HC TRADING MALTA LIMITED v K.I. (INTERNATIONAL) LIMITED & Ors

For CPR gateway 3, the anchor claim must involve both a viable real issue and an objective reason for the court to try it. A claim may remain a real issue even if it is very strong or likely to succeed. The reasonableness inquiry is evaluative and turns principally on utility, including the potential value of a judgment through recognition or enforcement. The anchor defendant’s intention to defend is relevant but not determinative.

Gateway 3 does not itself establish the proper forum. The court must separately assess the dispute as a whole, including the risk of fragmented proceedings and inconsistent findings. Claims against a principal debtor and a security provider may appropriately be tried together where their factual and legal issues are closely connected.

HC Trading Malta Ltd brought claims concerning dishonoured cheques issued by the second defendant, a Singapore-domiciled company, as security for liabilities allegedly owed by the first defendant under English-law coal sale contracts containing an exclusive jurisdiction clause. Permission had been granted to serve the defendants out of the jurisdiction, relying on the first defendant as the anchor defendant and on CPR gateway 3 for the second defendant.

The second defendant challenged the existence or exercise of jurisdiction under CPR Part 11. It argued that the anchor claim was unanswerable, lacked utility, and was not reasonably triable in England. It alternatively sought a stay on forum non conveniens grounds. The issues were whether gateway 3 was satisfied and whether England was the proper forum for the dispute.

1. The jurisdiction challenge and alternative stay application were dismissed.
2. The relevant date for testing the jurisdictional gateway and proper forum was the date of Henshaw J’s permission order, 6 May 2020. Subsequent evidence could be considered insofar as it illuminated the position at that date.
3. The first limb of gateway 3 contains two distinct requirements: a real issue and reasonableness. A real issue means a jurisdictionally founded and substantively viable claim, not one bound to fail. It may exist even where the claim is overwhelmingly strong or likely to succeed.
4. The reasonableness inquiry is objective and evaluative. The court may try an uncontested claim where judicial determination and relief would serve some useful purpose. Utility is assessed by common sense and, for a monetary claim, includes potential recovery against assets in the defendant’s home jurisdiction through recognition or enforcement. Any utility assists, although it does not necessarily establish reasonableness.
5. The anchor defendant’s intention to defend is relevant but not decisive. The court may proceed despite non-participation where the claim has utility, and an intention to defend does not itself make trial reasonable.
6. Satisfaction of gateway 3 does not establish the proper forum. Applying the Spiliada approach, England was clearly and distinctly the appropriate forum because the cheque claims were closely connected with the underlying sale contracts and security arrangements. Trying the principal-debtor and security-provider claims together reduced the risk of inconsistent decisions and avoided undesirable fragmentation between England and Singapore.
7. The alternative stay application also failed. No post-permission-order circumstances showed that continuation in England was contrary to the interests of justice.