SSL International Plc v TTK LIG Ltd

The Court of Appeal dismissed the appellants' appeals. The court held that CPR Part 6.5(3)(b) does not permit personal service on a senior officer to found jurisdiction over a foreign company that is not carrying on business within the jurisdiction; the established common-law line exemplified by Okura and The Theodohos remains applicable to the materially identical CPR provision. The judge found that the Indian joint venture company (TTK) was not carrying on business in England and Wales, there was no waiver of defective service, and therefore the claim form was not validly served.

The court also upheld the refusal to grant mandatory injunctive relief (effectively specific delivery) because the goods in issue were not shown to be ascertained within the meaning of section 52 of the Sale of Goods Act 1979, the orders sought would be difficult or impossible to supervise and enforce from this jurisdiction, and parallel proceedings were pending in the Indian Company Law Board. The court further held there was no satisfactory evidence that SSL's standard terms (including an English law choice and exclusive jurisdiction clause) had been incorporated into the contracts with TTK and that the proper law of the contracts was Indian law (Rome I Article 4.1(a)).

Background and parties: SSL (and related group company LRC) are members of the Reckitt Benckiser Group and long-term purchasers of condoms manufactured by TTK, an Indian joint venture. The dispute followed a breakdown in the joint venture when Indian directors gained effective control of TTK and ceased deliveries while seeking higher margins and different terms. The claimants sued in England seeking injunctions (compelling delivery) and damages for breach of contract and economic torts against TTK and various Indian individuals.

Procedural posture: The claim form was issued 17 June 2011. Mann J (EWHC 1695 (Ch)) refused without-notice interim injunctive relief and refused permission to serve several defendants out of the jurisdiction. After TTK did not file an acknowledgement of service, the claimants applied for default judgment; Peter Smith J (EWHC 2045 (Ch)) refused that application. The claimants appealed to the Court of Appeal.

Relief sought: Urgent injunctive relief including orders requiring TTK to resume deliveries of specified condoms (specific delivery), plus damages for breach of contract and economic torts (procuring breach and conspiracy).

Issues framed:

• Whether CPR Part 6.5(3)(b) permits service on a senior officer of a company that does not carry on business in the jurisdiction;
• Whether TTK in fact carried on business within the jurisdiction;
• Whether any defect in service had been waived;
• If service was valid, whether the court should have granted the injunctive relief sought, including whether the goods were ascertained within the meaning of section 52 Sale of Goods Act 1979 and whether specific delivery was appropriate;
• Whether permission to serve the other defendants out of the jurisdiction should have been granted and whether SSL's standard English-law terms governed the contracts.

Court's reasoning and conclusions: The court concluded that the common-law principle in Okura and The Theodohos — that service on a foreign company by serving a corporate officer is only effective where the company is present or carrying on business in the jurisdiction — applies to the materially identical CPR provision. Occasional board meetings in England and electronic approvals did not establish that TTK carried on business here. There was no waiver by TTK of defective service. On the merits of injunctive relief, the court found the goods were not shown to be ascertained as required for specific delivery under s.52 Sale of Goods Act 1979, practical difficulties and enforcement problems in supervising a mandatory order in India, and the existence of parallel proceedings before the Indian Company Law Board made England an inappropriate forum. The court also found insufficient evidence that SSL's standard terms were incorporated into the contracts; the proper law was Indian law (Article 4.1(a) Rome I).

Subsidiary findings: No adequate documentary basis was shown for incorporation of SSL's standard terms; purchase-order practice did not put TTK on notice of the terms. The court stressed reluctance to make mandatory foreign-directed orders that cannot be meaningfully enforced from England.

Appeal dismissed. The Court of Appeal held that CPR Part 6.5(3)(b) is inapplicable to a company not carrying on business in the jurisdiction, that TTK was not carrying on business in England and Wales and had not waived defective service, and that mandatory injunctive relief should not be granted because the goods were not ascertained, enforcement and supervision would be impractical and parallel proceedings in India made India the proper forum.

Appeal from the High Court of Justice, Chancery Division: judgments of Mann J [2011] EWHC 1695 (Ch) and Peter Smith J [2011] EWHC 2045 (Ch); appeal heard in the Court of Appeal resulting in dismissal [2011] EWCA Civ 1170.