Cesfin Ventures LLC v Dr Al Ghaith Al Qubaisi and Another
| Jurisdiction | England & Wales |
| Judge | Master Kaye |
| Judgment Date | 18 October 2021 |
| Neutral Citation | [2021] EWHC 3311 (Ch) |
| Docket Number | Case No: BL-2020-001805 |
| Court | Chancery Division |
[2021] EWHC 3311 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Master Kaye
Case No: BL-2020-001805
Mr G Hogan appeared on behalf of the Claimants
The Defendant did not attend and was not represented
The Third Party did not attend and was not represented
THE MASTER: This is a final hearing in relation to the claimant's application for an interim charging order dated 8 April 2021 to be made final in respect of a costs judgment of £75,000 pursuant to an order of Mr Spearman QC, sitting as a High Court Judge dated 16 March 2021. The sum remains wholly unpaid.
In order to enforce that costs judgment, the claimants sought and obtained an interim charging order over three properties, one in Ham Common, one at Hyde Park and one in Porchester Mews. The defendant is the registered legal proprietor of all three properties. In respect of two, Ham Common and Hyde Park, there is a first registered legal charge in favour of Abu Dhabi Corporate Bank (“ADCB”).
In October 2020, HHJ Eyre QC sitting as a High Court Judge, granted the claimants a Worldwide Freezing Injunction (“ WFO”) against the defendant. At the same time, he gave the claimants permission for both service out of the jurisdiction of both the claim form and any other documents in the proceedings. In addition, he granted permission to the claimant to serve the claim form and other documents in the proceedings by alternative means. There numerous different alternative methods of service identified in the order including service by email, service at various addresses both in this jurisdiction and others and service on the defendant's legal representatives in other jurisdictions. Those alternative methods were expanded by Mr Spearman QC. HHJ Eyre QC had been satisfied when making the order for service out by alternative means that it was appropriate to make that broad based order. The defendant was represented on the return date but does not appear to have otherwise engaged in these proceedings.
The documents relating to the interim charging orders and this hearing have been served using the same alternative means. I am satisfied that the various methods of service undertaken by the claimants in relation to the charging orders which are consistent with those approved by HHJ Eyre and Mr Spearman, are sufficient for the purposes of service of the interim charging orders and notice of this hearing on the defendants. The claimants have provided evidence of read receipts, tracking receipts in relation to the defendant.
The defendant has not engaged with these applications. The costs judgment remains wholly unpaid, and the judgment has not been appealed. It is an enforceable judgment debt. Subject to the position in relation to ADCB it is appropriate to make a final charging order in relation to each of the properties.
However, the issue that arises and which I need to determine today is the additional requirement under CPR 73.7(7)(d) to serve creditors who have been identified in the application for a charging order and/or as directed by the court. ADCB are the first charge holders in relation to two of the properties. They are a bank based in the UAE. Although there is a separate corporate entity, which is a UK representative office, that is not the same corporate entity as ADCB and whilst that office has also been served with copies of the applications for the charging orders and notice of this hearing, such service would not itself satisfy any requirement for service on ADCB.
CPR 73 specifies that the rules for service out of the jurisdiction in CPR 6, apply equally to CPR 73 as they do to any other part of the CPR. This presents a slightly unusual difficulty and potentially an unexpected consequence. ADCB are neither a party to these proceedings, nor is there any intention that they should be a party to the proceedings. CPR 73 merely requires creditors to be given notice of the charging order application in case it may affect their position in relation to the properties over which the charging orders are sought.
Here ADCB have a priority ranking first charge. Nonetheless, it is necessary formally for there to be permission to serve out of the jurisdiction. An application (although late) has been made therefore for permission to serve out and in addition for permission to serve by alternative means. It is supported by the witness evidence of Mr Fox which sets out all the methods of service used to bring these applications to the attention of ADCB and what if any response has been received.
Mr Hogan explained that the worldwide freezing order in this jurisdiction and these proceedings form part of a much broader dispute between the claimant and a company known as AGH, which is involved in the aircraft industry, the defendant and his brothers are shareholders of AGH and provided guarantees in respect of its liabilities to the second Claimant. The Claimant seeks to enforce an arbitral award it obtained in New York. I understand that enforcement proceedings brought in New York have been through the Federal Courts and Appeal Courts and that AGH has been unsuccessful. I understand that those proceedings in New York are the broad equivalent of both proceedings to pierce the corporate veil as against the brothers and/or section 423 Insolvency Act proceedings.
There are also, I understand, that as part of the process of enforcing the arbitral award the claimant has obtained worldwide freezing orders against AGH and others in the DIFC in Dubai, UAE, which also involve the defendant's brothers. There is pending application by the Claimant to join ADCB to those proceedings on the basis that ADCB is said to be in contempt for having acquiesced in breaches of the worldwide freezing order by others. That application is due for hearing next month. HFW represent ADCB in the DIFC proceedings. ADCB are therefore aware of the underlying dispute between the Claimant and Defendant.
It is against that background and that landscape of the much broader dispute that I come back to consider the question of whether there should be service out of the jurisdiction in relation to the charging order. I have taken into account the witness evidence of the Claimant and the detailed skeleton argument and submissions from Mr Hogan even if I do not in this brief judgment set out all the matters they have identified.
Whilst it is right that the court should require the claimants to satisfy the requisite steps to meet the requirements of CPR 6, it is of course important to bear in mind that ADCB is not a party to proceedings and there is no action being taken against ADCB in this jurisdiction. The process set out in CPR 73 is essentially a notification process enabling ADCB (or any other creditor) to raise any objections they may have to the charging order being made final. In this case none have been raised, but that raises the question as to whether I am satisfied that ADCB are on notice.
To satisfy the court that it can make an order for service out of the jurisdiction a party must satisfy the court that its claim falls within one of the gateways set out in CPR PD6B 3.1, that there is a serious issue to be tried and that England is clearly the appropriate forum for the claim. I keep in mind that these are essentially enforcement proceedings arising from an English costs judgment.
Mr Hogan submits that the...
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...rationale for the exceptional circumstance test falls away and the appropriate test is “good reason”. 110 In Cesfin Ventures LLC v ADCB [2021] EWHC 3311 Master Kaye, in my judgment, rightly found [30]: “… when one considers the authorities in the round, including the decision in Abela v Baa......