W NAGEL (A FIRM) v CHAIM PLUCZENIK & Ors

On a without-notice application for service out of the jurisdiction, the applicant must disclose facts material to the court’s limited jurisdictional inquiry, including significant objections which the defendants could reasonably raise. Materiality is assessed by the court. A serious and deliberate breach may justify setting aside service, even if the order might otherwise have been made.

England is not the clearly or distinctly appropriate forum where proceedings abroad are progressing, substantially overlap with the English claim, and create a risk of inconsistent judgments. The abuse of process tort was arguable in relation to civil proceedings, but the court indicated that it would not ordinarily police the use of foreign courts. The proceedings were therefore set aside or stayed in favour of Belgium.

W Nagel brought claims against Chaim Pluczenik, Pluczenik Diamond Company NV and Varda Shine. It alleged that related proceedings in Belgium constituted a tortious abuse of process and formed part of an unlawful means conspiracy.

The First and Second Defendants applied to set aside an order permitting service out of the jurisdiction and for declarations that the court lacked jurisdiction or should decline to exercise it. The Third Defendant, who had been served in England, applied for a stay on forum non conveniens grounds.

The central issues were whether material information about the Belgian proceedings had been withheld on the without-notice application, whether England was the appropriate forum, whether the claim raised a serious issue and fell within a jurisdictional gateway, and whether the proceedings against the Third Defendant should be stayed.

1. Material non-disclosure. The application for permission to serve out failed to disclose the existence and substance of an interim Belgian judgment which had determined that the Belgian courts had jurisdiction. It also presented an inaccurate account of the basis on which jurisdiction had been established and of the progress of the Belgian proceedings. Those matters were material to the forum conveniens assessment and to the allegation that the Belgian proceedings were founded on false jurisdictional premises. The breach was serious and deliberate. The order for service out should therefore be set aside.
2. The duty of full and frank disclosure applies to applications for service out, although the inquiry is narrower than on an application for a freezing injunction. The applicant must disclose facts and significant objections which could reasonably affect the court’s decision. The court retains a discretion as to the consequence of non-disclosure, taking account of culpability, materiality, proportionality and the administration of justice.
3. Forum conveniens. England was not clearly or distinctly the appropriate forum. The Belgian court had accepted jurisdiction, the Belgian claim was progressing, the res judicata issue was capable of being determined there, and allowing the English claim to proceed would substantially duplicate the Belgian proceedings and risk inconsistent judgments. The fact that English law might govern the tort, or that the earlier English proceedings had adjudicated related allegations, did not outweigh those considerations.
4. Merits and gateways. The existence of an abuse of process tort in relation to civil proceedings, the applicability of English law under Article 4(1) of Rome II, and recoverable loss were sufficiently arguable for the relevant threshold. Damage for the tort gateway could include direct and indirect damage. The claim therefore fell within limb (a) of PD 6B para 3.1(9). Limb (b) and the necessary and proper party gateway were not established: the substantial act was the commencement of Belgian proceedings, and the case against Ms Shine did not constitute a real issue suitable to found anchor-defendant jurisdiction.
5. The court indicated that, if necessary, it would have concluded that the abuse of process tort did not extend to foreign proceedings. The tort’s roots lay in the court’s control of its own powers and resources, and it was not ordinarily for an English court to police or second-guess the use of foreign courts. That conclusion was not determinative because the applications succeeded on other grounds.
6. The proceedings against Ms Shine were stayed pending the outcome of the Belgian proceedings. Belgium was the convenient forum for the claims against all parties, and Ms Shine was willing to testify and submit to Belgian jurisdiction.

Not an appeal. The judgment concerned applications in the Commercial Court to set aside an order permitting service out of the jurisdiction and to stay proceedings on forum non conveniens grounds.