Cherney v Deripaska (No 2)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CHRISTOPHER CLARKE |
| Judgment Date | 03 July 2008 |
| Neutral Citation | [2008] EWHC 1530 (Comm),[2007] EWHC 965 (Comm) |
| Docket Number | Case No: 2006 FOLIO 1218 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 03 July 2008 |
[2007] EWHC 965 (Comm)
The Honourable Mr Justice Langley
Case No: 2006 FOLIO 1218
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
COMMERCIAL COURT
Mr J. Brisby QC and Mr A. Holliman (instructed by Stephenson Harwood) for the Claimant
Mr R. Stewart QC, Mr N. Cherryman and Mr G. Chapman (instructed by Bryan Cave LLP) for the Defendant
Hearing dates: 19 and 20 April 2007
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.
THE HONORABLE MR JUSTICE LANGLEY
The Hon. Mr Justice Langley:
The Claimant (Mr Cherney) is an Uzbek by birth who spent a great deal of his working life in Russia. He now resides in Israel. The Defendant (Mr Deripaska) is Russian. He has vast business interests including (subject to this dispute) the beneficial ownership of a Russian company, Rusky Alyuminiy (“RusAl”).
Mr Cherney claims that by an oral agreement, made on 10 March 2001, Mr Deripaska agreed to hold 20% of the shares in RusAl on trust for him. It is alleged that this agreement was expressly made subject to English law and that it is evidenced by a written contract agreed and drafted in England. The written contract does not include an English law clause.
On 24 November 2006 the Claim Form, with Particulars of Claim, was issued in these proceedings. The claim seeks a Declaration that Mr Deripaska holds 20% of the shares in RusAl on trust for Mr Cherney together with related relief.
The only prior notification of the claim was a short letter dated 14 May 2006 from Mr Cherney's lawyers in Israel addressed to Mr Deripaska at an address of one of his companies in Moscow. That letter simply requested Mr Deripaska to begin the “repayment” of the 20% interest in RusAl. It did not threaten legal proceedings nor did it seek an address or representation for service of proceedings.
Mr Deripaska beneficially owns a house at 5, Belgrave Square, London, SW1X 5PH. On 26 November 2005, Mr Deripaska arrived at this property by car and went inside. Mr Hoskinson (a process server instructed on behalf of Mr Cherney) had been waiting outside the property. He handed the Claim Form in an envelope to a Mr Lawrence, who was standing outside the property, and asked Mr Lawrence to pass it on to Mr Deripaska, which Mr Lawrence agreed to do and did, having told Mr Hoskinson that Mr Deripaska was too busy to see him.
On 11 December an Acknowledgement of Service was filed on behalf of Mr Deripaska stating an intention to dispute jurisdiction.
Mr Deripaska's applications, dated 30 January 2007, seek to determine whether or not the Claim Form has been duly served upon him. He seeks an order that they have not. The applications also raise issues of jurisdiction. Mr Cherney's application, dated 7 February 2007, should he need it, seeks an order under CPR 6.9 dispensing with service of the Claim Form.
On 9 February, Tomlinson J gave directions the effect of which was that issues of service and “domicile” were to be dealt with at the present hearing. Those are the issues the subject of this judgment. Issues arising from Mr Deripaska's application that the court decline jurisdiction on the grounds of forum non conveniens or upon any application by Mr Cherney for permission to serve proceedings out of the jurisdiction are, if they are still live following this judgment, to be determined at a further hearing on 21 and 22 June.
This apparent complexity needs some explanation. Mr Cherney's case on the present issues has a number of bases with varying consequences. There are four possible outcomes:
i) Mr Cherney's primary case, and the one which gives him the “best” outcome, is that Mr Deripaska is domiciled in England, within the meaning of Article 59 of Council Regulation (EC) No 44/2201 (“the Jurisdiction Regulation”), and was served with the Claim Form on 26 November 2006, or service is to be dispensed with under CPR 6.9. If this case is right, this court will have jurisdiction to try the claim under Article 2 of the Jurisdiction Regulation. Questions of forum non conveniens are then irrelevant: Owusu v Jackson [2005] QB 801; Foote Cone & Belding Reklam Hizmetleri v Theron [2006] EWHC (Ch) 1585. The second hearing will not be required. The claim will proceed in this jurisdiction.
ii) If the court decides that Mr Deripaska is not domiciled in England, but that he was served with the Claim Form on 26 November 2006, the jurisdiction of this court will be established by service within this jurisdiction under CPR 6.2, 6.4 and 6.5. But it will be open to Mr Deripaska to contend that this country is not the appropriate forum to resolve Mr Cherney's claim the burden being upon him to make out that contention. The second hearing would be required to resolve that.
iii) If the court decides that Mr Deripaska is not domiciled in England, and was not served with the Claim Form but nonetheless was prepared to dispense with service under CPR 6.9, the position would be the same as in (ii).
iv) If Mr Cherney were to fail on all his submissions and the claim is to be pursued in this jurisdiction, he would have to seek permission to serve the Claim Form on Mr Deripaska out of the jurisdiction and establish, the burden being upon him, that England was the appropriate forum for the determination of the claim. That would then be the subject of the second hearing.
