DERIPASKA V CHERNEY

[2009] EWCA Civ 849, Court of Appeal, Lord Justice Waller, Lord Justice Moore-Bick and Sir John Chadwick, 31 July 2009

Conflict of laws - Service outside the jurisdiction - Whether English court possessed jurisdiction - Dispute as to whether parties had entered into English law and exclusive jurisdiction agreement - Whether claimant had reasonable prospect of success - Whether claimant had good arguable case on jurisdiction - Forum non conveniens - Possibility that claimant could not pursue proceedings in Russia - CPR Part 20

The parties were both Russian. C claimed that in March 2001 he met D in London and they agreed in writing that D would pay C US$250 million for his shareholding in an aluminium company and that D would hold some of the shares on trust for C for resale. C also claimed that they agreed orally that the agreements would be governed by English law and subject to English jurisdiction. C commenced proceedings in England alleging breach of these arrangements. D denied the validity of the first agreement and the existence of the second. C sought permission to serve D outside the jurisdiction. In earlier proceedings it had been held that D was not domiciled in England and Wales so that there was no jurisdiction under Council Regulation (EC) No 44/2001 and that purported service on D in London in November 2006 was ineffective.Permission was refused in the present application. The court held that where there was a dispute between two apparently credible witnesses as to the existence of an agreement, the court should before giving permission usually be satisfied that the claimant's contentions as to the agreement provided a much better, or at least a better, argument in favour of jurisdiction. On the facts permission for service abroad would be granted: (1) C had established that his cause of action had a reasonable prospect of success; (2) C had established that he had a good arguable case that the claim fell within CPR 6.20 on the basis that the agreement had been made in England - D had much better of the argument against the existence of a choice of law and jurisdiction agreement; (3) England was the appropriate forum in which to hear the action even though Russia was the natural forum - C had been accused of criminal conduct in Russia, he faced the risk of being arrested in Russia if he went there, there was a risk that a trial in Russia would never take place and there was a significant risk of government interference in favour of D if a trial took place in Russia. The judge gave permission to appeal on the question whether, once it had been decided that Russia was the natural forum, the court was entitled to take into account on a service out application (as opposed to one involving an application for a stay) whether a trial might ever take place in Russia. The Court of Appeal ruled that if a court has concluded in a permission to serve out case that the natural forum is other than England, it is open to the court still to find England the "proper forum" ie the place where in the interests of the parties and the ends of justice the case should be tried. The Court of Appeal held that the judge had exercised his discretion properly.