Deutsche Bank AG v Sebastian Holdings Inc & Anor

Service of proceedings is a formal act engaging the court’s jurisdiction, not merely a means of bringing proceedings to a defendant’s attention. Where the Hague Service Convention applies, service in accordance with the Convention is the primary route. An order for alternative service under CPR 6.15 requires a good reason beyond convenience or a desire for speed, otherwise the Convention would be subverted. The summary and flexible nature of a non-party costs application does not justify departing from ordinary principles governing service out of the jurisdiction. Alternative service may nevertheless be available where conventional service proves difficult or there is evidence of evasion, provided the facts then establish good reason.

Following judgment against Sebastian Holdings Inc for substantial sums and an order for payment on account of costs, Deutsche Bank applied to add Alexander Vik as a party for costs purposes and to seek a non-party costs order against him. The court permitted service of the application out of the jurisdiction by leaving the documents at a property in Connecticut.

Mr Vik challenged both the order and the effectiveness of service. The central issues were whether the documents had been affixed to the property, whether that method was permitted under Connecticut law, and whether there was good reason to authorise alternative service under CPR 6.15 where the United Kingdom, the United States and Monaco were parties to the Hague Service Convention.

1. Alternative service set aside. The order permitting service by leaving the application at the Connecticut property could not stand. The documents had been affixed to the gate, and that method was permitted under Connecticut law for the purposes of CPR 6.40(3)(c), but the issue was whether there was good reason to authorise it as alternative service.
2. The summary and administrative character of a section 51 non-party costs application did not justify departure from ordinary principles governing service on an individual out of the jurisdiction. The procedure’s need for speed and economy remained subject to fairness and the formal requirements of service.
3. Abela v Baadarani [2013] 1 WLR 2043 established that CPR 6.15 involves a value judgment based on the circumstances and does not require exceptional circumstances. But that decision concerned a case where neither the Hague Service Convention nor a bilateral service treaty applied. Its reasoning did not determine the position where a relevant convention applied.
4. In a Convention case, service under the Convention must be treated as the primary method. There must be a good reason beyond speed and convenience for permitting an alternative method. The evidence showed no attempt to evade service, no substantial delay under the Convention, and no other circumstance justifying departure from the Convention route. A possible two- or three-month delay was insufficient in the context of the proceedings.
5. The court made no decision on the other grounds of challenge. If service under the Convention or another conventional method proved difficult, or evidence showed an attempt to evade service, a renewed application under CPR 6.15 could be made on different facts. Costs appeared to follow the event, subject to further submissions.