Livingston Properties Equities Inc and others v JSC MCC Eurochem and another (British Virgin Islands)

In forum non conveniens proceedings, an assumption made for a stay application does not become a finding that an alternative forum is available for a service-out challenge. The applications engage distinct burdens: the claimant must satisfy the service-out requirements, while a defendant seeking a stay must establish an available forum that is clearly more appropriate, subject to any case for substantial justice in the forum. Conflicting expert evidence may justify a finding that availability has not been shown. The proper law cannot be selected without factual material identifying the closest connection for each pleaded tort. Contractual choice-of-law clauses do not determine tort claims against non-parties. Where governing law remains unknowable at the interlocutory stage, it may be treated as a neutral forum factor.

Eurochem brought proceedings in the British Virgin Islands alleging that former Russian executives and associated companies had participated in secret commission schemes. It sought relief including recovery of bribes, compensation, knowing receipt, dishonest assistance, unlawful means conspiracy and constructive-trust remedies.

Wallbank J dismissed applications to set aside service out of the jurisdiction and applications to stay the proceedings in favour of Russia. The Eastern Caribbean Court of Appeal reversed that decision, stayed the proceedings, set aside the service-out orders and discharged worldwide freezing orders. The appeal concerned the availability of Russia as an alternative forum, the governing law of the claims, and the proper application of forum non conveniens principles.

The Board allowed the appeal and advised that the order of Wallbank J be restored.

1. Applicable principles. The principles in Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460 govern both service-out and stay applications. For service out, the claimant must show a serious issue to be tried, a good arguable case within an applicable jurisdictional gateway, and that the forum is clearly or distinctly appropriate in the interests of the parties and the ends of justice. For a stay, the defendant bears the burden of showing an available forum which is clearly more appropriate, subject to the claimant demonstrating special circumstances requiring trial in the forum.
2. Availability of Russia. Wallbank J was entitled to conclude that Russia had not been shown to be an available forum because the expert evidence on Russian jurisdiction was conflicting and he could not determine which evidence to prefer. The ECCA was wrong to treat the judge’s willingness, on the separate stay applications, to assume that Russia might be available as an inconsistent finding. That assumption was made in the defendants’ favour and was not a finding on the cogency of the evidence.
3. Governing law. Governing law is an important connecting factor, but the court could not identify the law governing each pleaded tort through the exception to double actionability without factual material showing the closest and most real connection. The governing law was therefore not knowable at that stage and was a neutral factor. The Russian choice-of-law clauses in the executives’ service contracts could not mandate Russian law for tort claims against defendants who were not parties to those contracts.
4. Pleading foreign law. Foreign law did not have to be pleaded unless relied upon. Although the judge was wrong to rely on Dicey’s presumption of similarity in this context, the error caused no harm because his conclusion that the governing law could not then be identified was sound.
5. Other factors and remedies. Incorporation in the British Virgin Islands was a connecting factor, but the mere incorporation of an overseas person’s company did not itself amount to submission to the jurisdiction. The Board did not need to determine the weight of the remaining factors. It observed that, by analogy with Lord Goff’s discussion in Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460, practical justice might not be done where the alternative forum lacked equivalent remedies, but left that issue undecided.

• Privy Council: In [2020] UKPC 31, the Board allowed the appeal and restored Wallbank J’s order.
• Eastern Caribbean Court of Appeal: On 18 September 2018, the court reversed Wallbank J, stayed the proceedings in favour of Russia, set aside the service-out orders and discharged worldwide freezing orders.
• High Court of Justice of the British Virgin Islands: Wallbank J dismissed the applications to set aside service and to stay the proceedings.