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OUTER HOUSE, COURT OF SESSION
[2024] CSOH 86
CA94/23
OPINION OF LORD SANDISON
In the cause
MEX GROUP WORLDWIDE LIMITED
Pursuer
against
(FIRST) STEWART OWEN FORD; (SECOND) BRIAN ROBERT CORMACK;
(THIRD) COLM DENIS SMITH; (FOURTH) MICHAEL GOLLITS; (FIFTH) MELVILLE
CONSULTING PARTNERS LIMITED; (SIXTH) MELVILLE CONSULTANCY
LIMITED; (SEVENTH) REGAL CONSULTANCY INTERNATIONAL LIMITED;
(EIGHTH) CSM SECURITIES SARL; (NINTH) VON DER HEYDT & CO AG;
(TENTH) VON DER HEYDT INVEST SA; (ELEVENTH) MEX SECURITIES SARL;
and (TWELFTH) VIACHESLAV (known as "SLAVA") VOLOTOVSKIY
Defenders
Pursuer: Dean of Faculty et J Brown; Levy & McRae
First, Second, Fifth, Sixth and Seventh Defenders: No appearance
Third Defender: Party
Fourth and Ninth Defenders: RG Anderson; Harper Macleod LLP
Eighth Defender: K Young; Young & Partners Business Lawyers Limited
Tenth Defender: No appearance
Eleventh Defender: No appearance
Twelfth Defender: No appearance
12 September 2024
Introduction
[1]
In this commercial action the pursuer maintains that all of the defenders have
engaged in an unlawful means conspiracy directed at injuring its interests by causing
2
the eleventh defender, Mex Securities SARL, to seek to renege on a lawful and binding
agreement recorded in a Consent Order granted by the High Court of Justice of the British
Virgin Islands dated 14 December 2020. The claimed unlawful means are set out at length in
the summons. The pursuer claims to have suffered losses in consequence of that conspiracy
amounting to £85 million, primarily consequential upon the failure of a planned bond issue,
which failure is said to have been due to the defenders' actions. Further details of the
and in the judgment of the Court of Appeal of England and Wales in a related action
in Scotland, have stated objections in various forms to the jurisdiction of this court to
entertain some or all of the respective cases against them. I fixed a hearing on fact and law
for the purpose of determining the relevant pleas and any issue of relevancy or specification
connected with them. Affidavit evidence was provided by the pursuer's Yahya Taher, by
the third defender on his own behalf and separately on behalf of the eighth defender, and
by Jens Horstkotte on behalf of the ninth defender.
Background
[2]
For present purposes, the following aspects of the pursuer's case require to be noted.
It is, first of all, clear that its core allegation is that all of the defenders engaged in the alleged
unlawful means conspiracy against it with the view to furthering the carrying on of
substantial volumes of profitable investment business amongst the defenders.
[3]
Specifically in relation to the third and eight defenders, declarator is sought that
the defenders inter alia caused a commercial inducement to be paid to the third defender,
Mr Smith, by the transfer of investment funds from the ninth and tenth defenders, the
3
Von der Heydt companies, in the sum of at least $7m, to the eighth defender, CSM Securities
SARL (and thus indirectly to the benefit of the third defender, who is claimed to be the
partial beneficial owner of the eighth defender) in order to induce him to cause Mex
Securities SARL - which he is said to have controlled - to seek to renege on a supposed
agreement and subsequent Consent Order between it on the one hand and Mex Clearing
Limited and the pursuer on the other. The first and fourth defenders (Mr Stewart Ford and
Mr Michael Gollits respectively) are said to be engaged in business together with the third
in the ownership and control of the eighth defender. It is claimed that the third defender
has been used by the first defender over many years to assist and conceal the latter's
supposed dishonest activity in financial services, and that they were in regular ongoing
contact at the same time during the negotiations which ultimately led to the Consent Order.
[4]
So far as the ninth defender, Von der Heydt & Co AG, is concerned, the pursuer
narrates that on 17 May 2020 those parties entered into a Deed of Affirmation whereby the
ninth defender affirmed and undertook various matters. It is claimed that on 2 December
2020 the fourth defender indicated that it had become necessary for the ninth defender to
withdraw funds from certain notes issued by the eleventh defender, in anticipatory breach
of an undertaking given in the Deed of Affirmation. The pursuer claims that that state
of affairs gave rise to a substantial claim for damages for breach of the ninth defender's
obligations in terms of the Deed and that one of the aims of the alleged conspiracy was
to attempt to insulate the ninth defender from any such claim by inter alia fraudulently
misrepresenting its reasons for requiring to withdraw the funds in question.
4
Relevant statutory provisions
[5]
Paragraph 2 of Schedule 8 to the Civil Jurisdiction and Judgments Act 1982 inter alia
provides:
"2. Subject to rules 3 (jurisdiction over consumer contracts), 4 (jurisdiction
over individual contracts of employment), 5 (exclusive jurisdiction)
and 6 (prorogation), a person may also be sued--
...
(o)
(i)
where he is one of a number of defenders, in the courts for the place
where any one of them is domiciled, provided the claims are so
closely connected that it is expedient to hear and determine them
together to avoid the risk of irreconcilable judgments resulting from
separate proceedings; ..."
