Sibir Energy Ltd v Tchigirinski & Ors

Article 6(1) of the Lugano Convention permits a foreign defendant to be joined where an English-domiciled anchor defendant is already involved and the claims are sufficiently connected that joint determination is expedient to avoid irreconcilable judgments. The court should adopt a broad, commonsense assessment of the legal and factual connections between the claims. It need not conduct a detailed prediction of the litigation’s practical progress or assess the merits beyond, at most, whether there is a serious issue to be tried. However, Article 6(1) cannot be used where clear evidence shows that the claim against the anchor defendant is collusive, abusive or brought solely to obtain jurisdiction over the foreign defendant.

The claimants sought to join Josef Haener, a Swiss-domiciled intended defendant, to existing Commercial Court proceedings concerning the alleged misappropriation of more than US$400 million. The proposed joinder relied on Article 6(1) of the Lugano Convention 2007, with Henry Cameron, an English-domiciled defendant, relied on as the anchor defendant.

The claims against Haener and Cameron concerned alleged participation in the same fraud, including unlawful means conspiracy and dishonest assistance. Haener accepted that there was a serious issue to be tried and that separate proceedings risked irreconcilable judgments. The central issue was whether the court should examine the practical likelihood that the claim against Cameron would proceed, and whether the claim against him was genuine.

1. The application to join Haener succeeded in principle. Cameron was domiciled in England, the claims against Cameron and Haener raised closely connected factual and legal issues, and separate proceedings would create a risk of irreconcilable judgments.

2. Article 6(1) is an exception to the general domicile rule in Article 2 and must be applied with that principle in mind. The connection requirement itself guards against a claimant using an anchor defendant merely to oust the jurisdiction of the foreign defendant’s domicile.

3. The appropriate approach is broad and commonsense. The court assesses the closeness of the claims and the risk arising from potentially conflicting findings of fact or law. It should avoid an over-sophisticated analysis. The assessment is directed to the substance of the claims, not a detailed forecast of whether the anchor defendant will defend, settle, become dormant or ultimately reach trial.

4. The court is not required to assess the prospects of success of the claims against the defendants. At most, it may ask whether there is a serious issue to be tried. The authorities, including Kalfelis, Reisch Montage and Freeport, supported that limited approach.

5. There remains an exceptional safeguard against abuse. Clear evidence that the claim against the anchor defendant is collusive, fictitious or being maintained solely to bring the foreign defendant before the English court may justify refusal under Article 6(1), or in the limited scope available under the court’s inherent procedural discretion.

6. On the evidence, there was no sufficient factual basis for alleging collusion or that the claim against Cameron was merely a sham. The claim remained live, and the claimants sought directions for its pursuit. The application therefore succeeded, subject to detailed terms to be dealt with at hand down.