Belletti v Morici (2009)
It would rarely if ever be appropriate or expedient for the English court to assume jurisdiction under the Civil Jurisdiction and Judgments Act 1982 s.25 to grant interim relief in support of substantive proceedings abroad where the relevant defendants had no connection with the jurisdiction and the relevant assets were not located in England.
The applicants (P), who were resident in Italy, applied to set aside an ex parte order, which had been made in aid of a worldwide freezing order against another defendant and restrained them from dealing with certain assets, on the ground that the English court had no jurisdiction over them. The respondents (B) claimed to have been the victims of investment fraud perpetrated against them by the first defendant (M). M had been found guilty of aggravated fraud in Italy and the Italian court had entered judgment against him in favour of B for some four million Euros plus costs. B had obtained a worldwide freezing injunction against M from the Commercial Court pursuant to the Civil Jurisdiction and Judgments Act 1982 s.25, which permitted the granting of interim relief by an English court in support of substantive proceedings abroad, and Regulation 44/2001 art.31. B then discovered that M had concealed substantial assets in Monaco in the name of various companies and that P, who were M's parents, had assisted him in dealing with those assets. B then obtained the ex parte order restraining P from dealing with or disposing of any assets of M or the corporate defendants and any assets which P had acquired from M or the corporate defendants since the worldwide freezing order was granted. P applied to set aside the order against them on the basis that the English court lacked jurisdiction over them because there was no connecting link either between the assets and the jurisdiction or between them and the jurisdiction. B submitted that there was an issue between them and M as to the beneficial ownership of the assets held by P and that P were necessary or proper parties to the trial of that issue for the purpose of service out of the jurisdiction under CPR PD 6B para.3.1(3) and that they therefore did not need to rely on s.25; alternatively the court had jurisdiction under art.6 of the Regulation; alternatively the court should grant relief against P under s.25 without regard to whether it was "inexpedient" to do so under s.25(2); alternatively it was not inexpedient to grant relief against P under s.25 because there was a sufficient connecting link.
(1) The application of para.3.1(3) of the Practice Direction was limited to cases where the substantive dispute was before the English courts, because only in such a case was any claim going to be tried between the claimant and the defendant who had been or would be served with the proceedings. Where, as in the instant case, the substantive issue would be tried in Italy, there never would be any real issue between B and M which the English court would try, C Inc Plc v L (2001) 2 All ER (Comm) 446 QBD (Comm) considered. Where the substantive dispute was before the Italian courts, the only basis for jurisdiction against M was s.25 and para.3.1(5) of the Practice Direction. Even if para.3.1(3) was capable of applying to P in principle, there was as yet no real dispute between B and P who had been joined in order to obtain interim measures against them. Similarly since there was no substantive claim against M in England there could be no claim against P relying on art.6. (2) The ex parte order was a so-called Chabra order made in aid of the worldwide freezing order against M, TSB Private Bank International SA v Chabra (1992) 1 WLR 231 Ch D considered. However the court had no power to make such an order against P unless there was some basis for the English courts to assume territorial jurisdiction over them. Since the English court had no jurisdiction in respect of the substantive dispute, a fortiori against P, there was no basis for not applying the condition of "expediency" under s.25(2) as interpreted by the English courts. Where s.25 was invoked in a case where the defendant was domiciled in the European Union and art.31 of the Regulation therefore applied, the criterion of a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the contracting state had also to be satisfied, Van Uden Maritime BV (t/a Van Uden Africa Line) v Kommanditgesellschaft in Firma Deco-Line (C-391/95) (1999) QB 1225 ECJ applied. (3) The complete absence of any connection between P and England made it inexpedient to make an order against them. Their position had to be considered separately from that of M, Motorola Credit Corp v Uzan (No6) (2003) EWCA Civ 752, (2004) 1 WLR 113 followed. There was no evidence that any of the assets were situated in or connected with England. Where the relevant defendants had no connection with the jurisdiction and the relevant assets were not located in England, it would rarely if ever be appropriate or expedient for the court to assume jurisdiction under s.25, Mobil Cerro Negro Ltd v Petroleos de Venezuela SA (2008) EWHC 532 (Comm), (2008) 2 All ER (Comm) 1034 considered. It was also significant that P had no intention of complying with the court's order and the court had no sanction to enforce the order, Motorola followed. The real connecting factor criterion in Van Uden was not satisfied. Therefore the ex parte order was set aside.