Standard Bank Plc v EFAD Real Estate Company WLL and others

Service out of the jurisdiction

This case of Standard Bank Plc v EFAD Real Estate Company [2014] All ER (D) 57 (Jun) heard on 6 June 2014 looked at the issue of service out of the jurisdiction.

 What was the background?

The claimant bank (the bank) loaned funds to the first defendant (EFAD RE), pursuant to an Islamic finance agreement (the agreement).

The second defendant was the general manager and sole authorized signatory of EFAD RE. The third defendant was allegedly the chief executive officer of EFAD RE. The second and third defendants were based in Kuwait.

The bank, which was incorporated in England, sought to recover, from the first defendant, the sums loaned. It brought claims against the first defendant for breach of contractual obligations relating to the provision of security and in tort for deceit and conspiracy. The first defendant did not challenge the jurisdiction of the English court.

An Islamic finance agreement had been entered into in December 2008 (the December Murabaha). That agreement was governed by English law and provided for the non-exclusive jurisdiction of the English court. The proceedings were served, pursuant to a service of suit clause. The bank sought to hold the second and third defendants personally liable in tort for deceit, inducing breach of contract and conspiracy. It obtained permission, pursuant to CPR 6.36, to serve the proceedings on the second and third defendants in Kuwait.

When that proved impracticable, the bank sought leave, pursuant to CPR 6.15, to effect service on the solicitors representing all three defendants. The second and third defendants applied to the court, contending that the English court had no jurisdiction and that the requirements for service out of the jurisdiction had not been satisfied.

The issue for consideration?

The issue for consideration was whether the requirements for service outside the jurisdiction had been satisfied, namely whether: (i) in relation to the foreign defendants, there was a serious issue to be tried on the merits; (ii) there was a good arguable case that the claim fell within one or more of the jurisdictional gateways set out in para 3.1 of CPR PD 6B; and (iii) in all the circumstances England was clearly or distinctly the appropriate forum for the trial of the dispute, and whether, in all the circumstances, the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction.

The principal jurisdictional gateway on which the bank relied was that the second and third defendants were necessary or proper parties to the claim against EFAD RE within para 3.1(3) of CPR PD 6B.

The result?

The application was dismissed.

 

 

Relevant Articles
Area of Interest