Duty of confidentiality breached because of failure to agree back-to-back agreement on same terms

Dorchester Project Management v BNP Paribas Real Estate Advisory & Property Management, Court of Appeal

This case involved commercially sensitive plans to buy some development land. Dorchester wanted to disclose the information to BNP so that BNP could find a financial backer to help Dorchester to buy the site. Under a deed entered into between Dorchester and BNP, BNP could disclose confidential information to a third party if it procured a similar non-disclosure and non-circumvention agreement with that third party. BNP disclosed some information to a financial backer, and Dorchester did likewise in the belief that BNP had entered into a back-to-back agreement with that backer. There was no such agreement, however. The financial backer approached another person to purchase the land. Naturally, with significant money at stake, the case ended up at court.

The Court of Appeal decided that Dorchester and BNP had agreed for Dorchester to be protected against unauthorised disclosure and circumvention. The court should interpret the deed to keep the parties’ objectives in mind. The deed had required BNP to obtain a back-to-back agreement from the recipient before it passed confidential information to it. The parties could not have intended for BNP to be required to do this but not have any liability should it fail to do so. The agreement had intended BNP to keep and procure to be kept secret all confidential information coming to another’s knowledge as a result of BNP’s and that other’s relationship. Therefore, BNP’s liability extended to confidential information meeting that description coming from a source other than BNP, such as Dorchester itself.