JOINT STOCK COMPANY "AEROFLOT RUSSIAN AIRLINES" V BEREZOVSKY

[2013] EWCA Civ 784, Court of Appeal, Lord Justice Laws, Lord Justice Aikens and Mr Justice Mann, 2 July 2013

Conflict of laws - Arbitration - Joinder of defendants - Whether arbitration clause valid - Whether arbitration clause unenforceable - Whether other defendants should be joined - Arbitration Act 1996, sections 9(1) and 9(4) - Brussels Regulation (EC) No 44/2001, articles 6(1) and 23 - CPR Practice Direction 6B, para 3.1(3)

The claimant commenced proceedings against two individuals alleging that frauds had been committed against it by them. The two individuals were alleged to be domiciled in England and did not challenge the jurisdiction of the English courts. There were also five corporate defendants, three of which were domiciled elsewhere in the EU: one in Switzerland, and one in the British Virgin Islands. The claimant's case was that the individual defendants had caused it to enter into contracts of services with, and to obtain loans from, the corporate defendants. The individual defendants were convicted of fraud by the Russian courts in 2006 and 2007. Proceedings were served on: S, domiciled in Switzerland; H, domiciled in Luxembourg; and C, domiciled in Cyprus. Permission was also sought to serve F, domiciled in the BVI. S contended that there were both Swiss exclusive jurisdiction and arbitration clauses in the credit agreement with the claimant and that the court should either decline jurisdiction on the basis of the exclusive jurisdiction clause or stay its proceedings under section 9 of the Arbitration Act 1996. H and C argued that service on them under article 6 of the Brussels Regulation, (EC) No 44/2001 (which allows joinder where the claims against them are closely connected to the main claim, here against S) had to be set aside because the court did not have jurisdiction over S, and C also claimed that it was a party to the arbitration clause. F argued that permission for service under CPR PD 6B, para 3.1, on the ground that it was a necessary and proper party to the proceedings against S, should be refused because there was no jurisdiction over S.