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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Newsat Holdings Ltd & Ors v Zani [2006] EWHC 342 (Comm) (01 March 2006) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2006/342.html Cite as: [2006] 1 All ER (Comm) 607, [2006] 1 Lloyd's Rep 707, [2006] EWHC 342 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
(1) ![]() ![]() (2) ![]() ![]() (3) ![]() ![]() |
Claimants |
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- and - |
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CHARLES ![]() ![]() |
Defendant |
____________________
David Lewis (instructed by Messrs Middleton Potts) for the Defendant
____________________
Crown Copyright ©
Mr Justice David Steel :
Introduction
a) thatNewsat
has demonstrated a serious issue to be tried on the merits of the claim for the purposes of obtaining permission to serve out and a good arguable case for the purpose of the freezing order.
b) that England is the forum where the case may most suitably be tried in the interest of the parties and the ends of justice.
The parties
The regulatory framework
Initial agreement
New agreement
"The parties represent and warrant that their respective companies are…(ii) able to comply with the Agreement and are unaware of any information to the contrary of the intents of this agreement…(v
) on the part of Seysat that it has been duly authorised by the Government of the Seychelles the right to grant the Slot Rights to
Newsat
-425 as provided for in this Agreement and Seysat is not aware of any circumstances which would prevent or limit in any way
Newsat
-425's ability to fully utilise the Slot Rights and (vi) on the part of Seysat, it has fully disclosed to
Newsat
-425 all relevant facts relating to the Slot and Frequency bands, including without limitation, Seysat's rights to grant the Slot Rights within the Frequency Bands to
Newsat
-425."
The claim
"54. In those circumstances, it is the Claimants' case that:
1. The Defendant communicated his agreement to the incorporation of Clause U into theNewsat
Slot Agreement to the Claimants' lawyers in London and thereby falsely represented to them the truth of the representations.
2. The Defendant failed to communicate to the Claimants' lawyers in London the fact that the representations previously made by him in the Seychelles and upon which he appreciated that the directors of/people behindNewsat
(being the same people as the directors of/people behind ISC) would rely, were false.
55. Accordingly the Defendant's representations and omissions were directed to and made in London. Insofar as it is relevant, the Defendant knew that he was directing his communications to lawyers in London. It is clear on the evidence that, contrary to the Defendant's skeleton…, these acts were "substantial and efficacious".
56. Further, in making the representations contained in clause U of theNewsat
Slot Agreement … and in omitting to correct the false representations previously made by him and upon which he knew that the directing minds of
Newsat
were relying, the Defendant was directing such representations/omissions to the directing minds and will of
Newsat
. By November 2000, the Defendant knew that Mr Albert was not the directing mind and will of
Newsat
. The evidence (which is not effectively challenged by the Defendant) is that the directing mind and will of
Newsat
was in London."
"63. The Claimants, acting by Mr Wardrop and Mr Pedriks, acted in reliance upon the above representations (and omissions to correct), as the Defendant intended them to, by deciding to proceed with the Seychelles venture which involved, in particular, deciding to proceed with the purchase of the Palapa-B2R satellite and to move the satellite into position, deciding to causeNewsat
-425 to enter into the orbital Slot agreement and the AROSAs, authorising the payment of slot payments under the terms of the OSLA and AROSAs, deciding to instruct various third parties (including Winthrop) and thereby incurring significant expense, including trying to progress the co-ordination of the slot and in pursuing the prospect of a sale of the Group to Newskies….
65. As described in Shaw 1, the decisions made by Messrs Pedriks nd Wardrop were made by them in London, often at meetings held either at the offices at Portman Square and then at Wellington House or at Mr Pedriks' home or the offices of John White in London. The fact that such decisions were made in London is consistent with the decision to instruct solicitors in London. Accordingly it was Messrs Pedriks and Wardrop acting in London who made the above decisions on behalf of the Claimants and in reliance on the misrepresentations. "
Jurisdiction under CPR 6.28 (b)
"14. The form of words "place were the harmful event occurred," used in all the language versions of the Convention, leaves open the question whether, in the situation described, it is necessary, in determining jurisdiction, to choose as the connecting factor the place of the event giving rise to the damage, or the place where the damage occurred, or to accept that the plaintiff has an option between the one and the other of those two connecting factors.
