Apollo Ventures Company Ltd v Surinder Singh Manchanda
| Jurisdiction | England & Wales |
| Judge | Sir Nigel Teare |
| Judgment Date | 30 November 2021 |
| Neutral Citation | [2021] EWHC 3210 (Comm) |
| Docket Number | Case No: CL-2016-000282 |
| Court | Queen's Bench Division (Commercial Court) |
[2021] EWHC 3210 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Nigel Teare
Sitting As A Judge Of The High Court
Case No: CL-2016-000282
Iain Quirk QC (instructed by Reynolds Porter Chamberlain LLP) for the Claimant
Thomas Roe QC (instructed by Gresham Legal) for the Defendant
Hearing dates: 23 November 2021
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is an application by the Defendant that the Court stay the proceedings brought against him by the Claimant on the grounds that Thailand is the forum which is clearly and distinctly the more appropriate forum for the trial of this action. The Defendant is out of time for bringing such an application and therefore seeks an extension of time in which to do so. The Claimant opposes the applications. In particular the Claimant says that the Defendant has long ago submitted to the jurisdiction of the court and in such circumstances the requested extension of time should be refused.
The procedural history of the Claimant's claim is long and detailed and the claim has already occupied the attention of several judges of this Court and of the Court of Appeal. I do not propose to summarise the whole procedural history but merely those steps in the action which are of particular relevance to the Defendant's applications.
The Claimant is a Thai company in which the Defendant is a substantial shareholder. The Claimant alleges that the Defendant caused the Claimant to enter into two loans with a Thai businessman under which the Claimant borrowed £4.4 million and became liable to repay some £5.8 million. The Claimant alleges that the Defendant purported to enter into the loans on the Claimant's behalf without the knowledge of other officers of the Claimant and by the use of forged documents. It is alleged that the greater part of the proceeds of the loans were not paid for the benefit of the Claimant but for the benefit of the Defendant and members of his family.
The claim was issued on 9 May 2016 against the Defendant and several other Defendants, originally 7 other Defendants. On the same day a Worldwide Freezing order was granted. There was an application by the Defendant and two other Defendants to set aside the order giving permission to serve the proceedings out of the jurisdiction and an application by all Defendants to set aside the WFO. Those applications were dismissed by David Foxton QC on 15 June 2016 (save that the WFO against the 8 th Defendant was set aside); see [2016] EWHC 1416 (Comm).
On 20 February 2018 the Claimant served Amended Particulars of Claim and on 19 April 2018 the Defendant served his Defence. That amounted to a submission to the jurisdiction in the sense that the Defendant was content for the court to exercise the jurisdiction it had to determine the claim brought by the Claimant against him.
A number of claims relating to the loans have been issued in Thailand. Some had been commenced at the time of the applications before David Foxton QC; see paragraphs 12–13 of his judgment. Of particular significance is a later claim issued by the Claimant on 19 October 2018 against the Defendant and others concerning the aforesaid loans. This Thai claim against the Defendant is essentially the same claim as that brought against him in this court, save that the claim in this court includes a claim for proprietary relief (tracing) whereas the claim in Thailand may only have been for damages. On 21 November 2019 two shareholders in the Claimant also brought proceedings in Thailand against the Defendant concerning the same loans but claiming damages assessed by the reduction in value of their shares. (There is evidence that the former claim may reach trial in 2022 and that the latter claim has a trial fixed for 27 and 28 January 2022.)
On 27 July 2020 a CMC was heard before Christopher Hancock QC. On 10 August 2020 directions were given for trial. On 11 August 2020 Christopher Hancock QC ordered that the Claimant provide security for the costs of the other Defendants; the Defendant did not apply for such an order. The Claimant sought further time in which to provide the security and the other Defendants sought an order striking out the claim against them. Butcher J. dismissed the application for an extension of time and struck out the claim against the other Defendants on 15 January 2021.
On 6 May 2021 the Defendant issued his application for a stay of the proceedings against him.
The grounds of the application to stay
The application is based upon the well-known Spiliada principles. It is said that Thailand is the forum which is clearly and distinctly the more appropriate forum for the claim against the Defendant. Reliance is placed on the factors listed by David Foxton QC as pointing to Thailand as the more appropriate forum; see paragraph 40 of his judgment. The claims arise from transactions between a Thai company and a Thai businessman which are said to involve unlawful acts under Thai law, key witnesses are in Thailand, the key events involve issues of Thai law and there are proceedings in Thailand concerning the loans. When the matter was before David Foxton QC the claims were also proceeding against other Defendants as of right and that provided a strong reason for England nevertheless being the appropriate forum, as allowing the claim against the Defendant to proceed in England “would avoid separate trials in different jurisdictions”; see paragraph 41 of his judgment. Now that those other claims have been struck out only the claim against the Defendant remains in this jurisdiction. There is now no reason, it is said, why Thailand should not be regarded as clearly and distinctly the more appropriate forum for the resolution of the claim against the Defendant. As was pointed out by David Foxton QC an application to stay proceedings is determined by reference to the circumstances existing at the date the application is heard; see paragraph 44 of his judgment.
This submission on behalf of the Defendant is contested on the grounds, inter alia, that there are assets in England against which enforcement will be sought, the proceedings in England have been under way for 5 years and very substantial costs have been incurred by the Claimant which will be “sunk costs” if the Defendant succeeds. For those reasons it is said that, unlike the position in 2016, it now cannot be shown that Thailand is clearly and distinctly the more appropriate forum.
The application for an extension of time
However, it is common ground that CPR 11(4) requires an application to stay proceedings to be made within 14 days (or 28 days in the Commercial Court) after filing an Acknowledgment of Service. That time limit expired in June 2016.
Logically, therefore, the first issue between the parties to be decided is whether the Defendant can obtain the necessary extension of time in which to make his application for a stay.
It is also common ground (by reason of the analysis in several authorities to which it is unnecessary to refer) that whether or not it is appropriate to extend time depends upon an application of the Denton principles. The first stage is to assess the seriousness and significance of the breach of the CPR. The second stage is to consider why the breach occurred. The third stage is to evaluate all the circumstances of the case with a view to dealing justly with the application. The jurisdiction which the court is exercising is that conferred by CPR 3(9). The court must have regard in particular to the need for litigation to be conducted efficiently and at proportionate cost and to the need to enforce compliance with the rules, practice directions and orders.
The seriousness and significance of the breach of the CPR
It was recognised by Lord Collins in Texan Management Limited and others v Pacific Electric Wire & Cable Company Limited [2009] UKPC 46 at paragraph 70 that CPR Part 11 does not sit easily with applications for stays. “ For example circumstances may change and a defendant may wish to apply for a stay well after the proceedings have been commenced…..” In the present case there has been a change of circumstances; first, additional proceedings were commenced in Thailand in 2018 and 2019 and, second, the claims against the other Defendants were struck out in January 2021 with the result that there is, on the Defendant's case, no reason why the court cannot now conclude that Thailand is clearly and distinctly the more appropriate forum for determination of the Claimant's claim against the Defendant.
If the delay from June 2016 is considered then there has obviously been a serious...
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