Gorbachev v Guriev

The Court of Appeal dismissed the Trustees' appeal and held that the court has jurisdiction to permit service out of an application for third party disclosure under section 34 of the Senior Courts Act 1981 and CPR 31.17 where the documents sought are located within England and Wales. The court applied ordinary principles of statutory interpretation, recognising the presumption against extra-territoriality but concluding that the presumption has little force where the relevant documents are in the jurisdiction. The decision addressed the scope of Practice Direction 6B gateway (20) (service out where "a claim is made under an enactment") and held that an application under CPR 31.17 is a "claim" and constitutes "proceedings" for that purpose. The judge's exercise of discretion to permit service out and to allow alternative service under CPR 6.15 was upheld in the particular factual circumstances, including the presence of the documents in England and an existing related application against the English firm holding them.

Background and parties: The claimant, Mr Alexander Gorbachev, sought third party disclosure of electronic documents held in England by Forsters LLP concerning two Cyprus trusts (the Trustees being T.U. Reflections Ltd and First Link Management Services Ltd). The Trustees are Cypriot companies resisting service out. The matter arose in the context of a forthcoming commercial trial between the claimant and the defendant, Mr Andrey Guriev.

Nature of the application: The claimant applied for third party disclosure under section 34 of the Senior Courts Act 1981 and CPR 31.17 and obtained, from HHJ Pelling QC, permission under Practice Direction 6B gateway (20) to serve the application on the overseas Trustees out of the jurisdiction and for alternative service under CPR 6.15. The Trustees applied to set aside that order and the matter came before Mr Justice Jacobs; the Trustees appealed to the Court of Appeal.

Issues framed:

• Jurisdiction: whether the court can make an order for disclosure against a third party outside England and Wales and whether an application under CPR 31.17 falls within gateway (20) as a "claim" and as "proceedings".
• Discretion: whether the judge was wrong to exercise his discretion to permit service out in the facts of this case.
• Alternative service: whether the judge was wrong to permit alternative service rather than requiring service under the Hague Service Convention.

Reasoning: The court analysed CPR definitions and Practice Direction 6B and concluded that the words "claim" and "proceedings" have a neutral, ordinary meaning that includes an application for third party disclosure; Orexim was followed on gateway (20). The court acknowledged the presumption against extra-territoriality but concluded that it has diminished force where the documents in issue are physically or constructively within England and Wales. The judge's view that section 34 can be applied to third parties abroad when the documents are located in the jurisdiction was endorsed. The court left open the question whether the statute permits orders against persons abroad to produce documents located abroad, observing that that issue should be decided only if it arises and will be rare. On discretion and alternative service, the court found no error: the existence of related proceedings against Forsters in England, the location of the documents in England and the imminence of trial justified permitting service out and alternative service in the circumstances.

Subsidiary findings and practical observations: The court disagreed with the contemporaneous decision in Nix v Emerdata Ltd on the territoriality point. It emphasised that, even if jurisdiction exists to make orders against persons abroad for documents located abroad, such jurisdiction should be exercised only in exceptional cases and not to circumvent the letter of request/Hague Evidence Convention regime. The court did not resolve whether section 34 permits orders to obtain property outside the jurisdiction under section 34(3) and left those questions for later determination.

Appeal dismissed. The Court of Appeal held that (1) an application for third party disclosure under section 34 SCA and CPR 31.17 is a "claim" and constitutes "proceedings" for the purpose of Practice Direction 6B gateway (20); (2) where the documents sought are located in England and Wales, section 34 permits proceedings and service out against third parties abroad and the judge was entitled to permit service out in the factual circumstances; and (3) the judge was entitled to allow alternative service under CPR 6.15 given the urgency and the related outstanding proceedings. The court left open whether orders can be made against third parties abroad to produce documents located abroad, observing that such cases will be rare and require separate consideration.

Application originally heard by HHJ Pelling QC who granted permission to serve the application on the overseas Trustees (PD 6B gateway (20)) and alternative service; Trustee challenge to that order heard by Jacobs J in the Commercial Court ([2022] EWHC 1907 (Comm)) who upheld jurisdiction and ordered service; Trustees appealed to the Court of Appeal which delivered judgment at [2022] EWCA Civ 1270 dismissing the appeal.