course of negotiations, but simply in order to demonstrate why a particular course had been taken, the public policy considerations may not be relevant. It would be unthinkable that the attachment of the “without prejudice” label to a letter which expressly and unequivocally stated that no point under the Statute of Limitations would be taken if the initiation of proceedings was deferred pending negotiations, would oblige a court to decide, if the issue arose, that no action of the defendant had induced the plaintiff to refrain from issuing proceedings.”

52. In the present case, the plaintiff does not argue that the court is not entitled to examine the without prejudice correspondence, but argues that it does not bear the interpretation for which the defendant contends.

53. In Rush & Tompkins Ltd. v. Greater London Council [1989] A.C. 1280, the House of Lords acknowledged the rationale for the without prejudice rule as set out in Cutts v. Head, but commented that “…the rule is not absolute and resort may be had to the “without prejudice” material for a variety of reasons when the justice of the case requires it…the underlying purpose of the rule…is to protect a litigant from being embarrassed by any admission made purely in an attempt to achieve a settlement…” [p.1300, B - D]. In Forster v. Friedland (Unreported, Court of Appeal, Civil Division, 10 November 1992), Hoffman L.J., in discussing instances where the without prejudice rule might be set aside, referred to two cases in which the without prejudice correspondence in question involved blackmail, stating that these were “clear cases of improper threats, but the value of the without prejudice rule would be seriously impaired if its protection could be removed from anything less than unambiguous impropriety…”.

54. The issue of exceptions to the without prejudice rule arose for consideration by the Court of Appeal of England and Wales in Unilever PLC v. The Procter & Gamble Co. [2000] 1 W.L.R. 2436. Having conducted a thorough review of the law and the necessity for the rule, Robert Walker L.J. in his judgment on behalf of the court stated that “…[w]ithout in any way underestimating the need for proper analysis of the rule, I have no doubt that busy practitioners are acting prudently in making the general working assumption that the rule, if not “sacred” (Hoghton v Hoghton (1852)

15 Beav. 278, 321), has a wide and compelling effect. That is particularly true where the “without prejudice” communications in question consist not of letters or other written documents but of wide-ranging unscripted discussions during a meeting which may have lasted several hours” [p.2443-4, H-A].

55. The court went on to comment that “…[n]evertheless, there are numerous occasions on which, despite the existence of without prejudice negotiations, the without prejudice rule does not prevent the admission into evidence of what one or both of the parties said or wrote…”, and went on to give some examples, in particular the following: “(4) Apart from any concluded contract or estoppel, one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other “unambiguous impropriety”…But this Court has, in Forster v. Friedland…warned that the exception should be applied only in the clearest cases of abuse of a privileged occasion…”.

56. The concept of “unambiguous impropriety” was central to the judgment of the Court of Appeal in Ferster v. Ferster [2016] EWCA Civ. 717. That case involved a dispute between three brothers in relation to a family company. Two brothers, Stuart and Warren Ferster, instigated proceedings against a number of defendants including their brother Jonathan Ferster for, amongst other things, breach of fiduciary duty in the management of a company, Interactive Technology Corporation Limited (‘ITC’). Jonathan initiated proceedings pursuant to section 994 of the Companies Act 2006, which provides that the court can grant relief in favour of a member of a company where there is unfair prejudice, in that the manner in which the affairs of the company are being conducted is unfairly prejudicial to the interests of the members or some of them, including the petitioner. During mediation, Stuart and Warren had offered to sell their shares in the company to Jonathan for a specified sum. No agreement was reached at the mediation, but the mediator, who stayed in touch with the parties, passed on a communication to her from Stuart and Warren which withdrew an offer to sell shares to Jonathan at a specified sum and increased the sum sought for Jonathan to acquire their shares on the basis of an allegation that Jonathan would face charges of perjury, perverting the course of justice, and contempt of court, and that he was likely to be imprisoned, with his credibility and reputation destroyed.

57. Jonathan applied to amend his petition under section 994 of the Companies Act 2006 so as to refer to the contents of the email; the proposed amendment alleged that Stuart and Warren “sought to extort a ransom price from Jonathan for their shares in ITC by making improper and unwarranted threats to cause the company to commit him for contempt and cause criminal proceedings to be brought against him unless he agreed to purchase their shares at an inflated price” [para. 5, judgment]. As the email was sent in the context of a mediation, it would normally have been the subject of without prejudice privilege; the High Court held however that the contents of the email showed that it fell within the “unambiguous impropriety” exception to that privilege, and thus was available for use in the petition.

