Kanat Shaikhanovich Assaubayev and Others (Claimants v Michael Wilson & Partners, Ltd (Defendant
| Jurisdiction | England & Wales |
| Judge | Mr Justice Walker |
| Judgment Date | 21 March 2014 |
| Neutral Citation | [2014] EWHC 821 (QB) |
| Docket Number | Case No: QB/2012/0625 |
| Court | Queen's Bench Division |
| Date | 21 March 2014 |
[2014] EWHC 821 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
On appeal from the decision of Master Campbell in the Senior Costs Office on 10.09.2012
Case No: 1104228
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Walker
(sitting with assessors Master Rowley and Mr David Harris)
Case No: QB/2012/0625
Mr Nicholas Bacon QC and Mr George McDonald (instructed by Reed Smith LLP) for the first to sixth claimants (respondents)
Mr David Holland QC and Mr Paul Joseph (instructed under the Public Access Scheme) for the defendant (appellant)
The seventh claimant did not attend and was not represented
Hearing dates: 3 and 4 October 2013
Written submissions were lodged between 4 December 2013 and 6 February 2014 inclusive
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.
| A. Introduction and overview | 3 |
| A1. Introduction | 3 |
| A1.1 Refusal of application to stay a claim for statutory relief | 3 |
| A1.2 Staying proceedings in favour of arbitration | 4 |
| A1.3 Statutory and other relief against a solicitor | 6 |
| A1.4 Why the master refused a stay: in a nutshell | 7 |
| A1.5 Availability of Part III relief: solicitors & "recognised bodies" | 8 |
| A1.6 The Part III jurisdiction question | 8 |
| A2. Overview | 9 |
| A2.1 The claimants and the defendant | 9 |
| A2.2 The July retainer Costs Office claim | 10 |
| A2.3 The LCIA arbitration begun prior to the Costs Office claim | 10 |
| A2.4. Abbreviations, short forms, and "arbitration agreement" | 10 |
| A2.5. The Costs Office claim: issue, allocation & service out | 11 |
| A2.6 Acknowledgement of service & issue of initial stay application | 11 |
| A2.7. Credit Altyn ceases any active part in the Costs Office claim | 11 |
| A2.8 Hearing and determination of the initial stay application | 11 |
| A2.9 The 2013 amendments and other subsequent developments | 12 |
| A2.10 The appeal against the September order | 15 |
| A2.11 Written submissions after the hearing | 18 |
| A2.12 A fundamental point | 18 |
| A2.13 Conclusions on the appeal | 19 |
| B. The family, associated entities, MWP & key events | 21 |
| B1. The Jenington action: freezing orders against the family | 21 |
| B2. The family, GLH, Hawkinson, and Credit Altyn | 22 |
| B2.1. The Vos judgment and MWP's allegations | 22 |
| B2.2. More about the claimants in the Costs Office claim and GLH | 22 |
| B3. MWP and Mr Wilson | 23 |
| B4. More about the Jenington action in June 2010 | 24 |
| B5. The July retainer | 26 |
| B6. The August retainer, & Aidar's acknowledgment of service | 30 |
| B7. MWP and the High Court: autumn 2010 & spring 2011 | 34 |
| B8. Baurzhan's acknowledgment of service | 34 |
| B9. MWP and the High Court: autumn 2010 to spring 2011 | 35 |
| B10. Settlement of the Jenington action | 35 |
| B11. Invoices, termination and change of solicitors | 35 |
| B12. The arbitration proceedings | 36 |
| B13. The August retainer and Terra Raf invoices | 37 |
| C. The master's reasons for the September order | 37 |
| C1. Stay refused so that court's jurisdiction can be invoked | 37 |
| C2. An assumption that Part III relief was not arbitrable | 41 |
| C3. Terminology | 41 |
| C4. Unstructured arguments and failure to co-operate | 41 |
| D. Regulation of those conducting litigation | 42 |
| D1. Aspects of the regulation of conduct of litigation | 42 |
| D2. Statutes and codes regulating legal representatives | 43 |
| D2.1 The 1974 Act | 43 |
| D2.2 The Administration of Justice Act 1985 | 43 |
| D2.3 The Courts and Legal Services Act 1990 | 43 |
| D2.4 The Legal Services Act 2007 | 44 |
| D2.5 The Solicitors Code of Conduct | 44 |
| D3. Assessment: foreign branch of a regulated body | 44 |
| D4. Inherent supervisory jurisdiction over admitted solicitors | 44 |
| D5. The court's ordinary jurisdiction | 49 |
| D6. Regulation of unqualified actors and pretenders | 49 |
| D6.1 Offences and civil law entitlements: the 1974 Act | 49 |
| D6.2 Offences and civil law entitlement: AJA 1985 | 61 |
| D6.3 Offences and civil law entitlements: CLSA 1990 | 62 |
| D6.4 Offences and civil law entitlements: LSA 2007 | 63 |
| D6.5 Offences and civil law entitlements: territorial scope | 65 |
| D6.6 Offences and civil law entitlements: ordinary jurisdiction | 65 |
