A New Zealand court ruled that the United States does not have to hand over all its evidence against Megaupload founder Kim Dotcom. It is a setback for the German national in a US bid to extradite him for alleged online piracy, fraud and money laundering.

The Court of Appeal overturned a lower court ruling that the Federal Bureau of Investigation (FBI) should disclose all its evidence so Dotcom, could fairly contest the case against him. Lower courts had ruled twice that Dotcom should have access to all material the FBI was basing its extradition case on. But the Court of Appeal said the US government had a duty of "candor and good faith" in making an extradition bid, but a summary of the evidence held would do.

There were safeguards for any accused, such as the New Zealand courts and government seeking more information if they are not satisfied there is a prima facie case to be answered, the court of appeals said. William Akel, one of Dotcom's lawyers, said an appeal to New Zealand's Supreme Court was being considered. He pointed out it was impossible to tell if there has been compliance with candor and good faith if you don't know what documents are being relied on to support the case. There is also a lack of good faith involved in the entire case.

Ccourts have ruled that search warrants used in the raid of Dotcom’s house were illegal, unfrozen some of Dotcom's assets for living and legal expenses, relaxed restrictions of travel, and ordered extensive evidence disclosure. A New Zealand government spy agency was also found to have illegally spied on him on behalf of the US government, bringing an apology from the prime minister, and opening the way for a damages claim.