58. Stuart and Warren appealed the decision of the High Court to the Court of Appeal. In the event, the appeal was dismissed. The court (Floyd L.J.) stated that “…the critical question is whether the privileged occasion is itself abused. Although the test remains that of unambiguous impropriety, it may be easier to show that there is unambiguous impropriety where there is an improper threat than where there is simply an unambiguous admission of the truth…” [para. 11].

59. The court referred to the trial judge’s finding that

“this was an attempt at blackmail which falls firmly within the exception and … the email is admissible. The applicant is not trying to bring into evidence any discussions that genuinely took place in the mediation…[t]he impropriety consists, in my judgment, in threatening to pursue contempt proceedings, including a committal to prison, unless Jonathan pays the brothers a much higher price for the two-thirds share, an extra 25%, I am told, on the price previously considered…there is no lack of clarity in what is being said. This is not an instance where a party is trying to pick up exaggerated or colourful verbal statements made during a long, heated meeting between lay clients. This email appears to have been drafted by lawyers and is forwarded to Herbert Smith by the mediator. There is no ambiguity in the purpose of the threat, namely to pressure Jonathan to pay more for their shares…” [paras. 17-

18 of High Court judgment; para. 12 of Court of Appeal judgment].

60. The Court of Appeal went on to say as follows: “23….I agree with the [trial] judge that the threats here did unambiguously exceed what was proper, essentially for the reasons she gave. Firstly, the threats went far beyond what was reasonable in pursuit of civil proceedings, by making the threat of criminal action, (not limited to civil contempt proceedings). Secondly, the threats were said to have serious implications for Jonathan’s family because of Jonathan’s wrongdoings. Thirdly, the threats were of immediate publicity being given to the allegations. It is nothing to the point in this connection that Warren and Stuart may have believed the allegations to be true. The threat to publicise allegations of extreme severity against Jonathan and his partner, and within such a short timescale, placed quite improper pressure on Jonathan. Fourthly, the purpose of the threats was to obtain for the brothers an immediate financial advantage arising out of circumstances which should accrue, if they had basis in fact, to the benefit of the company. Finally, there was no attempt to make any connection between the alleged wrong and the increased demand.”

61. The court concluded by commenting that

“27. The judge decided the case on the basis that Stuart and Warren had some basis for their threats. She declined an invitation from counsel for Jonathan to come to a view that in fact they had no basis, relying on the fact that no threat was subsequently carried out, and the fact that Jonathan had unequivocally stated that no such bank accounts existed. Although we were pressed by Mr Butcher QC for Jonathan to revisit this issue on the basis of a respondent's notice, I have not found it necessary to do so. As the judge said, the impropriety arises from the nature of the threats themselves.”

62. In the present case, the plaintiff does not disagree that the test is whether or not the communication was “unambiguously improper”. The plaintiff relies on the

decision of the High Court of England and Wales in Ocean on Land Technology (UK) Ltd v Richard Land & Ors. [2024] EWHC 396 (IPEC) at para. 122 in which Deputy Judge Treacy, in dealing with the issue of “unambiguous impropriety”, stated as follows: “To recap, to fall within the exception, it is necessary to show that the without prejudice rule is being used to cloak wholly improper conduct and the possibility of perjury will not suffice. Conduct or statements which do not go beyond the bounds of what is to be expected in negotiation will not fall within the scope of the exception.”

63. The plaintiff also refers to the decision of the High Court of England and Wales in Morris v. Williams [2025] EWHC 218 (KB), a decision of District Judge Dodsworth, in which a claimant conceded in a Calderbank letter that he would admit that he “was fundamentally dishonest in respect of some of the representations made in respect of his claim….” The court held that the claimant was not entitled to rely on the letter having been sent “Without Prejudice – Save as to costs”, as the letter was “a clear admission of fundamental dishonesty on the part of the Claimant. That goes well beyond, say, an acceptance that the Claimant has over-egged his injuries, or their effects on his day to day activities, or a concession that some aspects of his case may be difficult to prove. All of those might be things said in usual exchanges in the context of without prejudice negotiations and which would fall to be protected by the without prejudice rule as they do not demonstrate unambiguous impropriety. Here the line has been crossed…” [para. 21].

