The Claimants' case is that each of the First to Fourth Defendants were complicit in a fraud whereby the proceeds of bullion (worth US $1 billion) were misappropriated, laundered and concealed, before ending up in entities owned and/or controlled by the First to Fourth Defendants. The Claimants, six companies each of which is in liquidation and registered in this jurisdiction, are said to have been used as vehicles through which the proceeds of the alleged fraud were passed.
The First to Fourth Defendants issued a number of applications, including “jurisdiction applications” for an order under CPR Part 11 declining jurisdiction over, or staying the Claims. The jurisdictional challenge extended to the Insolvency Applications. The Defendants suggested that India is the appropriate forum.
The Court applied the two-stage test in Spiliada. Stage one required the Court to consider whether India was an available jurisdiction and, if so, was it more appropriate than England. The Court considered the location of the parties, the matter to be tried, the fragmentation of the proceedings (as there are proceedings on foot in India), the applicable law, the witnesses and documents, and the importance of the insolvency moratorium. On balance, India is an available forum for the resolution of this dispute. However, it was for the Defendants to demonstrate that India is clearly or distinctly the more appropriate forum for the resolution of this dispute than England. The Defendants were found to have fallen well short of discharging this burden. On the facts, the Court found that England is clearly the more appropriate forum for the resolution of the dispute.
Given the conclusion in relation to stage one of the test, it was not necessary to consider stage two, namely where there are circumstances by reason of which justice requires that a stay should not be granted.
Whilst this is only one of many decisions in a complex and high value piece of litigation, and the decision turned on the specific facts, it provides a useful reminder of the considerations that the Court will take into account where jurisdiction is challenged.
Harrington and Charles Trading Co Ltd (In Liquidation) v Mehta, [2023] EWHC 307 (Ch)
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