Masri v Consolidated Contractors International Company SAL & Ors

The House of Lords held that CPR 71 does not authorise the English courts to order the attendance for examination of an officer of a foreign company who is outside the jurisdiction. Although the rule-making power under s.1 of the Civil Procedure Act 1997 is sufficiently wide in principle to permit rules directed at enforcement and procedure, the presumption against extra-territoriality applies to CPR 71. The court distinguished public examination powers in insolvency law (In re Seagull) and private bankruptcy powers (In re Tucker) and concluded that critical features and safeguards that justified extra-territorial effect in insolvency are absent from CPR 71. Further, CPR 6 provides no basis for service out of the jurisdiction of an order under CPR 71 (CPR 6.30(2) does not authorise service on non-parties abroad). Because of this, the court did not reach or refer the European law issues raised in the Court of Appeal.

Background and parties: Mr Masri obtained judgments in the Commercial Court against two Lebanese companies (CCIC and CCOG) for about US$64 million. CCIC’s chairman and director, Mr Toufic Khoury, habitually resident in Greece, was the subject of an application under CPR 71 for examination about CCIC’s means in aid of enforcement.

Procedural history: An order for examination was obtained without notice on paper by Master Miller (initially served on the company’s London solicitors and subsequently effected personally in Greece). On Mr Khoury’s application Master Miller set the order aside on grounds including lack of jurisdiction (20 December 2007). The Court of Appeal allowed Mr Masri’s appeal and remitted service issues; the House of Lords granted leave and heard the English law issues.

Nature of the claim and relief sought: Mr Masri sought an order under CPR 71.2 requiring Mr Khoury (an officer of the judgment debtor company) to attend court in England for examination about the company’s means to facilitate enforcement of the English judgment.

Issues framed: (i) Whether CPR 71.2 purports to confer power to order examination of a foreign officer of a foreign company; (ii) whether it purports to do so in respect of foreign assets; (iii) whether any such provision would be ultra vires the rule-making power in s.1 of the Civil Procedure Act 1997; (iv) whether CPR 6 provides a basis for service out of the jurisdiction in Greece; and (v) whether the Evidence Regulation (EC) No.1206/2001 and Brussels Regulation considerations required reference to the Court of Justice.

Court’s analysis and reasoning: The House accepted that the rule-making power under s.1(1) of the Civil Procedure Act 1997 and Schedule 1 is sufficiently wide in principle to permit rules concerning enforcement and procedure, and that rules could in theory address examinations about assets wherever situate. However, the presumption against extra-territoriality remains potent when construing procedural rules. CPR 71’s historical origin, extreme informality (orders may be made without notice and by court officers) and lack of statutory analogues or safeguards which justified extra-territorial effect in insolvency (In re Seagull) pointed strongly against applying CPR 71 to officers abroad. The court distinguished In re Seagull (public examination in insolvency) and treated In re Tucker (bankruptcy private examination) as supportive of restraint. On service, the House held CPR 6.30(2) is primarily concerned with documents for parties to proceedings and does not authorise general service out on non-parties; the Ikarian Reefer and related authorities were considered but not found to justify the wide construction. Consequently the order for examination could not be made or served in respect of Mr Khoury in Greece, the Court of Appeal’s order was set aside and Master Miller’s order restored. The court did not decide the European law points because they were unnecessary to the outcome.

Appeal allowed. The House held that CPR 71 does not authorise the English court to order the examination of an officer of a corporate judgment debtor who is outside the jurisdiction and that CPR 6 furnishes no basis for service out of the jurisdiction of such an order. The Court restored Master Miller’s order setting aside the examination order (20 December 2007) and set aside the Court of Appeal order permitting examination and service out (28 July 2008). The European issues were not decided as they were unnecessary.

Commercial Court judgments on liability and quantum: Gloster J, 28 July 2006 and 4 May 2007 (underlying judgment debt). Master Miller: order for examination obtained without notice 6 July 2007; Master Miller set aside that order 20 December 2007. Court of Appeal allowed Mr Masri’s appeal and ordered further consideration 28 July 2008 ([2008] EWCA Civ 876). House of Lords allowed appeal and restored Master Miller’s order 30 July 2009 ([2009] UKHL 43).