The Positions of the Parties

64. I do not propose to say much about the submissions of the parties, for two reasons. Firstly, both sides rehearsed their respective positions in the correspondence to which I have made extensive reference above, including references to the relevant caselaw to which I have alluded. Secondly, there is no significant disagreement between the parties as to the legal principles to be applied.

65. Both parties accept that the appropriate test is whether or not the communication which would otherwise attract without prejudice protection is unambiguously improper. As the court put it in Ferster v. Ferster, “…what is involved here is an evaluation of whether the threats unambiguously exceeded what was “permissible in settlement of hard fought commercial litigation” (Boreh v Republic of Djibouti [2015] EQHC 769 (Comm) at [132] per Flaux J)…” [para 23].

66. Essentially, the defendant argues that the plaintiff “unambiguously exceeded what is permissible in the settlement of hard fought commercial litigation…” [para. 50, written submissions]. The plaintiff contends that … “[w]hat a Defendant is not entitled to do, as is sought here, is to seek to open without prejudice communications in an effort to scandalise the Plaintiff where the correspondence has not clearly crossed the line into impropriety” [para. 20, written submissions]. “Without Prejudice Save as to Costs”

67. The Ogier letter of 24 October 2024 was headed “without prejudice save as to costs”. It is accepted that the letter contained no offer of settlement; as set out above at para. 22, the defendant contended that this fact alone deprived the letter of “without prejudice” protection. The plaintiff rejected this assertion: see para. 24 above.

68. The wording “without prejudice save as to costs” is normally used for the purpose of communicating a Calderbank offer; an offer of settlement which is to remain unseen by the court until the issue of costs is being decided. Section 169(1)(f) of the Legal Services Regulation Act 2015 permits the court, in deciding whether it should depart from the normal rule that costs should follow the event, to take into account “whether a party made an offer to settle the matter the subject of the proceedings, and if so, the date, terms and circumstances of that offer…”. Order 99(3)(2) of the Rules of the Superior Courts provides that, for the purposes of section 169(1)(f), “…an offer to settle includes any offer in writing made without prejudice save as to the issue of costs.”

69. The defendant is correct in suggesting that the “without prejudice save as to costs” designation was inappropriate. However, the policy considerations underpinning the without prejudice rule are clear; as Lord Griffiths said in Rush & Tompkins v. G.L.C., “…[t]he rule applies to exclude all negotiations genuinely aimed at settlement whether oral or in writing from being given in evidence” [p.1299, G]. The plaintiff’s position is that the WPSATC letter was written for the purpose of initiating just such a negotiation; it was the “opening shot” in what the plaintiff hoped would be a fruitful settlement engagement with the defendant.

70. It will often be the case that a party to litigation will wish to “get the ball rolling” in relation to negotiations without making its overture in open correspondence, and such a communication does not lose its without prejudice status just because it does not contain an offer. It appears to be well established in England and Wales that an “opening shot” in a negotiation can be covered by the without prejudice rule: see Thanki, The Law of Privilege (3rd Ed.) (2018) at para. 7.15.

71. The letter of 24 October 2024 should have been simply headed “without prejudice”, rather than “without prejudice save as to costs”. However, I do not consider that the use of the latter description, or the absence of an offer in that letter, of themselves deprive the letter of without prejudice protection. Indeed, though counsel for the defendant did not abandon these points at the hearing, neither were they strongly pursued; the defendant relies primarily on its contention that the WPSATC letter was “unambiguously improper”.

Analysis

72. All of the cases in this area, from Cutts v. Head onwards, emphasise the fact that the without prejudice rule is “founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish” [Lord Griffiths in Rush & Tompkins Ltd. v. G.L.C. at p.1299]. As Oliver L.J. put it in Cutts v. Head at p.306 of his judgment: “That the rule rests, at least in part, upon public policy is clear from many authorities, and the convenient starting point of the inquiry is the nature of the underlying policy. It is that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes, of course, as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should, as it was expressed by Clauson J. in Scott Paper Co. v. Drayton Paper Works Ltd. (1927) 44 R.P.C. 151, 156, be encouraged fully and frankly to put their cards on the table…The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability.”

