Tasarruf Mevduati Sigorta Fonu v Demirel and another
| Jurisdiction | England & Wales |
| Judgment Date | 26 July 2007 |
| Neutral Citation | [2007] EWCA Civ 799 |
| Docket Number | Case No: A3/2007/1158 |
| Court | Court of Appeal (Civil Division) |
| Date | 26 July 2007 |
[2007] EWCA Civ 799
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR JUSTICE LAWRENCE COLLINS
HC05C3744
Royal Courts of Justice
Strand, London, WC2A 2LL
The Master of the Rolls
Lady Justice Arden and
Lord Justice Hooper
Case No: A3/2007/1158
Mr Edward Cohen (instructed by Messrs Cartier & Co.) for the Claimant/Respondent
Mr Lawrence Cohen QC and Mr Alexander Pelling (instructed by Messrs Berwin Leighton Paisner LLP) for the Defendant/Appellant
Hearing dates: 25 July 2007
Judgement
Sir Anthony Clarke MR:
This is a judgment of the court.
Introduction
This action was brought at common law to enforce three judgments given in favour of the claimant ('TMSF') against the defendant in Turkey. On 6 December 2005 TMSF sought and obtained two orders from Mr Justice Lawrence Collins. The first was a world-wide freezing injunction relating to Mr Demirel's assets up to a value of US$46 million and an order providing for the provision of information by Mr Demirel as to his assets. The second was an order granting permission to serve the proceedings and the first order on Mr Demirel out of the jurisdiction. On 16 December 2005 Patten J varied the freezing injunction somewhat but substantially reimposed it.
Mr Demirel applied to discharge those orders. His application came before Mr Justice Lawrence Collins ('the judge'). The application was successful in part. By an order made on 21 December 2006 the judge, among other things,
i) set aside the order granting permission to serve the proceedings out of the jurisdiction in relation to judgments no 2001/1300 dated 26 November 2001 and no 2002/551 dated 11 June 2002 respectively; and
ii) set aside the freezing injunction.
The judge did not, however, set aside the order granting permission to serve the proceedings out of the jurisdiction in so far as it related to judgment no 2001/1461 dated 20 November 2001, which was in the principal sum of US$30,000,000.
It was accepted before the judge by TMSF that, contrary to the evidence it had put before the judge on the without notice application, the judgments of 26 November 2001 and 11 June 2002 were not final. The judge accordingly set aside the order in respect of those judgments. By contrast, it was accepted on behalf of Mr Demirel that there is at least a serious issue to be tried on the question whether the judgment of 20 November 2001 is final.
The applications before the judge in December 2005 were supported by an affidavit sworn by Ms Gulay Dogan of TMSF which described the background to the claims and said in paragraph 7 that TMSF had left it until late 2005 to enforce the judgments in England “since it only recently (9 November 2005) received evidence that [Mr] Demirel has assets here”. She said much the same in paragraph 30.
Mr Demirel swore an affidavit which stated that he had not at any relevant time had assets here. The judge held that, if it were necessary for TSMF to establish the presence of assets in England, the order for permission to serve the proceedings out of the jurisdiction would be set aside. However, as appears below, he held that it was not necessary to do so. He rejected a number of further submissions made on behalf of Mr Demirel and refused to set aside the order for permission to serve out of the jurisdiction.
The judge did however discharge the freezing order. He did so on the basis that the injunction was rightly granted but that, as he put it at [88], there was no point in its continuance, since the disclosure (ie of information) had been made, there were no assets here and the effectiveness as regards foreign assets was doubtful. The judge also ordered Mr Demirel to pay 75 per cent of TMSF's costs of the application and to pay £30,000 on account of that liability by 18 January 2007. Mr Demirel did not pay.
The appeal
The judge refused permission to appeal but, on a renewed application for permission to appeal made to this court out of time (and for other relief), Rix LJ adjourned the application for permission to appeal to be heard on notice to TMSF with appeal to follow if permission was granted. He said that he would have granted permission to appeal if there were no need for an extension of time. He directed that the application for an extension of time be heard at the same time as the application for permission to appeal and, in effect, granted a stay.