15. As regards this, it is well to point out that the place of the event giving rise to the damage no less than the place where the damage occurred can, depending on the case, constitute a significant connecting factor from the point of view of jurisdiction.
16. Liability in tort, delict or quasi-delict can only arise provided that a causual connection can be established between the damage and the event in which the damage originates.
17. Taking into account the close connection between the component parts of every sort of liability, it does not appear appropriate to opt for one of the two connecting factors mentioned to the exclusion of the other, since each of them can, depending on the circumstances, be particularly helpful from the point of view of the evidence and of the conduct of the proceedings.
18. To exclude one option appears all the more undesirable in that by its comprehensive form of words, article 5 (3) of the Convention covers a wide diversity of kinds of liability.
19. Thus the meaning of the expression "place where the harmful event occurred" in article 5 (3) must be established in such a way as to acknowledge that the plaintiff has an option to commence proceedings either at the place where the damage occurred or the place of the event giving rise to it."
This accordingly forms the basis of the amended form of RSC Rule 11 and its successor CPR Part 6.20. It is to be noted, however, both limbs of the option were viewed as justified because, depending on the facts, they could each "constitute a significant connecting factor" from the perspective of jurisdiction.
"In my judgment, common sense and policy considerations require one to ask where in substance the cause of action in tort arises, or what place the tort is most closely connected with."
In reality, this approach, if appropriate, was indistinguishable from the earlier practice under RSC Order 11 r 1 (i)(h): see e.g. Castree v
Squibb [1982] 2 All ER 589. It was clearly viewed with some doubt by the Court of Appeal in Source
Ltd
.
V
. Rheinland [1998] QB 54.
"In our view condition (c) [the damage has resulted from an act committed within the jurisdiction] requires the court to look at the tort alleged in a common sense way and ask whether damage has resulted from substantial and efficacious acts committed within the jurisdiction….. But the defendants are, we think, right to insist that the acts to be considered must be those of the putative defendant, because the question at issue is whether the links between him and the English forum are such as to justify his being brought here to answer the plaintiffs' claim:" per Slade LJ at p.437.
"17. It is only by way of exception to the general rule whereby jurisdiction is attributed to the courts of the defendant's domicile that Tile II, Section 2, attributes special jurisdiction in certain cases, including the case envisaged by Article 5 (3) of the Convention. As the Court has already held (Mines de Potasse d'Alsace, paragraphs 10 and 11), those cases of special jurisdiction, the choice of which is a matter for the plaintiff, are based on the existence of a particularly close connecting factor between the dispute and courts other than those of the defendant's domicile, which justifies the attribution of jurisdiction to those courts for reasons relating to the sound administration of justice and the efficacious conduct of proceedings.
18. In order to meet that objective, which is of fundamental importance in a convention which has essentially to promote the recognition and enforcement of judgments in States other than those in which they were delivered, it is necessary to avoid the multiplication of courts of competent jurisdiction which would heighten the risk of irreconcilable decisions, this being the reason for which recognition or an order for enforcement is withheld by virtue of Article 27 (3) of the Convention.
19. Furthermore, that objective militates against any interpretation of the Convention which, otherwise than in the cases expressly provided for, might lead to recognition of the jurisdiction of the courts of the plaintiff's domicile and would enable a plaintiff to determine the competent court by his choice of domicile."
In this connection it also worth referring to Marinari v
Lloyds Bank [1996] QB 217 which emphasises the same point in the context of where the damage occurred.
"24. In the case of libel by a newspaper article distributed in several contracting states, the place of the event giving rise to the damage, within the meaning of those judgments, can only be the place where the publisher of the newspaper in question is established, since that is the place where the harmful event originates and from which the libel was issued and put into circulation.
25. The court of the place where the publisher of the defamatory publication is established must therefore have jurisdiction to hear the action for damages for all the harm caused by the unlawful act.
