Tedcom Finance Ltd & Anor v Vetabet Holdings Ltd & Ors

At an urgent interlocutory stage, an applicant seeking interim relief need show only an arguable case that the court has jurisdiction. It was therefore arguable that Civil Procedure Rules 1998 Part 62.5 permitted service out of the jurisdiction for an arbitration claim seeking relief under section 44 of the Arbitration Act 1996. Read with section 2(3), that power arguably supported arbitration generally. It was not necessarily limited to an arbitration taking place in England or governed by English law. Alternatively, service might be authorised by Practice Direction 6B, paragraph 3.1(3), where there was a real issue concerning interim relief against a defendant already within the claim and the additional defendants were necessary or proper parties. The ultimate jurisdiction issue remained for the return hearing.

The claimants sought urgent arbitration-related interim relief to preserve assets. The arbitration was between Tedcom and Vetabet, but the proposed orders also concerned four other defendants outside the jurisdiction, alleged to be assisting the dissipation of assets or failing to preserve assets relevant to the arbitration.

Mr Justice Teare refused the requested injunction and associated relief against the non-party defendants because he doubted jurisdiction to issue and serve the arbitration claim form on them. He was prepared to grant relief against Vetabet alone, but the claimants did not pursue that course. The appeal concerned whether there was an arguable jurisdictional basis under Civil Procedure Rules 1998 Part 62.5 or Practice Direction 6B, paragraph 3.1(3), for service out of the jurisdiction.

1. Appeal allowed. At this urgent interlocutory stage the claimants had to show only an arguable case for jurisdiction. The ruling did not prejudice any respondent’s right to argue at the return hearing that the court in fact lacked jurisdiction.
2. There was an arguable basis under Civil Procedure Rules 1998 Part 62.5. The provision permits service out of the jurisdiction where the claim is for an order under section 44 of the Arbitration Act 1996. Section 44, read with section 2(3), arguably permits orders in support of arbitration generally. It was therefore arguable that the jurisdiction no longer depended on a consensual arbitration taking place in England or being governed by English law.
3. The earlier decision in Cienvik [1996] 2 Lloyds Reports 395 was decided under the Arbitration Act 1950 and the then applicable rules. The court considered that matters might have moved on under the 1996 Act and current procedural rules. Vale Do Rio Doce [2002] Lloyds Reports 1 was distinguishable for present purposes because it had considered the then equivalent of Part 62.5(1)(c), not Part 62.5(1)(b), and the former provision was more restrictive as to the connection with England.
4. There was also an arguable basis under Practice Direction 6B, paragraph 3.1(3). It was arguable that there was an issue against Vetabet which it was reasonable for the court to try, namely whether interim relief should be granted, and that the other defendants could be served as necessary or proper parties. Part 62.5 might not be an exclusive route.
5. The evidence was sufficiently persuasive for the interlocutory purpose to support concern that Vetabet might be dissipating assets with the assistance of the other respondents, or failing to preserve assets relevant to the arbitration. The court made the discussed order, while leaving the claimants free to seek fuller relief at the return hearing.

• High Court of Justice, Queen’s Bench Division (Commercial Court): Mr Justice Teare refused the requested injunction and associated relief against the non-party defendants because he was not persuaded that jurisdiction existed to issue and serve the proceedings. He was prepared to grant relief against Vetabet alone.
• Court of Appeal (Civil Division): The appeal was allowed on the basis that jurisdiction was arguable under Civil Procedure Rules 1998 Part 62.5 and, alternatively, Practice Direction 6B, paragraph 3.1(3). An interlocutory order was made, subject to fuller argument at the return hearing.