Yukos Finance BV & Ors v Lynch & Ors

Under Civil Procedure Rules 1998, r 6.15, alternative service requires a good reason arising from the circumstances of the case. Mere delay in ordinary service will generally be insufficient. Relevant considerations may include unsuccessful reasonable attempts to serve, likely further delay, evasion of service, the interests of other parties, and the intended recipient’s awareness of the proceedings.

For personal service, the question is whether the recipient acquired knowledge that the documents were legal documents requiring attention in connection with proceedings. That knowledge may be inferred from the recipient’s conduct, including inspecting the documents and attempting to evade service.

The claimants brought proceedings concerning the alleged unlawful sale of assets of Yukos Oil. The first defendant, Stephen Lynch, applied to set aside an order extending time for service out of the jurisdiction and an order retrospectively validating service by an alternative method at Beirut airport.

He argued that there had been unjustified delay, material non-disclosure, service contrary to Lebanese law, no good reason for alternative service, and inadequate communication of the nature of the documents. The court therefore considered the validity of the earlier procedural orders and whether the documents delivered to Mr Lynch gave him sufficient knowledge of their legal character.

1. Mr Lynch’s challenges to the orders of Phillips J dated 24 May 2016 and Andrew Baker J dated 24 March 2017, and his application for a declaration that the court had no jurisdiction over him, were dismissed.

2. The alleged delay did not justify setting aside the extension of time. The claimants had reasonably prioritised service in Florida, had applied for an extension before expiry of the original period, and had prepared for service in Russia, where service was expected to take substantial time. Nor did the failure to disclose the earlier unsuccessful subpoena service justify setting aside the order. The information was not material, and, even if material, the omission was not sufficiently serious.

3. For an order under Civil Procedure Rules 1998, r 6.15, the court considered that there was good reason for alternative service. Reasonable attempts to serve in the United States had failed; service in Russia was likely to be substantially delayed; there was evidence supporting an inference that Mr Lynch was seeking to avoid service; the other defendants had been served and had filed defences; and Mr Lynch was aware of the proceedings. Mere delay alone would not generally suffice.

4. The fact that delivery of foreign court documents on a Lebanese public holiday would not constitute good service under Lebanese law did not mean that the delivery was forbidden by that law. The court accepted the distinction between an act being invalid and an act being contrary to law.

5. Following the approach in Tseitline v Mikhelson and others [2015] EWHC 3065 (Comm), the relevant question was whether Mr Lynch acquired knowledge that the documents were legal documents requiring his attention in connection with proceedings. The visible documents were inspected by him at the airport. It was therefore safe to infer that he appreciated their legal nature and relevance to proceedings, despite his evidence that he was not wearing his glasses.