Can an internal non-legal representative of a litigant be a member to a confidentiality ring?



Taching Petroleum Company Limited (“Taching”) and Shell Hong Kong Limited (“Shell”) have respectively sold industrial diesel oil to Meyer Aluminium Limited (“Meyer”) and sue for the diesel oil purchase price. In its defence, Meyer argued that Taching and Shell have colluded to fix the price or exchanged price information in breach of the First Conduct Rule under the Competition Ordinance (Cap. 619) (the “CO”). In the 2nd case management conference of Taching Petroleum Company Limited v Meyer Aluminium Limited CTA 1/2018 and Shell Hong Kong Limited v Meyer Aluminium Limited CTA 2/2018, which was heard together on 22 February 2019, the Competition Tribunal had to deal with, among other things, whether Meyer’s senior management staff, namely its CEO and CAO should be included in  a confidentiality ring in inspecting the confidential documents and commercially sensitive business information disclosed by Shell and Taching in the course of the civil claim by them against Meyer.

Legal principles on confidentiality rings

Formation of confidentiality rings

In any civil proceedings, it is the starting point that the party who will be affected by a decision, not their advisers, would decide how to advance or respond to a case. Thus, discovery of documents is made to a party himself, not his solicitor or agent, to ensure that the parties to litigate are on an equal footing and with full knowledge of the materials before the court. In the case that the documents to be disclosed are confidential in nature, there will be collateral undertaking to protect the disclosing party from misuse of the disclosed information. However, if such collateral undertaking not to misuse the information is not sufficient, the Court may impose a restriction on disclosure of documents to the litigant on the other side.

Pursuant to section 143(1)(b) of the CO, the Competition Tribunal has the power to impose a confidentiality ring, which is a group of designated individuals who are authorized by the Court to inspect certain confidential material. Signed undertakings will be given by members of the ring to maintain confidentiality of the information and/or an undertaking to pay damages for breach of the undertaking is required. The onus is on the party seeking to show that the case is sufficiently exceptional to justify restrictions on disclosure, notwithstanding onerous undertakings as to confidentiality. The Court may consider the nature of the confidential document and its utility in the case.

The Tribunal agreed that it should also be vigilant to the following in determining whether further restrictions on disclosure are necessary:

  1. Confidentiality undertakings are difficult to police and enforce. It would be difficult for a party to prove that an undertaking was breached when market rumours are frequently spread around by industry players in private.
  2. The commercial harm is often difficult to quantify, for it is virtually impossible for the harmed party to estimate the extent of advantage gained by other market players.
  3. The party in breach of the confidentiality undertaking may be a relatively small enterprise who may not have sufficient resources to meet any claim for damages.

Members to a Confidentiality Ring

Typically, members to a confidentiality ring are usually limited to the litigant’s external legal representatives and/or experts. The rationale behind is that the disputed issues will be fully crystallized after the lawyers in the confidentiality ring having inspected the documents and that they may form a view as to whether individuals from the clients need to see some or all of the documents and whether application for further disclosure is needed. However, there are also some cases where employees of a party are allowed to become members of the confidentiality ring. For instance, in Roussel Uclaf v ICI [1990] RPC 45, the employees within the plaintiff’s patent department with the relevant technical expertise were allowed to become a member to the confidentiality ring for the purpose of the disclosure of the defendant’s confidential process.

In the present cases, there was no dispute as to formation of a confidentiality ring but the members to the ring. Meyer had voluntarily limited itself to having only 2 employees within the confidentiality (instead of 8 as originally suggested in the parties’ correspondence) with an express undertaking as to confidentiality. On the other hand, Shell argued that Meyer’s 2 employees should be excluded from the confidentiality ring.

The Tribunal held that Shell had failed to discharge the burden of showing why Meyer’s suggested restriction on access to 2 persons was not sufficient. In particular, the Tribunal pointed out that Shell’s personnel had not filed any affirmation to show why the 2 employees of Meyer were not appropriate persons to have access, or what potential and significant harm could be caused to Shell if any employee of Meyer were included in the confidentiality ring. Accordingly, the Tribunal granted Meyer’s request to include its CEO and CAO as members to the confidentiality ring.


As highlighted in the Tribunal’s decision, it is recognized in competition law that one man’s market advantage is invariably another’s market disadvantage. Disclosure of any confidential information must be handled with greatest care to protect the disclosing party from any detriment to its commercial interest. The Tribunal’s decision is significant in having comprehensively summarized the legal principles of confidentiality rings in respect of inspection of confidential information. The decision also demonstrates that the Tribunal adopts a holistic approach as to the formation of the confidentiality ring.


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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
Published by ONC Lawyers © 2019