Karafarin Bank v Gholam Reza Mansoury Dara
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 04 June 2009 |
| Neutral Citation | [2009] EWHC 1217 (Comm) |
| Docket Number | Case No: 2007 FOLIO 1434 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 04 June 2009 |
[2009] EWHC 1217 (Comm)
Before: Mr. Justice Teare
Case No: 2007 FOLIO 1434
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Ali Reza Sinai (instructed by Simons Muirhead Burton) for the Defendant
Jasbir Dhillon (instructed by Gordon Dadds) for the Claimant
Hearing dates: 21 May 2009
Approved Judgment
MR.JUSTICE TEARE
Mr. Justice Teare:
This is an application by the Defendant to stay the proceedings in this action on the grounds that there are concurrent proceedings in Iran or, in the alternative, that the proceedings be stayed pending the conclusion of the concurrent proceedings in Iran.
The claim brought against the Defendant is for sums due on 13 cheques. He is said to be liable on the cheques pursuant to the law of Iran which is the governing law.
This application to stay the English proceedings is most unusual. An earlier application to stay these proceedings on the grounds that Iran was the most appropriate forum was not pursued when it was appreciated that the decision of the European Court in Osuwu v Jackson [2005] QB 801 prevented any such application. Thereafter the Defendant submitted to the jurisdiction of this court and filed a defence. Directions were given for the trial of the action. The trial is due to commence on 6 July 2009. Thus the application which was made on 11 May was made less than two months before the trial date.
The application was heard on the penultimate day of last term and it was not possible to give judgment on the final day of term. In view of the imminence of the forthcoming trial and the work required to prepare for that trial the parties need to know the outcome of the Defendant's application as soon as possible. I have reached the clear conclusion that the application should be dismissed and will express my view shortly.
The explanation for this application being made so late in the day is as follows.
Unknown to the Defendant the Claimant had, before commencing the English proceedings, commenced proceedings in Iran on 4 of the 13 cheques. In 2006 the Claimant presented the four cheques to the Tehran Revolutionary Public Prosecutor's Office for the purpose of requesting the commencement of criminal and civil proceedings against the Defendant. The Defendant was convicted in his absence of a criminal offence in relation to those cheques and sentenced to two years imprisonment. Civil judgments on those cheques were also obtained against the Defendant.
When the Defendant issued an application to stay the English proceedings in this court in November 2007 on the grounds that Iran was the most appropriate forum he was unaware of the criminal convictions and civil judgments against him in Iran. Although the basis of that application was that Iran was the most appropriate forum the Claimant did not disclose the existence of the civil (or criminal) judgments in Iran.
As a result of disclosure made in these proceedings (four of the cheques bore the stamp of the Public Prosecutor) it seems that the Defendant suspected that there might have been proceedings against him in Iran. By 30 August 2008 and probably before that date the Defendant's Iranian lawyer learnt of the Iranian convictions and judgments. The Defendant himself learnt of the judgments by 7 September 2008. 1
The Claimant confirmed the existence of the criminal convictions and civil proceedings by letter dated 12 September 2008The Defendant soon took action in Iran to have the criminal convictions set aside. However, when a pre-trial review took place before this court in November 2008 no suggestion was made by the Defendant that an application such as that which is now made might be made. Instead, directions were given for disclosure, exchange of witness statements and expert reports, for the trial date of 2 February 2009 to be vacated and a new trial date to be fixed for not before 1 June 2009.
In December 2008 the criminal conviction is relation to one cheque was set aside.
On 16 March 2009 the Defendant requested the Claimant to undertake either to apply to the Iranian court to set aside the Iranian judgments or to withdraw the proceedings commenced in this jurisdiction. The Claimant failed to give either undertaking but by letter dated 17 April 2009 said that it was prepared to agree not to enforce the Iranian judgments without first giving the Defendant reasonable notice in writing.
On 6 May 2009 the remaining criminal convictions were set aside. The Iranian lawyer representing the Claimant has stated that the Presiding Judge asked if the Claimant had applied for writ of enforcement. He replied that they had not and “as the Presiding Judge seemed surprised, I decided to request a writ of enforcement.” He described such writ as necessary preliminary step in enforcement proceedings. The Judge granted such writ.
On 11 May 2009 the application to stay the English proceedings was made and on 12 May 2009 an appeal against the civil judgments was commenced in Iran.
I accept that this application could not have been brought before the date when the Defendant or those advising him were aware of the Iranian judgments. That was probably before 30 August 2008 but the precise date is not apparent. Although it is readily understandable that the Defendant's priority was to seek to overturn the criminal convictions in Iran that does not explain why this court was not informed at the pre-trial review in November 2008 that an application such as is now being made was a possibility. Indeed, since the Defendant or those advising him knew of the Iranian proceedings by 30 August 2008 at the latest this application ought to have been made at the pre-trial review. In the event the Defendant delayed until 11 May 2009 before making this application. When I asked why this application was made so late I was told that the Defendant wanted to present his application in the most favourable manner and that it was right to make the application once the Defendant was in a position to commence the civil appeals in Iran. The Defendant said that this after the hearing on 6 May 2009 in Iran. I asked whether it followed that the decision to make the application so late was a tactical decision. Counsel said that he could not say whether there was a tactical decision to delay because the Defendant had instructed his current solicitors and counsel on 29 April 2009 but the matter had been mooted at the end of 2008. Legal professional privilege was not waived and so I do not therefore know what the reason for the delay was. If there was a tactical decision to delay making the application until the Defendant was in a position to commence his appeal against the civil judgments in Iran that would plainly not be an acceptable explanation. If there was no such tactical decision then there was an unexplained and therefore unacceptable delay from November 2008 until May 2009. The request for an undertaking was made on 16 March 2009 but, if an application such as that which has now been made was to be made, that request ought to have been made before the pre-trial hearing in November 2008.
The basis of this application as explained in written and oral submissions appeared to me to be threefold.
First, it was said that the Claimant was abusing the process of this court by bringing proceedings on all 13 cheques when they had already commenced proceedings and obtained judgment against the Defendant in respect of 4 cheques. In this regard reliance was placed upon Australian Commercial Research and Devlopment Ltd v ANZ McCaughran Merchant Bank Ltd. [1989] 3 All ER 65 in which Sir Nicolas Browne-Wilkinson V-C. stated (at pp.69–70) that where a plaintiff seeks to pursue the same defendant in two jurisdictions in relation to the same subject matter he is required to elect...
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