JSC Mezhdunarodniy Promyshlenniy Bank & Anor v Pugachev & Ors

When a late jurisdictional challenge may affect the validity of proceedings, the court must decide whether to pause the trial by applying the overriding objective. The relevant considerations include fairness, proportionality, expense, efficient use of court resources, the complexity and importance of the case, and the risk of duplicated evidence or submissions. The court may continue the trial where stopping immediately would cause a disproportionate waste of costs and resources, provided that the challenge is dealt with promptly and kept under active review.

The proceedings were enforcement proceedings concerning trusts and related allegations. On the morning fixed for cross-examination, the first defendant applied to adjourn the trial. He argued that Judgment Regulation (Recast) 1215/2012 did not apply, that the court’s jurisdiction had not been engaged, and that he had not been properly served.

The court could not determine the merits of the jurisdictional argument at that stage. The issue was whether the trial should stop immediately while the application was considered.

1. The application to stop or adjourn the trial immediately was refused. The trial was to continue.
2. The decision was governed by the overriding objective in Civil Procedure Rules 1998, Part 1, rule 1.1(1) and rule 1.1(2). The court had to deal with the case justly and at proportionate cost, having regard to equality of arms, expense, expedition, fairness, the importance and complexity of the case, the parties’ financial positions, and the proper allocation of court resources.
3. The jurisdictional challenge appeared capable, if correct, of affecting service and the engagement of the court’s jurisdiction. It also created a risk that evidence might later need to be repeated if the first defendant became properly involved. Those risks were material but did not make an immediate adjournment proportionate.
4. Stopping the trial at once would cause a substantial and avoidable waste of the parties’ and the court’s resources. The appropriate course was therefore to continue the trial, accepting that future costs or further evidence might require unusual directions.
5. The application was not to be adjourned indefinitely. The court directed that its position be reviewed with counsel two days later, thereby preserving the possibility of a different course after the parties had had time to investigate the jurisdictional arguments.