The Public Institution for Social Security v Mr Fahad Maziad Rajaan Al Rajaan & Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henshaw |
| Judgment Date | 06 November 2020 |
| Neutral Citation | [2020] EWHC 2979 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2019-000118 |
| Date | 06 November 2020 |
[2020] EWHC 2979 (Comm)
THE HONOURABLE Mr Justice Henshaw
Case No: CL-2019-000118
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Stuart Ritchie QC, Michael Lazarus, Louise Merrett and Nico Leslie (instructed by Stewarts Law LLP) for the Claimant
Kenneth MacLean QC, James MacDonald and Tamara Kagan (instructed by Slaughter and May) for the Third, Eighth, Ninth and Tenth Defendants
Jonathan Adkin QC and Charlotte Beynon (instructed by Peters & Peters Solicitors LLP) for the Fourth Defendant
Frances Tregear QC and Tony Singla (instructed by Herbert Smith Freehills LLP) for the Eleventh Defendant
Daniel Jowell QC and Richard Blakeley (instructed by Milbank LLP) for the Twelfth Defendant
David Davies (instructed by Macfarlanes LLP) for the Thirteenth Defendant
Nathan Pillow QC and Tom Ford (instructed by Hogan Lovells International LLP) for the Fourteenth Defendant
Written submissions were received on behalf of the Fifth Defendant
The other Defendants did not appear and were not represented
Hearing dates: 20–23 July 2020
Further submissions received in writing on 28 and 30 July 2020
Draft judgment circulated to the parties on 30 October 2020
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 | 5 |
| (B) BACKGROUND | 7 |
| (1) Key parties | 7 |
| (2) Procedure for Mutual Legal Assistance | 8 |
| (3) Swiss Criminal Proceedings | 9 |
| (4) Swiss Debt Collection Proceedings | 9 |
| (C) OUTLINE OF PIFSS'S CLAIMS AGAINST THE APPLICANTS | 10 |
| (1) Overview | 10 |
| (2) Pictet | 14 |
| (3) Mirabaud | 18 |
| (4) Legal basis of claims | 22 |
| (D) ISSUES AND STANDARD OF PROOF ON THE PRESENT APPLICATIONS | 23 |
| (E) CONTENTS OF JURISDICTION AGREEMENTS | 25 |
| (1) Banque Pictet | 25 |
| (2) Pictet Europe | 30 |
| (3) Banque Mirabaud | 31 |
| (F) INCORPORATION/FORMAL VALIDITY OF JURISDICTION AGREEMENTS | 33 |
| (1) Scope of the dispute | 33 |
| (2) Principles | 34 |
| (a) Applicable law(s) | 34 |
| (b) EU law requirements | 39 |
| (c) Article 23(1)(a): agreement in or evidenced in writing | 39 |
| (d) Article 23(1)(b): parties' established usage | 46 |
| (e) Article 23(1)(c): usage in international trade or commerce | 46 |
| (f) Incorporation principles of Swiss law | 47 |
| (g) Incorporation principles of Luxembourg law | 53 |
| (3) Banque Pictet | 54 |
| (4) Pictet Europe | 58 |
| (5) Banque Mirabaud | 59 |
| (G) MATERIAL VALIDITY UNDER EU LAW | 65 |
| (1) Principles | 65 |
| (2) Banque Pictet | 72 |
| (3) Pictet Europe | 75 |
| (4) Banque Mirabaud | 77 |
| (H) SCOPE UNDER DOMESTIC LAW | 78 |
| (1) Swiss law | 79 |
| (a) General approach | 79 |
| (b) Tort claims and foreseeability | 82 |
| (c) Whether any connection is needed in this case | 90 |
| (d) Concurrent tort and breach of contract | 91 |
| (e) Applicability of jurisdiction clauses to other contracts | 94 |
| (f) Temporal scope | 94 |
| (2) Luxembourg law | 96 |
| (3) The Banque Pictet and Mirabaud jurisdiction clauses | 97 |
| (4) The Pictet Europe jurisdiction clauses | 98 |
| (I) APPLICABILITY OF JURISDICTION AGREEMENTS TO PIFSS'S CLAIMS | 98 |
| (1) Pictet Secret Commission Claims | 98 |
| (i) Contracts with related entities | 102 |
| (ii) Lack of ‘relevant’ formal contracts | 103 |
| (iii) Scope of contracts containing EJCs | 105 |
| (iv) Claims not related to contracts | 106 |
| (v) EJCs not covering intentional/hidden wrongdoing | 107 |
| (vi) Part of larger scheme unconnected to Pictet accounts | 108 |
| (2) Pictet Accessory Claims | 108 |
| (3) Mirabaud Secret Commission Claims | 112 |
| (4) Mirabaud Accessory Claims | 119 |
| (5) Claims against M. Bertherat | 121 |
| (6) Claims against M. Mirabaud and M. Fauchier-Magnan | 126 |
| (a) M. Mirabaud | 126 |
| (b) M. Fauchier-Magnan | 128 |
| (7) Claims against M. Argand | 128 |
| (8) Claims against M. Amouzegar | 128 |
| (J) ARTICLE 6/ARTICLE 8 JURISDICTION | 132 |
| (1) Relevance to the present case | 132 |
| (2) General principles relating to Article 6 | 133 |
| (3) Interaction of Article 6 with Article 23 jurisdiction agreements | 138 |
| Situation (a): jurisdiction clause covering claims against same defendant | 139 |
| Situation (b): jurisdiction clause covering claims against another defendant | 145 |
| (4) Banque Pictet | 145 |
| (5) Pictet Europe | 147 |
| (6) Banque Mirabaud | 147 |
| (7) M. Bertherat | 147 |
| (8) M. Mirabaud and M. Fauchier-Magnan | 148 |
| (9) M. Argand | 148 |
| (10) M. Amouzegar | 150 |
| (K) CLAIMS AGAINST PICTET BAHAMAS AND PICTET ASIA | 152 |
| (L) CONCLUSION | 159 |
(A) INTRODUCTION
The Claimant (“ PIFSS”) is a public institution authorised by law to operate the State of Kuwait's social security system and pension scheme. Its primary role is to provide Kuwaiti nationals with insurance for retirement, disability, sickness and death.
