Cherney v Deripaska [2008] EWHC 1530 (Comm), [2008] All ER (D) 37 (Jul)
Queen’s Bench Division, Commercial Court
Christopher Clarke J
3 July 2008
Under CPR 6.20, the essential test is that the claimant has to satisfy the court that England is the proper place in which to bring the claim. Even where there is a dispute between two apparently credible witnesses the court should usually, before giving permission, be satisfied that the claimant’s contentions about the alleged agreement provided a much better, or at any rate a better, argument in favour of there being the ground for jurisdiction alleged than of there not being one.
Geoffrey Vos QC and David Lord (instructed by Dechert LLP) for the claimant.
Roger Stewart QC, Nick Cherryman and Graham Chapman (instructed by Bryan Cave) for the defendant.
The claimant, after working for a considerable period in Russia, resided in Israel. The defendant was Russian, with substantial international business interests including the beneficial ownership of a Russian company.
According to the claimant, by an oral agreement of March 2001, the claimant agreed to hold 20% of the shares in the company on trust for him. It was alleged that that agreement was expressly made subject to English law.
In November 2006, a claim form was issued, seeking a declaration regarding the claimant’s alleged holding. The claimant’s attempts to serve the defendant in London failed, and he therefore applied for permission to serve the defendant out of the jurisdiction. The issues included whether or not the claimant had established that each cause of action in respect of which he claimed stood a reasonable prospect of success for the purposes of CPR 6.20 and 6.21 and whether, in respect of each of his claims, he had a good arguable case that the claim fell within one or more of the types of claim specified in CPR 6.20.
The parties disagreed as to the approach that the court should take in respect of the latter requirement in circumstances where there were two conflicting accounts as to what occurred at a meeting, which the court could not resolve on written evidence alone; in particular, where both sides might be said to have a good arguable case.
MR JUSTICE CHRISTOPHER CLARKE: His lordship considered Konkola Copper Mines plc v Coromin Ltd [2006] EWHC 1093 (Comm), [2006] 2 All ER (Comm) 400, Canada Trust Co v Stolzenberg (No 2) [2002] 1 AC 1, [2000] 4 All ER 481 and Bols Distilleries (t/a Bols Royal Distilleries) v Superior Yacht Services Ltd [2006] UKPC 45, [2007] 1 All ER (Comm) 461.
The essential test, laid down by the rules, was that the claimant had to satisfy the court that England was the proper place in which to bring the claim. If he satisfied the court, the court had a discretion to permit service out. As Lord Justice Rix pointed out in Konkola, the discretionary nature of the exercise enabled the court to couch its decision in terms that did not prejudice the final trial, eg by deciding that the material before it was not sufficiently good to displace an established jurisdiction, or, presumably, to establish jurisdiction in England.
An understandable wish not to prejudice future proceedings might influence the basis on which the court proceeded (ie on the basis of discretion) and the way in which it expressed itself (ie non prejudicially). But it could not avoid the need to determine whether or not permission was to be granted in a case where the issue as to whether or not there was a ground for jurisdiction was no more than evenly balanced, or where the case in favour of an agreement was somewhat less convincing than the claim that there was not but was still plausible.
Ground for jurisdiction
Even in a case where there was a dispute between two apparently credible witnesses the court should usually, before giving permission, be satisfied that the claimant’s contentions about the alleged agreement provided a much better, or at any rate a better, argument in favour of there being the ground for jurisdiction alleged than of there not being one.
In granting permission to serve out of the jurisdiction the court was exercising an exorbitant jurisdiction over those who were not within its ordinary reach. In those circumstances the court was justified in applying the good arguable test in that manner in order to avoid the risk of compelling individuals or companies to submit to a jurisdiction to which they ought not in truth to be made subject.
Further, if the concept which the phrase reflected was of the court being satisfied or as satisfied as it could be having regard to the limitations which an interlocutory process imposed that factors existed which allowed the court to take jurisdiction, it ought ordinarily to require that, when the court looked at the material, it found the points in favour of the ground for jurisdiction alleged to be more than just evenly balanced by those which pointed the other way.
If it were otherwise it would appear to follow that a defendant who had at least as good a chance of showing that he did not agree to litigate in England as the claimant had of showing that he did, would be likely to find himself compelled to litigate in England, on the footing that, once a good arguable case was made out in favour of an English exclusive jurisdiction clause, discretionary considerations would be unlikely to call for the case to be decided elsewhere.
His lordship did not regard the above test as introducing by the back door a requirement that a claimant seeking permission should prove his case on the balance of probabilities.
The court was concerned, at the present stage, with the arguments in favour of the respective parties in the light of the material then tendered. While the court was entitled to reject the wholly implausible, what it would be concerned with was the relative plausibility of the contentions. Proof on the balance of probabilities would require a finding of fact, not a decision about the strength of arguments, and would probably require the availability of oral evidence and discovery.
His lordship considered the facts and held that England was the appropriate forum and the claimant should be entitled to serve out of the jurisdiction.
