Abu Dhabi Commercial Bank PJSC v Bavaguthu Raghuram Shetty & Ors

The court considered contested jurisdiction and forum non conveniens issues, service out under section 1140 of the Companies Act 2006, the applicability of the tort gateway and the governing law under Article 4 of the Rome II Regulation. It accepted undertakings from each defendant and concluded there was a real issue to be tried against each defendant but that Abu Dhabi was a clearly and distinctly more appropriate forum. The court therefore stayed proceedings as against the first to fourth defendants, recording a limited concession of jurisdiction for applications to lift the stay in the event of breach of undertakings, and gave liberty for the defendants to apply to seek a declaration that the English court will not exercise jurisdiction and to set aside service out.

The judge held that Article 4(2) of Rome II dictated that Abu Dhabi (UAE) law governed because the parties were habitually resident in the same country when damage occurred, and Article 4(3) could not realistically yield English law. The court refused permission to appeal on the principal grounds, made detailed costs orders (defendants recover their costs of the claim and of the freezing-order set-aside application and one-third of their costs of the jurisdiction challenge, on the standard basis) and directed that an interim payment on account to the first defendant should be £300,000.

This was a first instance commercial jurisdiction and interim relief hearing concerning claims by Abu Dhabi Commercial Bank PJSC. The background included ongoing insolvency processes (an English PLC insolvency and extensive insolvency processes in the UAE) and an existing worldwide freezing order. The claimant challenged jurisdiction and sought to resist the defendants' application to prevent England being the forum for trial and to discharge or vary interim relief.

• Nature of the application: contested jurisdictional challenges (including service under s.1140 Companies Act 2006 and the Practice Direction 6B gateways), forum non conveniens, consequence of accepted undertakings, and consequential orders about the worldwide freezing order and costs; an application for permission to appeal was also determined.
• Issues framed by the court: (i) whether there was a real issue to be tried against each defendant; (ii) whether service on the first defendant complied with s.1140 Companies Act 2006 and whether the claims against defendants passed through the appropriate gateway(s) including tort to a limited extent; (iii) whether England was the clearly and distinctly appropriate forum or whether Abu Dhabi was plainly more appropriate; (iv) the applicable law under Article 4 of Rome II (including the effect of Article 4(2) and the narrow exceptional scope of Article 4(3)); (v) whether there had been adequate full and frank disclosure in the without-notice freezing-order application (fair presentation and alleged failures under section 6 as raised in argument); and (vi) appropriate orders about the worldwide freezing order pending any appeal and the allocation and basis of costs.
• Court’s reasoning and disposition: the judge found service under s.1140 to be proper and that, overall, the claims passed the necessary gateway stages to permit jurisdictional inquiry. However, on an overall evaluative assessment the centre of gravity of the dispute was in the UAE: Article 4(2) applied because the claimant and defendants were habitually resident in Abu Dhabi when the damage occurred, so Abu Dhabi law governed; Article 4(3) could only apply in exceptional circumstances which were not met. For those reasons the court concluded Abu Dhabi was the clearly and distinctly more appropriate forum and accepted defendants' undertakings. The court explained that it would record a narrow concession of jurisdiction limited to applications to lift the stay if undertakings were breached. It stayed proceedings as against defendants 1–4 with liberty for those defendants to apply for declarations and to set aside service out. On the worldwide freezing order, the judge declined to grant the long-stop extension sought from the court itself and directed the claimant to seek any longer delay from the Court of Appeal in a permission-to-appeal application; the court fixed a limited date (29 April at 4:30pm) by which the freezing order should discharge if permission was refused. Permission to appeal was refused on the principal forum and disclosure grounds as having no realistic prospect of success. Costs were awarded to the defendants: the defendants recover their costs of the claim and of the freezing-order set-aside application in full and one-third of their costs of the jurisdiction challenge, assessed on the standard basis; the first defendant is to receive an interim payment on account of £300,000.

First instance: the court stayed the proceedings generally as against the first to fourth defendants (with liberty for those defendants to apply for declarations that the court will not exercise jurisdiction and to set aside service of the claim form out of the jurisdiction). The court accepted undertakings from the defendants, recorded a limited concession of jurisdiction confined to applications to lift the stay in the event of breach, refused permission to appeal (no realistic prospect of success on the forum and disclosure grounds), delayed discharge of the worldwide freezing order to 29 April 2022 at 4.30pm in the event permission is refused, awarded defendants their costs of the claim and of the freezing-order set-aside application and one-third of their costs of the jurisdiction challenge (standard basis) and ordered an interim payment of £300,000 to the first defendant.