Orexim Trading Ltd v Mahavir Port and Terminal Private Ltd & Ors

For service out of the jurisdiction under Practice Direction 6B para 3.1(20)(a), an enactment must expressly contemplate proceedings involving a foreign defendant or foreign element. A general statutory remedy is insufficient. A related-claim gateway requires more than a common background debt or a claim being described as parasitic; the claims must arise from the same or closely connected facts and involve a genuine connecting factor. The serious-issue threshold is modest, but suspicion alone does not establish a real prospect of success. Where a gateway is unavailable, permission to serve out and ancillary relief must be set aside, even if the merits and forum factors would otherwise favour the claimant.

The claimant sought to maintain proceedings against Indian companies concerning an unpaid settlement obligation, alleged undervalue transfers of vessels under Insolvency Act 1986 s 423, and a declaration that the transfers were shams. Permission had previously been granted to serve MPT, Singmalloyd and Zen out of the jurisdiction, and a freezing injunction had been granted against Zen.

MPT and Zen applied to discharge the permission and, in Zen’s case, the injunction. The issues were whether an applicable jurisdictional gateway existed, whether there was a serious issue to be tried, whether England was clearly the appropriate forum, and whether there had been material non-disclosure.

1. Outcome. Permission to serve MPT in respect of the Insolvency Act and declaration claims was set aside. Service on Zen was set aside entirely and the freezing injunction was discharged. The position of Singmalloyd was reserved for submissions at hand-down.
2. Statutory-enactment gateway. The claim under Insolvency Act 1986 s 423 did not fall within Practice Direction 6B para 3.1(20)(a). Following the reasoning in Re Harrods (BA) and Banco Nacional de Cuba, a general enactment does not suffice. The enactment must indicate on its face that it contemplates proceedings involving persons or events outside the jurisdiction. Section 423 contained no such limitation or express foreign element.
3. Related-claim and necessary-party gateways. The s 423 claim did not arise from the same or closely connected facts as the contractual damages claim. The claims required proof of materially different and more extensive matters. A claim is not within the gateway merely because it protects or is parasitic upon another claim. For the same reason, Zen was not shown to be a necessary or proper party to the damages claim. The declaration claim could not rely on those gateways either.
4. Merits and forum. Although unnecessary to the result, the judge held that the claims disclosed a serious issue to be tried. The unusual vessel-sale transactions, apparent undervalue, financial stress and evidence concerning creditor prejudice justified that conclusion, while recognising that such claims may depend on inference. Had a gateway existed, England would have been the clearly appropriate forum on the assumed facts.
5. Non-disclosure. Also hypothetically, the original orders would not have been discharged for material non-disclosure. The disclosure was generally full, and the alleged omissions were either immaterial, fairly presented, or explained by mistake.