High Tech International AG v Deripaska
| Jurisdiction | England & Wales |
| Judge | THE HON. MR JUSTICE EADY,The Hon. Mr Justice Eady |
| Judgment Date | 20 December 2006 |
| Neutral Citation | [2006] EWHC 3276 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ06X01160 |
| Date | 20 December 2006 |
[2006] EWHC 3276 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Hon. Mr Justice Eady
Case No: HQ06X01160
Andrew Hunter (instructed by Baker McKenzie LLP) for the Claimant
Adrienne Page QC and Jacob Dean (instructed by Bryan Cave) for the Defendant
Hearing dates: 13 and 14 November and 12 December 2006
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 three Claimants in these proceedings are, respectively, High Tech International AG, P.I.C. Hi-Tech International and Dr Shatha Hussein Al-Musawi. All are involved in the manufacture and sale of aluminium and also in energy trading. They have launched proceedings against the Defendant ("Mr Deripaska") and seek compensation (put at more than US$ 30m) in respect of wrongs known to Russian law as "civil injury" and "damage to reputation". The relevant acts are alleged to have taken place in 1995, in Russia, and with the intention of destroying the Claimants' business. The delay is explained on the footing that the steps alleged to have been taken only came to the Claimants' attention in 2003.
Mr Deripaska is a Russian citizen. He was born in 1968 and graduated in 1993 from the Lomonosov Moscow State University and, in 1996, from the Plekhanov Academy of Economics. He is Vice-President of the Russian Union of Industrialists and Entrepreneurs, Chairman of the Board of the Russian National Committee of the International Chamber of Commerce and a member of the Russian Federal Business Council. On the appointment of the President of Russia, he represents the country in the Business Council of the Asian-Pacific Co-operation Forum.
From 1994 to 1997 he was general manager of Sayanogarsk Aluminium Smelter. From 1997 to 2001 he was President of Sibirsky Aluminium. In 2001 he was elected chairman of the Board of Bazovy Element (in English, Basic Element). He is a member of the board of Rusal, which is the largest aluminium company in the world.
At first sight, the claim seems an unlikely one to come before the English court, but it is alleged that Mr Deripaska has a domicile within this jurisdiction for the purposes of Council Regulation (EC) 44/2001 ("the Judgments Regulation"). If this contention is correct then, it is submitted, the Claimants are entitled to sue the Defendant here despite the absence of any factual or legal connection with this jurisdiction: see Owusu v Jackson [2005] QB 801 (ECJ).
The matter came before me on Mr Deripaska's application for a declaration that the court has no jurisdiction. The primary issue argued before me, therefore, on 13 and 14 November and 12 December, was whether the Claimants are able to demonstrate a "good arguable case" to the effect that Mr Deripaska does have a domicile here. The material date is that of commencing these proceedings (in April 2006). Although Dr Al-Musawi claimed in her witness statement that the Claimants did not believe that a fair trial of the issues would be possible in Russia, that is not a matter which has been pursued before me.
Today the notion of "domicile" has to be construed in accordance with s.41 of the Civil Jurisdiction and Judgments Act 1982:
"For an individual to be regarded as domiciled in the UK, two conditions must be satisfied:
(i) The individual must reside in the UK; and,
(ii) The nature and circumstances of his residence must indicate that he has a substantial connection with the UK."
It is thus clear that these two concepts must be considered separately and independently. It is not necessary to address "substantial connection" unless "residence" has been established.
Under this statutory framework, by contrast with the position at common law, it is not necessary to establish the existence of a permanent home in order to demonstrate domicile. It is contemplated that a person may have more than one domicile. In this case, for example, it could hardly be disputed that Mr Deripaska was domiciled in Russia. What is suggested is that he was also domiciled in England at the material time.
As I have noted, the standard of proof which the Claimants have to achieve is that of "good arguable case": Canada Trust v Stolzenberg (No 2) [2002] 1 AC 1, 13.
Although domicile is defined in terms of "residence", this concept must be construed in accordance with its ordinary meaning and connotes a settled or usual place of abode: Bank of Dubai Ltd v Abbas [1997] IL Pr 308. This, in turn, requires "some degree of permanence or continuity". On the facts of that case, it was held in the Court of Appeal that there was nothing to rebut the Defendant's claim that he usually stayed with friends or in a hotel. There was thus no "good arguable case" that he owned a property here or that he was registered as an occupier for any purpose.
Mr Deripaska, by contrast, owns two valuable homes in this jurisdiction, one in Weybridge and the other in Belgrave Square. He acquired the Weybridge property in September 2001 and Belgrave Square in April 2003. I am told that currently they are together worth approximately £40m. Although they are owned through a corporate structure, largely for reasons concerned with inheritance tax, there is no dispute that Mr Deripaska is beneficially entitled and responsible for the outgoings.
It is an important part of the evidence that Mr Deripaska is extremely wealthy, his financial worth being measured in hundreds of millions of pounds. He is one of the world's most wealthy individuals and has substantial interests in a number of businesses, most particularly Rusal. Moreover, it is also an important part of the background that he has homes in other parts of the world. There are houses under construction in Beijing and Kiev and land acquired with a view to building in Montenegro. There are several homes in Russia itself. There are two houses in France and a further one under construction. There is another in Sardinia and a house under lease in New Delhi. I am told that there are, either completed or under construction, a total of over 20 houses in various parts of the world. It is thus clear that the background circumstances against which my conclusions have to be reached are unusual.
I am asked particularly to have in mind the recent decision of Patten J in Foote Cone & Belding Reklim Hizmetleri v Theron [2006] EWHC 1585. The learned Judge came to the conclusion in that case that residence had been established. The Defendant was the sole owner of a property in Kingston, which the learned Judge described as one of his real residences at the relevant time. He apparently came to England regularly, about once a month, and was registered for council tax and utility bills. The matter was summarised by Patten J at [23] in these terms:
"… The Kingston property is his home when he lives in England … One can have a residence in more than one place and domicile under the statutory definition depends on residence, not on the old common law test of where one intended to permanently reside in the sense of indefinitely and exclusively".
Mr Hunter for the Claimants places considerable reliance upon the reasoning of Patten J in Foote Cone. He argues, in particular, that the Belgrave Square property could be described as Mr Deripaska's home "when he lives in England". It should not be forgotten, however, that even in the context of a second or third home the notion of "residence" requires "some degree of...
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