Victor Victorovich Plekhanov v Alexey Andreyevich Yanchenko
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cockerill |
| Judgment Date | 13 May 2020 |
| Neutral Citation | [2020] EWHC 1201 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2019-000528 |
| Date | 13 May 2020 |
[2020] EWHC 1201 (Comm)
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
Mrs Justice Cockerill DBE
Case No: CL-2019-000528
Mr Andrew Scott (instructed by Macfarlanes LLP) for the Claimant
The Defendant appeared in person
Hearing date: 1 May 2020
Approved Judgment
Introduction
I have heard two applications: (i) by the Defendant (“Mr Yanchenko”) to challenge the Court's jurisdiction out of time (the “Jurisdiction Application”); and (ii) by the Claimant (“Mr Plekhanov”), for judgment in default of a Defence (the “Default Judgment Application”).
As further described below, the claim is for US$786,530 due from Mr Yanchenko under a written agreement dated 13 October 2018 (the “Agreement”). The Agreement contains what Mr Plekhanov says is a clear clause providing for the English Court's jurisdiction.
Mr Plekhanov's position is that so far as concerns the Jurisdiction Application:
i) It has been made out of time and in circumstances where Mr Yanchenko is deemed to have accepted the Court's jurisdiction pursuant to CPR r. 11(5).
ii) There has been no application for an extension of time and there would be no proper basis to grant such extension having regard to the relief from sanctions principles that apply by analogy.
iii) There is accordingly no need for the Court to examine the merits of the Jurisdiction Application. But even if that were otherwise, it is readily apparent that the challenge is baseless given the English jurisdiction clause.
Mr Yanchenko submits that the Jurisdiction Application was made in time and that his application should be upheld inter alia because the requirements of the clause were not met before proceedings were commenced.
So far as concerns the Default Judgment Application, Mr Plekhanov says that no Defence has been served and the deadline for it has long since passed. The conditions for judgment in default of defence are met and Mr Plekhanov is thus entitled to the relief sought in the Claim Form and Particulars of Claim.
Mr Yanchenko disputes the Default Judgment Application, in particular on the basis that the Certificate of Service was filed out of time and that he could not have filed a defence while contesting the jurisdiction.
Background
The Claim
The Claim is for US$786,530 said to be due from Mr Yanchenko under the Agreement. It is a straightforward claim for a sum due under a written agreement, which itself dealt with disputes which had arisen under an Investment Management Agreement which was governed by English Law and contained an exclusive jurisdiction clause.
As appears from its recitals, the background is that Mr Yanchenko had been managing an account of Mr Plekhanov at Interactive Brokers, the balance of the account fell below an agreed level, and Mr Yanchenko agreed to restore it to US$800,000, at which point the Investment Management Agreement would be terminated.
Pursuant to Clauses 1 and 2 of the Agreement, Mr Yanchenko was to effect that restoration by 5 May 2019, failing which Mr Plekhanov would be entitled to claim the amount by which the balance fell below US$800,000 from him. Pursuant to Clause 3, Mr Yanchenko agreed to satisfy that claim within 5 business days of receipt.
Clauses 8 and 9 of the Agreement provide as follows:
“8. The parties have decided that this Agreement shall be governed by English law.
9. In the event of the emergence of any dispute, the Parties shall appoint a meeting to resolve it through negotiations. The parties have also agreed that the meeting appointed for the settlement of disputes may not be rescheduled more than 2 (Two) times and that the total duration of the rescheduling may not exceed 15 (Fifteen) calendar days. If no agreement is reached after the holding of the meeting, the Parties shall have the right to apply to a London court pursuant to the competence and/or jurisdiction of the courts.”
As at 5 May 2018, the Interactive Brokers account was US$786,530 below the agreed level. Mr Plekhanov issued a payment request in that amount. Mr Yanchenko says he did not have that amount. Payment was not made within the five days prescribed by the Agreement.
By various emails and other communications in May and June 2019, Mr Plekhanov claimed that sum from Mr Yanchenko, who seems to have acknowledged that it was due. For example in correspondence on one occasion he said: “I have violated the terms by which I am obliged to make payment”.