Submissions for the eighth defender
[6]
On behalf of the eighth defender, counsel noted that the sole ground of jurisdiction
ultimately asserted in relation to that defender was the ground set out in paragraph 2(o)(i)
of Schedule 8 to the 1982 Act, and submitted that the claim against it was not so closely
connected with the claims against those defenders domiciled in Scotland that it was
expedient to hear and determine them together to avoid the risk of irreconcilable judgments
resulting from separate proceedings. Indeed, on the pursuer's pleadings, there was no
prospect at all of its claim that the eighth defender had participated in a conspiracy against
it being made out. Since there was no possibility of any judgment being given against the
eighth defender, the risk of irreconcilable judgments simply did not arise, no ground of
jurisdiction over it existed, and the action as directed against it fell to be dismissed.
[7]
The pursuer's position was that the eighth defender was a vehicle through which a
bribe or financial inducement was paid to the third defender. No blameworthy conduct was
5
averred on the part of the eighth defender. Applying the definition of the tort of conspiracy
to injure by unlawful means set out by the Court of Appeal in Kuwait Oil Tanker SAK v
"where the claimant proves that he has suffered loss or damage as a result of
unlawful action taken pursuant to a combination or agreement between the
defendant and another person or persons to injure him by unlawful means,
whether or not it is the predominant purpose of the defendant to do so",
the pursuer's pleadings directed at the eighth defender were irrelevant.
[8]
It was accepted that the decision of the European Court of Justice in Freeport Plc v
Arnoldsson (C-98/06) [2007] ECR I-8319 established that there was no requirement for the
legal bases of the causes of action against all defenders to be identical in order to fall within
the principle expressed in paragraph 2(o)(i) of Schedule 8 to the 1982 Act. However, that
decision also made clear at [41] that:
"It is for the national court to assess whether there is a connection between the
different claims brought before it, that is to say, a risk of irreconcilable judgments
if those claims were determined separately and, in that regard, to take account of
all the necessary factors in the case file, which may, if appropriate yet without its
being necessary for the assessment, lead it to take into consideration the legal bases
of the actions brought before that court."
[9]
In Freeport, the court affirmed the rule set out in Roche Nederland BV v Primus
(Case C-539/03) [2006] ECR I-6535 at [26] that: "It is not sufficient that there be a divergence
in the outcome of the dispute, but that divergence must also arise in the context of the same
situation of law and fact." In the present case, there was no real risk of such an outcome
in respect of the eighth defender. Nowhere was it alleged that the eighth defender had
undertaken positive steps to further any type of conspiracy. All of the averments relating
to positive steps taken in furtherance of a conspiracy related to other parties. At its highest,
the eighth defender was said to be a mere conduit rather than a wrongdoer.
6
Submissions for the ninth defender
[10]
On behalf of the ninth defender, counsel submitted that the court had no jurisdiction
to hear claims based on a breach of, or non-contractual claims in relation to, the Deed of
Affirmation. The pursuer's averments relating to claims under the Deed were irrelevant and
should be excluded from probation. The introductory words of paragraph 2 of Schedule 8
to the Civil Jurisdiction and Judgments Act 1982 stipulated that paragraph 2(o)(i) was
"subject to ... rule 6 (prorogation)". The content of rule 6 reflected the terms of Art 17 of
the 1968 Brussels Convention, as amended on the UK's accession to that regime in 1978.
Further, section 22(2) provided that:
"(2) Nothing in Schedule 8 affects the operation of any enactment or rule of
law under which a court may decline to exercise jurisdiction because of the
prorogation by parties of the jurisdiction of another court."
[11]
The Deed of Affirmation bore to be between the pursuer and the ninth defender.
It contained a prorogation clause. Clause 6, the choice of law and jurisdiction clause in the
Deed, provided:
"6.1 This Deed and any dispute or claim arising out of or in connection with it
or its subject matter or formation (including non-contractual disputes or claims)
shall be governed by, and construed in accordance with, the laws of Luxembourg
and/or Germany.
6.2 Each Party irrevocably agrees that the courts of Luxembourg and/or Germany
shall have exclusive jurisdictions to settle any dispute or claim arising out of or in
connection with this deed or its subject matter or formation (including
noncontractual disputes or claims)."
[12]
Germany and Luxembourg were each member states of the European Union. The
EU instruments which prior to implementation completion day formed part of Scots law
applied in respect of choice of law. Evidence of German law was provided in an affidavit
by Jens Horstkotte, a lawyer at a firm which had acted for the ninth defender. The short
propositions set out by Mr Horstkotte - that Germany is a Member State of the EU and that
7
the Rome I/Rome 3 II and Brussels I regimes apply there - were not controversial. His
evidence was formal in nature. That Germany was a member state of the EU to which
Brussels I applied was a factual proposition that the court could and should readily accept.
The content of the law under Brussels I Recast was the law of Scotland, of which the court
had judicial knowledge, until the end of IP completion day at 11.00pm on 31 December 2020:
European Union (Withdrawal Agreement) Act 2020, section 39; European Union
(Withdrawal) Act 2018, section 1A(6). The Deed of Affirmation bore to be dated 17 May
2020, ie prior to IP completion day. Any gaps in the adequacy of the evidence could be
filled by the application of that judicial common sense which was characteristic of the
court's modern approach to foreign law. In this context, that meant interpreting the case
law of the EU with which the court was well familiar, it having formed part of Scots law
prior to IP completion day: cf Advocate General for Scotland v Murray Group Holdings
was clear that the German courts would give effect to the choice of law and jurisdiction
clause.
