Summary
On an application for service out against one of several defendants, the existence of continuing English proceedings involving other defendants on the same or closely allied issues may make England the clearly appropriate forum. The risk of duplicated proceedings and inconsistent judgments is a powerful factor.
On a without-notice application, materiality is assessed objectively. The applicant must disclose facts which may influence the court’s decision, after making proper inquiries, but need not identify every conceivable point. The court retains a discretionary power to continue or re-grant relief despite non-disclosure, having regard to culpability, significance, proportionality and the interests of justice.
A strong prima facie case of fraud may support a finding of real risk of dissipation.
Factual background
The claimants alleged that the defendants had induced the payment of more than US$500 million and €24.85 million through a fraudulent investment-fund scheme. They sought damages, restitution, proprietary relief and declarations of trust.
At the return-date hearing, Mais and Dr Pontes challenged service out and sought discharge of worldwide freezing and proprietary injunctions. Mr Onderwater also sought discharge, a case-management stay and related relief. The applications concerned forum, full and frank disclosure, risk of dissipation and the effect of an unpursued arbitration stay application.
The central issues were whether England was clearly or distinctly the appropriate forum, whether material non-disclosure justified discharge, and whether the evidence established a real risk that a future judgment would be defeated by unjustifiable dissipation.
Held
- Forum. The jurisdictional challenge by Mais and Dr Pontes was dismissed. Although the Consultancy Agreement contained an Angolan jurisdiction clause, the claims against several defendants were continuing in England and involved common facts, transactions, witnesses and documents. The defendants were real parties to the dispute, rather than being joined merely to obtain jurisdiction. Requiring parallel proceedings in Angola would create substantial duplication and a real risk of inconsistent judgments. England was therefore clearly and distinctly the appropriate forum.
- Full and frank disclosure. The court found no material non-disclosure concerning Dr Pontes’ background, the involvement of President dos Santos and Mr Filomeno dos Santos, the political context, the Landmark Hotel meetings, the possible application of Angolan law or the remedies available under Angolan law. Materiality was an objective question. The claimants were required to disclose matters relevant to the court’s exercise of discretion, but were not required to present every conceivable defence or collateral point.
- Even if some additional matters ought to have been disclosed, the omissions were neither substantial nor deliberate. Applying the principles in Brink’s Mat Ltd v Elcombe and National Bank Trust v Yurov, the interests of justice favoured continuing the injunctions.
- Risk of dissipation. The evidence of false documents, alleged fraudulent misrepresentations, the transfer to a small English company and unexplained payments supported a real risk, judged objectively, that a future judgment would not be met because of unjustifiable dissipation. The freezing injunction was therefore maintained.
- Other applications. The unpursued application by Project SPV for a stay under section 9 of the Arbitration Act 1996 was dismissed. Mr Onderwater’s consequential case-management stay application was also dismissed. The order of Popplewell J continued to trial or further order, with costs prima facie following each event.
The court’s approach to earlier authorities
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Key cases cited
16 authorities cited.
- AK Investment CJSC v Kyrgyz Mobil Tel Limited and others (Isle of Man) [2011] UKPC 7
- Donohue v. Armco Inc and Others [2001] UKHL 64
- Spiliada Maritime Corpn v Cansulex Ltd (The Spiliada) [1987] AC 460
- Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528
- Candy & Ors v Holyoake & Anor [2017] EWCA Civ 92
- Jong v HSBC Private Bank (Monaco) SA [2015] EWCA Civ 1057
- Kazakhstan Kagazy Plc & Ors v Arip [2014] EWCA Civ 381
- National Bank Trust v Yurov [2016] EWHC 1913
- OJSC VTB Bank v Parline Ltd [2013] EWHC 3538
- JSC BTA Bank v Granton Trade Ltd & Ors [2010] EWHC 2577 (Comm)
- Arena Corporation Limited v Schroeder [2003] EWHC 1089 (Comm)
- Credit Agricole Indosuez v Unicof Ltd and others [2003] EWHC 2676 (Comm)
- Citi-March Ltd v Neptune Orient Lines Ltd [1996] 1 WLR 1367
- AIGLON LTD. AND L’AIGLON S.A. v. GAU SHAN CO. LTD. GAU SHAN CO. LTD. v. AIGLON LTD. AND OTHERS [1993] 1 Lloyd's Rep 164
- Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350
- ARATRA POTATO CO. LTD. AND ANOTHER v. EGYPTIAN NAVIGATION CO. (THE "EL AMRIA") [1981] 2 Lloyd's Rep 119
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Cases citing this case
3 later cases · 2 positive · 1 caution
Most senior citing decisions:
- Rechtsanwalt Dr Michael Jaffé & Anor v Greybull Capital LLP & Ors [2024] EWHC 2534 (Comm) explained
- Dr Markus Boettcher v Xio (UK) LLP (in liquidation) & Ors [2023] EWHC 801 (Comm) applied
- Avonwick Holdings Ltd v Azitio Holdings Ltd & Ors [2020] EWHC 1844 (Comm) applied
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