{"id":6472,"date":"2020-12-08T09:29:49","date_gmt":"2020-12-08T14:29:49","guid":{"rendered":"https:\/\/www.campbellslegal.com\/?p=6472"},"modified":"2021-10-07T10:04:03","modified_gmt":"2021-10-07T15:04:03","slug":"the-privy-council-clarifies-an-aspect-of-the-approach-to-determining-the-appropriate-forum","status":"publish","type":"post","link":"https:\/\/www.campbellslegal.com\/client-advisory\/the-privy-council-clarifies-an-aspect-of-the-approach-to-determining-the-appropriate-forum-6472\/","title":{"rendered":"The Privy Council clarifies an aspect of the approach to determining the appropriate forum"},"content":{"rendered":"

(Livingston Properties Equities Inc. and others (Respondents) v JSC MCC Eurochem and another (Appellants)<\/em> [2020] UKPC 31 \u2013 30 November 2020)<\/strong><\/h3>\n

By a judgment dated 30 November 2020 (the \u201cJudgment<\/strong>\u201d), the Judicial Committee of the Privy Council (the \u201cBoard<\/strong>\u201d or the \u201cPrivy Council<\/strong>\u201d) allowed an appeal brought by JSC MCC Eurochem and another (\u201cEurochem<\/strong>\u201d) against a decision of the Eastern Caribbean Court of Appeal (the \u201cCourt of Appeal<\/strong>\u201d) relating to applications to set aside service out of the jurisdiction and for a stay of proceedings in the British Virgin Islands (the \u201cBVI<\/strong>\u201d).<\/p>\n

Background<\/strong><\/h3>\n

In August 2015 Eurochem commenced proceedings in the BVI seeking recovery of bribes that had allegedly been paid to, or for the benefit of, two Russian nationals that held senior positions in Eurochem. The other Defendants were limited liability companies; the majority of which were incorporated in the BVI. It was alleged by Eurochem that the corporate defendants were used to facilitate the payment and receipt of bribes.<\/p>\n

In November 2015 the Eastern Caribbean Supreme Court in the BVI (the \u201cHigh Court<\/strong>\u201d) granted the ex parte<\/em> application made by Eurochem for permission to serve their claim form outside of the jurisdiction (on those defendants that were domiciled outside of the BVI). Following service upon them, some of the defendants that were not resident or domiciled in the BVI applied to the High Court to set aside the order for service out of the jurisdiction. They also sought to stay the main proceedings on the basis that the High Court did not have jurisdiction to hear the claim. A number of the BVI companies also applied to stay the proceedings on this basis arguing that Russia, and not the BVI, was the most appropriate forum to hear the claim on account of the main protagonists being Russian nationals and because their contracts of employment with Eurochem (which underpinned many of the issues) were governed by Russian law.<\/p>\n

On 1 November 2016 the Honourable Mr Justice Wallbank dismissed the applications and held that the BVI was the most appropriate forum for the trial. The defendants appealed against the judgment of Wallbank J. On 18 September 2018 the Court of Appeal allowed the appeal and reversed the decision of Wallbank J by setting aside the order for service out of the jurisdiction, granting a stay of the proceedings in the BVI and by holding that Russia was a more convenient forum for the hearing of the claim.<\/p>\n

Eurochem appealed to the Privy Council.<\/p>\n

The Privy Council\u2019s Judgment<\/strong><\/h3>\n

The Privy Council reiterated the principles which a judge has to apply when considering applications to serve proceedings on defendants that are not resident or domiciled in the BVI. Those are:<\/p>\n

    \n
  1. Firstly, that there is a serious issue to be tried on the merits, that is, a substantial question of fact or law.<\/li>\n
  2. Secondly, that there was a good arguable case that the claim against the foreign defendants fell within the classes of case for which permission to serve out may be given.<\/li>\n
  3. Thirdly, a claimant must show that the BVI was clearly or distinctly the appropriate forum for the trial of the dispute and that in all of the circumstances the court ought to exercise its discretion to permit service out of the jurisdiction.<\/li>\n<\/ol>\n

    Principles 1 and 2 above were not in dispute in this case and it was therefore for Eurochem to show that the BVI was clearly and distinctly the appropriate forum for trial in relation to the foreign defendants. Conversely, the BVI defendants were required to show that some other forum (Russia in this instance) was clearly and distinctly the appropriate forum.<\/p>\n

    The Privy Council focussed on the following issues: (1) whether Russia was clearly or distinctly the appropriate forum for the trial of the dispute; and (2) whether Russian or BVI law was properly applicable to the claim.<\/p>\n

    Whether Russia was clearly or distinctly the appropriate forum for the trial of the dispute <\/u><\/p>\n

    The Board held that Russia was not shown to be an appropriate forum, reasoning that:<\/p>\n