ED&F Man Capital Markets llp v Obex Securities llc and another
| Jurisdiction | England & Wales |
| Neutral Citation | [2017] EWHC 2965 (Ch) |
| Date | 2017 |
| Year | 2017 |
| Court | Chancery Division |
Practice - Service out of jurisdiction - Pre-action disclosure - Application for permission to serve application for pre-action disclosure out of jurisdiction - Whether power to allow service of “claim form” out of jurisdiction extending to pre-action application - Whether application for pre-action disclosure “proceedings” allowed to be brought by enactment - Whether court having power to grant permission for service out of jurisdiction -
The court’s power in CPR r 6.36F1 to permit a claimant to serve a “claim form” out of the jurisdiction extends to applications before action. An application for pre-action disclosure, made pursuant to section 33(2) of the Senior Courts Act 1981F2, is a form of “proceedings” within the meaning of the jurisdictional gateway in paragraph 3.1(20)(a) of CPR Practice Direction 6B. Therefore, the court has power pursuant to rule 6.36 and paragraph 3.1(20) to permit service of an application for pre-action disclosure out of the jurisdiction (post, paras 13–14, 22–23, 25).
Where, therefore, the master granted permission to serve an application for pre-action disclosure out of the jurisdiction under CPR r 6.36 and paragraph 3.1(20) of Practice Direction 6B, and the company and person against whom the application had been made applied to set aside the grant of permission—
Held, refusing the application, that since all the conditions set out in section 33(2) of the Senior Courts Act 1981 and the Civil Procedure Rules were satisfied and since, if substantive proceedings were brought, the courts of England and Wales would be the appropriate forum, the master had been correct to exercise the jurisdiction under CPR r 6.36 and paragraph 3.1(20) of Practice Direction 6B to permit service out of the jurisdiction (post, paras 34–37, 38, 39).
The following cases are referred to in the judgment:
AES Ust-Kamenogorsk Hydropower Plant llp v Ust-Kamenogorsk Hydropower Plant JSC
Black v Sumitomo Corpn
Norwich Pharmacal Co v Customs and Excise Comrs [
Towergate Underwriting Group Ltd v Albaco Insurance Brokers Ltd
No additional cases were cited in argument.
The following additional cases, although not cited, were referred to in the skeleton arguments:
Attheraces Ltd v Ladbrokes Betting and Gaming Ltd
Clermont Energy Partners llp v SDP Services Ltd
Fern Computer Consultancy Ltd v Integraph Cadworx & Analysis Solutions Inc
Hutchinson 3G UK Ltd v O2 (UK) Ltd
APPLICATION
By an application notice dated 22 December 2016 the applicant, ED&F Man Capital Markets llp, sought permission to serve an application notice and supporting evidence out of the jurisdiction on the respondents, Obex Securities llc and Randall Katzenstein, in New York. On 3 February 2017 Master Teverson granted the permission sought.
By an application notice dated 15 March 2017 the applicants applied to have the master’s order set aside.
The facts are stated in the judgment, post, paras 3–10.
Alec Haydon (instructed by
Sarah Harman (instructed by
The court took time for consideration.
22 November 2017. CATHERINE NEWMAN QC handed down the following judgment.
1 By an application dated 15 March 2017 I am asked to set aside an order made by Master Teverson ex parte on 3 February 2017 giving leave to serve an application for pre-action disclosure out of the jurisdiction in New York. I shall call that order “the master’s order”.
2 To avoid confusion between the applicants and respondents on the application for leave to serve out and on the application to set aside that leave I shall refer to the parties when mentioning them separately as “Man” and “Obex/RK”.
3 By way of background, the basic facts are that Man, a broker, took on clients on the introduction of Obex, acting by RK, on terms of a written Introducing Broker Agreement between Obex Securities llc and Man dated 25 November 2016, which included a jurisdiction clause providing for proceedings to be brought in the courts of England and Wales.
4 Obex/RK introduced two clients, Platinum Partners Value Arbitrage Fund LP (“Platinum”) and Prime Capital (Bermuda) Ltd (“Prime”).
5 Man brokered a number of CFD trades for Platinum but in August 2016 Platinum failed to meet a margin call and was insolvent, leaving Man with losses.
6 Man asserts that Obex/RK knew that Platinum was insolvent when Obex introduced Platinum as a client and that they made false representations to Man about its solvency and worth. Man suspects that these representations were made fraudulently.
7 I was told that Platinum’s CEO, Mark Nordlicht, is under investigation in the USA for fraud.
8 The parties are agreed that the test to be applied in considering an application to serve out of the jurisdiction is set out at the notes to CPR r 6.37.15 in Civil Procedure 2017 (“the White Book”) namely: (i) a serious issue to be tried on the merits of the claim against a foreign defendant; (ii) a good arguable case that the claim falls within one or more of the gateways provided under paragraph 3.1 of CPR Practice Direction 6B; and (iii) England and Wales is clearly and distinctly the appropriate forum for the trial of the dispute and that in all the circumstances the court ought to exercise its discretion to permit service out of the jurisdiction.
9 The serious issue to be tried on the merits and the good arguable case refer to the application for pre-action disclosure and not, at this stage, to the underlying substantive claim.
10 Obex/RK’s primary case is that the court has no jurisdiction to serve an application for pre-action disclosure out of the jurisdiction. Obex/RK accept that if the substantive proceedings were to be brought then the courts of England and Wales are the appropriate forum. However as a secondary argument they say that there was a serious non-disclosure before the master which means that the court should not have exercised its discretion to permit service out.
11 I agree with Obex/RK that since their primary case turns on an interpretation of the law I must resolve it and not simply ask myself whether there is a good arguable case to the effect that there is jurisdiction.
Jurisdiction12 Plainly the court has a well-known jurisdiction to grant disclosure before action in certain circumstances, and equally plainly it has a well-known jurisdiction to permit service of claims outside the jurisdiction in certain circumstances. Does the court have jurisdiction to permit the service out of applications for pre-action disclosure?
13 Starting first with the jurisdiction to serve out, does the word “claim” in CPR r 6.2(c) include an application for pre-action disclosure? The answer to that question is in the affirmative. “Claim” encompasses many forms of application to the court and extends to petitions and applications made before action. CPR r 6.2(c) includes “any” applications made...
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