Masri v Consolidated Contractors Group SAL
| Jurisdiction | England & Wales |
| Judge | Sir Anthony Clarke Mr,Rix,Richards L JJ. |
| Judgment Date | 24 October 2005 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 October 2005 |
[2005] EWCA Civ 1436
Court of Appeal (Civil Division).
Sir Anthony Clarke Mr, Rix and Richards L JJ.
Charles Aldous QC and Simon Birt (instructed by Herbert Smith LLP) for the appellants.
Christopher Carr QC and Simon Salzedo (instructed by Simmons & Simmons) for the respondent.
The following cases were referred to in the judgment:
Besix SA v Wasserreinigungsbau Alfred Kretzschmar GmbH & Co KG (WABAG)ECAS (Case C-256/00) [2002] ECR I-1699.
Canada Trust Co v Stolzenberg (No. 2) [1998] CLC 23, [1998] 1 WLR 547 (CA); [2001] CLC 118, [2002] 1 AC 1 (HL).
Gascoine v Pyrah [1994] 1 L Pr 82.
Kalfelis v Bankhaus Schroder, Munchmeyer, Hengst & CoECAS (Case 189/87) [1988] ECR 5565.
Owusu v JacksonECAS (Case C-281/02) [2005] 1 CLC 246.
Contract — Service out of jurisdiction — Alleged non-performance of written contract — Assignment of interest in oil concession — Whether interest in concession held by contracting party — Claimant had real prospect of showing that defendant company was party to agreement and there were compelling reasons why issue should be disposed of at trial — Whether court had jurisdiction over foreign defendants in second action — Claims against Greek defendants in second action so closely connected with claims against UK defendant in first action that it was expedient to hear and determine them together — Council Regulation 44/2001, art. 6(1).
This was an appeal by defendants from part of a decision of Cresswell J ([2005] 1 CLC 1125)dismissing applications by the defendants for declarations that the court had no jurisdiction to entertain the claimant's claim against them.
The claimant, M, claimed damages against K and four companies (CCUK, CC Holding, CCIC, CC Oil and Gas) in which K had a direct or indirect interest. The claim was for damages for breach of a written contract made in London where M was then resident. The agreement related to rights in an oil field initially held by CCIC and later assigned to CC Oil and Gas. M's primary case was that the parties to the agreement were M and CCUK and that K had signed the agreement on behalf of CCUK. The appellants' case was that K made the agreement on behalf of CCIC. In case it was held that, as CCUK contended, CCUK was not the other party to the agreement, M claimed in the alternative that it was one of the other companies in the group, viz. CC Holding, CCIC or CC Oil and Gas, or K himself.
In his first action M claimed against CCUK, an English company. In his second action M claimed in the alternative against K, CC Holding, CCIC and CC Oil and Gas. The claim form in the second action was served on K and CCIC in Greece, where they were both domiciled, pursuant to Council Regulation 44/2001, and on CC Holding and CC Oil and Gas in Lebanon, pursuant to permission to serve out of the jurisdiction which had been granted on a without notice application.
CCUK applied for summary judgment in the first action on the ground that there was no prospect of a finding that CCUK was a party to the 1992 agreement. The judge dismissed that application. In the second action the judge held that M did not have to proceed against K and CCIC in Greece under art. 2 of the Regulation but was entitled to rely on art. 6(1) or 5(1) of the Regulation. He further held that there was a serious issue to be tried as between M and CC Holding and/or CC Oil and Gas, and that England was the appropriate forum for the trial of any claim against them.
The defendants appealed against the judge's holding that M was entitled to sue K and CCIC in England under art. 6(1) because one of a number of defendants, namely CCUK, was domiciled in England, and M's claims against K and CCIC were so closely connected with his claim against CCUK that it was expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. The defendants submitted that on its proper construction art. 6(1) applied only where the relevant defendant was a defendant in the same proceedings as a defendant domiciled in England.