Article 1.1 of Chapter 1 provides that (with irrelevant exceptions) the Regulation “shall apply in civil and commercial matters”. Article 2.1 of Section 1 of Chapter II provides that:
“Subject to this regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State”
Article 59.1 of Chapter V provides that:
“In order to determine whether a party is domiciled in the Member State whose courts are seized of a matter, the court shall apply its internal law.”
Article 60.1 of Chapter V provides that:
“For the purposes of this Regulation, a company or other legal person … is domiciled at the place where it has its:
(a) statutory seat, or
(b) central administration, or
(c) principal place of business.”
The “domicile” of individuals is provided for by the Civil Jurisdiction and Judgments Order 2001, SI 2001 No. 3929, (“the Judgments Order”). So far as material, paragraphs 9(2) and 9(6) of Schedule 1 to the Judgments Order provide:
“(2) An individual is domiciled in the United Kingdom if and only if—
(a) he is resident in the United Kingdom; and
(b) the nature and circumstances of his residence indicate that he has a substantial connection with the United Kingdom.
(6) In the case of an individual who—
(a) is resident in the United Kingdom …, and
(b) has been so resident for the last three months or more,
the requirements of sub-paragraph 2(b) … shall be presumed to be fulfilled unless the contrary is proved.”
In Owusu v Jackson the Court of Justice of the European Communities held that Article 2 of the Brussels Convention (in materially the same terms as Article 2 of the Judgments Order) was mandatory and so not subject to any exception derived from the principles of forum non conveniens. The court emphasised that “respect for the principle of legal certainty” and “the predictability of the rules of jurisdiction” underlay and supported such a result, as well as the legal protection of defendants who would generally be better placed to conduct their defence before the courts of their “domicile” as defined.
It is also established law that the relevant date for consideration of the domicle of Mr Deripaska is the date (24 November 2006) on which the Claim Form was issued: Dicey, Morris & Collins: The Conflict of Laws, 14 th Ed., 11–271; Canada Trust Co v Stolzenberg (No 2) [2002] 1 AC 1 (decided on the materially identical provisions of the Lugano Convention); Petrotrade Inc v Smith [1998] 2 All ER 346 (decided on the Brussels Convention).
Thus, it is Mr Cherney's case that as at 24 November 2006, Mr Deripaska was domiciled in the United Kingdom within the meaning of paragraphs 9(2) and 9(6) of the Judgments Order. The place of residence relied upon is 5, Belgrave Square. It is to be noted, however, that paragraph 9(2) uses the language of “he is resident in” not “he has a residence in” England.
The parties are agreed, in accordance with Dicey, Morris & Collins at 6–117, that the meaning of “resident” may differ within different branches of the law or legal contexts. They are also agreed that in the present context a person will be resident in England if it is for him a settled or usual place of abode and that such a place of abode connotes some degree of permanence or continuity which will of course depend on the particular circumstances of each case: see Bank of Dubai Limited v Abbas [1997] 1 L Pr. 308 in particular per Saville LJ at pages 311–312.
It is also rightly agreed that for the purposes of the Judgments Order a person may be “resident” at more than one place on the same date: Foote Cone at paragraph 23.
There is, I think, some risk of over analysis. The words are ordinary English words. The question is whether or not, on the evidence, Mr Deripaska “is resident” in England. The benefits of certainty and predictability in the interests of defendants (paragraph 14) need to be kept in mind in addressing the question.
On an interlocutory application of the present kind this question has to be answered on the basis of whether or not Mr Cherney has established a good arguable case that the answer to it is “Yes”. That is a lower test than...
To continue reading
Request your trial
-
Lolita Vladimirovna Danilina v (1) Vladimir Anatolevich Chernukhin
...lengths to influence individuals and the evidence they might give … and/or to affect the outcome of the Arbitration”. They also cite Cherney v. Deripaska [2008] EWHC 1530 (Comm), where Christopher Clarke J concluded that there was a “significant risk” that Mr Deripaska would seek to influen......
-
Yukos Capital S.a.r.L (a company incorporated in the Luxembourg) v OJSC Rosneft Oil Company (a company incorporated in the Russian Federation)
...principle. Whether the present case necessarily involves the same or a similar determination will be considered further below. 204 Cherney v Deripaska 205 162. Yukos Capital placed considerable reliance upon the case of Cherney v Deripaska (No. 2) [2009] 1 All ER (Comm) 333. It was a jurisd......
-
Dynasty Company for Oil and Gas Trading Ltd v The Kurdistan Regional Government of Iraq
...91, SC(E)Canada Trust Co v Stolzenberg (No 2) [2002] 1 AC 1; [2000] 3 WLR 1376; [2000] 4 All ER 481, HL(E)Cherney v Deripaska (No 2) [2008] EWHC 1530 (Comm); [2009] 1 All ER (Comm) 333; [2009] EWCA Civ 849; [2010] 2 All ER (Comm) 456, CACleveland Museum of Art v Capricorn Art International ......
-
Sang Youl Kim v Sungmo Lee
...under [9] of the Jurisdiction Order is that of ‘residence’. That is an ordinary English word and should be given its ordinary meaning: Cherney v Deripaska [2007] EWHC 965 (Comm), [19]; Bestolov v Povarenkin [2017] EWHC 1968 (Comm), 41 In Levene v Commissioners of Inland Revenue [1928] AC 2......