[13]
Art 17 of the Brussels Convention had been superseded by the Brussels I Recast
Regulation Art 25 (1215/2012/EU) and that was the law that applied in Scotland until
IP completion day. The decisions of the CJEU, in particular Case 23/78 Meeth v Glacetal
Sarl [1978] ECR 2134, [1979] 1 CMLR 520 at [5], followed in Case C-387/98 Coreck Maritime
the courts of Germany and Luxembourg would consider the jurisdiction clause in the Deed
of Affirmation to be a valid and enforceable exclusive jurisdiction clause in terms of Art 25
of Brussels I Recast which, like Art 17 of the Brussels Convention, was based on the
8
recognition of the force of the independent will of the parties to a contract in deciding which
courts were to have jurisdiction to settle disputes falling within the scope of the Regulation:
Recital (19) of Brussels I Recast.
[14]
Art 31 of Brussels I Recast envisaged the possibility of more than one court having
exclusive jurisdiction. That was reflected in the position adopted in the standard UK
commentary on Art 25 of Brussels I, A Dickinson and E Lein (eds) Brussels I Recast
Regulation: A Commentary (Oxford: OUP, 2015) at paragraph 9.85: "although the provisions
refer to `the court or courts of a Member State', parties can choose two or more courts for the
purpose of settling their disputes".
[15]
On the pursuer's hypothesis that the Deed of Affirmation was relevant to its claim,
it was subject to a jurisdiction clause which prorogated the jurisdiction of the courts of
Luxembourg and/or Germany. That clause was effective to exclude the jurisdiction of
other courts as a matter of EU law. Accordingly, to the limited extent that the pursuer's
case against the ninth defender was based on an alleged breach of the Deed of Affirmation,
those averments ought not to be remitted to probation. Their clear purpose was to permit
the court to make findings of fact about such an alleged breach. That was a dispute in
relation to which the pursuer and ninth defender had prorogated the exclusive jurisdiction
of the courts of Luxembourg and/or Germany. In Fiona Trust and Holding Corporation v
"In my opinion the construction of an arbitration clause should start from
the assumption that the parties, as rational businessmen, are likely to have
intended any dispute arising out of the relationship into which they have
entered or purported to enter to be decided by the same tribunal. The clause
should be construed in accordance with this presumption unless the language
makes it clear that certain questions were intended to be excluded from the
arbitrator's jurisdiction. As Longmore LJ remarked, at para 17: `if any
businessman did want to exclude disputes about the validity of a contract, it
would be comparatively easy to say so.'"
9
[16]
Lord Hope of Craighead had further noted:
"[26] ... No contract of this kind is complete without a clause which identifies
the law to be applied and the methods to be used for the determination of
disputes. Its purpose is to avoid the expense and delay of having to argue about
these matters later. It is the kind of clause to which ordinary businessmen readily
give their agreement so long as its general meaning is clear. They are unlikely to
trouble themselves too much about its precise language or to wish to explore the
way it has been interpreted in the numerous authorities, not all of which speak
with one voice. Of course, the court must do what it can to provide charterers
and shipowners with legal certainty at the negotiation stage as to what they are
agreeing to. But there is no conflict between that proposition and the guidance
which Longmore LJ gave in paras 1719 of the Court of Appeal's judgment about
the interpretation of jurisdiction and arbitration clauses in international commercial
contracts. The proposition that any jurisdiction or arbitration clause in an
international commercial contract should be liberally construed promotes legal
certainty. It serves to underline the golden rule that if the parties wish to have
issues as to the validity of their contract decided by one tribunal and issues as to its
meaning or performance decided by another, they must say so expressly. Otherwise
they will be taken to have agreed on a single tribunal for the resolution of all such
disputes.
[27] The overall purpose of clause 41 is identified in the two opening paragraphs.
These are the choice of law and jurisdiction clauses. There is no sign here--leaving
aside the question of arbitration for a moment--that the parties intended that the
disputes which were to be determined in accordance with the laws of England and
be decided by the English courts were not to include disputes about the charter's
validity. The simplicity of the wording is a plain indication to the contrary. The
arbitration clause which follows is to be read in that context. It indicates to the
reader that he need not trouble himself with fussy distinctions as to what the
words `arising under' and `arising out of' may mean. Taken overall, the wording
indicates that arbitration may be chosen as a one-stop method of adjudication for
the determination of all disputes. Disputes about validity, after all, are no less
appropriate for determination by an arbitrator than any other kind of dispute that
may arise. So I do not think that there is anything in the owners' point that it must
be assumed that when the charters were entered into one party was entirely ignorant
that they were induced by bribery. The purpose of the clause is to provide for the
determination of disputes of all kinds, whether or not they were foreseen at the time
when the contract was entered into.
[28] Then there are consequences that would follow, if the owners are right. It is
not just that the parties would be deprived of the benefit of having all their disputes
decided in one forum. The jurisdiction clause does not say where disputes about the
validity of the contract are to be determined, if this is not to be in the forum which
is expressly mentioned. The default position is that such claims would have to be
brought in the jurisdiction where their opponents were incorporated, wherever
and however unreliable that might be, while claims for breach of contract have to
be brought in England. But why, it may be asked, would any sensible businessmen
10
have wished to agree to this? As Bingham LJ said in Ashville Investments Ltd v
Elmer Contractors Ltd [1989] QB 488, 517, one should be slow to attribute to
reasonable parties an intention that there should in any foreseeable eventuality be
two sets of proceedings. If the parties have confidence in their chosen jurisdiction
for one purpose, why should they not have confidence in it for the other? Why,
having chosen their jurisdiction for one purpose, should they leave the question
which court is to have jurisdiction for the other purpose unspoken, with all the risks
that this may give rise to? For them, everything is to be gained by avoiding litigation
in two different jurisdictions. The same approach applies to the arbitration clause."
