Islamic Republic of Pakistan v Zardari & Ors

On an application to serve proceedings out of the jurisdiction, the claimant must show a reasonable prospect of success, a good arguable case on the jurisdictional facts, and that England and Wales is clearly the appropriate forum. A claim concerning property situated in England may fall within CPR 6.20(10) even where the underlying wrongdoing occurred abroad and the property has become sale proceeds. Under CPR 6.20(14), constructive-trust jurisdiction may arise where a substantial part of the acts giving rise to liability occurred in England. Full and fair disclosure is required on a without-notice application, but an omission is material only if it misleads the court concerning jurisdiction or discretion. The court dismissed applications to set aside permission to serve out.

Pakistan claimed beneficial ownership of the proceeds of sale of the Rockwood Estate in Surrey. It alleged that the estate had been purchased and refurbished through secret commissions and bribes received by Asif Ali Zardari and Benazir Bhutto, using offshore companies and trusts.

Permission to serve the defendants outside the jurisdiction had been granted by Cooke J under CPR 6.20(10) and CPR 6.20(14). Mr Zardari and the defendant companies applied to set aside that permission, challenging the merits, jurisdictional gateways, forum conveniens and alleged non-disclosure. The central issues were whether Pakistan’s claim had a sufficient prospect of success, whether the jurisdictional gateways were satisfied, whether England was clearly the appropriate forum, and whether the without-notice evidence had materially misled the court.

1. Merits and evidential threshold. The claimant had to show a reasonable prospect of success under CPR 6.21(1)(b), equivalent in substance to having no real prospect of success under CPR 24.2. The good arguable case standard applied to the jurisdictional facts. Pakistan had shown a real prospect of establishing that the defendants controlled the offshore vehicles, that corrupt payments funded the refurbishment and that the purchase funds were also corrupt proceeds. No final findings of fact were made.
2. CPR 6.20(10). The whole subject matter of the claim related to property in England because the Rockwood Estate and its sale proceeds were in England. The rule was not confined to claims concerning title or possession and could apply to money representing English property. The court’s discretion prevented an exorbitant exercise of jurisdiction.
3. CPR 6.20(14). A bribe and property representing it could be held on constructive trust. The defendant companies’ alleged liability arose from their acquisition of the English property with corrupt funds. It was unnecessary to decide definitively whether Mr Zardari fell within this gateway because he was plainly within CPR 6.20(10), and in any event was a necessary or proper party under CPR 6.20(3).
4. Forum conveniens. England was clearly the appropriate forum. The dispute concerned an English property and fund, English conveyancing and refurbishment activities, English witnesses and documents, and events occurring in several jurisdictions. The Isle of Man liquidation did not determine ownership of the estate or its proceeds and created no sufficient reason to displace the English forum.
5. Non-disclosure. The evidence on the without-notice application was reasonably accurate. The omissions concerning the Deemster’s observations about the evidence did not materially mislead Cooke J or affect the grant of permission.
6. The applications to set aside permission to serve out were dismissed.

Permission to serve the defendants outside the jurisdiction was granted by Cooke J on 6 March 2006. The High Court dismissed the subsequent applications to set aside that permission.