The Public Institution for Social Security v Khaled Al Rajaan & Ors

Under Gateway 3 of CPR Practice Direction 6B, a person is a proper party if, assuming all parties were within the jurisdiction, they would properly be joined to the action. Joinder may be proper where a binding determination is needed for enforcement abroad, even though no substantive relief is sought against the additional party. The issue of the deceased’s liability should be determined once, in proceedings where it is already properly before the court. Such joinder does not collapse the distinction between administration and succession: determining liability does not determine succession under foreign law.

The Public Institution for Social Security claimed against the estate of Fahad Al Rajaan, alleging corruption during his tenure as its Director General. After his death, his children were joined as defendants. PIFSS relied on Swiss law, under which heirs automatically succeed to the deceased’s assets and liabilities and must all be bound by a judgment for enforcement against the estate as a whole in Switzerland.

Jacobs J dismissed the children’s jurisdiction challenge, holding that PIFSS had a good arguable case that they were proper parties on an enforcement basis: [2024] EWHC 3321 (Comm). The Court of Appeal considered whether the children were proper parties under Gateway 3 and whether one child had been validly served under section 1140 of the Companies Act 2006.

1. Appeal dismissed. Arnold LJ gave the leading judgment. Nugee LJ and Asplin LJ agreed.
2. The applicable test under Gateway 3 of CPR Practice Direction 6B was that stated in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Limited [2011] UKPC 7, [2012] 1 WLR 1804. The question is whether, supposing both parties had been within the jurisdiction, they would both have been proper parties. That is so where the claims involve one investigation, are closely bound up, or involve a common thread.
3. On the Enforcement Basis, the children were proper parties. They did not admit their father’s liability or accept the English court’s determination of it. The same liability issue therefore arose between PIFSS and the children as between PIFSS and the estate. Although the issue would become material between PIFSS and the children only if enforcement were attempted in Switzerland, it should be determined once, in the existing proceedings, rather than potentially being litigated again during enforcement.
4. That conclusion did not collapse the English distinction between administration and succession. Determining the deceased’s liability as between PIFSS and the children did not determine succession or whether the children could disclaim their inheritance. Those matters remained for the Swiss courts under Swiss law.
5. It was permissible in principle to join a party to ensure that the party was bound by the court’s determination, even where no cause of action was asserted against that party. The court treated the Chabra jurisdiction, joinder of an assignor, orders under rule 19.13 of the Civil Procedure Rules 1998, and intervention by persons interested in the subject matter as illustrations of that broader principle. The conclusion was consistent with Commercial Bank of Dubai PSC v Al Sari [2024] EWHC 3304 (Comm).
6. The Substantive Basis was not decided because the Enforcement Basis was sufficient. Ground 2, concerning service under section 1140 of the Companies Act 2006, was likewise unnecessary to determine.

• Court of Appeal (Civil Division): dismissed the appeal and upheld the conclusion that the children were proper parties under Gateway 3.
• High Court of Justice, King’s Bench Division, Commercial Court: Jacobs J dismissed the jurisdiction challenge and held that PIFSS had a good arguable case on the Enforcement Basis in [2024] EWHC 3321 (Comm).