[17]
The application of those principles, common to jurisdiction and arbitration clauses,
ought to result in the clear conclusion that clause 6.2 of the Deed of Affirmation excluded
the jurisdiction of the Scottish courts in relation to any matter with a reasonably direct
connection to the content of the Deed. That included, at the very least, the question of
whether the ninth defender was in breach of its terms, whether or not a conclusion on that
issue was a necessary element of the pursuer's case against the ninth defender. There was
no discretion to disregard the prorogation agreement in a case falling within the ambit of
Schedule 8 of the 1982 Act. If there was such a discretion, it should not be exercised in this
case. Rather, the court should sustain that defender's first plea-in-law, or at any event
reserve it for determination after proof before answer.
Submissions for the third defender
[18]
As a party litigant, the third defender was afforded the privilege of addressing the
court after the other defenders. He spoke to a note of argument previously lodged by him
setting forth his position as to why the court had no jurisdiction over him. He was, firstly,
not domiciled in Scotland, as the pursuer had latterly accepted. He vehemently denied
having been involved in any conspiracy, challenged in his oral submissions and in affidavits
lodged by him the veracity or accuracy of many of the matters of fact relied upon by the
pursuer as supportive of its conspiracy hypothesis - setting forth his own detailed version
11
of events - and referred to various passages in the English Court of Appeal judgment in
the related proceedings which were critical of the pursuer's candour and conduct of its
litigations.
[19]
The claims made by the pursuer against those defenders not domiciled in Scotland,
including himself, were not so closely connected with the claims against those who were
domiciled in Scotland that it was expedient to hear and determine them together to avoid
the risk of irreconcilable judgments resulting from separate proceedings, in terms of
paragraph 2(o)(i) of Schedule 8 to the 1982 Act. On the pleadings, the pursuer's position
was that the eighth defender was a vehicle through which a bribe was paid to the third
defender. The third defender did not receive any inducements or bribes in any form from
any party. He had taken no active part in any conspiracy. There was no ground of action
which could be raised that would lead to conflicting judgments.
[20]
In any event, Scotland was forum non conveniens in respect of the dispute. An action
was live in the British Virgin Islands, which was capable of resolving the present dispute.
Further reference was made to passages supportive of that proposition in the Court of
Appeal judgment already referred to. This court ought to decline jurisdiction in favour
of that forum, which was clearly more appropriate to hear the case than were the Scottish
courts. It would not be contrary to the interests of justice for the case to be tried in that
forum. The basis of the pursuer's action was that the various defenders conspired to cause
the eleventh defender to breach the terms of a Consent Order issued by the BVI court. The
proceedings in the BVI had as their object the question of whether that Consent Order had
itself been obtained by fraud. That was an entirely prior question to that which the pursuer
sought to have determined in the current action. Continuing with the present action risked
causing entirely unnecessary expense. The third defender was not a party to the BVI
12
proceedings, but understood that they involved no question of Scots law and would settle
the question of whether the Consent Order was entered into by fraud on the basis of the law
of the BVI. Given the parties' business interests and activities in the BVI - in contrast to the
lack of such activities in Scotland - the BVI was the most appropriate forum. In any event,
Luxembourg (as the place of his domicile) was a more appropriate form for proceedings
against him than Scotland, and a judge there could be expected to be familiar with the legal
framework underpinning the activities of the eighth defender.
[21]
The court should dismiss the action so far as directed against him.
Submissions for the pursuer
[22]
On behalf of the pursuer, the Dean of Faculty confirmed that the sole ground
of jurisdiction now asserted against the third and eighth defenders was that set out in
paragraph 2(o)(i) of Schedule 8 to the Civil Jurisdiction and Judgments Act 1982. It was
also the sole ground of jurisdiction asserted against the fourth and ninth defenders, who
appeared to accept that jurisdiction had been made out against them on that ground. There
was no dispute that the first, second, fifth, sixth and seventh defenders were domiciled in
Scotland. From the point at which they lodged defences they had admitted the pursuer's
averment that the court had jurisdiction. The necessary "anchor defenders" were therefore
present, and the action against them here would continue regardless of the jurisdictional
position concerning the other defenders. The first question for the court was whether the
claims against the third and eighth defenders were so closely connected with the claims
against the other defenders that it was expedient to hear and determine them together
to avoid the risk of irreconcilable judgments resulting from separate proceedings.
13
[23]
The assessment required in that connection was one that could in most cases be
carried out by the court on the basis of a general review of the pleadings, and it was not
usually necessary to have averments specifically directed at the issues of close connection,
expediency or irreconcilable judgments: Compagnie Commercial Andre SA v Artibell Shipping
that irreconcilable judgments be inevitable, merely that there be a risk of such an outcome.
It was reasonable to proceed on the basis that such a risk must be greater than de minimis.