In these proceedings, PIFSS brings claims against 37 defendants, for sums totalling US$847.7 million, arising from the alleged corruption between 1994 and 2014 of its former Director General, the First Defendant Mr Fahad Maziad Rajaan Al Rajaan. That sum is said to represent the known total of unlawful corrupt payments received by Mr Al Rajaan and his associates. Mr Al Rajaan is the main anchor defendant in relation to other defendants.
PIFSS alleges that the financial institution defendants, together with certain individual partners or representatives of those institutions and a number of other financial intermediaries and associated corporate vehicles, acted in concert in various combinations to make corrupt payments to Mr. Al Rajaan and to assist him to conceal and dispose of such payments. The payments are alleged to have been in violation both of Mr Al Rajaan's fiduciary duties to PIFSS (as its most senior officer) and of Kuwaiti public property and anti-bribery laws. PIFSS has identified seven corrupt schemes to date, pursuant to which it alleges the corrupt payments were made and concealed by different groups of defendants.
Mr Al Rajaan and his wife, the Second Defendant (“ Ms Al Wazzan”), are sued here on the basis of being now domiciled in England. The Fifteenth to Seventeenth Defendants are English companies. PIFSS seeks to found English jurisdiction against the majority of the other defendants pursuant to Article 6(1) of the Lugano Convention, or its counterpart in the Recast Brussels Regulation (Article 8(1)), on the basis that the claims against them are so closely connected to those against Mr Al Rajaan that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. In the case of two parties involved in the present application – Pictet Bank and Trust Limited (“ Pictet Bahamas”) and Bank Pictet & Cie (Asia) Limited (“ Pictet Asia”) – PIFSS was given permission to serve proceedings out of the jurisdiction pursuant to CPR 6.36/Practice Direction 6B § 3.1(3) on the basis that they are necessary or proper parties.
This judgment relates to a jurisdiction challenge made by ten of the defendants, whom PIFSS alleges were in aggregate involved in unlawful corrupt payments of over US$500 million.
Three of those ten defendants – Banque Pictet & Cie SA (“ Banque Pictet”), Pictet & Cie (Europe) SA (“ Pictet Europe”) and Mirabaud & Cie SA (“ Mirabaud”) – are banks based in Switzerland or (in the case of Pictet Europe) Luxembourg who contend that PIFSS is bound by exclusive jurisdiction agreements to bring all such claims against them in Geneva or Luxembourg, albeit Pictet Europe has undertaken to consent to Geneva jurisdiction for the purposes of this claim. Alternatively, if PIFSS is bound to pursue at least some of the claims against them in Geneva or Luxembourg, these defendants contend that the English court cannot assume jurisdiction in relation to the balance of the claims against them pursuant to Lugano Convention Article 6/Recast Brussels Regulation Article 8.
The Fourth Defendant (“ M. Bertherat”) is a former partner of Banque Pictet; and the Twelfth and Thirteenth Defendants (“ M. Mirabaud” and “ M. Fauchier-Magnan”) were partners in Mirabaud. It is common ground that, subject to certain important points of contention, these defendants are entitled to rely on the exclusive jurisdiction clauses if and to the same extent as Banque Pictet and Mirabaud are. They argue that all claims against them fall within those jurisdiction agreements, and make a similar alternative argument in relation to Article 6/Article 8 to that made by Banque Pictet, Pictet Europe and Mirabaud.
The Fourteenth Defendant (“ M. Argand”) is a senior Swiss lawyer, domiciled and practising in Switzerland, who is alleged to have assisted Mirabaud in setting up structures for the payment of secret commissions to Mr Al Rajaan. He contends that, if Mirabaud, M. Mirabaud and M. Fauchier-Magnan successfully challenge the jurisdiction, it will follow that the requirements of Lugano Convention Article 6 are not satisfied in relation to him.
Pictet Bahamas and Pictet Asia submit that if Banque Pictet successfully challenges the jurisdiction, then this court should decline on forum non conveniens grounds to exercise jurisdiction over them. They have undertaken to consent to Geneva jurisdiction.
M. Amouzegar is a former employee of Banque Pictet and is domiciled in Switzerland. He was not represented before me, for reasons I shall explain later, though his solicitor filed a witness statement on his behalf. He too challenges jurisdiction, relying...
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