Deripaska v Cherney [2009] EWCA Civ 849, [2009] All ER (D) 02 (Aug)
Court of Appeal, Civil Division, Waller, Moore-Bick LJJ and Sir John Chadwick, 31 July 2009
If a court has concluded in a leave to serve out case that the natural forum is other than England, it remains open to the court still to find England the “proper forum”.
Ali Malek QC, Joe Smouha QC, Christopher Harris (instructed by Bryan Cave) for the defendant. Geoffrey Vos QC, David Foxton QC, David Lord QC and James Weale (instructed by Dechert LLP) for the claimant.
The appeal was concerned with where the trial of an action should take place. The claimant alleged that he was entitled by an oral agreement to a share of a Russian company known as “Rusal”, that English law and jurisdiction had been orally agreed, and that it would not be possible to bring his claim in Russia since he would face assassination, arrest on trumped-up charges and the lack of a fair trial.
The judge held that the claimant had a reasonable prospect of success in his claim, and indeed the better side of the argument; that, although there was a good arguable case for English law and jurisdiction, the claimant did not have the better argument—in respect of jurisdiction, the defendant had much the better side of the argument; and that since it was common ground that if the contracts had been made, they had been made in England, the English court had a basis for exercising its discretion to take jurisdiction under CPR 6.20(5)(a) (now 6BPD.3—3.1(6)(a).
The judge went on to find that although the “natural forum” was Russia, the risks inherent in a trial in Russia were “sufficient to make England the forum in which the case can most suitably be tried in the interest of both parties and the ends of justice”. The defendant appealed.
Waller LJ:
His lordship appreciated that litigants often felt strongly about the place where cases should be tried but disputes as to forum should not become state trials.
The first question was whether, if a court had concluded in a leave to serve out case that the natural forum was other than England, whether it was open to the court still to find England the “proper forum” namely the place where in the interests of the parties and the ends of justice the case should be tried.
The defendant’s submission was founded on The Spiliada Maritime Corporation v Cansulex Ltd (The Spiliada), [1986] 3 All ER 843.The defendant argued that, once the court had found that a claimant had failed to establish that England was the “natural” forum, that concluded the position. He submitted that in a stay case once a defendant had failed to show that another jurisdiction was the “natural” forum that was the end and no second stage was necessary .
Thus the “obverse” of that was that a conclusion that England was not clearly the natural forum concludes the argument in a service out case.
Rejection
His lordship rejected that submission. Certainly if the natural forum was unavailable that would provide a strong basis for the court giving leave to serve out, but that was not the limit of the court’s powers.
Furthermore Lord Goff in The Spiliada was not using the word “appropriate” in the sense simply of “natural”. The use of the word “appropriate” as opposed to “natural” in that summary was deliberate.
In the summary Lord Goff had not gone through a two-stage process; he had gone straight to what was the ultimate question—what was the forum where in the interest of the parties and the ends of justice the trial should take place.
There were instances in the authorities when the word “appropriate” and the word “natural” in relation to forum were used interchangeably.
In relation to service out, the distinction between what might at stage one seem the “natural forum”, as the place with which the case had the closest connection, and ultimately the “appropriate or proper forum” which a plaintiff could establish, even if England was not the “natural forum” if justice required that permission to serve out be given.
Approach
His lordship turned to the correct approach if a natural forum other than England had been identified. In The Spiliada itself the judge did not go through a two-stage process.
The test he applied was whether the plaintiff had shown the English court “to be distinctly more suitable for the ends of justice.” That, of course, was ultimately the correct question.
Ultimately what the judge found to be crucial was the “Cambridgeshire factor”, ie the fact that he was trying a similar case where teams of lawyers and experts had already prepared a precisely similar case and where thus it would be wasteful if the parties were to have to start again in Canada
Discretion
It was the exercise of that discretion which the House of Lords had restored. The point was that The Spiliada was not a case where there was a clear natural forum other than England, but justice still required the case to be tried in England.
So far as establishing that there were factors that made England an appropriate forum despite another forum being natural, one factor, that justice could not be achieved in that natural forum, required “cogent evidence”.
The requirement was that the claimant should “clearly establish” that England was the appropriate forum in that sense.
It should not be forgotten that the judge was deciding whether a discretion should be exercised and it was for the judge to evaluate the evidence and reach his conclusion.
His lordship made clear again that the judge was not conducting a trial. He turned to the facts of the case and held that he would not interfere with the judge’s exercise of discretion.
The appeal would therefore be dismissed.
Moore-Bick LJ and Sir John Chadwick delivered concurring judgments.
