{"id":47074,"date":"2025-01-30T13:29:14","date_gmt":"2025-01-30T13:29:14","guid":{"rendered":"https:\/\/my.legal500.com\/developments\/?post_type=legal_developments&p=47074"},"modified":"2025-01-30T13:30:09","modified_gmt":"2025-01-30T13:30:09","slug":"english-jurisdiction-challenges-some-recent-guidance","status":"publish","type":"legal_developments","link":"https:\/\/my.legal500.com\/developments\/thought-leadership\/english-jurisdiction-challenges-some-recent-guidance\/","title":{"rendered":"English Jurisdiction Challenges: Some recent guidance"},"content":{"rendered":"

In complex international disputes, a key consideration is where to litigate.\u00a0 This issue is fundamental to any litigation strategy for a well-advised claimant – one jurisdiction may carry notable advantages over another, producing a better outcome for clients.\u00a0\u00a0 <\/strong><\/p>\n

As a litigation forum, the English courts are very well regarded.\u00a0 As noted in the Law Society\u2019s International Data Insights Report of 2024[1]<\/a>, the English legal system is hugely appealing for its certainty of law, flexibility, the expertise and impartiality of its lawyers and judiciary, the speed of its decision-making, its position on recoverability of costs and the general enforceability of English law judgments.\u00a0\u00a0 According to the Law Society\u2019s International Data Insights Report, \u201ca record 64% of litigants in cases between April 2023 and March 2024 came from jurisdictions outside the UK, representing a total of 84 nationalities<\/em>\u201d. Whilst England is clearly a desirable forum, however, whether or not the English courts have jurisdiction to hear the dispute depends on a number of factors.\u00a0 This article considers the approach an English court may take when faced with a jurisdiction challenge and the relevant tests to be satisfied bearing in mind guidance in recent case law.<\/p>\n

In international disputes, frequently more than one country has potential jurisdiction to hear a case.\u00a0 The relative advantages and disadvantages of different legal regimes (cost, speed and enforceability being paramount) can force a race to commence proceedings in the preferred jurisdiction, so-called \u201cforum shopping\u201d (in the hope the court first seised will take jurisdiction where it can).\u00a0 Less well-prepared parties might subsequently commence parallel proceedings in another jurisdiction (albeit with a tactical disadvantage – judges may resist subsequent parallel proceedings on account of replicating costs and possible conflicting judgments).\u00a0 Where the English Court considers that it should have jurisdiction, it may issue an anti-suit injunction to prevent a party from continuing prior foreign proceedings.\u00a0 Conversely, if the English Court considers it does not have jurisdiction, it may stay English proceedings (or refuse to grant permission to serve out of the jurisdiction against foreign defendants).\u00a0 In some cases, for example where international conventions apply, the English courts may have to decline jurisdiction.\u00a0 This may be the case where the parties have agreed an exclusive jurisdiction clause in favour of a different jurisdiction.<\/p>\n

In circumstances where no international convention applies, the English courts have a general discretion, under English common law rules, to determine whether or not they should exercise jurisdiction to hear a case. Under these rules, the English court accepts jurisdiction if a defendant is validly served with proceedings (either within or outside the jurisdiction).\u00a0 If the defendant is within the jurisdiction (that is, physically within England or Wales) and is validly served with process, the English court will have prima facie jurisdiction over the defendant.\u00a0 This is based on a territorial conception of jurisdiction.\u00a0 Where a defendant is registered or resident abroad (so not physically present within England or Wales), the claimant needs to make the case for the English courts having jurisdiction.\u00a0 In that scenario, the court\u2019s permission is needed to serve proceedings out of the jurisdiction.\u00a0\u00a0 To obtain permission to serve out, the following test (the \u201cjurisdiction test\u201d) needs to be satisfied:[2]<\/a><\/p>\n

    \n
  1. \n
      \n
    1. there is a good arguable case that the claim falls within one of the jurisdictional “gateways” (such gateways highlight features of the case which indicate a connection with the jurisdiction – for example, where the contract the subject of the dispute is governed by English law or tortious acts have been committed in England or the loss has been suffered in England);<\/li>\n
    2. there is a serious issue to be tried on the merits of the claim;<\/li>\n
    3. England is clearly and distinctly the appropriate forum for the trial of the dispute (the \u201cforum non conveniens<\/em>\u201d test).<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      Once the prima facie case for jurisdiction has been made and proceedings started, a defendant may still contest the English court\u2019s jurisdiction.\u00a0 The defendant need only succeed on any one ground of the above three-pronged jurisdiction test for the English court to decline jurisdiction.<\/p>\n

