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Where a claimant has already issued related Court proceedings in
another jurisdiction, the English Court is unlikely to be the
appropriate forum for the trial of a claim, according to the recent
High Court decision in Punjab National Bank (International) Ltd
v Srinivasan and others [2019] UKHC 89 (Ch).
Facts
The Claimant, Punjab National Bank (International) Ltd
(ʺPNBʺ), made several loans between 2011
and 2014 totalling $45million relating to oil and energy projects
in the USA.
PNB issued a claim in England against the various borrowers,
alleging breaches of contract, fraudulent misrepresentation and
deceit in relation to these loans.
All of the defendants were based in either India or the USA.
Therefore, PNB applied to the English Court for permission to serve
the claim on these defendants out of the jurisdiction.
PNB was originally granted permission by the Court. However, the
defendants contested the order and the Court ruled that it be set
aside, effectively dismissing PNB's claim in England.
Appropriate forum?
One of the main grounds the Court considered upon the
defendants' application was that England could not be the
appropriate forum for the claim.
In its response to the application, PNB pointed to various
factors in support of English jurisdiction (it is where PNB is
based, where the loans were negotiated, made and due for
repayment). Some of the loans also contained non-exclusive English
jurisdiction clauses, which can indicate a presumption of
jurisdiction.
However, the Court ultimately concluded that all of these
factors were overridden because PNB had already issued Court
proceedings in the USA and India. The Judge found no good reason
why the defendants should be concurrently sued in England for
overlapping claims.
Further grounds for setting aside
Of importance to the judge's decision was that PNB had not
properly informed the English Court about the existence of the USA
and India claims when it initially sought permission to serve the
claim on the defendants in India and the USA.
Litigants making a 'without notice' application (without
notice to the other side), as is the case for an application to
grant permission for service outside of the jurisdiction, must give
full and frank disclosure to the Court of the circumstances
surrouding the claim and the application. The Court concluded that
PNB's failure to make this material disclosure was misleading
and "a serious breach of the claimant's duty to the
court", which would have been grounds alone for setting
the permission aside.
And the Court also found that PNB had made extensive amendments
to the Particulars of Claim after permission was granted. This
meant the Particulars of Claim was not the same document the Court
reviewed when granting permission. The Particulars of Claim that
PNB served was therefore not within the scope of the order granting
permission.
Comment
This case confirms the well-established rules relating to
jurisdiction.
The guidance provided by the Court also has wider application,
especially concerning further clarification of a claimant's
obligation to make full and frank disclosure in such 'without
notice' applications.
The Court also noted that it may set aside orders for permission
to serve out of the jurisdiction if claimants do not refer their
Particulars of Claim back to the Court following any significant
amendments.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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