Transworld Payment Solutions U.K. Limited & Anor. v First Curaçao International Bank N.V. & Anor.

For service out of the jurisdiction, the claimant must show a good arguable case on the gateway, a serious issue to be tried and that England and Wales is clearly or distinctly the appropriate forum. The court identifies the forum with the most real and substantial connection, considering the dispute as a whole and the interests of all parties and the ends of justice.

Earlier foreign proceedings, including proceedings seeking negative declarations, are relevant but not determinative. Their weight depends on their substance, scope, overlap, the risk of inconsistent decisions and whether they can resolve the whole dispute. A stay is exceptional where the English court is the natural forum and the foreign proceedings leave material issues or parties outside their scope.

An assignment of an office-holder’s section 213 claim is ineffective where the company entered liquidation before the statutory reform permitting assignment came into force.

The claimants brought proceedings concerning alleged United Kingdom VAT carousel fraud. They alleged that First Curaçao International Bank N.V. and Mr Deuss had assisted or participated in fraudulent trading, dishonest assistance, breaches of fiduciary duty and related statutory liabilities.

FCIB had already commenced proceedings in Curaçao seeking, among other relief, negative declarations concerning the claimants’ threatened claims and the effect of settlement agreements governed by Curaçao law. FCIB sought to set aside permission to serve out and, alternatively, a stay. Mr Deuss sought a stay pending the Curaçao proceedings.

FCIB also challenged the assigned section 213 claims on the basis that the relevant companies had entered liquidation before the statutory provisions permitting assignment of office-holder claims came into force. The court therefore considered forum, case management, negative declarations and the validity of those assignments.

1. Forum and service out. The court treated the hearing as a rehearing of the permission question. The claimants retained the burden of showing, for each claim, a good arguable case on the gateway, a serious issue to be tried and that England and Wales was clearly or distinctly the appropriate forum.
2. The dispute was characterised as a whole rather than divided mechanically into separate issues. Its essence was the alleged fraud against HMRC through predominantly English companies. The relevant companies, operations, meetings, witnesses, damage and alleged breaches of fiduciary duty were principally connected with England and Wales. The statutory section 213 claims could only be determined there, and England was the only forum in which all material claims and parties, including Mr Deuss, could be before the court.
3. The Curaçao proceedings and the Curaçao jurisdiction clause were material factors, but did not outweigh the stronger connections with England. The foreign proceedings were substantially framed as negative declarations. Such proceedings require caution because they reverse the usual procedural roles and may create res judicata and other procedural complications. They were not determinative, particularly because their scope, treatment of the alleged fraud and ability to resolve all claims remained uncertain.
4. The risk of inconsistent decisions did not justify a stay. The Curaçao proceedings did not concern the same complete dispute, did not include all parties or claims and did not have exclusive jurisdiction. The proposed undertakings by Mr Deuss did not sufficiently eliminate the risk of relitigation. A stay for a preliminary issue in Curaçao was also hazardous and impracticable because the proposed issue could not reliably be defined or detached from the fraud and release issues.
5. Assigned section 213 claims. Before the legislative change, office-holder claims under section 213 were not company property capable of assignment. Section 246ZD and the transitional provisions applied only to companies entering liquidation on or after 1 October 2015. The relevant MTIC companies entered liquidation earlier, so their purported assignments were ineffective and there was no serious issue to be tried on those claims.
6. FCIB’s forum non conveniens and case-management applications, and Mr Deuss’s stay application, were dismissed. The position concerning the assigned section 213 claims was left for consequential consideration, including whether the assignors or amended claims would be pursued. Consequential matters, including any permission to appeal, were adjourned.

This was a first-instance decision of the High Court. The judgment records that the related Curaçao proceedings had passed through the Court of First Instance, the Joint Court of Justice and the Supreme Court of the Netherlands, but those proceedings were not appeals from this judgment.