Deripaska v Cherney

On an application for permission to serve proceedings outside the jurisdiction, England may be the proper forum even though another country is the natural forum. The claimant must clearly establish that England is where the claim can most suitably be tried in the interests of all parties and the ends of justice.

A real risk that justice will not be obtained abroad must be established by positive and cogent evidence. The court assesses future risks rather than requiring proof that the feared events will probably occur. A contractual jurisdictional gateway extends to proprietary relief arising from contractual rights, including a constructive trust claim.

The claimant alleged that an agreement made in London entitled him to the value of a substantial shareholding in a Russian aluminium company and to associated proprietary relief. Christopher Clarke J permitted service outside the jurisdiction and held that England was the proper place for trial: [2008] EWHC 1530 (Comm).

Although Russia was the natural forum, the judge found risks of assassination, prosecution on fabricated charges and improper state interference with a Russian trial. The defendant appealed, contending that finding another country to be the natural forum precluded permission to serve out, or required more compelling evidence. He also challenged the contractual gateway for the constructive trust claim.

The central questions were whether England could remain the proper forum, whether the evidence justified that conclusion, and whether the proprietary claim was a claim in respect of a contract made within the jurisdiction.

1. The appeal was dismissed unanimously. The principles governing permission to serve outside the jurisdiction and a stay on forum non conveniens grounds pursue the same ultimate objective: identifying the forum in which the case can most suitably be tried in the interests of all parties and the ends of justice. The respective burdens differ, and a claimant seeking service out must show clearly that England is the appropriate forum.

2. Finding that another country is the natural forum does not conclude a service-out application. The court must proceed to consider whether circumstances going beyond ordinary connecting factors nevertheless make England the proper forum. Objectively established evidence that substantial justice will not be obtained in the natural forum is one such circumstance. No additional compelling connection with England is required beyond a valid jurisdictional gateway.

3. Allegations impugning the institutions of a friendly foreign state must be distinctly advanced and supported by positive and cogent evidence. The court is assessing risks of future events rather than conducting a trial. It need not find on the balance of probabilities that assassination, fabricated prosecution or judicial interference will occur. The significance of a risk depends upon both its likelihood and the gravity of the threatened event.

4. The judge had ample evidence supporting his assessment. The evidence justified findings that proceeding in Russia would materially increase the claimant's risk of assassination; that prosecution on fabricated charges was a real possibility; and that the importance of the company and the defendant's links with the Russian state created a significant risk of interference with the judicial process. These findings concerned the unusual features of this dispute and did not amount to a general conclusion that fair trials were unavailable in Russia.

5. Evaluation of affidavit and expert evidence in a forum dispute is primarily for the first-instance judge. An appellate court should intervene only for misdirection or where the evidence was incapable of supporting the findings. Neither basis for intervention was established.

6. The words “in respect of a contract” in the contractual service-out gateway are broad. They encompassed proprietary rights and a constructive trust remedy said to arise from the contractual bargain, including rights asserted over shares received in exchange for the original shares. The possibility that Russian law governed the contract and did not recognise the asserted remedy was a matter for trial. It was not a knockout defence preventing a serious issue from arising.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The order permitting service outside the jurisdiction and allowing the proceedings to continue in England was upheld: [2009] EWCA Civ 849.
2. High Court, Commercial Court: Christopher Clarke J held that Russia was the natural forum but that England was the proper place for trial because of the identified risks to the claimant and to a fair adjudication. Permission to serve outside the jurisdiction was granted: [2008] EWHC 1530 (Comm).