On February 21 2014, His Honour Deemster Doyle, First Deemster and Clerk of the Rolls, delivered his judgment in Hirco v Hiranandani1, in which the issue was whether in all the circumstances the Isle of Man was the appropriate forum for the trial of the dispute. Deemster Doyle identified that his principal task was to resolve the place that would be in the best interests of all parties involved, and where justice would be delivered. This, of course, mirrors the overriding objective under Rule 1.2 of the Rules of the High Court 2009, the principle on which the so called "new litigation" culture in the Isle of Man Courts is based, that is to deal with cases justly and efficiently.

The Facts

Potentially competing jurisdictional agreements existed, between the relevant parties, dealing with their inter-relationships. The first claimant Hirco plc ("Plc") was incorporated in the Isle of and subsequently listed on AIM. The second claimant Hirco Holdings Limited ("Holdings") was a company registered in Mauritius and a wholly owned subsidiary of Plc. The Defendants were Niranjan Hiranandani (who was the chairman and non-executive director of Plc between December 2006 and December 2010) and who resides in India, and Priya Hiranandani-Vandrevala (director and chief executive of Plc between December 2006 and December 2010) and who resides in London.

The expressed purpose of the floatation of Plc on AIM was to raise funds for Plc's proposed investment into Indian real estate development. The flotation of Plc was promoted using an AIM Admission Prospectus which included five pipeline projects, of which Plc and Holdings eventually invested in four. Holdings did not itself have the funds necessary to make these investments and so Plc advanced funds to Holdings under documented loan agreements. The overall money invested was around £350.8 million in the four projects. Mr Hiranandani had signed an agreement with Hirco and Plc in December 2006 (the "Appointment Letter"), which stated that he submitted to the non- exclusive jurisdiction of the Isle of Man Courts should any disputes arise. However there was also an agreement in place between Holdings and Mr Hiranandani setting out the terms of the relationship between Holdings and Mr Hiranandani, which contained an arbitration clause should disputes arise, and that arbitration proceedings should be held in Singapore.

The Claimants alleged that the Defendants made and conspired in making fraudulent misrepresentation to them which induced them to invest the £350.8 million in the Indian real estate projects to be developed by entities associated with the Hiranandani family. The Claimants also alleged that the two Defendants had breached their fiduciary duties of loyalty to them as they had failed to disclose the fact the development periods were unrealistic and unachievable and that the valuations were flawed.

The Submissions

The Claimants argued that the alleged fraud was on an Isle of Man company and the alleged wrongs were at least in part committed in the Isle of Man and that these were further reasons as to why any trial should be held in the Isle of Man. By contrast, Mr Hiranandani's preferred forum was the Singapore arbitration. In summary, the Claimants argued:

  • Mr Hiranandani had contractually agreed to submit to the jurisdiction of the Isle of Man should any disputes arise showed his willingness to litigate in the Isle of Man
  • There was a need for one single factual enquiry in order to serve the ends of justice
  • The Isle of Man was the appropriate forum for the resolution of the dispute as the Defendants alleged fraud was on an Isle of Man company of funds held in the Isle of Man
  • The location of witness and documents was not a factor that favoured any particular jurisdiction in this case. Potential witnesses were located in England, India, France, Australia, as were the documents however this did not affect where the trial should be heard
  • Expert evidence was required for this case and so no particular jurisdiction possessed the specialist knowledge required, so again this was not a factor to consider
  • Depriving Plc the benefit of Isle of Man proceedings would be unjust. Here the Claimants were referring to the limitation period available in India for this dispute (a possibly forum), compared to that of the Isle of Man. The claim for breach of director's duties would be time barred if the proceedings were to be held in India
  • Confining Plc to remedies before the Indian court would effectively deny it justice, as realistically a trial in India would not take place before 2024 at the earliest.

However, the Defendants argued that:

  • There was no substantial connection to the Isle of Man, the only connection was that Plc was incorporated in the Isle of Man
  • The Appointment Letter only contained a non-exclusive jurisdiction clause, which thereby anticipated the possibility another forum would be appropriate
  • The links to India were more significant than those to the Isle of Man, as the business of Plc had to take place in India since that is where the projects were being developed.

Mr Hirandani sought that the Isle of Man proceedings issued against him be set aside or alternatively, that due to another agreement he had entered into with Hirco which contained an arbitration clause, the proceedings against him should be stayed pending the outcome of that arbitration (which was to take place in Singapore).

The Determination

In his determination, Deemster Doyle referred to the Privy Council decision arising from a Manx Appeal, Altimo Holdings v Kyrgyz Mobil Tel Ltd2 applying the guidelines established in Spiliada Maritime Corporation v Cansulex Ltd3, that in order to have served the Defendants out of the jurisdiction the Claimants had to satisfy the requirements that:

  1. There was a serious issue to be tried
  2. There was a good arguable case
  3. That in all the circumstances the Isle of Man was clearly the appropriate forum for the trial of the dispute.

Deemster Doyle decided that the Defendants had submitted to the jurisdiction by virtue of the Appointment letter, despite the fact it was a non-exclusive jurisdiction clause, and also that the case had very real and significant Manx connections as the case involved Manx companies and the breaches of duties towards those companies, in particular Plc.

Rejecting the Defendants' submission that the Indian Courts would be better placed to deal with the issues, (as any trial in that jurisdiction could take 10 to 15 years to resolve at first instance and so this substantial delay would mean the trial could not be conducted expeditiously), Deemster Doyle cited Lord Bingham in Donohue v Armco Inc4 in which he stated "in a situation of this kind the interests of justice are best served by the submission of the whole dispute to a single tribunal which is best fitted to make a reliable, comprehensive judgment on all the matters in issue".

Had the claim been heard in India where the Claimants would face a more disadvantageous limitation regime, Deemster Doyle agreed with the Claimants that this would have a prejudicial effect on their claim and would deprive them of practical justice. The Deemster again referred to the Kyrgyz Mobil Tel case5 where Lord Collins stated "where the claim is time barred in the foreign jurisdiction and the Claimant's claim would undoubtedly be defeated if it were brought there, practical justice should be so done."

Deemster Doyle also referred to the overriding objective under rule 1.2 of the Rules of the High Court of Justice 2009, reminding the Advocates involved in this case of the need to deal with cases justly and that they have a duty to the court to endure in the public interest that the proper and efficient administration of justice is achieved.


The Manx courts are no strangers to heavyweight commercial litigation which, invariably, have issues of foreign law. Parties that litigate before the Manx Courts do so with confidence that their proceedings will be dealt with expeditiously and fairly before a judiciary familiar with complex multi-jurisdictional issues.


1. ORD 2013/4

2. [2011] UKPC 7

3. [1987] AC 460

4. [2001] UKHL 64

5. [2011] UKPC 7

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