High Tech International Ag & Ors v Deripaska

For statutory domicile, residence and substantial connection are separate requirements. Residence means a settled or usual place of abode and requires some degree of permanence or continuity. Ownership of a substantial home does not by itself establish residence, particularly where the individual has numerous international homes and makes brief, fragmented business visits. The question is one of fact and degree, assessed by the quality and nature of the visits rather than by counting days. A person’s business connections, family members’ visits and responsibility for property outgoings may not establish residence where the individual’s own conduct shows that the properties are merely convenient stopovers. Because residence was not established, the court did not need to determine substantial connection or the validity of service.

The claimants sought more than US$30 million from the defendant in respect of alleged wrongs said to have occurred in Russia in 1995. The defendant applied for a declaration that the High Court had no jurisdiction.

The claimants relied on the defendant’s ownership of substantial properties in England, his visits for business purposes, family connections and business activities. They argued that he had a domicile in the United Kingdom under section 41 of the Civil Jurisdiction and Judgments Act 1982. The central issue was whether, at the commencement of proceedings in April 2006, they had a good arguable case that the defendant resided in the United Kingdom.

1. The defendant’s application succeeded and a declaration was granted that the court had no jurisdiction.
2. Section 41 of the Civil Jurisdiction and Judgments Act 1982 requires two separate conditions: residence in the United Kingdom and circumstances indicating a substantial connection with it. The second condition need not be considered unless residence is established.
3. The applicable standard was a good arguable case, as stated in Canada Trust v Stolzenberg (No 2) [2002] 1 AC 1. Residence bears its ordinary meaning and denotes a settled or usual place of abode, requiring some degree of permanence or continuity, as indicated by Bank of Dubai Ltd v Abbas [1997] IL Pr 308.
4. The statutory concept does not require a permanent home and permits more than one domicile. Nevertheless, residence remains a factual question. There is no presumption that ownership of a substantial property establishes residence.
5. The defendant’s English properties were kept ready for use and he bore their outgoings, but his visits were brief, fragmented and generally ancillary to Russian business. His pattern did not resemble the more continuous or regular residence found or contemplated in Cooper v Cadwalader [1904] 5 TC 101, IRC v Lysaght [1928] AC 234 or Foote Cone & Belding Reklim Hizmetleri v Theron [2006] EWHC 1585.
6. The court therefore found that it would not be realistic to describe the defendant as residing in the United Kingdom. It was unnecessary to decide substantial connection, validity of service or the effect of the defendant’s company and business links.