Similarly, the court need only find it expedient that the claims should be tried together to
avoid such a risk, and need not apply any higher test, such as necessity. All of this was to
be assessed on
"a broad commonsense approach....bearing in mind the objective of the article,
applying the simple wide test set out.... and refraining from an over-sophisticated
analysis of the matter.":
Lord Saville, cited with approval in Compagnie Commercial Andre SA. As Lord Saville had
pointed out, assessing whether there was a risk that a future judgment to be issued by one
court might be irreconcilable with another future judgment to be issued by a different court
was a more difficult and uncertain exercise than considering whether two issued judgments
were in fact irreconcilable.
[24]
On the question of whether the actions were closely connected, all of the defenders
were alleged to be co-conspirators, and were sued jointly and severally for the same wrong.
The essence of the pursuer's case was that the third defender agreed the settlement with
the pursuer and then acted to further his own interests and those of, in particular, the first,
fourth, ninth and tenth defenders by seeking to prevent the implementation of the
settlement. The pursuer's case was that these defenders acted as they did to protect the
14
fourth, ninth and tenth defenders from what would otherwise be the consequence of them
having lost their clients' money, and to preserve and further their mutual commercial
interest in the ongoing business activity primarily conducted through the medium of the
eighth defender. The pursuer further averred that, despite the protestations of the first
defender that he had no beneficial interest in the eighth defender and limited business
involvement with it, the true position was very different and he had both a substantial
beneficial interest in it and exercised a substantial degree of control over it. A single
indivisible delictual claim against a combination of joint wrongdoers might be thought to
be the paradigm example of a case in which claims against various defenders were closely
connected. If the present case did not involve closely connected claims it was difficult to
conceive of a type of case that would. The present case involved a very substantially closer
connection between the claims than existed in Compagnie Commercial Andre SA, in which
jurisdiction was established.
[25]
So far as the risk of irreconcilable judgments was concerned, the third and eighth
defenders made no averments on the matter, but it appeared that they contended that
they should be sued in Luxembourg. That would require the proceedings to be conducted
in French, notwithstanding all of the communings giving rise to the action having been
conducted in English and none of the parties or material witnesses being a native French
speaker. The position could be stated very shortly: the action against the other defenders,
who all accepted jurisdiction and were said to be part of a single conspiracy, would proceed
in Scotland. The third and eighth defenders contended that they should be sued, for the
self-same conspiracy, in the courts of Luxembourg. The two jurisdictions would be asked
to decide the very same issue. The risk of irreconcilable judgments was obvious and
substantial. As to expediency, if, as the pursuer contended, the risk of irreconcilable
15
judgments following from separate proceedings was obvious and substantial it would
inevitably be expedient to avoid that risk by hearing the claims against all defenders in
a single process, particularly when the claims were as closely connected as those in the
present case. Although the test was a unitary one, the closer the connection and the greater
the risk of irreconcilable judgments, the more obvious it would be that it was expedient to
hear the claims together. That the other defenders accepted the jurisdiction of the court was
a factor weighing heavily in favour of the conclusion that it would be expedient to hear all
claims together. In this regard, one might refer, by analogy, to the case of Evans Marshall &
Co Ltd v Bertola SA and Another (No 1) [1973] 1 WLR 349, in which the Court of Appeal
declined to give effect to an exclusive jurisdiction clause invoked by one of two separate
defendants. Sachs LJ said (at 377):
"I would, moreover, refer to one further factor which in my judgment has
considerable weight. The conspiracy allegations, which we were told are
definitely being pursued and are supported by evidence prima facie fit to be
left to a jury, sound in tort ... It would seem odd indeed, even if such a tort
exists, or alternatively is recognised, in Spain (as to which no evidence has
been put before us), were we, in all the circumstances, to adopt a course which
necessitated separate trials of this cause of action in Spain and in England."
[26]
It was also helpful to consider the observations of Lord Bingham of Cornhill, quoting
Lordship went on to say:
"33. [There is] the prospect, if an injunction is granted, of litigation between
the Armco companies on one side and Mr Donohue and the PCCs on the other
continuing partly in England and partly in New York. What weight should be
given to that consideration in the circumstances of this case?
34. I am driven to conclude that great weight should be given to it. The
Armco companies contend that they were the victims of a fraudulent conspiracy
perpetrated by Donohue, Atkins, Rossi and Stinson. Determination of the truth
or falsity of that allegation lies at the heart of the dispute concerning the transfer
agreements and the sale and purchase agreement. It will of course be necessary for
any court making that determination to consider any contemporary documentation
16
and any undisputed evidence of what was said, done or known. But also, and
crucially, it will be necessary for any such court to form a judgment on the honesty
and motives of the four alleged conspirators. It would not seem conceivable, on
the Armco case, that some of the four were guilty of the nefarious conduct alleged
against them and others not. It seems to me plain that in a situation of this kind
the interests of justice are best served by the submission of the whole dispute to a
single tribunal which is best fitted to make a reliable, comprehensive judgment on
all the matters in issue. A procedure which permitted the possibility of different
conclusions by different tribunals, perhaps made on different evidence, would in
my view run directly counter to the interests of justice."
[27]
Similar considerations were here apparent.
[28]
The plea of forum non conveniens was taken by the third defender. The forum in
question was said to be the BVI. The third defender made no averment that he was subject
to the jurisdiction of the BVI court, or even that he would voluntarily submit to it. The test
for a Scottish court to decline to deal with the matter on the basis of forum non conveniens
was that it should be persuaded that there was a foreign court having jurisdiction which
was "clearly more appropriate": Royal Bank of Scotland plc v Davidson [2009] CSOH 134,
and Sim v Robinow (1892) 19R 665. The onus was on the party taking the plea to make it out.
