Bnp Paribas Sa v Ojsc "Russian Russines" and Another

Hearing date: 18 April 2012

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 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 which was issued on 28 February 2012 by the Claimant for an order pursuant to CPR 6.15(2) that the proceedings in this action have been validly served on the Second Defendant. The application is opposed by the Second Defendant who has appeared by counsel but expressly without prejudice to its pending jurisdiction and anti-suit appeals in the Court of Appeal.

The jurisdiction appeal is from a decision of this court on 24 November 2011 in which Blair J. dismissed challenges to the jurisdiction by the First and Second Defendants and declared that the claim form had been validly served on the Second Defendant by way of service on lawyers acting for the Second Defendant in Russia. There is now no dispute, following the decision of the Court of Appeal in Abela v Baadarani [2011] EWCA Civ 1571 given on 15 December 2011, that service on the lawyers in Russia was not good service. It is in those circumstances that the present application was issued and a hearing sought on an expedited basis.

The jurisdiction appeal is due to be heard on Tuesday of next week. In view of the limited time to prepare my judgment so that it is available to the parties this week this judgment will be shorter than it would otherwise have been. It does however set out the essence of my reasoning.

CPR 6.15 (2) provides:

"On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service."

An order pursuant to CPR 6.15(2) has been described as a retrospective declaration of service. CPR 6.15(1) enables the court to make a prospective order for an alternative method of service "where it appears to the court that there is a good reason" to do so. It is common ground that when an application is made for a declaration of retrospective service pursuant to CPR 6.15(2) the applicant must show not only that there have been steps taken to bring the claim to the attention of the defendant but also that there is good reason to make the declaration.

The nature of the good reason required by CPR 6.15 has been discussed by the Court of Appeal in Cecil v Bayat [2011] 1 WLR 3086. I summarised the guidance given in that case in JSC BTA Bank v Ablyazov and Khazhaev [2011] EWHC 2988 (Comm) at paragraph 34 as follows:

"Although the observations of both Stanley Burnton LJ and Rix LJ in Cecil v Bayat as to how this jurisdiction should be exercised are strictly obiter dicta they were made after hearing full argument and therefore are of very persuasive authority. It is necessary to note the following observations in particular. Stanley Burnton LJ said, at paragraph 66, that whilst the fact that proceedings served by an alternative method will come to the attention of a defendant more speedily than proceedings served under the Hague Convention is a relevant consideration, it is in general not a sufficient reason for an order for service by an alternative method. He further said, at paragraph 67, that in general the desire of a claimant to avoid the delay inherent in service under the Hague Convention cannot of itself justify an order for service by alternative means. Service by alternative means may be justified by facts specific to the defendant, "as where there are grounds for believing that he has or will seek to avoid personal service where that is the only method permitted by the foreign law" or by facts relating to the proceedings, "as where an injunction has been obtained without notice"; see paragraph 68. Rix LJ agreed that the mere desire for speed was unlikely to amount to good reason. However, he left out of account those cases where service can take very long periods and observed that "it may be that some flexibility should be shown in dealing with such cases, especially where litigation could be prejudiced by such lengthy periods"; see paragraph 113."

In Abela v Baadarani [2011] EWCA Civ 1571 the Court of Appeal has confirmed the guidance given in Cecil v Bayat. Longmore LJ said at paragraph 22 as follows:

"Nevertheless the exercise of this power is liable to make what is already an exorbitant power still more exorbitant and I am persuaded by Mr Greatorex that it must indeed be exercised cautiously and, as Stanley Burnton LJ said in paragraph 65 of Cecil v Bayat, should be regarded as exceptional."

Mr. Houseman has submitted on behalf of the Claimant that steps have already been taken to bring the claim to the attention of the Second Defendant. Those steps are the following:

i) By 27 June 2011 Bryan Cave had been instructed to act on behalf of the Second Defendant for the purpose of challenging the jurisdiction of this court. Before that date, on 20 June 2011, the claim form had been served on Bryan Cave. Accordingly, as from 27 June 2011 it it likely that the claim form had been brought to the attention of the Second Defendant.

ii) In November 2011 the Second Defendant had been represented by leading counsel before Blair J.

iii) On 14 December 2011 the Re-Amended Claim Form was served on Bryan Cave pursuant to permission granted by Blair J. on 1 March 2012.

iv) On 2 March 2012 the Re-Amended Claim was served on Bryan Cave pursuant to permission granted by Burton J. on 1 March 2011.

Miss Selvaratnam QC, counsel for the Second Defendant, submitted that the "service" of the claim form on 20 June 2011 was irrelevant because Bryan Cave had not been instructed until after that date. She also submitted that the "service" of the Re-Amended Claim Form on 14 December 2011 could not be relied upon because Blair J., in giving permission to serve the Re-Amended Claim Form on the Second Defendant on 13 December 2011, ex parte on very short notice to the Second Defendant, had said, in circumstances where the Second Defendant intended to seek permission to appeal against the court's judgment of 24 November 2011, that his order "in no way prejudices [the Second Defendant's] position." Although no similar statement was made by Burton J. when permitting service of the Re-Amended Claim Form on the Second Defendant on 1 March 2012 his order should be regarded in the same way as the order of Blair J.

My conclusion on these matters is as follows. I accept that Bryan Cave were not instructed on 20 June 2011 when the claim form was provided to Bryan Cave so that it cannot be said that the claim form was brought to the attention of the Second Defendant on that day. However, once Bryan Cave had been instructed on or before 27 June 2011 for the purposes of challenging the jurisdiction of the court in this matter there can be no doubt that the claim form was brought to the attention of the Second Defendant. In circumstances where leading counsel was instructed to challenge the jurisdiction that is the only realistic conclusion.

After some hesitation I have concluded that the Claimants cannot rely on the service of the Amended and Re-Amended Claim Forms on Bryan Cave on 14 December 2011 and 2 March 2012 as further evidence of the claim form being brought to the attention of the Second Defendant. Blair J.'s order that the Amended Claim Form could be served on Bryan Cave was expressed "to follow the existing orders as made on 24 November 2011". By that he meant that since the court had declared that service of the claim form on the Second Defendant's Russian lawyers was good service it was appropriate to permit service of the Amended Claim Form on Bryan Cave who were the solicitors on the record. However, he recognised that there was an intention to seek permission to appeal from the declaration that service on the Russian lawyers was good service and, by making an order which "followed" that order, he was, expressly, not intending to prejudice that appeal. It was...