      In terms of understanding the English Court\u2019s approach to the test, the recent case of Wwrt Limited v Zhevago [2024] EWHC 122 (Comm)<\/u> (the \u201cWwrt case<\/strong>\u201d) is instructive.\u00a0 In the context of an international fraud, it shows the attitude of the court tasked with deciding (i) relevant foreign law issues, (ii) the extent to which actions committed internationally need to have occurred within England in order to found jurisdiction and (iii) the substantive evidence needed to support a jurisdiction claim\/challenge.<\/p>\n

      In this case, it was alleged that an international fraud had been perpetrated by Mr Zhevago (a Ukrainian businessman and billionaire with diverse worldwide business interests).\u00a0\u00a0 Amongst his many interests, Mr Zhevago owned and controlled a Ukrainian bank, PJSC Finance and Credit Bank (the \u201cBank<\/strong>\u201d).\u00a0 The Bank had been the tenth largest bank in Ukraine but in 2015 it failed financially and was liquidated.\u00a0 It was taken over by the Deposit Guarantee Fund of Ukraine (\u201cDGF<\/strong>\u201d).\u00a0 In 2021, following an investigation, DGF brought a claim, on behalf of the Bank, against Mr Zhevago and others before the English courts: PJSC Bank \u201cFinance and Credit\u201d v Zhevago [2021] EWHC 2522<\/u> (the \u201c2021 case<\/strong>\u201d).\u00a0 It was alleged that by a variety of fraudulent loan schemes involving English registered corporate vehicles, Mr Zhevago and others had extracted the equivalent of US$500million from the Bank between 2010 and 2015.\u00a0 Based largely on the same facts, the 2021 case (in which Mr Zhevago challenged the jurisdiction of the English courts to hear the Bank\u2019s claim) proved significant in the later Wwrt case of 2024 (in which Mr Zhevago again challenged the jurisdiction of the English courts to hear Wwrt\u2019s claim).\u00a0 In 2021, Mr Zhevago had successfully contested the English court\u2019s jurisdiction on the grounds that England was not the most appropriate forum (limb 3 of the jurisdiction test above).<\/p>\n

      By 2024, as different claims against Mr Zhevago were progressed, facts relevant to the jurisdiction argument of 2021 had changed.\u00a0\u00a0 First, whereas the 2021 case was brought in the name of the Bank, the 2024 claim was commenced by Wwrt Limited (\u201cWwrt<\/strong>\u201d) as second assignee of the Bank\u2019s rights against Mr Zhevago. (In distressed debt scenarios it is common for a creditor to assign (i.e. transfer) its rights to a debt to a third party for a discounted sum).\u00a0 This fact was material because Mr Zhevago\u2019s argument was that the Bank\u2019s tortious rights against him were neither expressly transferred to Wwrt under the express terms of the Ukrainian law assignment nor did such rights pass automatically as a matter of Ukrainian law.\u00a0 In relation to limb 2 of the jurisdiction test, if Wwrt was not entitled to bring the claim against Mr Zhevago there was no serious issue which could be tried on the merits of the claim.\u00a0\u00a0 Second, whilst the limb 3 \u201cforum non conveniens<\/em>\u201d argument had been raised in 2021 (and on the face of it, already determined), it was argued by Wwrt that since then, based on intervening events, additional arguments could be made as to the availability and suitability of Ukraine as a competing jurisdiction.\u00a0 For example, war had since broken out in Ukraine (February 2022).\u00a0 It was alleged also that Mr Zhevago had sought to bribe the most senior judge of the Ukrainian Supreme Court so that it would be difficult to get a fair hearing there.\u00a0 Lastly, there was an alleged real risk that Mr Zhevago would seek to challenge enforcement of any judgment from the Ukrainian court on the basis of unfairness and bias within the Ukrainian legal system.\u00a0 Whilst this last argument had been raised and rejected in 2021, in 2023 Mr Zhevago had argued in French proceedings that he faced a risk of unfairness and bias before the Ukrainian courts when successfully resisting extradition from France to the Ukraine to face criminal charges.\u00a0 If, by Mr Zhevago\u2019s own argument, Ukrainian courts were unsuitable in that context, Wwrt argued that the Ukrainian courts should be considered unsuitable to hear the civil case.<\/p>\n

      The Court considered each limb as follows:<\/em><\/p>\n

      \u00a0<\/em>Serious issue to be tried on the merits<\/em><\/p>\n

      In relation to the assignment (governed by Ukrainian law), the Court found that on the evidence and argument before it, there was no express contractual provision to transfer tortious rights.\u00a0 Moreover, there was no substantive Ukrainian law which allowed for the automatic transfer of such rights.\u00a0 As a result, there was no basis on which the claim could be brought by Wwrt and therefore no serious issue to be tried on the merits.\u00a0\u00a0 The court noted that an \u201cissue of Ukrainian law is viewed, in the context of English proceedings, as an issue of fact, not an issue of law<\/em>.\u201d\u00a0 Where such an issue arises in the context of a summary judgment or \u201cserious issue to be tried<\/em>\u201d argument, the court can adopt the approach it normally takes to issues of fact which is to \u201cconsider whether the factual point raised carries the necessary degree of conviction to reach the threshold of having a real, as opposed to a fanciful, prospect of success\u2026.\u201d\u00a0 <\/em><\/p>\n