There was no averment that the present dispute could be litigated in the BVI, or that all of
the present defenders could be convened there. It was suggested that there was an existing
litigation in the BVI which had some degree of overlap, but the parties were not the same
and the grounds of action were different. The BVI proceedings were narrowly focused
on the Consent Order pronounced by the BVI court. There were obvious practical
consequences of litigating in the BVI. None of the parties to the present action was
domiciled there and the only connection any party had to that jurisdiction was that the
pursuer had a wholly owned BVI subsidiary. The pursuer was incorporated in Hong Kong
and had its head office in the UAE. All of the defenders were domiciled in either Scotland,
17
Luxembourg or Germany. The third defender could not force the other parties to the action
to litigate in the BVI, and so the plea of forum non conveniens suffered the same problems
regarding the risk of irreconcilable judgments as had already been canvassed. In this regard,
[2024] 4 WLR 35. There, a claim was made against three defendants - referred to as
"Lama" and "the Brothers". Cockerill J having found jurisdiction against Lama established
(at [130]), went on to say:
"133. ... The argument only progresses to this stage if the arguments in favour of
[the proper forum being Saudi Arabia] fail. If that is the case Lama has been served
as of right in a forum where Rana can achieve substantial justice and-- absent a case
management stay--the dispute with Lama proceeds here. In those circumstances
it is simply illogical to conclude vis-à-vis the Brothers that Jordan is the forum
conveniens, given that the factual and legal issues on the claim against Lama almost
entirely overlap with those in the claims against the Brothers. It is the same breaches
of contract and the same conspiracy. While some of the acts within the conspiracy
are said to have been committed by the Brothers alone, others are said to have been
committed by all three."
[29]
Her Ladyship went on, under reference to Donohue, to say:
"142. In my judgment the risk of multiplicity of proceedings and irreconcilable
judgments is properly to be regarded in this case as an important factor. Some
further weight is added by the point rightly made by Mr Shane Sibbel in his
very clear submissions that there is authority to the effect that the court is to be
particularly vigilant on this score where the claim alleged is one in conspiracy--and
the more so where (as here) the case seems likely to stand or fall against all or none."
[30]
Finally in this regard, reference might be made to Lakatamia Shipping Co Ltd v Su
to argue forum non conveniens. Bryan J observed at [178]:
"...(2) Lakatamia's claims against Mr Su and Mr Chang will be determined at trial in
this jurisdiction. Both Mr Su and Mr Chang are subject to this court's jurisdiction ...
The fact that the proceedings will continue against Mr Su and Mr Chang in relation
to a conspiracy claim in this jurisdiction is, and has long been recognised as, another
very powerful factor. As Lord Briggs JSC said in Vedanta Resources [i.e. Lungowe v
18
`70. In cases where the court has found that, in practice, the claimants
will in any event continue against the anchor defendant in England, the
avoidance of irreconcilable judgments has frequently been found to be
decisive in favour of England as the proper place, even in cases where all
the other connecting factors appeared to favour a foreign jurisdiction ...'
(3)
It makes obvious sense, when the central claim is of a conspiracy, for all
the co-conspirators to be tried in the same jurisdiction, and in the jurisdiction that
is at the heart of the claims which is England in the context of the Blair Freezing
Order and Cooke Judgments, and which is where the claims against Mr Su and
Mr Chang will inevitably proceed. It would make little sense for two co-conspirators
(jurisdictionally anchored here) to be tried in England and another co-conspirator
(Maître Zabaldano) to be tried separately in Monaco. Quite apart from the obvious
risk of irreconcilable judgments, it would be wasteful in terms of costs, and
potentially prejudicial, for Lakatamia to be expected to pursue parallel litigation
in two separate forums, in relation to one of which (Monaco) there are little or no
connecting factors at all (as further addressed below).
(4)
It would be unattractive, and inappropriate, to pursue parallel proceedings
in Monaco against Mr Su, Mr Chang and Maître Zabaldano to the proceedings that
will continue in any event in England. Whilst it is said on Maître Zabaldano's behalf
that such a claim could be brought in Monaco (from a jurisdiction perspective) this
ignores the inherent uncertainties of whether or not, in fact, jurisdiction could be
achieved and maintained against Mr Su and Mr Chang (and whether any judgment
there obtained would be enforceable). Not only would requiring Lakatamia to bring
its claims against Maître Zabaldano in Monaco give rise to the risk of irreconcilable
judgments, it would also be wasteful in costs and potentially prejudicial to expect it
to pursue parallel litigation in two jurisdictions when proceedings are already extant
in this jurisdiction."
[31]
These observations were highly pertinent here. Not only could it not be said that the
BVI was "clearly more appropriate" for trial of the case of conspiracy against the third
defender: one could go further and say that it very clearly would not be, given the
commonality of the issues arising and the fact that the case against the other defenders
would proceed in Scotland. Essentially the same points could be made about the secondary
suggestion that Luxembourg would be a more appropriate forum.
[32]
The ninth defender maintained that by contract it and the pursuer had prorogated
the jurisdiction of the courts of Germany and/or Luxembourg in respect of certain issues. It
19
recognised that that plea would exclude only some elements of the present action and would
not entitle the ninth defender to have it dismissed.