Held, dismissing the appeal:
1. There was a real issue between M on the one hand and each of the appellants on the other as to who was the other party to the agreement. If M's claims against CCUK on the one hand and the appellants on the other hand were to be tried in different courts, there would be a risk of irreconcilable judgments. It followed that it was expedient to hear the claims together in the same action for the purposes of art. 6(1).
2. The judge had been right to hold that the reference in art. 6(1) to “the defendants” was wide enough to include both defendants in one action and defendants in more than one action. Otherwise the rationale of the provision which was to prevent irreconcilable judgments would not be achieved. There was no suggestion that the action against CCUK was brought with the sole object of ousting the jurisdiction of the courts in Greece. The appellants and CCUK were all defendants in the courts for the place where one of them was domiciled because CCUK was domiciled in England and all the appellants were defendants in English proceeding. The fact that those proceedings were not the same proceedings was irrelevant. Kalfelis v Bankhaus Schroder, Munchmeyer, Hengst & CoECAS(Case 189/87)[1988] ECR 5565andGascoine v Pyrah[1994] 1 L Pr 82considered.
Sir Anthony Clarke MR:
1. This is an appeal from part of an order made by Cresswell J on 17 May 2005 ([2005] 1 CLC 1125). By paragraph 3 of that order, the judge dismissed applications by the defendants in claim no 2004 Folio 831 for declarations that the court had no jurisdiction to entertain the claimant's claim against them and in each case for an order setting aside service of the claim form. Permission to appeal was refused by the judge but subsequently granted by Waller LJ.
2. The applications arose in this way. The claimant, Mr Masri, claims damages against Mr Said Khoury and four companies in all of which Mr Khoury has a direct or indirect interest. They are Consolidated Contractors International UK Ltd (“CCUK”), Consolidated Contractors Group SAL (“CC Holding”), Consolidated Contractors International Co (“CCIC”) and Consolidated Contractors (Oil and Gas) (“CC Oil and Gas”).
3. The claim against Mr Khoury and the four companies is the same, namely damages for breach of a written contract which was dated 6 November 1992 and was made in London. I shall describe the claim as the claim for damages because that is how it is pleaded. However it may be that on analysis it is a claim in debt for sums due under a contract.
4. As at 6 November 1992 Mr Masri was resident in London where he had lived since 1982. He moved to Jordan in about 1993 or 1994 and has been resident there every since. Mr Khoury is President of CCIC and CC Holding and is domiciled in Greece. CC Holding is simply a holding company and is incorporated in Lebanon. CCIC is also incorporated in Lebanon and is a subsidiary of CC Holding. It has its principal place of business in Greece. CCUK is indirectly a subsidiary of CC Holding, and CC Oil and Gas is a direct subsidiary of CC Holding. They are incorporated in England and the Lebanon respectively.
5. As summarised by the judge, the position under the 1992 agreement is briefly as follows. The agreement relates to rights in an oil field in South Yemen known as the Masila block or Masila concession (“the concession”). The relevant oil interest, a 10% interest in the concession, was initially held by CCIC. It was agreed to be assigned to CC Oil and Gas by an assignment dated 25 October 1992. The defendants contend that CCIC still held the interest at the time of the 1992 agreement because the assignment had not then taken effect. Mr Masri contends that the assignment was effected on 25 October 1992 so that by the time of the November 1992 agreement the relevant interest had passed to CC Oil and Gas. The interest is currently held by CC Oil and Gas. I will return to the 1992 agreement in a moment.
6. In the first action (2004 Folio 124) Mr Masri claimed against CCUK, alternatively CC Holding. Mr Masri has discontinued the claim in the first action against CC Holding. In the second action (2004 Folio 831) Mr Masri claims in the alternative against Mr Khoury, CC Holding, CCIC and CC Oil and Gas.
7. The first action was commenced by claim form dated 18 February 2004 and the second action was...
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