Punjab National Bank (International) Ltd v Srinivasan & Ors

On an application to serve proceedings out of the jurisdiction, deliberate and material non-disclosure of parallel foreign proceedings is a serious default. The ordinary consequence is that the order permitting service is discharged, although the court retains a discretion to continue or reinstate it. That discretion must be exercised sparingly, having regard to the protection of the administration of justice, the public interest in full and frank disclosure, culpability, materiality and proportionality.

Exclusive English jurisdiction clauses are important factors in deciding the appropriate forum, but they do not automatically require the English court to accept duplicative contractual proceedings. Service by email under alternative-service provisions requires exceptional circumstances. An extension of time for service should normally relate to issues concerning service itself.

Punjab National Bank (International) Ltd appealed from the Chief Master’s order setting aside permission to serve proceedings out of the jurisdiction, permission to serve by email, an extension of time for service, the claim form and service on the defendants.

The claims arose from loans and guarantees connected with projects in the United States. Parallel proceedings had been brought in South Carolina and Chennai. The Chief Master found inadequate pleading of fraud, inappropriate forum, material non-disclosure, unauthorised service of amended pleadings, lack of exceptional circumstances for email service, an invalid extension of time and service out of time.

The central issues were whether those conclusions were correct and whether the orders should nevertheless be reinstated, wholly or partly.

1. Permission to appeal and forum. Permission to appeal was granted on the issues pursued. The Chief Master had placed insufficient weight on the English jurisdiction clauses, the centre of gravity of the lending relationship, the effect of the Hague Convention and Brussels Recast, and the fact that the Pesco claims were not covered by the foreign proceedings. England was the appropriate forum for the Pesco contractual claims and, if seriously arguable, the fraud claims. It was not the appropriate forum for duplicative contractual claims relating to the SEPL and Trishe loans.
2. Fraud pleading. Fraud must be properly particularised and specific against each alleged wrongdoer. The pleadings were diffuse and generalised, did not identify specific representations made by individual defendants, and did not explain the alleged authority of the non-party said to have made them. No sufficiently serious case in deceit or misrepresentation was shown.
3. Non-disclosure. The deliberate failure to disclose the US and Chennai proceedings was a serious breach of the duty of full and frank disclosure. The ordinary rule is that an order obtained in breach should be discharged, but the court may continue or reinstate it. That jurisdiction is penal and must be exercised sparingly, considering culpability, significance, the administration of justice, the public interest and proportionality. The breaches were sufficiently serious that both orders had to be set aside in their entirety and not reinstated.
4. Service and amendments. The 9 February 2018 order authorised service of the latest amended documents on all defendants. Nevertheless, email service was unjustified because no exceptional circumstances existed. The extension of time was properly refused because it was not required by difficulties concerning service, and service was in any event out of time. Relief from sanctions was unavailable in light of the procedural failures and the material non-disclosure.
5. The appeal against the Chief Master’s order was dismissed.

• High Court (Chancery Division): The Chancellor granted permission to appeal, but dismissed the appeal against the Chief Master’s order setting aside the permission and service orders.