DENISOV v DELVECCHIO & Ors.

Permission to serve proceedings out of the jurisdiction requires three conditions: a serious issue to be tried; a good arguable case that a jurisdictional gateway is satisfied; and a showing that England and Wales is clearly and distinctly the most appropriate forum.

A gateway concerning constructive trustees may be available where the claim arises from historical acts or events within the jurisdiction, even if the relevant assets have since left it. The jurisdictional gateway does not, however, determine the forum question. The court must undertake a practical assessment of the dispute’s real connections. The use of an English bank account as a temporary conduit is ordinarily insufficient where the principal parties, material events and applicable law are substantially connected elsewhere.

The claimant sought permission to serve proceedings out of the jurisdiction on three defendants in a fraud claim concerning the purchase of property in Sardinia. The alleged fraud involved the transfer of funds through a Barclays account in London, followed by their transfer to Switzerland.

The claimant alleged deceit, constructive trust, dishonest assistance and unlawful means conspiracy. The principal defendants lived in San Marino, while the claimant lived in Russia and the property and most material events were connected with Italy, San Marino, Russia or Switzerland.

The central issues were whether the claims passed through the relevant gateways in Practice Direction 6B and whether England and Wales was clearly and distinctly the most appropriate forum.

1. Application dismissed. The claimant established a serious issue to be tried on the merits.
2. The court applied the three requirements summarised in AK Investment CJSC v Kyrgyz Mobil Telephones Limited [2011] UKPC 7: a serious issue to be tried, a good arguable case within a gateway, and a forum conveniens showing that England and Wales was clearly and distinctly the most appropriate forum.
3. Paragraph 3.1(15) of Practice Direction 6B was realistically arguable as applying to a claim arising from historical acts or events occurring within the jurisdiction. The fact that the funds had later left England did not necessarily prevent reliance on the historical-events limb of the gateway.
4. On the evidence, it was realistically arguable that the funds credited to the Barclays account were subject to a Quistclose-type constructive or resulting trust. The alleged instructions given by the second defendant to the London agent therefore arguably involved acts and events within the jurisdiction and supported reliance on gateway 15. The first and third defendants were also arguably necessary or proper parties under paragraph 3.1(3).
5. Despite those conclusions, England and Wales was not clearly and distinctly the most appropriate forum. The claimant and principal defendants were resident elsewhere; the property and alleged fraud were connected with Italy, San Marino, Russia and Switzerland; the funds had merely passed through England; and the English account was intended to be a conduit. The risk of parallel litigation was not a trump card. The English connection was therefore no more than happenstance.
6. The subsequent application for permission to appeal failed. The discretionary nature of the forum decision created a particularly high threshold, and there was no realistic prospect of a different conclusion.

This was a first-instance application in the High Court. The judgment records that permission to appeal was sought after the substantive decision, but concludes that the necessary realistic prospect of a different outcome was absent.