Vitol Bahrain EC v Nasdec General Trading Llc & Ors

Permission to serve a foreign defendant out of the jurisdiction must be assessed by reference to the circumstances when permission was granted. Later events may illuminate the earlier position, but do not themselves justify setting permission aside.

Under the necessary or proper party gateway, the court must first examine the claim against the anchor defendant in isolation. A foreign defendant should not be joined merely to avoid multiple proceedings where the anchor claim has no independent substance without that defendant. The court must then consider whether England is clearly or distinctly the appropriate forum for the dispute that genuinely requires determination. An available and more appropriate foreign forum cannot be made unavailable by a claimant’s decision not to participate in its proceedings.

Vitol sought declarations concerning title to two oil cargoes sold by Nasdec and stored in Fujairah. Fal Oil asserted that the cargoes had been misappropriated from it and that it retained title. Vitol also joined Standard Chartered Bank because it might have a security interest.

Permission had been granted for service on Fal Oil outside the jurisdiction. Fal Oil applied to set that order aside, contending that Fujairah was the appropriate forum. Vitol sought a case management stay if its jurisdiction challenge failed. The central issues were the time at which the jurisdiction application had to be assessed and whether Fal Oil was a necessary or proper party to an English claim against Nasdec and Standard Chartered.

1. The jurisdiction challenge succeeded. Permission to serve Fal Oil out of the jurisdiction was set aside. A case management stay was granted in the remaining English proceedings pending determination of the Fujairah proceedings.
2. The three requirements for permission to serve out were identified: a serious issue to be tried; a good arguable case that the claim falls within a jurisdictional gateway; and a clear or distinct appropriateness of the foreign jurisdiction for the trial. Fal Oil accepted, for present purposes, that the gateway requirement was satisfied.
3. The application to set aside permission had to be determined by reference to the position on 16 November 2012, when permission was granted. Subsequent changes were not relevant as such, although later evidence and events could cast light on considerations that existed at the earlier date.
4. For the necessary or proper party gateway, the court must first identify and examine the claim against the anchor defendant without assuming joinder of the foreign defendant. Vitol had no genuine claim against Nasdec or Standard Chartered in isolation. Nasdec and Vitol agreed that Nasdec had good title, while Standard Chartered had asserted neither title nor a security interest in the cargoes.
5. The real dispute was between Vitol and Fal Oil over title. The claims against Nasdec and Standard Chartered were dependent upon that dispute. The risk of duplicated proceedings or inconsistent judgments therefore did not make England the appropriate forum. Fujairah was available to all material protagonists and was clearly the more appropriate forum for determining title.
6. Vitol could not make Fujairah unavailable or less appropriate by choosing not to participate there. If the Fujairah proceedings later established a defect in Nasdec’s title, Vitol could then pursue any resulting warranty claim against Nasdec in England.
7. In the circumstances, further steps in the English proceedings against Nasdec and Standard Chartered were stayed pending the outcome in Fujairah.

This was a first-instance jurisdiction decision. The judgment records that Males J had previously dismissed an application to continue an anti-suit injunction, but that decision was not the decision under appeal.