Zufi Alexander v Century Financial Brokers LLC & Ors

On an application to serve proceedings out of the jurisdiction, the claimant must show a serious issue to be tried, a good arguable case within a jurisdictional gateway, and that England is clearly or distinctly the appropriate forum. A section 423 claim also requires a more than fanciful prospect of a sufficient connection with England. The assessment is fact-sensitive and considers all relevant circumstances, including contractual jurisdiction clauses, the parties and transactions, related proceedings, available remedies and the risk of fragmentation. At the jurisdiction stage, disputed questions about transaction value and restorative relief should not finally be determined where they require trial findings and the exercise of discretion.

The claimant brought a claim under section 423 of the Insolvency Act 1986 concerning a Migration Agreement and related arrangements involving three defendants. She alleged that the arrangements transferred valuable clients and future commission income from the first defendant to the second defendant for nominal consideration, intending to put assets beyond her reach and prejudice her interests as a judgment creditor.

The second defendant, a Dubai company, challenged jurisdiction under CPR 11(1), seeking to set aside permission to serve out or service itself. The claimant relied principally on Practice Direction 6B paragraph 3.1(20)(a), and alternatively paragraph 3.1(3), with the English defendant serving as anchor defendant. The issues were whether there was a serious issue to be tried, a sufficient connection with England, and whether England was clearly or distinctly the more appropriate forum.

1. Application dismissed. The claimant satisfied the requirements for service out of the jurisdiction.
2. The applicable test required a serious issue to be tried on the merits, a good arguable case that the claim fell within a jurisdictional gateway, and that England was clearly or distinctly the appropriate forum. The merits threshold was low: the claim had to be more than fanciful and more than merely arguable, although it could remain improbable.
3. There was a serious issue to be tried under section 423 of the Insolvency Act 1986. The accrued termination rights and non-waiver clause might materially affect the value of transferred rights and any eventual remedy, but they did not make the claim unarguable. The court’s restorative and discretionary powers under sections 423 and 425 required the factual matrix and remedy to be assessed at trial.
4. The Migration Agreement could arguably have transferred value beyond CFB’s creditors and provided benefits to CFC and CMC beyond the default contractual position. It was not necessary at this stage to establish the precise benefit received by each defendant.
5. The alternative gateway in Practice Direction 6B paragraph 3.1(3) was satisfied. CMC had defended the claim and was capable of being an anchor defendant; CFC, CMC and CFB were parties to the impugned arrangements and were necessary and proper parties.
6. There was a serious issue to be tried concerning a sufficient connection with England. The English law and jurisdiction clauses, CMC’s status as an English company and its participation in the proceedings carried substantial weight. The possibility of fragmentation and the limited present availability of an equivalent UAE remedy also materially favoured England.
7. England was clearly and distinctly the more appropriate forum. The merits observations were provisional and did not bind the trial judge.

First-instance jurisdiction decision. No earlier appellate decision is stated in the judgment.