73. Robert Walker L.J. in Unilever cites the above passage with approval, and goes on to acknowledge that there are occasions where the without prejudice rule “does not prevent the admission into evidence of what one or both of the parties said or wrote…”. He gives as an example of such an occasion “if the exclusion of the evidence would act as a cloak for perjury, blackmail or other “unambiguous impropriety” (the expression used by Hoffman L.J. in Forster v. Friedland…) … [b]ut this Court has, in Forster v. Friedland…warned that the exception should be applied only in the clearest cases of abuse of a privileged occasion” [p.2444, F-H].

74. Both parties accept that the appropriate test in the present case of whether the without prejudice protection should be lifted on the correspondence in question is whether there has been “unambiguous impropriety”. The plaintiff suggests that there was no impropriety in the correspondence, or that if the correspondence is capable of an inference of impropriety, that such an inference is not so clear and unambiguous as to warrant removal of the protection.

75. I accept that “unambiguous impropriety” as set out in the cases to which I have referred is the appropriate test in the present case. However, it is important to bear in mind the necessity to protect the integrity of the without prejudice rule by imposing a strict requirement that the impropriety be clearly established. As Hoffman L.J. put it in Forster v. Friedland, “…[t]he rule is designed to encourage parties to express themselves freely and without inhibition. I think it is quite wrong for the tape recorded words of a layman, who has used colourful or even exaggerated language, to be picked over in order to support an argument that he intends to raise defences which he does not really believe to be true.”

76. The defendant emphasises that the present case does not involve heated or intemperate words spoken in the course of a negotiation. The WPSATC letter was written by the solicitors on record for the plaintiff and is a response to the Arthur Cox letter on behalf of the defendant of the previous day. It is a lengthy letter, which the defendant says must be regarded as carefully considered and written on the instructions of the plaintiff. The references on the letter appear to indicate the involvement in the letter of three persons from Ogier, one of whom was a partner in the firm.

77. In his second affidavit, Mr. Fenelon identifies “the principal author of the without prejudice correspondence”. In its written submissions, the plaintiff states as follows: “11…[I]n the course of [the WPSATC letter], it is accepted that alternative phrasing may have precluded the misinterpretation which has been taken by the Defendant (centring apparently on the phrase “deal with”) as the basis for the assertion that an improper threat had been made to solicit a payment…

12. … the Plaintiff, having parted ways with their former solicitor, is not now in a position to summon in aid the principal author of the correspondence to explain its purpose and intent. Rather curiously, in the circumstances of the case, the principal author, is now a senior associate employed with the Defendant’s current solicitors (although with assurances that he is not involved in the present litigation).”

78. This submission was made, not by way of criticising the “principal author”, but for the purpose of explaining why it fell to Mr. Fenelon, the principal of the plaintiff’s new solicitors, to address by affidavit the contents of correspondence with which he was not involved. The defendant, for his part, submitted that the departure of the “principal author” from Ogier did not necessarily preclude him from being required to give evidence in the matter on behalf of the plaintiff, even if he now worked for the solicitors for the defendant; and that, in any event, the partner from Ogier whose reference was on the letters, and who presumably worked in concert with the “principal author” in relation to the correspondence, could likewise have been requested to address the matter.

79. In oral submissions, counsel for the plaintiff referred to a “rather public falling out between the plaintiff and its former solicitors. Proceedings were issued. They were happily compromised but they caused a measure of delay in these proceedings…”. Counsel went on to suggest, in effect, that in all the circumstances, it was not a practical proposition to obtain affidavits from the authors of the Ogier letters to explain what they meant [transcript p.75, line 27 to p.76, line 13].

80. While I would not rule out the possibility that affidavit evidence from an author of the impugned correspondence might be relevant as to why certain matters were addressed or phrased in a particular way, it seems to me that the court must look at the exchange of correspondence in the light of all relevant surrounding circumstances in order to decide whether an objective inference can be drawn that some significant element of the correspondence is unambiguously improper. If there were room for genuine doubt as to whether an impugned statement is improper, the without prejudice protection must remain in place. However, genuine debate is not created by a post facto rationalisation or subjective explanation of what a statement meant; the court must assess whether the impugned statement or document, viewed from the perspective of the recipient, was objectively improper such that it should not attract without prejudice protection.

