Punjab National Bank (International) Ltd v Vishal Cruises (Private) Ltd & Ors

Permission to serve proceedings out of the jurisdiction requires only one applicable gateway, established on the better of the argument standard. The merits threshold is low: the claim must have a real, rather than fanciful, prospect of success. Forum conveniens is assessed by considering the claims as a whole, including the risk of multiplicity and inconsistent judgments.

A failure of full and frank disclosure warrants setting aside service orders only where the undisclosed matter was material, assessed in its procedural context. Certificates issued by foreign authorities under the Hague Convention create a very strong presumption that service complied with local law. Alternative service requires good reason and, in a Hague Convention case, circumstances amounting to exceptionality. An anti-suit injunction requires a high threshold of vexation, oppression, unconscionability or some other basis in the interests of justice.

The Bank brought claims against guarantors of lending provided to Vishal Cruises and Passat Kreuzfahrten in connection with the purchase and charter of a vessel. The guarantees included English-law guarantees, Indian-law guarantees and guarantees governed by Mauritian law. Permission had been granted to serve certain defendants in India, and subsequent orders extended time and permitted alternative service.

The defendants applied to set aside the service orders, alleging inadequate jurisdictional gateways, no serious issue to be tried, forum non conveniens, material non-disclosure and defective Hague Convention service. They also sought an anti-suit injunction restraining insolvency proceedings brought by the Bank against Superior Industries before the Indian National Company Law Tribunal.

1. Jurisdictional gateways. The Bank cleared at least Gateway 7 because the payment obligations were owed to an English-domiciled bank and were performable in England. The court applied the general rule that, absent a specified place of performance, a guarantor’s obligation follows the place of performance of the principal debt. Gateway 3 was also likely satisfied because the claims were interdependent and involved overlapping liabilities. A defendant served abroad with permission could act as an anchor defendant.
2. Serious issue to be tried. The guarantees’ alleged invalidity under Indian law raised a genuine dispute on the evidence. The low merits threshold was therefore met. The court considered that the second Vishal guarantees were strongly arguable as governed by English law, having regard to the principal facility, the Bank’s domicile and the place of payment. Alleged Indian illegality did not defeat the claims at this stage.
3. Forum conveniens. England was clearly and distinctly the appropriate forum. The claims were closely intertwined, some claims were already proceeding in England as of right, and a trial in India would create a substantial risk of multiple and irreconcilable judgments.
4. Non-disclosure. The alleged non-disclosures, including Indian insolvency proceedings, security, attempted vessel sales and alleged FEMA difficulties, were not material to the jurisdictional issues. The court distinguished Punjab National Bank (International) Ltd v Srinivasan & Ors, where the foreign proceedings were genuinely duplicative and the merits were materially weaker. Even if the FEMA issue had required disclosure, the service orders would have been upheld because the merits were strong and culpability was materially lower.
5. Service. The Indian certificates of service created a very strong presumption of valid service which was not rebutted. The Passat claim was also served on Mr Agrawal on the same occasion as the Vishal claim. Alternatively, technical defects could be cured under CPR 3.10, and the exceptional circumstances justified dispensing with service under CPR 6.16.
6. Alternative service and anti-suit relief. The exceptionality threshold for alternative service was met because of repeated failed Hague attempts, prolonged delay, actual notice and the absence of prejudice. The anti-suit injunction was refused. The Indian insolvency proceedings concerned a distinct insolvency question, were brought in the company’s domicile and were not shown to be vexatious or oppressive. The applications were dismissed and permission to appeal was refused.

First-instance applications in the High Court (Commercial Court). The court dismissed the applications to set aside service orders, challenge jurisdiction and obtain an anti-suit injunction. Permission to appeal was refused.