Newsat Holdings Ltd & Ors v Zani

For jurisdiction in tort, the place where the harmful event occurred may be either the place of the event giving rise to the damage or the place where the damage occurred. In fraudulent or negligent misrepresentation cases, the relevant event is ordinarily where the misrepresentation originated or was made, rather than merely where it was received and acted upon. The defendant’s acts must be substantial and efficacious and there must be a particularly close connecting factor with the forum. A claimant’s decision to instruct solicitors in England, or the fact that management decisions were made there, does not by itself establish damage sustained in England. Direct monetary loss is generally located where the relevant payments or transactions occurred.

The claimants, Bermuda companies operating in the satellite communications sector, alleged that the defendant made fraudulent misrepresentations concerning Seychelles orbital-slot rights. Cooke J had granted permission to serve the defendant in the Philippines under CPR 6.20(8)(a) and (b), together with a worldwide freezing order. The defendant applied under CPR 11(1) and (6) to set aside service, permission and the order.

The parties accepted that there was a serious issue to be tried, a good arguable case for the freezing order, and that England was the appropriate forum. The issue was whether the claimants had shown a good arguable case that damage was sustained in England or resulted from an act committed there.

1. The application succeeded. The claimants had no good arguable case that the defendant committed substantial and efficacious acts within England which gave rise to the damage. Nor had they shown that the relevant damage was sustained in England.

2. Under CPR 6.20(8)(b), the expression “place where the harmful event occurred” reflects the approach under article 5(3) of the Brussels Convention. It permits jurisdiction at either the place of the event giving rise to the damage or the place where the damage occurred. Each must provide a significant and particularly close connecting factor.

3. In misrepresentation cases, the harmful event is ordinarily located where the misrepresentation originated or was made. Receipt and reliance in England do not, without more, establish that the defendant committed an act there. The approach in Domicrest Limited v Swiss Bank Corporation was preferred to the approach in Minster Investments Ltd v Hyundai Precision & Industry Co Ltd.

4. The claimants’ wasted expenditure was principally paid from accounts outside England. Their liability to English solicitors was likewise paid from Bermuda funds to an account in the United States. The decisions to instruct solicitors and to incur expenditure in England did not constitute sufficient connecting factors, and the direct monetary damage was not suffered in England.

5. The claim form, permission to serve out, freezing order and service were set aside, and the defendant was entitled to the relief sought.

Not stated in the judgment.