CIMC Raffles Offshore (Singapore) Pte Ltd v Schahin Holding SA (Rev 1)

Under Civil Procedure Rules 1998, Part 71, the court has no power to order a company officer to attend for examination or provide asset information if that officer is outside the jurisdiction when the application is made or when the order is made. A later presence in the jurisdiction, or personal service there, does not cure the absence of jurisdiction at either relevant time. Where jurisdiction exists, the court retains a discretion to regulate implementation. That discretion must be exercised proportionately, having regard to the officer’s position, likely usefulness, personal circumstances and parallel enforcement steps.

The claimants had obtained judgment by consent against Schahin Holding SA for approximately $67 million under an English-law guarantee. After non-payment, they applied under CPR Part 71 for orders requiring two Brazilian-resident company officers, Salim Schahin and Fernando Schahin, to attend court and disclose information about the company’s assets and refinancing.

The orders were made ex parte. Neither officer was in the jurisdiction when the applications were made. Fernando was present when the orders were made, but Salim’s presence at that time was uncertain. The central issue was whether Part 71 empowered the court to make orders against officers who were outside the jurisdiction at the time of application or order.

1. Applications allowed. The Part 71 orders were set aside because they were not lawfully made.
2. Following the House of Lords decision in Masri v Consolidated Contractors International (UK) Ltd (No.4) [2009] UKHL 43, the court has no power to entertain an application or make an order against an individual who is outside the jurisdiction. The relevant question concerns both the time when the application is made and the time when the order is made. If the individual is outside the jurisdiction at either time, Part 71 does not authorise the order.
3. The Court of Appeal’s observations in Kuwait Airways Corporation v Iraq Airways Corporation [2010] EWCA Civ 741 did not alter that conclusion. They arose in an ex parte appeal heard with great haste and did not establish that service within the jurisdiction could validate an order made when the individual was outside it.
4. Both applicants were outside the jurisdiction when the applications were made. Salim was also outside it when his order was made, or the claimants failed to prove otherwise. His order therefore had to be set aside. The same conclusion followed for Fernando because the application against him was made while he was outside the jurisdiction.
5. Alternatively, Salim’s order would have been set aside as excessive and disproportionate. He was 74 and would have difficulty travelling from Brazil, while Fernando, the company’s chief financial officer, was better placed to provide the relevant information. If Fernando’s order had been valid, the court would have postponed his attendance until June to take account of parallel enforcement steps.