Abela & Ors v Baadarani & Anor

For service-out purposes, a claimant establishes a real issue to be tried where the claim has a realistic prospect of success. The court should avoid conducting a mini-trial on incomplete evidence, particularly where fraud, knowledge and limitation are disputed.

A non-exclusive English jurisdiction clause is an important factor, but it is not conclusive where related foreign proceedings exist. Where a claimant domiciled in a Member State is entitled to invoke an English jurisdiction agreement, the ordinary forum conveniens discretion may be displaced by Article 23 of the Judgments Regulation.

The court may retrospectively validate steps bringing proceedings served abroad to the defendant’s attention where there is good reason, the method is not unlawful in the foreign state, and the defendant is fully apprised of the claim.

The claimants alleged that the defendants had procured a share purchase contract through fraud, conspiracy, undue influence, unconscionable bargain, bribery and dishonest assistance. The first defendant applied under CPR Part 11 to set aside permission to serve the proceedings out of the jurisdiction, arguing that there was no real issue to be tried, that the claims were time-barred, and that England was an inappropriate forum because related criminal and civil proceedings were pending in Lebanon.

He also challenged extensions of time for service and alternative service. The court considered the effect of the settlement of related proceedings, the English governing-law and jurisdiction clause, Article 23 of the Judgments Regulation, and whether delivery of the claim documents to the defendant’s Lebanese lawyer constituted good service.

1. Real issue to be tried. The test under CPR 6.37(2) was the CPR Part 24 standard: whether there was no real prospect of success. The court should not conduct a mini-trial on partial evidence where the issues depended on disputed factual evidence and cross-examination. The claimants had demonstrated a real issue concerning the alleged fraud, when it was discovered, and whether it could reasonably have been discovered before the limitation period expired. The related claims in undue influence, unconscionable bargain, bribery and dishonest assistance likewise raised issues to be tried.
2. Settlement. Construing the settlement in the related proceedings, and following the guidance in Heaton v AXA Equity and Law Life Assurance Society plc [2002] 2 AC 329, the settlement had not released the claims against the present defendants. The settlement expressly reserved rights against them.
3. Forum. The non-exclusive jurisdiction clause created a significant factor in favour of England, although the prior Lebanese proceedings meant it was not decisive. Article 23 of the Judgments Regulation gave the English courts jurisdiction in respect of the claim brought by the claimant domiciled in Cyprus. Applying Owusu v Jackson [2005] QB 801 (ECJ), that jurisdiction could not be displaced by the ordinary forum conveniens rules. The English court was not forum non conveniens, particularly because the principal claimant was not a party to the Lebanese proceedings and the claimants had undertaken not to pursue the same claims there.
4. Service abroad. CPR 6.37(5)(b)(i) conferred, or necessarily implied, a power to direct alternative service abroad. That power included the equivalent of CPR 6.15(2), enabling steps already taken to be treated as good service. The delivery of the claim form and supporting documents to the defendant’s Lebanese lawyer was sufficient. The defendant was fully aware of the proceedings, the method was not shown to contravene Lebanese law, diplomatic service was impractical, and further delay and expense would be unacceptable.
5. The orders extending the validity of the claim form were therefore unnecessary. In any event, the principles governing extensions under CPR 7.6(2) justified the orders, and there was no basis to interfere with them. All the first defendant’s applications were dismissed.

First-instance decision. The judgment records earlier orders by Mr Justice Morgan, Mr Justice Sales and Mr Justice Lewison concerning service out of the jurisdiction, extensions of time and alternative service. Those orders were upheld or left undisturbed.