81. The difficulty in the present case is that there is no express statement in the WPSATC letter which can clearly, on its own terms and taken in isolation, be characterised as “improper”. In other cases, there was a statement or admission of some intended action or conduct which was clearly improper. In Ferster, the impugned communication “went far beyond what was reasonable in pursuit of civil proceedings, by making the threat of criminal action…the threats were of immediate publicity being given to the allegations….” In Morris v. Williams, the claimant stated that he would “admit that he was fundamentally dishonest in respect of some of the representations made in respect of his claim.” In the present case, the defendant invites the court to infer impropriety from the terms of the WPSATC letter, in essence arguing that the inference is objectively clear and unambiguous; the rationale for this contention is summarised in the letter from Arthur Cox of 8 November 2024 to which reference is made at para. 23 above.

82. The defendant relies particularly on the following matters in support of his allegation of unambiguous impropriety:

• the defendant had by letter of 23 October 2024 firmly rejected the plaintiff’s invitation to mediation;

• the WPSATC letter was written in response to that letter;

• the WPSATC letter repeatedly urged the defendant to make proposals to compensate the plaintiff;

• attention was drawn by the plaintiff in the WPSATC letter to the statement in the letter of 23 October 2024 that the defendant was focussed on “vindicating his position, good name and reputation…”;

• the final substantive section of the WPSATC letter – quoted at para. 20 above – sought to assert that the criminal proceedings in Switzerland against Mr. R and Mr. D would have implications for the defendant and sought to link this matter to the plaintiff’s claim against the defendant;

• reference was made to the Zurich District Attorney evaluating criminal complaints against Mr. R and Mr. D, and “also considering whether other persons and/or legal entities are involved…”, and to the District Attorney having “authorised the Swiss Police to progress investigations into the complaints relating to theft of QPQ Intellectual Property and other alleged criminal offences…”. The defendant contends that these statements “[aim] to convey the seriousness and swift progression of the Swiss Criminal Proceedings” [written submissions, para. 13].

83. The defendant in its written submissions contends that: “15. The update in respect of the progression of the Swiss Criminal Proceedings and the possible expansion of those proceedings to include other persons or entities, in a letter containing a clear request for a financial settlement in separate civil proceedings in this jurisdiction, can only be understood as a means of applying improper and unlawful pressure on the Defendant to make such a financial settlement. (In support of this application the Defendant has obtained evidence from a Swiss law expert, Dr Claudio Bazzani, which inter alia makes clear that a Swiss criminal complainant may substantially influence the course of criminal proceedings, including the expansion and continuation of such proceedings.)

16. This interpretation is put beyond doubt by the following critical paragraph: “It may be prudent for your client to now look to limit the potential reputational damage that will result from having his dealings with these individuals, which relate directly to QPQ Intellectual Property, poured [sic] over in open court. This is a matter which has already generated press coverage based solely upon the relatively dull motion for entry into the Commercial List. Our client suggests your client ought to consider his position to these matters holistically and seek to engage with our client on a proposal to deal with the Proceedings and the Swiss criminal complaints, which may potentially have an upside for both parties.” [(Emphasis in written submissions)].

17. The final sentence above amounts to a direct invitation to the Defendant to make a payment to the Plaintiff in return for which the Plaintiff will bring an end to both the Proceedings and the Swiss Criminal Proceedings. The reference to “deal with” the Proceedings and the Swiss criminal complaints, can have no other possible meaning.”

84. The inference contended for by the defendant centres wholly around the final section of the WPSATC letter under the heading “Criminal proceedings in Switzerland”, and in particular the final part of that section which I have reproduced in italics at para. 20 above. The essence of the defendant’s contention is expressed at para. 20 of the defendant’s written submissions as follows: “The impropriety of this proposal is plain on its face. It seeks to use the threat of existing or expanded foreign criminal proceedings as a means of securing compensation from the Defendant and thereby attempts to abuse the protection afforded by without prejudice privilege to prevent disclosure of what is plainly an improper and menacing proposal.”

85. The plaintiff sets out in some detail in the final section of the WPSATC letter the situation regarding the Swiss criminal proceedings, to which the defendant is not a party. It is confirmed by Mr. Raeber in his affidavit supporting the application for admission to the commercial list – see para. 40 above – that the Swiss criminal proceedings were instigated by the plaintiff, and that those proceedings would assist with the Irish litigation. While some issue was taken by Ogier in the correspondence with the extent to which the plaintiff could influence or participate in the Swiss proceedings, the uncontested evidence of Dr. Bazzani confirms inter alia that criminal complainants obtain party status, and “may substantially influence the course of criminal proceedings, including the expansion or discontinuation of such proceedings…the plaintiff and/or QPQ AG may persuade the Zurich District Attorney to broaden the scope of the criminal proceedings to target additional individuals or entities, or to prosecute further offences…” [see para. 43 above].

