Suppipaj & Ors v Narongdej & Ors

Where foreign law may apply but a claimant does not rely on its content, the claimant may plead a complete case on the basis of the default application of English law. If the defendant pleads foreign law, the claimant may ordinarily respond in a reply, although case management may make amendment of the particulars more convenient. Costs remain discretionary. A claimant should not ordinarily bear amendment costs merely because it initially relied reasonably on the default rule. In a claim under Insolvency Act 1986, sufficient connection with England and Wales is assessed as part of the court’s broad discretion. The relevant factors are non-exhaustive, and related litigation in England may itself provide a sufficient connection.

The claim concerned an alleged conspiracy involving transfers of shares in Thai energy companies. The claimants advanced, among other claims, claims under foreign law and a claim under section 423 of the Insolvency Act 1986. Two case-management issues arose at a case management conference.

First, the court determined who should bear the costs of amendments pleading Thai law after the defendants had pleaded foreign law. Secondly, the Tenth Defendant applied to strike out, or obtain summary judgment on, the section 423 claim on the ground that there was no sufficient connection with England and Wales.

1. Costs of amendments. The usual position under CPR Part 17 is that the party applying to amend pays the costs of and occasioned by the amendment. That position may be displaced where the circumstances make a different order just. The claimants had been entitled to rely initially on the default rule in Rule 25(2) of Dicey & Morris. They had not pleaded the content of foreign law and had not thereby improperly pleaded an existing foreign-law cause of action.
2. The default rule permits a claimant to plead its case as if English law applied where it does not rely on the content of foreign law. If a defendant wishes to rely substantively on foreign law, it should plead that law in its defence. The claimant may ordinarily respond in its reply, although amendment of the particulars may be more convenient in a particular case. The rule is flexible and may be adjusted for case-management reasons. The defendants’ position that the claimants could not respond in a reply, coupled with their reliance on foreign law in their defences, justified treating the amendments as costs in the case.
3. Section 423 claim. Under Insolvency Act 1986, the court’s power to grant relief is subject to a broad discretion. Where foreign elements exist, the court must be satisfied that the defendant is sufficiently connected with England and Wales for it to be just and proper to grant relief. The factors identified in Re Paramount Airways (No. 2) are not exhaustive. The court must consider all relevant circumstances and avoid exercising the jurisdiction oppressively or unreasonably.
4. At the strike-out or summary-judgment stage, the question was whether there was a realistic prospect of establishing a sufficient connection. Although the ordinary connecting factors pointed away from England, the Tenth Defendant would in any event be involved in English proceedings concerning the same transfers and faced related damages claims. Following Jyske Bank (Gibraltar) Ltd v Spjeldnaes and Avonwick Holdings Ltd v Azitio Holdings Ltd, that related litigation could constitute a connecting factor. The approach in Orexim Trading Ltd v Mahavir Port and Terminal Private Ltd was materially distinguishable because the section 423 claim there was substantially free-standing.
5. The Tenth Defendant’s application was dismissed. The section 423 claim could proceed, subject to the defendant relying at trial on all circumstances, including the absence of other English connections, in opposing relief.