[33]
The clause in question was clause 6.2 of the Deed of Affirmation dated 17 May 2020.
Jurisdiction clauses, like arbitration clauses, were generally to be construed in accordance
with the guidance given in Fiona Trust. The issue was whether the present dispute was one
falling within the scope of the words "any dispute arising out of or in connection with this
deed or its subject matter or formation (including non-contractual disputes or claims)". It
was acknowledged that the words chosen in the Deed were wide and that that choice might
be presumed to have been deliberate. Nevertheless there had to be a sensible limit. The
present claim was not founded on the Deed. Nor did it concern a breach of it or a dispute
as to its validity. At its highest the Deed, and the antecedent dealings recorded in it, formed
part of the background to the settlement that the pursuer reached with the eleventh
defender in Dubai in December 2020, and which was subsequently embodied in the Consent
Order in the BVI. The present action concerned claims in delict arising from what were
alleged to be concerted acts by the defenders to seek to deprive the pursuer of the benefit
of that settlement and to present knowingly false claims against the pursuer. The fact that
the Deed of Affirmation formed one part of the background to the Dubai settlement was
insufficient to engage the jurisdiction clause: cf Sea Master Special Maritime Enterprise v Arab
ninth defender, since the clause was not relied upon to found a plea of "no jurisdiction",
and merely to found an argument that the pursuer's averments relating to the Deed should
be excluded from probation. That argument was baseless. The Deed was not founded upon
as a cause of action. Rather, it was the subject of averment as part of the background context
20
to, and one of the reasons for, the averred conspiracy. Excluding it from probation would
make no sense, and was not warranted by the clause in question.
[34]
In any event, the court had a residual discretion not to give effect to a prorogation
agreement. In Donohue, Lord Bingham had observed at [24]:
"If contracting parties agree to give a particular court exclusive jurisdiction to
rule on claims between those parties, and a claim falling within the scope of the
agreement is made in proceedings in a forum other than that which the parties
have agreed, the English court will ordinarily exercise its discretion (whether by
granting a stay of proceedings in England, or by restraining the prosecution of
proceedings in the non-contractual forum abroad, or by such other procedural
order as is appropriate in the circumstances) to secure compliance with the
contractual bargain, unless the party suing in the non-contractual forum (the
burden being on him) can show strong reasons for suing in that forum. I use
the word 'ordinarily' to recognise that where an exercise of discretion is called for
there can be no absolute or inflexible rule governing that exercise, and also that a
party may lose his claim to equitable relief by dilatoriness or other unconscionable
conduct. But the general rule is clear: where parties have bound themselves by
an exclusive jurisdiction clause effect should ordinarily be given to that obligation
in the absence of strong reasons for departing from it. Whether a party can show
strong reasons, sufficient to displace the other party's prima facie entitlement to
enforce the contractual bargain, will depend on all the facts and circumstances
of the particular case. In the course of his judgment in The Eleftheria [l9701 P 94,
at pp. 99-100, Brandon J helpfully listed some of the matters which might properly
be regarded by the court when exercising its discretion, and his judgment has been
repeatedly cited and applied. Brandon J did not intend his list to be comprehensive,
but mentioned a number of matters, including the law governing the contract, which
may in some cases be material ..."
[35]
If the prorogation clause in the Deed of Affirmation did bite in the circumstances of
the present case, there were strong reasons for departing from it, and the court should
exercise its discretion to do so.
Decision
[36]
The matters requiring determination on the present motion may be dealt with in
relatively short order. The relevant legal principles are not in serious dispute and their
application in this case appears to me to be quite straightforward. It is important to stress
21
at the outset - particularly for the benefit of the third defender as a party litigant - that the
only question I have to address is whether the court has jurisdiction to hear and decide the
case put forward in the pursuer's pleadings. That I proceed, as I must, on the basis of those
pleadings in no way infers any view on the part of the court that they will at proof be
established in whole or in part.
Relevancy of case against eighth defender
[37]
The eighth defender accepted that proof of the alleged conspiracy was highly likely
to depend on the court's willingness after enquiry to draw from the primary facts then made
out the necessary inferences in support of the pursuer's allegations. I note in that connection
that the pursuer clearly avers that the eighth defender is a vehicle owned and controlled
by the first, third and fourth defenders, and that it received funds in furtherance of an
arrangement amongst all the defenders whereby the third defender sought to renege on an
agreement which led to the BVI Consent Order and which had been made by him on behalf
of the eleventh defender, with a view to providing commercial benefit in various forms to all
of the defenders. It is certainly not possible to say that the pursuer's claim against the eighth
(or any other) defender will succeed at proof, but more to the point for present purposes,
nor is it possible to say that it is bound to fail. Put another way, it is not inconceivable that
the evidence to be led in support of the pursuer's averments will allow or even compel the
inference to be drawn that the eighth defender was a participant in the alleged conspiracy
and is jointly and severally liable with the other conspirators for the damage caused by the
conspiracy to the pursuer. The principal objection advanced to the prospect of the eighth
defender being found liable in damages for conspiracy consisted in the observation that it
was not alleged it had itself actively committed some wrongful act against the pursuer. That
22
objection is misplaced. Liability in the form of conspiracy here alleged depends on being
party to a combination having as one of its purposes the taking of unlawful action by one
or more of the conspirators to the detriment of another. The precise role played by each
conspirator, whether active or passive, in itself wrongful or lawful, is not the true touchstone
of liability. In these circumstances the eighth defender is in no different position from the
other defenders for the purposes of assessing the application of the jurisdictional test set out
in paragraph 20(o)(i) of Schedule 8 to the 1982 Act.
