ABCI v Banque Franco-Tunisienne & Ors

A claim served outside the jurisdiction must fall within the jurisdictional ground identified by the originating process and supporting evidence. A claimant cannot use later pleadings or the court’s curative powers to introduce a cause of action that was never contemplated when leave was obtained.

For a tort claim, receipt in England of a communication sent from abroad is not itself an act committed here. Damage means the direct monetary loss caused by the wrong, rather than an antecedent contractual commitment.

Indemnity costs require circumstances taking the case outside the norm. Conduct need not involve moral blame, but ordinarily must be unreasonable to a high degree. A court awarding interest on costs before judgment has discretion over both the period and the rate.

ABCI appealed against orders setting aside service on four Tunisian respondents in two commercial actions. One action sought to invalidate settlement agreements allegedly procured by duress. The other alleged a conspiracy to induce investment through false accounts. The deputy Commercial Court judge held that neither action fell within the pleaded grounds for service outside the jurisdiction. He also found that service on the Tunisian Ministry of Finance did not comply with the State Immunity Act 1978.

The judge awarded indemnity costs, permitted the separately represented respondents to recover their respective costs subject to assessment, and awarded interest on all costs at 8% from a date before judgment. The appeal concerned jurisdiction under the former Rules of the Supreme Court, the authenticity of documents relied upon to establish jurisdiction, indemnity costs, separate representation and interest on costs.

1. Disposition. The appeals against the jurisdiction and costs decisions were dismissed. The order for pre-judgment interest on costs was varied from 8% to 1% above base rate.

2. The settlement-agreements claim was not brought to affect the alleged share-subscription agreement within RSC Order 11 rule 1(1)(d). Setting aside the later Tunisian agreements would restore shares which ABCI had already owned, without requiring reliance on the earlier agreement. The later agreements’ possible consequences for claims arising under the earlier agreement were insufficient. They were separate Tunisian contracts made years later and principally concerned the surrender of shares and an arbitral award.

3. The writ governed the causes of action for which service outside the jurisdiction had been authorised. Its unspecified damages claim could not reasonably be read as a claim for breach of the share-subscription agreement. Later points of claim and proposed amendments could cure defects but could not introduce a cause of action never contemplated when leave was obtained. Once service on BFT failed, there was no properly served anchor defendant through whom the other respondents could be joined as necessary or proper parties.

4. Alternatively, there was no good arguable case that the alleged contract was made in England or that the critical documents were authentic. The court could scrutinise especially closely the fact said to establish jurisdiction. The documents’ late and staged production, their absence from earlier proceedings and contemporaneous accounts, and inconsistencies within ABCI’s own material provided strong reasons to doubt their genuineness.

5. The conspiracy claim also fell outside Order 11 rule 1(1)(f). Mere receipt in England of accounts sent from Tunisia was not an act committed here by the alleged tortfeasors. The alleged conspiracy, preparation of the accounts and their dispatch occurred in Tunisia. The relevant damage was the direct monetary loss produced by investing, not an earlier contractual commitment. Payment moved from Switzerland to Tunisia, and there was no good arguable case that loss was sustained in England.

6. Service on the Ministry of Finance had not complied with section 12(1) of the State Immunity Act 1978. The Tunisian procedural rule governing domestic service did not establish an agreement to accept foreign proceedings within section 12(6).

7. Indemnity costs were justified by the changing case, reliance on the curative jurisdiction, excessive and fragmented evidence, material non-disclosure and the manner in which the claims were pursued. Moral blame or wholly unreasonable conduct was unnecessary, although the cumulative conduct here was unreasonable to a high degree. Separate representation was reasonable in this unusually complex litigation, but the costs judge was directed to disallow unreasonably duplicated costs.

8. CPR rule 43.3(6)(g) gave the court discretion over the rate of interest awarded on costs before judgment. The statutory judgment rate governed interest after judgment only. The appropriate pre-judgment rate was 1% above base rate.

1. Court of Appeal (Civil Division): The jurisdiction and costs appeals were dismissed. The pre-judgment interest order was varied to 1% above base rate.
2. Commercial Court: HHJ Chambers QC, sitting as a deputy Commercial Court judge, set aside the proceedings for want of jurisdiction. He additionally held service on the Ministry of Finance ineffective under the State Immunity Act 1978, awarded indemnity costs in the two relevant actions, allowed separate representation subject to assessment for unreasonable duplication, and awarded interest on costs at 8% from 7 December 2000.