26. However, that forum will generally coincide with the head of jurisdiction set out in the first paragraph of article 2 of the Convention.
27. As the court held in Mines de Potasse d'Alsace, the plaintiff must consequently have the option to bring proceedings also in the place where the damage occurred, since otherwise article 5 (3) of the Convention would be rendered meaningless.
28. The place where the damage occurred is the place where the event giving rise to the damage, entailing tortious, delictual and quasi-delictual liability, produced its harmful effects on the victim.
29. In the case of an international libel through the press, the injury caused by a defamatory publication to the honour, reputation and good name of a natural or legal person occurs in the places where the publication is distributed, when the victim is known in those places."
i) A rule in relation to mis-statement which emphasizes where it is received and acted upon would over favour the Claimant's jurisdiction contrary to the structure of the Convention and the warning in that regard from the European Court.
ii) Such concerns undermined confidence in the approach of Steyn J in Minster.
iii) By analogy with the tort of defamation, the harmful event occurs where the mis-statement "originates": see also Bier para.16.
"He concluded that, applying the formula stated in the Bier case, the place where the harmful event giving rise to the damage occurred was where the misstatement originated. As the learned judge observed, it was there that the negligence, if not every element of the tort, was likely to have taken place and for that and other reasons the place from which the misstatement was put into circulation was as good a place to found jurisdiction as the place where the misstatement was acted on, even if receipt and reliance were essential parts of the tort.
I would respectfully go further and conclude that it is a better place, if one is seeking to identify the place of the event which is the origin of the damage as it was described in the Bier case, and if one puts to one side, as one is required to do, the rules of national law which define the necessary elements of the commission of the tort in question. It is true that in the course of his judgment, Steyn J had identified as the event causing harm in the case before him the receipt of the negligently produced certificates in England rather than their production and dispatch. But, in so far as there is a conflict between the judgment of Rix J and Steyn J on this point, as well as on the question of which is the right approach, I prefer the judgment of Rix J."
"41. However, we will consider the position on an opposite basis. If one assumes that there is a good arguable case for saying that the accounts were received here, the question arises whether that is sufficient. We have already observed that, when presenting its case in its skeleton before the Judge, ABCI does not appear to have considered that it was (since it relied only on damage suffered here). But it now relies on the receipt of the accounts here as a sufficient "substantial and efficacious" act. O.11, 1.1(1)(f) was formulated as it stood in 1995, in order to be consistent with and give effect to art. 5 (3) of the then Brussels Convention. The fact that the present case is not within the scope of the Brussels Convention is by the way. The significance of O. 11, r. 1(1) (f) was considered in the light of authorities in the European Court of Justice by Mr Justice Rix in DomicrestLtd v
. Swiss Bank Corporation, [1999] QB 548. He concluded that the mere receipt here of negligent assurances conveyed by telephone from abroad, on which the recipient acted by releasing goods abroad, did not constitute the commission by the person giving the assurances of an act here which could ground jurisdiction in respect of the damage suffered abroad. Article 5(3) is one of a number of special jurisdictions, which, as exceptions to the general European rule that suit must be brought in the country of the defendant's domicile, are not to be given too extensive a scope. The alternative possibility of founding jurisdiction in the place where damage is sustained anyway alleviates the position from a claimant's viewpoint. Mr Justice Rix thus disagreed with the approach of asking where "in substance the cause of action arises, or what place the tort is most closely connected with", which had been adopted by Mr Justice Steyn in the earlier authority on art. 5(3) of Minster Investment
Ltd
.
v
Hyundai Precision & Industry Co.
Ltd
., [1988] & Lloyd's Rep. 621, prior to three of the European Court authorities on which Mr Justice Rix relied. We favour Mr Justice Rix's reasoning and conclusion. …"
"185. ….If it were necessary to reconsider the decision, the starting point would be consideration of the scope of the decision in Shevill … and what application it might have to claims for fraudulent and negligent misrepresentation. "
Damage "sustained within the jurisdiction": see CPR 6.20 (8) (a)
Conclusion