[co-author: Harriet Geddis]

A recent High Court judgment has emphasised that where a claimant has chosen to sue a party in England rather than in another jurisdiction, factors such as the risk of a multiplicity of proceedings and inconsistent judgments may justify England being the appropriate forum if the claimant had a reasonable and legitimate reason to choose England. The relative ease of enforceability of an English judgment constituted such a reason in this case.¹

The Facts

The case relates to the alleged conspiracy between the ultimate owners of a borrowing entity (the “Anchor Defendants”) and the former directors/shareholders of the claimants; two major Russian banks. Other than the Anchor Defendants being domiciled in England, the facts of the case were closely connected with the Russian Federation: the claimants and defendants were all Russian, the alleged wrongdoing occurred primarily in Russia, the alleged losses were sustained in Russia, the cause of action relied upon was based on Russian law and most of the relevant documents were in Russian.

The claimants had obtained permission from the court to serve the claim outside the jurisdiction on the Defendants other than the Anchor Defendants (the “Additional Defendants”) on the grounds that they were necessary and proper parties to the claim against the Anchor Defendants. The Additional Defendants challenged the English court’s jurisdiction and applied to set aside the order allowing the claimants permission to serve the claim on them out of the jurisdiction.

The claimants argued that due to the risk of a multiplicity of proceedings relating to the same issues leading to inconsistent decisions, the Additional Defendants should be parties to the proceedings in England rather than having to be sued in Russia. The Additional Defendants relied on the Supreme Court’s judgment in Lungowe and others v Vedanta Resources and another² contending that because the risk of irreconcilable judgments had arisen only as a result of the claimants’ decision to sue the Anchor Defendants in England (rather than in another forum) the claimants could not rely on this factor as the reason for concluding that the proper place for the litigation against the Anchor Defendants was England.

The claimants argued in response that, whilst they could have issued proceedings against the Anchor Defendants in Russia, issuing proceedings in England was the ‘only rational choice’ due to the relative ease of enforcing an English judgment and the fact that the Anchor Defendants were likely to resist the enforcement of a Russian judgment. In particular, there was a risk the Anchor Defendants would not appear in any Russian proceedings so that any Russian judgment granted would not be enforceable against the Anchor Defendants’ assets in the Cayman Islands.

The Decision

The court considered the facts of this case to be distinguishable from the Vedanta case: it was reasonable here for the claimants to have issued the claim against the Anchor Defendants in England for two reasons. First because of their concerns regarding the ease of enforceability of any Russian judgment on the Anchor Defendants’ assets, in particular in the Cayman Islands. The court noted that the ease with which a judgment could be enforced was a legitimate juridical advantage to consider. The second factor was that the defendants had not offered to submit to the jurisdiction of the Russian Court. The undesirability of a multiplicity of proceedings and the consequent risk of inconsistent judgments remained an important and legitimate factor to be considered when determining the appropriate forum for the claim. This risk would arise if the English courts were to decline jurisdiction over the Additional Defendants because the same claim, based on the same facts, would then be determined in two different jurisdictions.

The court noted that the risk of a multiplicity of proceedings was a particularly important factor to consider in actions where conspiracy is alleged.

Accordingly England was the appropriate forum in which the claims against the Additional Defendants could be suitably tried: it would be “consistent with the ends of justice and the interests of the parties that judgment on [the claim] is reached by a court which has heard evidence and submissions from all parties, not just some.”

Key Takeaway

Where there are alternative possible jurisdictions in which a claim can be commenced, it may be reasonable for a claimant to bring its claim in England where a factor in its decision is the relative ease of enforcing an English judgment. The court will take into account the risk of multiplicity of proceedings and inconsistent judgments to determine whether England is clearly or distinctly the more appropriate forum, such factors being especially important where allegations of a conspiracy between various Defendants is alleged.

Footnotes

1) PJSC National Bank Trust and another v Mints and others [2021] EWHC 692 (Comm).

2) Lungowe and others v Vedanta Resources and another [2020] AC 1045