Avonwick Holding Ltd v Azitio Holdings Ltd & Ors

Alternative service in a Hague Convention case is exceptional and requires special circumstances. The court must consider all relevant circumstances, rather than treating delay or the defendant’s knowledge as independently decisive. Relevant factors include whether the defendant knows of the claim, whether proper service could have been effected within the claim form’s validity, the claimant’s conduct, the likely duration and significance of delay, and any resulting litigation prejudice. Delay may justify alternative service where, in the context of existing proceedings and a fixed trial, service through the Convention would prevent effective case management or cause the litigation to fall behind. The test remains fact-sensitive.

The judgment concerned an application by the 14th and 15th defendants to set aside an order permitting alternative service under CPR 6.15. The order had been made without notice after the defendants, domiciled in Ukraine, were joined to existing proceedings involving claims concerning interests in UGMK.

The additional claimants also sought validation of service on solicitors in London. The central issue was whether the exceptional circumstances required for alternative service in a Hague Convention case were established, having regard to the defendants’ knowledge, the anticipated delay in service through the Convention, and the possible effect on a trial listed for October 2019.

1. The Set Aside Application was dismissed. It was unnecessary to determine the Validation Application.
2. Although the application was expressed to rely on CPR 23.10 and CPR 3.1, the jurisdictional challenge fell within CPR 11. No ruling on that procedural issue was necessary.
3. Under CPR 6.15, read with the Hague Convention authorities, alternative service is exceptional and is permitted only in special circumstances. The court must consider all relevant circumstances. The defendant’s knowledge of the claim is important, but knowledge alone is insufficient.
4. The evidence justified an inference that the applicants were aware of the claims through their solicitors, related corporate proceedings and settlement discussions.
5. Service through the Hague Convention in Ukraine could take a year or more. In this case, that delay would cause litigation prejudice because issues involving the applicants might need to be dealt with at the October 2019 trial. Prompt service was necessary to enable effective participation and to bind the applicants by the outcome.
6. Each Hague Convention case turns on its facts. The exceptional circumstances test was satisfied.