86. The final section of the letter intimates that, while the defendant is not a party to the criminal proceedings, the investigations by the Swiss Police, which it is suggested have been prioritised by the District Attorney and which involved “searches [which] resulted in seizure of computers, phones and hardcopy materials relevant to their investigations”, are likely to involve the defendant in, at the very least, “potential reputational damage that will result from [the defendant] having his dealings with these individuals…poured [sic] over in open court…”.

87. A party to litigation is entitled to write to the opposing party without prejudice, and outline the adverse consequences which will ensue for that party if they do not settle the case. However, in the present case, the plaintiff goes further. It suggests that the defendant “ought to consider his position [in relation] to these matters holistically…” – presumably, that the defendant should consider his position not just in relation to the Irish proceedings, but in relation to the Swiss proceedings as well – “…and seek to engage with our client on a proposal to deal with the Proceedings and the Swiss criminal complaints, which may potentially have an upside for both parties.”

88. In my view, the inference which the defendant draws from this letter is unambiguous and unavoidable. The defendant, despite his refusal by letter of the previous day to engage with mediation, is urged to make a proposal to “deal with” the Irish proceedings, and the Swiss criminal proceedings to which he is not a party. The somewhat heavy-handed references to the power of the Swiss Police to expand their investigations or “involve” other persons or entities in criminal proceedings initiated by the plaintiff suggest strongly that a failure to advance such a proposal is likely to result in the plaintiff promoting an expansion of the Swiss proceedings to involve the defendant in potential criminal liability and/or personal reputational damage.

89. The letter put pressure on the defendant to settle civil proceedings by an implicit threat of involving him in criminal proceedings to which he is not a party. It was a considered letter, emanating from the plaintiff’s solicitors. The actions of the plaintiff do not have to be unlawful: in this regard, see Crane World Asia PTE Limited v. Hontrade Engineering Limited [2016] HKEC 1377. It is sufficient that the conduct in question be improper.

90. The facts of the present case bear some similarity to those in Ferster v. Ferster, save that the threat of criminal proceedings as a means of putting pressure on a party to settle civil proceedings in that case was expressly made in correspondence, and therefore was very clearly “unambiguous”. In the present case, the threat is implicit rather than explicit; can it be said that a threat which is not made expressly can be unambiguous?

91. I do not think it can be the case that improper pressure can only be exerted expressly or overtly. A veiled threat is still a threat. I am of the view that the plaintiff, having been rebuffed in its efforts to persuade the defendant to mediate, attempted to exert pressure on the defendant by emphasising to him the prospect of his becoming involved in criminal proceedings which the plaintiff itself had initiated and was in a position to influence, and suggesting to him that he should make a proposal to “deal with” both the civil proceedings and the criminal proceedings, thereby clearly implying that the plaintiff had the power to bring the criminal proceedings to an end if a satisfactory proposal were made.

92. I am very conscious that without prejudice communications should not be “picked apart”, and that the without prejudice protection should only be lifted in exceptional circumstances. To do otherwise would have a chilling effect on negotiations, whereby parties might be more circumspect in what they share in a negotiation, to the detriment generally of the public policy of encouraging settlement of litigation.

93. In the present case however, I am satisfied that the pressure exerted on the defendant by the WPSATC letter was improper, and exceeded what was “permissible in settlement of hard fought commercial litigation”. I think that, objectively considered, the defendant was entitled to draw the inferences from that letter which were set out in the Arthur Cox letter of 8 November 2024 by way of reply. The impropriety was unambiguous, and it would work an injustice on the defendant if such a letter could be sent to him while attracting the protection of the without prejudice rule.

Conclusion

94. In the circumstances, I will make an order permitting the correspondence set out in the appendix to the notice of motion – and listed at para. 11 above – to be admitted into evidence, and treated as open correspondence. As these letters form a sequence, I consider that they should all be admitted into evidence.

95. I will list the matter for mention only at 10.30am on Wednesday 8 October 2025 to consider any further order to be made, including costs.