In PPF Capital Source v Singh & Anor  EWHC 3097 (Ch),
the fact that a company controlled by one of the defendants had
begun an arbitration of the same dispute in Hong Kong was not a
compelling reason to stay the English proceedings. On the contrary,
there were compelling reasons for the proceedings to continue.
PPF Capital Source (PPF) entered into an agreement with
Greenmybusiness Limited (GMB) (a company controlled by a Mr Singh)
whereby GMB agreed to obtain a $100million standby letter of credit
from Barclays Bank. Under the agreement, PPF paid $1.5million to
GMB. PPF alleged that it was induced to enter into the agreement as
a result of alleged fraudulent misrepresentations said to have been
made to it by Mr Singh, and a Mr Patel.
Following service of a detailed letter of claim in July 2015,
PPF commenced English court proceedings against Mr Singh and Mr
Patel in April 2016. The first defendant, Mr Singh, sought and
obtained extensions of time for service of his defence, ultimately
expiring on 3 June 2016. On that day, instead of filing a defence,
Mr Singh caused GMB to commence arbitration proceedings in Hong
Kong and applied for the English proceedings against him to be
stayed on the basis that the agreement required disputes between
PPF and GMB to be decided by way of arbitration in Hong Kong.
Mr Singh claimed the allegations made against him in the English
proceedings were baseless and that they had been put forward solely
to evade the arbitration clause in the agreement: GMB (not Mr
Singh) was party to the arbitration clause. In the weeks prior to
the application being heard, Mr Singh's solicitors came off the
record and Mr Singh did not correspond with PPF.
The English court declined to stay the proceedings. Applying
Mabey & Johnson Ltd v Danos  EWHC 1094 (Ch) and
Reichhold Norway ASA v Goldman Sachs International 
1 W.L.R. 173, the Court considered that it had a discretion to stay
proceedings in circumstances where there was: a claim by a claimant
against a company and an individual; an arbitration agreement
between the claimant and the company alone pursuant to which an
arbitration had been commenced; and overlap of subject-matter
between the claims against the company and the individual. However,
such discretion should not be exercised save in rare and compelling
In reaching its decision, the Court stressed that the merits of
Mr Singh's defence had no "real bearing on the question of
whether there were compelling circumstances which ought to lead
[it] to stay [the] claim".
The Court observed that the strongest argument against a stay
was as follows: if the proceedings were stayed, and the arbitration
was decided in GMB's favour, the English proceedings would be
unlikely to be pursued. However, conversely, if the arbitration was
decided in PPF's favour, the English court action would
proceed. In that event, as Mr Singh was the controlling mind of
GMB, it would likely be an abuse of process for him to ask for
specific matters decided by the arbitrator to be re-litigated in
the English court. Following the arbitration, many of the issues
between Mr Singh and PPF would not have to be investigated again.
However, this was not true for Mr Patel. Mr Patel was not a party
to the arbitration and would not be bound by any award, meaning the
case involving him would have to proceed in full in any event and
the issues would have to be investigated all over again.
There were a number of other reasons the Court identified why
the English proceedings should continue. First, it was not known
whether the arbitration in Hong Kong would go ahead. Second,
important documents held by Barclays Bank could be more easily
obtained by way of third party disclosure in the English
proceedings rather than in the context of an arbitration in Hong
Kong. Third, the fact that the arbitration was commenced by GMB on
the very last day for Mr Singh to serve his defence and after no
communication from him about the substance of his case suggested
that "the arbitration may well be a tactical manoeuvre to try
and simply delay the evil day when this case comes on for
The Court's comments are of particular note to parties
engaged in cross-border disputes and the associated jurisdiction
battles which often arise, and serve as a reminder that the English
courts are unlikely to look favourably on obviously tactical
In the recent decision in Joyce Whitfield v Revenue & Customs Commissioners  UKFTT 685 (TC) the Tribunal considered that inflexible and disproportionate behaviour by a party's legal representative...
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