"Close connection"
[38]
The proper approach to be taken to the assessment of the test put forward in that
paragraph was clearly set out in Compagnie Commercial Andre SA and Sarrio SA. An
allegation that a number of defenders engaged together in a single conspiracy must be
the paradigm, or close to the paradigm, of a case where claims against those defenders
are closely connected in the relevant sense. In that regard it is not possible to fault, or
usefully to add to, the observations of Sachs LJ in Evans Marshall already set out, or those
of Lord Bingham in Donohue at [33] - [34]. It follows that jurisdiction is established against
the third and eighth defenders on the proper application of paragraph 20(o)(i).
Forum non conveniens
[39]
The question to be asked and answered in relation to a plea of forum non conveniens
is clearly established by the Scottish authorities cited. It is whether the party taking the
plea has made out a case that a forum other than the courts of Scotland is clearly more
appropriate for the adjudication of the dispute. Neither of the other candidate jurisdictions,
namely the BVI and Luxembourg, appears to me to be clearly more appropriate than
23
Scotland in that regard. There are certainly connections between what is said to have
occurred and the judicial organs of the BVI, but those connections are not so pervasive in
the overall context of the conspiracy allegations as to render that a clearly more appropriate
forum. The nature and incidents of the alleged conspiracy extend far beyond the shores
of the BVI and it is far from obvious that the courts there would have jurisdiction to deal
satisfactorily with the various issues which are likely to arise. The allegations which the
pursuer wishes to have tried have very little substantial connection with Luxembourg, and
although it might be convenient in the narrow sense of that word for the third (and eighth)
defenders to be sued there as the place of their domicile, that does not render it a clearly
more appropriate forum than Scotland. Most tellingly of all, however, in relation to both the
BVI and Luxembourg as potential alternative fora, given that the anchor defenders are being,
and will continue to be, sued in Scotland, any declinature of jurisdiction over the third
defender here would result in the prospect of irreconcilable judgments, the potential for
which in itself renders those alternatives clearly inappropriate. The reasoning and
conclusions of Cockerill J in Al-Aggad and of Bryan J in Lakatamia Shipping in this regard
cannot sensibly be gainsaid. The third defender's plea of forum non conveniens must be
repelled.
Prorogation agreement
[40]
Applying the liberal principles of construction noted as appropriate in Fiona Trust for
application to jurisdictional prorogation clauses, it is clear that this court has no jurisdiction
to entertain any claim or dispute arising out of or in connection with the Deed of
Affirmation. It does not matter that the present action is not founded on that Deed, or that
reference to it is said merely to form part of the background to the pursuer's actual claim.
24
The applicable yardstick is precisely that set out in the clause in question itself; put at its
widest, is the court being asked to decide a matter of dispute arising in connection with the
Deed? The existence and terms of the Deed are not matters of controversy between the
pursuer and the ninth defender and so do not fall within the scope of the prorogation clause.
Further, I am prepared to accept that what anyone thought about the significance of the
Deed, even if that is in dispute, is not in itself something that directly arises in connection
with the Deed within a sensible commercial reading of the prorogation clause; the
resolution of that matter would not impinge in any way upon the question of the true
import of the Deed. However, the stark questions of whether the ninth defender's intimated
intention to withdraw funds from notes issued by the eleventh defender constituted a
breach by it, present or anticipatory, of the terms of the Deed, and what the legal
consequences of any such breach might be, cannot reasonably be regarded as anything other
than a matter of dispute arising in connection with the Deed and thus, whether as an end in
itself or as a stepping-stone to some further and more significant goal of the pursuer, as a
matter which the pursuer and the ninth defender have validly agreed was not to be the
proper subject of this court's adjudication. The pursuer's averments that the ninth
defender's actions amounted to a breach of the terms of the Deed, and its averments
depending upon that suggestion, will accordingly be refused probation.
[41]
For the avoidance of doubt, I reject the submission that the Scottish courts have a
common law discretion to refuse to give effect to a prorogation clause complying with the
requirements of the 1982 Act in a case falling within the ambit of Schedule 8 thereof. The
terms of the statute provide no support whatsoever for such a submission and the common
law of England as it relates to circumstances not falling within the ambit of the Act provides
no proper basis for any different conclusion.
25
Disposal
[42]
I shall repel the third defender's first plea-in-law. I shall repel the eighth defender's
first plea-in-law, as well (for want of insistence) as its second and third such pleas. I shall
sustain the ninth defender's first plea-in-law to the extent of refusing probation to the first
sentences of Articles 12 and 13 of Condescendence, and to the words "settlement of the
ninth defender's liabilities to the pursuer" in the latter Article. The ninth defender's second
plea-in-law will be repelled for want of insistence. Although the tenth defender's first three
pleas-in-law concern the jurisdiction of this court, its bankruptcy supervisor has stated that
its defences as a whole are not insisted upon. I shall also refuse probation to the wording
in Article 3 of Condescendence (relating to the eighth defender) "and on that hypothesis is
domiciled at that place of business amongst others" on the basis that the pursuer's argument
that the court has jurisdiction over that defender on the basis of its domicile was abandoned
by it shortly before the diet of debate.
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