Surrender of passport

In the case of Corbiere Limited v Xu, the Court ordered a defendant to surrender his passport until he had complied with a disclosure order requiring him to disclose the location of certain confidential information that he had obtained unlawfully.

The facts of the case were that Mr Xu had been employed in London as a hedge fund analyst.  In the early part of 2014, after receiving a bonus of £400,000, when he felt that he deserved £1.1million, Mr Xu began making plans to leave London and to return to Hong Kong.  

In August 2014, he quietly resigned, leaving a note on his manager’s desk explaining that he was returning to Hong Kong.  He did not mention the new job that he had already lined up in Hong Kong.  He was subsequently seen on the employer’s CCTV removing a suitcase from the building.  His abrupt departure triggered an urgent application for court orders to prevent him from using certain highly confidential data that he had accessed and apparently removed from the building.  He was duly stopped at the airport in Hong Kong and eventually extradited to the UK where he was charged with fraud.  A four year prison sentence was imposed but he failed to comply with a Serious Crime Prevention Order requiring him to deliver up to his former employer all of the company’s confidential information in his possession. The employer therefore commenced a private civil action seeking an injunction restraining Mr Xu from using or disclosing to any other person the confidential information and seeking an order that he be restrained from leaving the jurisdiction and that he surrender his passport.

The Court considered the following factors in relation to the proposed surrender of the passport:-

1. What harm would be caused to Mr Xu in making the order?
2. What harm would be caused to the employer if the passport was not surrendered?
3. Was the surrender of the passport reasonable and necessary taking account of the employer’s application for the delivery up of confidential information?
4. For how long should the passport be surrendered?

The Court agreed to make the order requiring Mr Xu to surrender his passport.  It took account of the strength of the employer’s case, the employer’s interest in not having the confidential information held by Mr Xu exploited, and the fact that no substantial harm would be caused to Mr Xu by virtue of the surrender of his passport.  The Court held that the balance was in favour of restraining Mr Xu from leaving the jurisdiction and requiring him to surrender his passport until he had complied with the disclosure order. 

The case demonstrates the Court’s powers to make ancillary orders in support of a primary application for the disclosure or return of confidential information held unlawfully by a third party.  But it also highlights the need for a very careful balancing exercise to be carried out weighing up the need to protect the Claimant’s interests alongside the risk of harm being caused to the Defendant.