Misland (Cyprus) Investments Ltd & Amor v McKillen & Anor

For the purposes of Article 6(1) of the Brussels Regulation, a defendant domiciled in England may serve as an anchor defendant where it has a real, rather than nominal, interest in the litigation. The claims must be so closely connected that it is expedient to determine them together to avoid a risk of irreconcilable judgments.

A defendant’s neutrality, or the fact that another party controls it, does not by itself deprive it of a real interest. Declaratory relief is discretionary and is not necessarily unavailable because the declaration affects the rights of a person who is not a party, provided that person has an opportunity to make representations.

The claimants sought declarations concerning whether security granted by Patrick McKillen over his shares in Coroin Limited had become enforceable. That issue would trigger provisions in the shareholders’ agreement and Coroin’s articles requiring the directors to consider whether Mr McKillen was deemed to have served a transfer notice.

Mr McKillen, who was domiciled in Ireland, challenged the English court’s jurisdiction under Article 6(1) of the Brussels Regulation. Master Bowles held that Coroin was an appropriate anchor defendant and dismissed the jurisdiction applications. The application for permission to appeal and the appeal were heard together.

1. Appeal dismissed. The requirements of Article 6(1) of the Brussels Regulation were satisfied.
2. Coroin was not a nominal defendant. Whether Mr McKillen’s security had become enforceable directly affected Coroin because it determined whether its directors could be requisitioned to consider the transfer-notice provisions. Coroin therefore had a real interest and was a proper party.
3. The claims were closely connected because they raised exactly the same issue. Separate proceedings could produce inconsistent conclusions, including a decision in Ireland that the security was unenforceable followed by different proceedings in England in which the contrary conclusion was reached. Coroin’s controlling shareholders did not remove that risk.
4. The court declined to decide the wider issue concerning the effect of Aeroflot v Berezovsky [2013] EWCA 784 on the need to scrutinise the merits of an anchor-defendant claim. The point was unnecessary to the decision. The judge’s provisional view was that, absent satisfaction as to the genuineness of the claim against Coroin, the appeal would have been allowed.
5. The absence of a person whose rights may be affected is a factor against declaratory relief, but does not prevent a declaration where that person has an opportunity to make representations. The power under CPR 40.20 is discretionary and modern practice takes a pragmatic approach.

1. High Court (Chancery Division): Master Bowles dismissed the applications challenging jurisdiction on 8 May 2014.
2. High Court (Chancery Division): permission to appeal was granted and the appeal was dismissed by His Honour Judge Behrens on 25 November 2014.