      The jurisdictional gateway<\/em><\/p>\n

      In relation to the jurisdictional gateway, Wwrt claimed it had a good arguable case in respect of a tortious claim that damage \u201chas been or will be sustained from an act <\/em>[perpetrating the fraud] committed or likely to be committed, within the <\/em>[English] jurisdiction<\/em>.\u201d<\/p>\n

      In relation to tortious acts in an international context, the court recognised that not all the tortious acts needed to have been committed within the jurisdiction but whatever acts were committed here needed to be more than relatively minor or insignificant (i.e. they needed to be substantial and efficacious) in order for the court to consider taking jurisdiction.\u00a0 In assessing whether acts which had taken place within the jurisdiction were minor or insignificant, the test is not relative to acts committed in other jurisdictions.\u00a0\u00a0 As regards \u201cgood arguable case\u201d, the court simply needed to decide who had the better of the case.<\/p>\n

      Wwrt claimed that during the relevant period when the conduct took place, whilst not resident in the jurisdiction, Mr Zhevago came to England for specific business and family visits.\u00a0 When Mr Zhevago was in the jurisdiction he was working and the inference could be drawn (which met the good arguable standard) that substantial and efficacious steps in furtherance of the fraud were taken here.\u00a0 In response, Mr Zhevago\u2019s counsel produced flight itineraries to evidence the time spent by Mr Zhevago in England and argued that time spent in England was either connected with Mr Zhevago\u2019s work for Ferrexpo plc (which was not connected with the alleged fraud) or to visit his family.\u00a0\u00a0 On the available evidence, the Court found that there were \u201cno strong or good reasons to doubt<\/em>\u201d Mr Zhevago\u2019s evidence.\u00a0 Accordingly, Wwrt did not have a sufficient case to meet the good arguable case standard that there were substantial and efficacious acts committed within the jurisdiction.\u00a0\u00a0 The Court did go on to consider whether there could be a good arguable case if it looked at the tort alleged \u201cin a commonsense way\u201d.\u00a0 Taking into account the fact that Mr Zhevago visited England and worked \u201con the go\u201d, might it be inferred that substantial and efficacious acts were carried out in the jurisdiction?\u00a0 As to that, the Court considered that there was nothing to suggest it was necessary for Mr Zhevago to do anything in England to accomplish any aspect of the fraud.\u00a0 On the contrary the centre of gravity of the fraud was Ukraine.\u00a0 This was the obvious place where steps would have been required in order to put in place the fraud and to accomplish it.\u00a0 Moreover, fatally, not only were there no acts which could be described as substantial and efficacious, there was no evidence of any acts being carried out in England in furtherance of the fraud at all.\u00a0 The Court was, therefore, unable to make any such inference.<\/p>\n

      In deciding the issue, the Court acknowledged that, at the pre-disclosure interlocutory stage, it may be difficult for a claimant asserting fraud to evidence what acts have been carried out within the jurisdiction. The Court recognised that inadequate disclosure by the party resisting jurisdiction or an inability to test their evidence by cross-examination without a full hearing might make it difficult to form a provisional view; it also acknowledged that on the limited evidence available to it at the interlocutory stage, a view reached by the Court on such evidence could, with the benefit of later, full disclosure, prove to be wrong.\u00a0 However, the Court concluded that it is sufficient to found jurisdiction if the claimant can show a \u201cplausible evidential basis<\/em>\u201d for the claim. For that, the claimant needs to put before the court sufficient material to persuade the court that it has the better of the case that substantial and efficacious acts have been committed within the jurisdiction.\u00a0 The claimant had not been able to do that.\u00a0\u00a0 This was also not a case where inadequate disclosure meant the Court was unable to form a provisional view as to which party had the better of the case.\u00a0\u00a0 The Court was able to form a provisional view based on Mr Zhevago\u2019s evidence and concluded that he had the better of the case.<\/p>\n

      \u00a0Forum non conveniens<\/em><\/p>\n

      Based on the principles set out in Spiliada Maritime Crpn v Cansulex Ltd [1987] 1 AC 60<\/u>, as considered by subsequent authorities, the Court reiterated the well-established principles in relation to forum non conveniens <\/em>(limb 3 of the jurisdiction test). Briefly:<\/p>\n