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Orexim Trading Limted v Mahavir Port and Terminal Private Limited (and others)

In this case, the claimant brought proceedings against the first defendant claiming damages for breach of a settlement agreement, and an order under s.423 of the Insolvency Act 1986 for the setting aside of the sale of a vessel. It was alleged that the sale of the vessel was a sham designed to put the first defendant’s assets out of the reach of the claimant. The latter claim was also brought against two other defendants, being the purchaser and sub-purchaser of the vessel.      

The settlement agreement was subject to an English jurisdiction clause, and so it was common ground that the court had jurisdiction to hear that head of claim. However, the defendants challenged the Court’s jurisdiction to hear the claim under s.423 of the Insolvency Act 1986. In particular, they contended (inter alia) that the Court lacked “gateway” jurisdiction to hear that claim, because the claim did not fall within any of the paragraphs of CPR PD6B. 

The claimant argued that the claim fell within paragraph 3.1(20)(a) of CPR PD6B, which gives the court jurisdiction to hear claims "under an enactment which allows proceedings to be brought…"  That argument was supported by the decision of Flaux J in Erste v JSC [2013] EWHC 2926, and by the decision of Evans Lombe J in Jyske v Spjldnaes [2000] BCC 16. 

In a judgment handed down on 27 October 2017, HHJ Waksman QC (sitting as a judge of the commercial court) upheld the defendants’ jurisdiction challenge, and held that the decisions of Flaux J and Evans Lombe J were wrong. Applying the decisions of the Court of Appeal in Re Harrods (BA) [1992] Ch. 72, and of Lightman J in Banco Nacional de Cuba [2001] 1 WLR 2039, it was held that, in order for a claim to fall within paragraph 3.1(20(a) of CPR PD6B, the relevant enactment had to state on its face that it contemplates proceedings against foreign defendants. The decisions of Flaux J and Lightman J had not taken into account the decision of the Court of Appeal in Re Harrods, and were therefore decided per incuriam. 

Luke Pearce appeared on behalf of the first defendant, instructed by HFW.  

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