| D6.7 Unqualified actors/pretenders: inherent supervisory jurisdiction | 65 |
| E. Active claimants' suggested knockout blow | 65 |
| F. Part III jurisdiction over MWP | 69 |
| F1. General | 69 |
| F2. Role of Mr Wilson | 69 |
| F3. Part III jurisdiction pursuant to estoppel or contract | 70 |
| F4. Other observations on Part III jurisdiction | 71 |
| G. The new claims | 71 |
| G1. The two types of new claim | 71 |
| G2. Extent of the inherent supervisory jurisdiction | 72 |
| G3. The inherent supervisory jurisdiction and arbitration | 76 |
| G4. Invocation of the inherent supervisory jurisdiction | 76 |
| G5. New paragraphs 5 to 9: the ordinary jurisdiction | 77 |
| G6. Hawkinson's paragraph 10: the ordinary jurisdiction | 79 |
| G7. New paragraphs 5 to 10: overview | 79 |
| H. Conclusion | 79 |
| Annex 1: Abbreviations and short forms | 80 |
| Annex 2: The application to serve the Costs Office claim on MWP out of the jurisdiction | 90 |
| Annex 3: The 1974 Act | 92 |
| Annex 4: The Administration of Justice Act 1985 | 99 |
| Annex 5: The Courts and Legal Services Act 1990 | 105 |
| Annex 6: The Legal Services Act 2007 | 111 |
| Annex 7: The Solicitors Code of Conduct | 120 |
A. Introduction and overview
A1. Introduction
A1.1 Refusal of application to stay a claim for statutory relief
This appeal was, in its original form, concerned solely with a question of forum: whether a substantial part of the claim should be stayed in favour of arbitration. However the points argued on the appeal have involved wider questions, including as to whether certain statutory and non-statutory jurisdictions can be invoked in litigation, and the extent to which certain questions are capable of being arbitrated. Disputes between the parties arise, in part, because the defendant conducted litigation in London when it was not entitled to do so. This conduct on the part of the defendant involved the commission of criminal offences. There is debate as to the precise offences committed, but there can be no doubt that the defendant was guilty of serious wrongdoing in this regard.
The claim has been brought in the Senior Courts Costs Office of the High Court (the "Costs Office"). The wider questions, however, do not commonly arise in the Costs Office and raise, or have the potential to raise, important questions as to the jurisdiction of the High Court.
The appeal is brought by the defendant against an order of Master Campbell dated 10 September 2012 ("the September order"). The September order refused an application by the defendant which, as revised, would have stayed a substantial part of a claim (the "Costs Office claim") begun by a Part 8 claim form issued in the Costs Office on behalf of seven claimants on 16 August 2011. The claim form sought substantive relief which the court is empowered to grant by the Solicitors Act 1974 ("the 1974 Act"). The stay was sought primarily under section 9 of the Arbitration Act 1996 ("the 1996 Act"), and alternatively under the court's inherent jurisdiction to stay its own proceedings ("the inherent stay jurisdiction").
A1.2 Staying proceedings in favour of arbitration
The 1996 Act provides:
9. Stay of legal proceedings
(1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.
…
(4) On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.
…
30. Competence of tribunal to rule on its own jurisdiction
(1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to—
(a) whether there is a valid arbitration agreement,
(b) whether the tribunal is properly constituted, and
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement.
(2) Any such ruling may be challenged by any available arbitral process of appeal or review or in accordance with the provisions of this Part.
The approach to be taken when considering a stay of court proceedings under s 9 of the 1996 Act is now clear. The court's approach in this regard, once it has been established that the court itself has jurisdiction, was described in paragraphs 72 to 80 of the judgment of Aikens LJ, with whom Laws LJ and Mann J agreed, in Joint Stock Company "Aeroflot-Russian Airlines" v Berezovsky [2013] EWCA Civ 784 (" Aeroflot"). For convenience only, I summarise that approach in 7 stages:
(1) In principle there is a burden on the party asserting that there is (a) a concluded arbitration agreement as defined in the 1996 Act, and (b) that it covers the disputes that are the subject of the court proceedings, to prove that this is the case.
(2) If the party seeking a stay cannot prove both (a) and (b) on the balance of...
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