Pacific International Sports Clubs Ltd v Soccer Marketing International Ltd & Ors

In a forum non conveniens application, the claimant must show that England is the proper forum where permission has been given to serve defendants out of the jurisdiction. A defendant served within England bears the burden of showing that another forum is clearly more appropriate. A foreign forum should be rejected only on positive and cogent evidence that substantial justice cannot be obtained there. General evidence of corruption or procedural disadvantage is insufficient.

Where the Judgments Regulation prevents a stay against a defendant domiciled in a Member State, that does not necessarily require related claims against other defendants to be tried in England. The court may stay those claims where the principal dispute has no real connection with England and the foreign forum is clearly more appropriate.

Pacific, a Mauritian company, claimed under Ukrainian law that its shareholding in Dynamo Kiev had been diluted and extinguished through unlawful share transfers, a rights issue and related corporate steps. It sought damages for abuse of civil rights and restitution for unjust enrichment against several defendants.

Some defendants were served in England, while BVI companies were served out of the jurisdiction. The defendants applied for stays, setting aside of the permission order, strike-out, summary judgment and other relief. Pacific argued that Ukraine was unsuitable because of alleged political interference and judicial impropriety, and relied on Owusu v Jackson concerning a defendant domiciled in England.

1. The BVI defendants had not submitted to the jurisdiction. A defendant’s conduct must amount to unequivocal submission. Their challenges to jurisdiction were expressly maintained and their other applications were made without prejudice to those challenges: SMAY Investments Ltd v Sachdev.

2. The court applied the principles in Spiliada Maritime Corporation v Cansulex Ltd. Ukraine was the natural and only realistic forum. The dispute, parties, documents, witnesses, applicable law and subject matter were overwhelmingly connected with Ukraine. The claims involved difficult and developing questions of Ukrainian law.

3. Pacific had not established by positive and cogent evidence that substantial justice could not be obtained in Ukraine. The evidence raised serious concerns about Ukrainian judicial independence, but general reports, allegations and disputed procedural history did not cross the required threshold. The assessment was fact-sensitive and claimant-specific, as illustrated by Cherney v Deripaska and Yugraneft v Abramovich.

4. Owusu v Jackson prevented the court from staying the claim against SMI on forum non conveniens grounds because SMI was domiciled in England for the purposes of the Judgments Regulation. The possible risk of inconsistent decisions did not require the entire dispute to remain in England. SMI was a relatively minor participant, and allowing its position to dictate the forum for the dispute as a whole would let the tail wag the dog.

5. The court declined to apply articles 27 or 28 of the Judgments Regulation reflexively. The Ukrainian proceedings relied upon were not pending or on foot. A temporary case-management stay against SMI was premature, although it might become appropriate if equivalent Ukrainian proceedings were commenced and fairly pursued.

6. The court did not finally determine the Ukrainian-law questions concerning article 13, limitation or unjust enrichment. If required to do so, it would not have struck out the claims for disclosing no reasonable cause of action or for being time-barred. Nor would it have struck them out as an abuse of process under Henderson v Henderson and Johnson v Gore Wood & Co.

7. The permission order and service on the BVI defendants were set aside on forum non conveniens grounds. The court also stated that the article 13 claim was a new cause of action, not merely fuller pleading of the conspiracy claim, and that the strict approach to the cause of action supporting service out remained applicable under the CPR: Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc, Grupo Torras v Al-Sabah, ABCI v Banque Franco-Tunisienne and ED & F Man Sugar Ltd v Lendoudis.

The claim against Mr Surkis was stayed. The permission order and the service out on the BVI defendants were set aside.