Koza Ltd & Anor v Akcil & Ors (2018)
The test for whether an alternative means of service of proceedings should be permitted under CPR r.6.15 in a Hague Service Convention case was whether there was a "good reason"; that did not require exceptional, special circumstances. A UK company was permitted to serve proceedings on an organ of the Turkish state via UK solicitors' offices where that firm acted for defendants who were closely associated with the Turkish organ, although it did not represent the organ itself.
The claimants sought an order that they be permitted to serve documents on various parties to the proceedings via an alternative method of service under CPR r.6.15.
The first claimant was an English subsidiary of the sixth defendant Turkish company (D6), a large Turkish-based conglomerate. Pending an investigation into allegations against the group, the seventh defendant (D7), an organ of the Turkish state, appointed interim trustees including the eighth to fourteenth defendants (new parties) to replace the board of D6. Disputes arose regarding the management and control of the English company. A law firm represented the new parties, but did not represent D7. In January 2018, the claimants sent D7 proceedings to its offices in Turkey. The claimants alleged that the Turkish Ministry of Justice had co-operated with Turkish officials to confiscate the first claimant's funds and so could not be relied upon to effect regular service of proceedings on D7 under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. The claimants sought, in the alternative, an order that (1) serving the proceedings on the new parties via the law firm's London office also amounted to service on D7; (2) the delivery of the proceedings in January 2018 to D7's offices in Turkey amounted to good service via an alternative method under r.6.15(2); (3) alternative service could be effected by serving the proceedings on D7's Turkish offices by private courier or post.
The claimants submitted that under r.6.37(5)(b)(i), the court's power to permit alternative service under r.6.15 applied to cases where the court's permission was not required for service outside of the UK jurisdiction. The law firm submitted that the claimant's request was an unprecedented attempt to serve a party to the proceedings via a law firm which did not act for them.
Legal test under r.6.15 -The starting point was that the instant case was one to which the Hague Service Convention applied. Turkey was a signatory, and had exercised its entitlement to limit the means by which service could be effected on Turkish parties to the medium of service via official channels in Turkey, specifically the General Directorate of International Law and Foreign Relations at the Ministry of Justice. There was a difference in case law on whether the test to permit alternative service under r.6.15(1) in a Hague Service Convention case was that there be exceptional, special circumstances, or whether there needed to be a "good reason". The test in Societe Generale v Goldas Kuyumculuk Sanayi Ithalat Ihracat AS  EWHC 667 (Comm) was the right one, and Cecil v Bayat  EWCA Civ 135 followed that approach, Societe Generale applied; Cecil followed. Rule 6.15 required a good reason; it was doubtful that that good reason required exceptional, special circumstances. In a Hague Service Convention case, the more restrictive the relevant state had been in what it regarded as appropriate service the more cogent the reason would have to be to be a "good reason" for service within r.6.15.
Application of test - The claimants' submission that there would be a likely delay of five months or more if the Hague Service Convention route for service was used, and that the political situation in Turkey was deteriorating which could cause significant delay in bringing the proceedings to trial, was not a strong or compelling ground identifying likely prejudice. The claimants' second ground for alternative service was more significant, namely that given its serious allegations of wrongdoing against the current regime in Turkey and its control and abuse of the Turkish judicial system, it was unlikely that the Hague method of service which directly involved the Ministry of Justice, would be effective. That was a powerful reason for saying that the instant case was one in which there was a good reason for alternative service to be permitted. Whilst the court was not in a position to make any finding as to the validity of the claimants' allegations, there was ample material to show that it was a case where there were real grounds for concern that being confined to the Hague grounds of service might never produce service at all or could produce a long delay. An order for alternative terms of service was appropriate.
Form of order - D7 had appointed the trustees, and on the materials before the court the trustees had to be able to make contact with D7, and report back to it. D7 and the new parties were plainly closely associated. The new parties could be served via M's London offices, and that would also be regarded as effective service on D7.
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26 Feb 2018
Richard Spearman QC
LTL 28/2/2018 EXTEMPORE
Siward Atkins QC