Dennis v Tag Group Ltd & Ors

The court held that two foreign shareholders, TAG Group Limited and Bahrain Mumtalakat Holding Company B.S.C., had voluntarily submitted to the jurisdiction of the English court by their conduct in resisting an urgent injunctive application brought by the petitioner, Mr Dennis. The judge applied the conventional objective test (the viewpoint of a disinterested bystander) to determine whether acts and omissions were only explicable by waiver of jurisdictional objection. Key factors were the defendants' conduct in requesting and receiving application papers, giving undertakings in the English Court without an express reservation as to jurisdiction, preparing and filing witness statements and skeleton arguments addressing the merits, and not informing the court at the injunction hearing that jurisdiction was contested. The court rejected a special carve-out that would immunise defendants resisting injunctions from submitting to jurisdiction by their conduct. In the alternative the judge held that Article 24 of the Recast Brussels Regulation applied, such that permission to serve out was not required.

Background and parties: The petitioner, Mr Ronald Dennis (a 25% shareholder, director and former chief executive of McLaren Technology Group Ltd), sought urgent injunctive relief to prevent shareholders (TAG and BMH, who together held 75% of McLaren) from placing him on garden leave and delegating board authority to an interim executive committee. The injunctive application was heard in November 2016; the petitioner subsequently issued a section 994 petition and applied for an order treating service on TAG and BMH as good service in London.

Nature of the application: The specific relief sought in the December 2016 application was an order that the unfair prejudice petition be treated as properly served on TAG and BMH by delivery to their London solicitors. The threshold issue was whether TAG and BMH had submitted to the jurisdiction of the English court by their conduct during the injunctive proceedings; alternatively whether Article 24 of the Recast Brussels Regulation permitted service out without permission.

Issues framed:

• Whether participation in and resistance to the injunction application amounted to voluntary submission to the jurisdiction of England and Wales.
• Whether there is any special legal rule excusing conduct in resisting injunctive relief from constituting submission.
• Alternatively, whether the exclusive jurisdiction provisions of the Recast Brussels Regulation (Article 24) applied so that permission to serve proceedings out of the jurisdiction was not required.

Court's reasoning and findings:

• The judge applied established authorities and adopted an objective, disinterested-bystander test: a party submits to jurisdiction if its conduct is only explicable on the basis that it has accepted the Court's jurisdiction.
• The court found a number of factors pointing to submission: requests for, and actual receipt of, the application papers; providing undertakings in the English court without an express and clear reservation of jurisdiction; drafting and filing witness statements and skeleton arguments addressing the merits; failing to notify the court at the injunction hearing that jurisdiction was in issue; and reliance on arguments directed to the merits (including that damages were an adequate remedy) without indicating that enforcement of any award might require foreign proceedings.
• The judge rejected the submission that there is a carve-out for defendants resisting injunctions: the same objective test applies and a defendant may avoid submission only by taking unequivocal steps reserving the right to object to jurisdiction.
• Accordingly the court concluded TAG and BMH had unequivocally submitted to the jurisdiction (or waived their right to contest jurisdiction) and granted the application. In the alternative the court found that Article 24 of the Recast Brussels Regulation applied and permission to serve out was not required.

Procedural posture: First instance determination in the Companies Court of the Chancery Division; the judgment records earlier interlocutory injunctive hearings before Mr Justice Newey and the Chancellor in November 2016 and the subsequent contested jurisdiction application in December 2016.

The petitioner's application was granted. The court held that TAG Group Limited and Bahrain Mumtalakat Holding Company B.S.C. had voluntarily submitted to the jurisdiction of the English court by their conduct in the injunctive proceedings (an objective bystander test); alternatively, Article 24 of the Recast Brussels Regulation applied so that permission to serve out was not required. The judge therefore ordered accordingly.