There also appear to have been repeated attempts to meet in person, with a view to resolving matters amicably. Mr Plekhanov says, and I see from the correspondence, that meetings in person were offered on May and June but that all these attempts came to nothing. There is a dispute between the parties, which is not material for present purposes as to whether Mr Yanchenko refused to meet.
There were however certainly telephone conversations. Indeed Mr Yanchenko positively says that an agreement compromising this claim was reached by phone on 16 May. That is his defence to the claim. His affidavit of 4 February refers to an email evidencing that agreement. That email says:
“According to the results of our telephone conversation yesterday, I accepted for myself:
1. You have agreed that I continue to work on your brokerage account.
2. You are entitled to block my account access at any time.
3. If the balance exceeds 100,000 USD any amount from above can be withdrawn from your account by you even without notifying me
4. Trading on your account does not relieve me from liability by agreement. I for my part will also seek a solution for transferring to your bank account, but my obligations will be reduced by the amount earned in your brokerage account.”
Mr Plekhanov replied to each point: “According to the terms of the Agreement”. He also said: “I am conducting the legal process and taking other measures to protect my interests”.
Macfarlanes for Mr Plekhanov sent a letter before action dated 11 June 2019. Mr Plekhanov says that Mr Yanchenko failed to respond to it. Mr Yanchenko says that he sent an email on 18 June asserting the existence of the compromise agreement, though the actual email was not before me.
Mr Plekhanov commenced these proceedings on 23 August 2019. Mr Yanchenko was put on notice of the existence of the proceedings by email at once and does not dispute that he received this informal notification.
The Claim Form, Particulars of Claim, Response Pack and other documents were formally served on Mr Yanchenko in Italy on 16 October 2019, as confirmed by the Certificate of Service filed with the Court. There is no dispute that such service was effective, though Mr Yanchenko relies on the fact that the Certificate of Service was filed late.
Pursuant to CPR rr. 6.35(3)(a) and 58.6(3), Mr Yanchenko was required to file an Acknowledgment of Service within 21 days of being served with the Claim Form, i.e. by 6 November 2019.
So far as the records in the Court file are concerned Mr Yanchenko failed to comply with this requirement: his Acknowledgment of Service was filed on 13 December 2019, i.e. 37 days late and more than twice the period of time afforded for such filing.
Mr Yanchenko's explanation in correspondence with Macfarlanes in November 2019, and before me, is that he posted the document to the Court on 29 October 2019, but it was not received.
He relies in this connection on what he describes as a delivery confirmation, but appears instead to be a proof of posting dated October 29. It is not clear what was posted under cover of that proof. The absence of records on the Court's file, and later enquiries made by Mr Plekhanov's solicitors, suggest that either no Acknowledgement of Service arrived or it was not accepted as a valid filing.
On 14 November 2019, Mr Yanchenko sent an email to Macfarlanes stating “ I responded to your lawsuit in a letter to a London court that the lawsuit was misplaced”. Macfarlanes responded by email the same day informing him that the Court file contained no such letter and drawing attention to the need to file an Acknowledgment of Service and the relevant dates for doing so, and for disputing the Court's jurisdiction. That email also advised him to instruct English solicitors immediately “as we have previously noted”.
Mr Yanchenko responded by further email dated 14 November 2019. This asserted that “[t]he court received form N9(CC) on November 1. The copy is in attach”. The attachment was what appears to be a scan of the original Acknowledgement of Service, but nothing dealing with its receipt by the Court. It is unclear what basis Mr Yanchenko had for asserting that the Court “received” this Acknowledgment of Service.
On the basis of these facts I am prepared to conclude that on the balance of probabilities an Acknowledgement of Service was sent, as the proof of posting says. However that does not mean that it was received, or that as a matter of law it was deemed received. The evidence is that it was not received.
As for deemed receipt, I explained to Mr Yanchenko in the course of argument that there appears to be no basis for deeming an Acknowledgement of Service to be received. There is no equivalent provision to that which allows deemed service of a claim form within the jurisdiction. There is also no equivalent for service out of the jurisdiction.
So far as Acknowledgement of Service is concerned it appears that it is the responsibility of the defendant to get the document to the Court's office. Thus:
“White Book paragraph 10.1.1”: “Filing”: Means delivering, by post or otherwise, to the court office. The...
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