Masri (Respondent) v Consolidated Contractors International Company SAL and others and another (Appellant) and another

The power under rule 71 of the Civil Procedure Rules 1998 to require an officer of a corporate judgment debtor to attend court and provide enforcement information does not extend to an officer outside the jurisdiction. The officer is a separate person who has not submitted to the court. For this purpose, the officer is closer to a foreign witness than to the judgment debtor.

Rule 6.30(2) governs service of documents on parties to existing proceedings. It does not create a general power to serve ancillary orders on non-parties abroad. Service out requires express statutory or rules-based authority. Rule 6.20(9), concerning claims to enforce judgments, does not cover an application to examine a foreign officer. Rule 71 is not confined to information about domestic assets where it otherwise applies.

Masri v Consolidated Contractors International Company SAL concerned enforcement of a US$64 million judgment debt owed by two Lebanese companies. The respondent judgment creditor obtained an order under rule 71 of the Civil Procedure Rules 1998 requiring Mr Khoury, an officer of one debtor company who was habitually resident in Greece, to attend court and provide information about the company’s means.

Master Miller set aside the order for lack of jurisdiction. The Court of Appeal allowed the creditor’s appeal in [2008] EWCA Civ 876 and remitted the question whether personal service in Greece had been valid. The House of Lords first considered the English-law issues. The central questions were whether rule 71 authorised an examination order against a company officer abroad and whether rule 6 provided authority to serve that order outside the jurisdiction.

1. Appeal allowed unanimously. Lord Mance delivered the leading speech. Lord Scott, Lord Rodger, Lord Walker and Lord Brown expressly agreed with his reasons. The Court of Appeal’s order was set aside and Master Miller’s order restoring the position before the examination order was made was reinstated.

2. Per Lord Mance, the rule-making power in section 1 of the Civil Procedure Act 1997 was broad enough in principle to authorise procedural rules concerning examination of a foreign officer of a corporate judgment debtor. It also permitted rules concerning information about assets abroad. The statutory restriction on subpoenas in section 36 of the Supreme Court Act 1981, however, prevented a rule requiring an ordinary witness outside the United Kingdom to attend for examination.

3. Per Lord Mance, that breadth of enabling power did not determine the construction of rule 71. The presumption against extra-territoriality remained applicable. A personal judgment debtor was already subject to the court’s jurisdiction, so adjudication and enforcement formed part of one process. An officer of a corporate debtor had a separate legal personality, had not submitted to the jurisdiction and was closer to an ordinary witness.

   The rule’s domestic history, its informal without-notice procedure and the absence of the public and universal features of compulsory winding up all indicated that rule 71 was not intended to reach officers abroad. The rule nevertheless contained no restriction confining a valid examination to domestic assets.

4. Per Lord Mance, rule 6.30(2) concerned documents served on parties to proceedings. It did not confer a general power to serve an ancillary order on any non-party abroad merely because the original proceedings had been validly instituted. Service out required express statutory or rules-based authority. The contrary reasoning associated with The Ikarian Reefer (No 2) could not establish a general inherent power, although a non-party who was truly a party’s alter ego might present a special case.

5. Per Lord Mance, rule 6.20(9), which concerned a claim to enforce a judgment, did not cover examination of a foreign witness to discover assets wherever they might exist. Accordingly, rule 6 supplied no basis for serving Mr Khoury in Greece. The European-law issues did not arise, and no reference to the Court of Justice was necessary.

1. House of Lords: In Masri v Consolidated Contractors International Company SAL [2009] UKHL 43, the House unanimously allowed Mr Khoury’s appeal, set aside the Court of Appeal’s order and restored Master Miller’s order.

2. Court of Appeal: In [2008] EWCA Civ 876, reported at [2009] 2 WLR 699, the court allowed Mr Masri’s appeal and remitted the question whether service in Greece had been valid.

3. High Court: On 20 December 2007, Master Miller set aside the examination order, principally because jurisdiction was lacking under domestic and European law.