Marashen Ltd v Kenvett Ltd & Anor

Permission to serve proceedings outside the jurisdiction must be granted before the court may authorise alternative service on a foreign defendant within the jurisdiction. Rule 6.15 of the Civil Procedure Rules 1998 is not an independent foundation for jurisdiction.

Where the Hague Service Convention or an exclusive bilateral service treaty applies, an alternative method outside the treaty requires exceptional circumstances. Ordinary delay, expense or convenience is insufficient, although exceptionally lengthy delay, litigation prejudice or disproportionate service costs may qualify. The Convention does not prohibit alternative service completed within England because that method entails no transmission of documents for service abroad.

The claimant sought a non-party costs order under section 51 of the Senior Courts Act 1981 against the beneficial owner of the defendant company. The Master authorised alternative service of the application on solicitors in England, although the proposed respondent lived in the Russian Federation and no permission to serve outside the jurisdiction had been granted.

The proposed respondent appealed. The issues were whether permission to serve out was a prerequisite, whether the Hague Service Convention prohibited alternative service within England, and whether the circumstances justified departure from the Convention procedure.

1. The appeal was allowed and the Master's alternative-service order was set aside. Where a defendant resides outside the jurisdiction, an order for alternative service within England can be made only after the court has determined that the proceedings are suitable for service out and has granted permission. The power arises through rule 6.37(5)(b)(i) of the Civil Procedure Rules 1998. Rule 6.15 is not a freestanding basis of jurisdiction: Abela v Baadarani [2013] UKSC 44 and Plantation Holdings (FZ) LLC v Dubai Islamic Bank PJSC [2013] EWCA Civ 1229 applied.

2. Permission to serve the section 51 application in the Russian Federation was granted. There was an express jurisdictional gateway, a serious issue to be tried, and England and Wales was the only forum in which the ancillary non-party costs relief was available.

3. The Hague Service Convention did not remove the court's jurisdiction to authorise alternative service within England. The question whether jurisdiction should be exercised over a foreign resident is distinct from the method by which service is effected. Service completed within England involves neither transmission of a document for service abroad nor service abroad. The risk of circumventing the Convention is addressed through the stringent threshold governing the rule 6.15 discretion.

4. Where the Hague Service Convention, or an exclusive bilateral service treaty, applies, exceptional circumstances must be established before service by a method outside the treaty is authorised. Mere delay or expense is insufficient. Delay may qualify where it causes litigation prejudice or is exceptionally long and incompatible with the due administration of justice. Disproportionate service costs may also be material in a claim of modest value. The contrary, less restrictive approach in Maugham v Wilmot (No 2) [2016] EWHC 29 (Fam) was not followed.

5. The exceptional-circumstances threshold was not met. The hybrid nature of a section 51 application did not itself make the case exceptional. The anticipated service period was ordinary delay and caused no identified prejudice. Article 15 of the Convention could permit progress after six months in the stated circumstances. There was also no evidence that translation costs were disproportionate to the substantial costs claim. The court therefore declined to make a fresh alternative-service order.

1. High Court (Chancery Division): The appeal was allowed. The order under rule 6.15 of the Civil Procedure Rules 1998 was set aside, permission to serve outside the jurisdiction was granted, and a fresh alternative-service order was refused.

2. Master: By an order dated 27 October 2016, Master Price refused to set aside the earlier alternative-service order and ordered the proposed respondent to pay the application costs. Reasons were handed down on 18 November 2016.

3. High Court: Snowden J granted permission to appeal on 3 April 2017.