HAJI-IOANNOU AND OTHERS v. FRANGOS AND OTHERS

A person having a special business domicile in a Contracting State under that State’s law is domiciled there for the purposes of article 2 of the Brussels Convention and must ordinarily be sued there.

Where jurisdiction instead arises under national law through article 4, an English court may decline jurisdiction on forum non conveniens grounds, including in favour of another Contracting State. A civil claim attached to criminal proceedings engages the Convention, but article 21 applies only where the proceedings have both the same cause and the same object.

A claim to beneficial ownership of shares in a ship-owning company does not constitute a claim to legal ownership of its ship. It therefore cannot support an Admiralty arrest based on ownership.

The plaintiffs alleged that approximately US$49 million had been transferred to the first defendant under an informal arrangement for investment in ships while remaining beneficially theirs. The first defendant maintained that the transfers were gifts or loans. Related criminal proceedings and appended civil claims had been pursued in Greece.

The plaintiffs served the first defendant during a temporary visit to London and sought permission to serve fourteen foreign companies outside the jurisdiction. Neuberger J stayed the English proceedings on forum non conveniens grounds but rejected other jurisdictional objections.

The plaintiffs appealed against the stay and the refusal of service out. The first defendant cross-appealed, principally contending that his special business domicile in Greece brought him within article 2 of the Brussels Convention. The court also considered articles 4, 21 and 22, alleged abuse of process, Admiralty arrest, proprietary tracing and service out.

1. The plaintiffs’ appeal was dismissed and the first defendant’s cross-appeal under article 2 was allowed. The court gave a single judgment to which all three members had substantially contributed. Under article 52 of the Brussels Convention, Greek law determined whether the first defendant was domiciled in Greece. His work from the Piraeus office through which he managed the relevant fleet, and the business character of the dispute, established a special business domicile under article 51 of the Greek Civil Code. Article 2 therefore required him to be sued in Greece.

2. If article 4 had applied instead, the English court could have stayed or dismissed proceedings on forum non conveniens grounds in favour of another Contracting State. Jurisdiction founded on national rules under article 4 does not exclude that power. The order could effectively disseise the English court so that articles 21 and 22 did not make the exercise futile.

3. Article 21 did not require a stay. A civil claim appended to Greek criminal proceedings fell within the Convention and was definitively pending. The Greek and English proceedings involved the same parties and substantially the same factual and legal cause. Their objects differed, however: the Greek claim sought money, whereas the English proceedings substantially sought tracing and beneficial interests in acquired assets.

4. Article 22 required a broad, commonsense assessment of related actions. Although the Greek claim remained pending at first instance for this purpose, its attachment to criminal proceedings made an article 22 stay wholly inappropriate.

5. The claim could not support arrest of the ships. “Ownership” for Admiralty jurisdiction meant legal ownership unless expressly qualified as beneficial ownership. Even proof of the pleaded trust concerning the funds or company shares would not displace the ship-owning companies’ legal ownership of their vessels.

6. Greece was clearly the more appropriate forum. The parties, witnesses, documents, alleged arrangement, business activities and related proceedings were overwhelmingly connected with Greece. Greek law offered extensive personal remedies against the first defendant. The speculative availability of proprietary remedies against foreign companies and foreign assets did not make a Greek trial unjust.

7. The pleaded case against the ship-owning companies was very weak and disclosed no sufficiently established basis for treating their ships as trust assets. Since the action against the first defendant was stayed and the case was not otherwise proper for service out, permission to serve the second to fifteenth defendants outside the jurisdiction was refused. The writ was set aside for lack of jurisdiction.

• Court of Appeal (Civil Division): Allowed the first defendant’s cross-appeal under article 2 of the Brussels Convention, dismissed the plaintiffs’ appeal and otherwise dismissed the cross-appeal. The writ was set aside for lack of jurisdiction.
• High Court, Chancery Division: Neuberger J stayed the English proceedings on forum non conveniens grounds, declined to stay them under articles 21 or 22, rejected the application to set aside the writ for abuse, and treated service out as unnecessary following the stay.