Yukos Finance B.v and Others v Stephen Lynch and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 20 July 2017 |
| Neutral Citation | [2017] EWHC 1812 (Comm) |
| Docket Number | Case No: CL-2015-000829 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 20 July 2017 |
[2017] EWHC 1812 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Mr. Justice Teare
Case No: CL-2015-000829
Jawdat Khurshid (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the Claimants
First Defendant represented himself
Hearing date: 30 June 2017
Judgment Approved
This is an application by the First Defendant, Mr. Stephen Lynch, to set aside (i) an order dated 24 May 2016 by which Phillips J. extended the time for service of the Amended Claim Form on Mr. Lynch out of the jurisdiction until 22 May 2017 and (ii) an order dated 24 March 2017 by which Andrew Baker J. granted the Claimants retrospective permission to serve the Amended Claim Form out of the jurisdiction in Lebanon by means other than those provided for under CPR 6 and declared that service on Mr. Lynch on 1 January 2017 was good service. Mr. Lynch sought an order that the Amended Claim Form had not been validly served on him and a declaration that the English court had no jurisdiction to try the claim brought by the Claimants against him.
Mr. Lynch represented himself on this application. He provided the court with a skeleton argument of some 15 pages and then addressed the court with the assistance of a "speaking note" of some 48 pages. He made his points with clarity and firmness. He had earlier provided the court with a witness statement dated 16 May 2017.
It is unnecessary to say much about the underlying claim. The claim concerns the sale by auction of assets of Yukos Oil. It is said that Mr. Lynch and others acted unlawfully with regard to that auction and are liable to compensate the Claimants. Mr. Lynch accepts that he participated in the auction but has not addressed the claim against him because his application is not concerned with the merits of the claim but with the question of service.
On this application Mr. Lynch submitted that the order extending time for service out of the jurisdiction should be set aside on the grounds of (i) delay in service in Russia and (ii) failure to disclose failed attempts to serve a subpoena in Florida. With regard to the order retrospectively declaring that steps taken in Beirut Airport to serve him with these proceedings were good service he said that that order should be set aside on the grounds (i) that those steps were contrary to the law of Lebanon, (ii) that there was no good reason for the order and (iii) that the steps taken were not such as to bring the nature of the documents served on him to his attention. I shall consider each of these objections.
Delay in service in Russia
Mr. Lynch submitted that the order dated 24 May 2016 by Phillips J. ought not to have been made because there had been delay of up to 8 months in seeking to serve him in Russia.
The relevant chronology appears to have been as follows. The claim form was issued on 23 November 2015. The Second to Fourth Defendants were served within the jurisdiction between 15 and 18 January 2016. Permission to serve Mr. Lynch out of the jurisdiction in Florida and Moscow was obtained from Phillips J. on 23 March 2016. The Second to Fourth Defendants served their Defences between 6 and 9 May 2016. Attempts were made to serve the First Defendant in Florida between 6–29 April 2016 and between 17–18 May 2016. The deadline for service on Mr. Lynch expired on 22 May 2016, 6 months after the issue of the claim form.
The Claimants sought to effect service in Florida as a priority because they considered, on the basis of information from the Foreign Process Service, that service in Russia would take a minimum of 12 months. However, before applying on 20 May 2016 for an extension of time in which to effect service abroad, the Claimants had arranged for the Claim Form and other documents to be translated and "legalised" in preparation for service in Russia. Phillips J. extended time for service for some 12 months.
The alleged 8 month delay in serving Mr. Lynch is made up of 4 months after the issue of the claim form before applying for permission to serve the claim form out of the jurisdiction (thus from November 2015 until March 2016) and then a further 4 months to initiate service of the claim form in Russia (thus from March to July 2016, when the Claimants submitted full documentation to the Foreign Process Service).
The application seeking permission to serve out of the jurisdiction was supported by the first witness statement of Mr. O'Sullivan dated 22 March 2016. From that it is apparent (see paragraph 61) that the Claimants had anticipated that the claim form would be served on Mr. Lynch within the jurisdiction because it was thought that he travelled to England on a regular basis. However, they concluded that he had not travelled to England in the period since the claim had been issued and accordingly sought permission to serve out of the jurisdiction. It is also apparent (see paragraph 12) that the Claimants had sought to identify the countries where he was likely to be found. In these circumstances I am not persuaded that there was any material delay in seeking permission to serve out.
So far as the alleged delay thereafter is concerned it was, it seems to me, appropriate for the Claimants to seek to serve in Florida as a priority given that service in Russia was likely to take a minimum of 12 months. Once the attempt at service in Florida had failed the Claimants properly applied for an extension of time for service out of the jurisdiction before the 6 month period had elapsed. I have not been able to ascertain from the evidence the reason why the full documentation was not provided to the Foreign Process Service until 15 July 2016 but such date was less than 2 months after the order of Phillips J. and some 10 months before the time for service out would expire. I am not persuaded that this delay, if such it was, was such that the order of Phillips J. should be set aside.
Non-disclosure of failed attempt to serve in Florida
Mr. Lynch says that the Claimants failed to disclose to the court, when seeking an extension of time for service out of the jurisdiction, that the Claimants had failed to serve a subpoena which had been issued by the Florida court. The application notice alleges that the Claimants misled the court as to Mr. Lynch's whereabouts. In his skeleton argument Mr. Lynch suggested that the failed service of the subpoena had not been disclosed in order that the Claimants could describe their attempts to serve the claim form in this action in Florida as legitimate.
Mr. O'Sullivan replied to this serious allegation in his seventh witness statement. The subpoena was issued in connection with Yukos-related litigation in the Netherlands. It was obtained in December 2015 when the Claimants expected Mr. Lynch to come to Florida. It is said that he changed his travel plans and left the US in order to avoid service. Subsequently a second subpoena was obtained in May 2017 and was validly served on Mr. Lynch at Miami International Airport. Mr. O'Sullivan's answer to the serious allegation is that "the Claimants believed and still believe that the First Defendant has owned and maintained a residence at the US address and continues to use the US address from time to time."
There is a conflict of evidence as to whether Mr. Lynch owns or maintains a residence in Florida but for present purposes what is important is that the Claimants believe their case that he has a residence there to be true. There was therefore no attempt to mislead the court as to the whereabouts of Mr. Lynch. The Claimants did not inform the court of the failed attempt to serve the subpoena in Florida but that failed attempt did not cause the Claimants to believe that he did not have a residence there. Rather, they thought that he had been careful to avoid being served. I am not persuaded that the information was material; the information would not have caused the court to refuse to permit service in Florida. But if it were material, I am not persuaded that the Claimant's failure to disclose it was so serious that Phillips J.'s order should...
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