Jurisdiction

Byers and others v Yacht Bull Corporation and another [2010] EWHC 133 (Ch), TLR 15 February

The second applicant, Financiere Meeschaert SA, a company incorporated and domiciled in France, sought a declaration that the English court had no jurisdiction to hear a claim to beneficial ownership of a yacht by the liquidators of Madoff Securities International, a company incorporated in England then owned and controlled by Mr Bernard Madoff. The yacht, which at all material times was moored in Antibes and had been acquired by money emanating from Madoff Securities, was registered in the Cayman Islands in the register of British Shipping in the name of the first applicant, Yacht Bull Corporation, a Cayman Islands company owned and controlled by Mr Madoff’s wife. The second applicant contended that Council Regulation (EC) No 44/2001 of 22 December 2000, on jurisdiction and the recognition and enforcement of judgments applied with the consequence that proceedings against it had to be brought in France as provided by art 2. The liquidators contended that the original ownership claim was within the exception from the regulation for ‘proceedings relating to the winding-up of insolvent companies’ in art 1(2)(b). The court did not accept the liquidators’ submission that the application had to be considered as a whole in the sense that dependent or alternative claims falling within the exception could change the nature of the claim on, or to which they were dependent or alternative. The principal claim was the declarations to beneficial ownership, the other claims were either dependent or alternative. It was necessary to consider whether the principal claim was within the exception. Accordingly, the relevant question was whether the claim for ownership was within the exception. It was not. The exception contained in art 1(2)(b) did not apply so as to exclude the regulation as a whole. Accordingly, the English court had no jurisdiction to hear the claim by the liquidators.