Bank of Baroda, GCC Operations & Ors v Nawany Marine Shipping FZE & Ors

Defective service may be cured under CPR 3.10 where the claimant attempted the required procedural step, the defect caused no prejudice, and refusing relief would elevate form over substance. A challenge to service is properly made under CPR Part 11, and an acknowledgment of service filed solely to contest jurisdiction does not waive service defects. A statutory security-enforcement process is not necessarily substantive debt-recovery litigation merely because a reviewing tribunal may consider issues relevant to the underlying debt. An election to abandon an English jurisdiction option requires clear and unequivocal words or conduct. A stay for forum non conveniens requires proof that the alternative forum is clearly and distinctly more appropriate; a case-management stay is exceptional and requires a rare and compelling case.

The claimants, three banks, sued companies and individual guarantors under English-law facility and guarantee documents. The defendants applied under CPR Part 11 for the court to decline jurisdiction or stay the proceedings.

The application relied first on defective service, and secondly on proceedings before the Mumbai Debt Recovery Tribunal under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002. The defendants argued that those proceedings constituted an election of Indian jurisdiction, made India the forum conveniens, or justified a case-management stay. The central issues were whether service could be cured, who had commenced the Indian proceedings, whether they were substantively parallel debt claims, and whether a stay was justified.

1. Service. The defective service was properly challengeable under CPR Part 11. An acknowledgment of service expressly filed for the purpose of contesting jurisdiction did not waive the defect. CPR 3.10 could cure the defect because service had been attempted against all defendants, there was no prejudice or limitation issue, and refusal would produce a triumph of form over substance. The court made the necessary validating order.
2. Indian proceedings. The SARFAESI process was a statutory, non-judicial self-help enforcement procedure. The first step was taken by the claimants, but proceedings before the DRT arose only when the defendants made their section 17 application. Those proceedings were limited enforcement proceedings, not classic debt-collection proceedings. Although some merits issues might arise in a section 17 challenge, they were limited to matters relevant to the basis on which the SARFAESI jurisdiction was invoked.
3. Election. The jurisdiction clause allowed the finance parties to bring concurrent proceedings in any number of jurisdictions. Even if the claimants had commenced the Indian proceedings, their conduct did not clearly and unequivocally communicate an election to abandon the contractual right to sue in England. The defendants’ construction of the phrase allowing concurrent proceedings to the extent permitted by law was circular and would deprive the provision of meaning.
4. Forum and case management. India was not clearly and distinctly the more appropriate forum. The English jurisdiction clauses, English governing law, and the limited nature of the SARFAESI proceedings weighed against a stay. A case-management stay is available only in rare and compelling cases, and that threshold was not met.
5. The defendants’ application was dismissed.