The issues in the appeal
It is convenient to consider the issues in the appeal before considering whether it is appropriate to grant an extension of time. Mr Demirel advances essentially three grounds of appeal as follows:
i) that the court had no jurisdiction to permit service out of the jurisdiction on the true construction of CPR 6.20(9) (“the jurisdiction point”);
ii) if there was jurisdiction, that permission to serve out should have been refused on the ground that the proceedings would serve no useful purpose (“the no useful purpose point”); and
iii) in any event, that the claim should be heard in the Cayman Islands and not here (“the forum conveniens point”).
Before considering these grounds in turn, we should note that it is not now sought to re-open a number of points raised before the judge. First, TMSF does not seek to reopen any point upon which it lost before the judge. Second, (and perhaps more importantly for present purposes) Mr Demirel does not seek to reopen any point upon which he lost, other than the three grounds set out above. Thus he does not seek to reopen what the judge called the public law point, which was that the court had no jurisdiction to enforce foreign public law and that this is what TMSF is asking it to do here. The judge held that TMSF had a real prospect of success on those issues. He held that, if the principles expressed by this court in President of the State of Equatorial Guinea v Logo Ltd [2006] EWCA Civ 1870 were applied, it was highly likely that TMSF would succeed on this point. In any event, it was open to Mr Demirel to raise the point hereafter, albeit not on an application to set aside the grant of permission to serve the proceedings out of the jurisdiction. We turn to consider the grounds of appeal in turn.
The jurisdiction point
CPR 6.20 (9), which we will call 'the rule', provides:
“6.20 In any proceedings to which rule 6.19 does not apply, a claim form may be served out of the jurisdiction with the permission of the court if
….
(9) a claim is made to enforce any judgment or arbitral award.”
These are not proceedings to which rule 6.19 applies because that rule applies to cases where the permission of the court is not required and this is not such a case.
It is important to note that it is not sufficient for a claimant to show that his claim is a claim “made to enforce a judgment or arbitral award” because, as is common ground between the parties, the rule expressly provides that in such a case a claim form may be served out of the jurisdiction of the court “with the permission of the court”. The rule does not specify the circumstances to be taken into account in the exercise of its discretion to grant permission. In addition, CPR 6.21(2A) provides for a further condition, namely that the court will not give permission unless satisfied that England and Wales is the proper forum in which to bring the claim.
Mr Edward Cohen submitted to the judge and submits to us that jurisdiction to give permission to serve a claim form out of the jurisdiction to enforce a foreign judgment only exists where, at the time when the application is made, there are assets in England and Wales against which the judgment can be enforced or at least where the judgment is otherwise enforceable in England and Wales. An alternative formulation canvassed in the course of the argument was that at the time of the application there must be at least a real prospect of assets within the jurisdiction against which the judgment could be enforced within a reasonable time.
Mr Cohen relies in this regard upon the well-known cases decided under RSC Order 11 and its predecessors. Perhaps the best-known of them is The Hagen [1908] P 189, where Farwell LJ said at page 201:
“During these present sittings Vaughan Williams L.J. and myself have on more than one occasion had to consider Order xi, and we have had many authorities discussed and fully considered by the Court, and the conclusion to which the authorities led us I may put under three heads. First we adopted the statement of Pearson J, in Société Générale de Paris v Dreyfus Brothers (1), that “it becomes a very serious question, and ought always to be considered a very serious question, whether or not, even in a case like that, it is necessary for the jurisdiction of the Court to be invoked, and whether this Court ought to put a foreigner, who owes no allegiance here, to the inconvenience and annoyance of being brought to contest his rights in this country, and I for one say, most distinctly, that I think this Court ought to be exceedingly careful before it allows a writ to be served out of the jurisdiction.” The second point which we considered established by the cases was this, that, if on the construction of any of the sub-heads of Order xi. there was any doubt, it ought to be resolved in favour of the foreigner; and the third is that, inasmuch as the application is made ex parte, full and fair disclosure is necessary, as in all ex parte applications, and a failure to make such a full and fair disclosure would justify the Court in discharging the order, even although...
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