Idemia France SAS v Decatur Europe Ltd & Ors

This is a dispute about jurisdiction.

The underlying commercial dispute between the parties concerns a claim by the First

The dispute about jurisdiction has arisen in this way. Decatur (which is an English company) and Tiger (which is incorporated in Bangladesh) have brought an action for the Discount Sums against Idemia in the courts of Bangladesh. Idemia (which is a French company) claims that that action (“the Bangladesh Action”) has been brought in breach of the jurisdiction provisions in the underlying contracts, which confer exclusive jurisdiction upon the competent courts of Geneva, Switzerland. Decatur and Tiger disagree, claiming that the subject matter of the Bangladesh Action is not covered by the jurisdiction provisions on which Idemia relies.

It might be thought that the obvious forum in which that dispute as to jurisdiction should be resolved would be the courts of Switzerland or, possibly, those of Bangladesh. However, Idemia says that its contractual right to be sued in Switzerland (and nowhere else) means that it cannot be forced to litigate in Bangladesh. As for the courts of Switzerland, Idemia says that the Swiss courts do not have power to issue the anti-suit injunction which it needs to restrain the further prosecution of the Bangladesh Action.

Idemia has therefore brought this action before the English courts. In it, Idemia claims to be entitled indirectly to enforce the jurisdiction provisions on which it relies by enforcing guarantees which Idemia claims that Decatur and Tiger have each given for the other’s obligations under the relevant contracts, and which contain English law and jurisdiction clauses.

The Third Defendant (“Mr Rahman”) is alleged by Idemia to own and control Decatur and Tiger, and to have procured their breaches of the jurisdiction provisions of the relevant agreements and/or to have conspired with Decatur and Tiger. Idemia says that the English courts also have jurisdiction over Mr Rahman, both because he

Decatur and Tiger dispute that the guarantee documents on which Idemia’s claim in the present action is founded amount to enforceable contracts. Mr Rahman disputes that he has been properly served with the proceedings. All of the Defendants assert that the English courts have no jurisdiction to entertain this action and/or should stay these proceedings on forum non conveniens or case management grounds.

On 15 June 2018 Robin Knowles J gave Idemia permission under CPR 6.36 and 6.37 to serve these proceedings on Tiger in Bangladesh but refused Idemia’s application for an interim injunction. Idemia has issued an application for summary judgment, which is due to be heard on 14 May 2019.

There are 5 applications presently before the court:

Both parties have served extensive evidence in connection with these applications.

Both parties have also served expert evidence (which is the subject of the

CPR 35.4(1) states in terms that “No party may .. put in evidence an expert’s report without the court’s permission”. It is apparent from the dates given above that the Defendants served their experts’ reports on Idemia well before they applied for the necessary permission. Idemia could have responded by applying to the court to exclude the Defendants’ evidence. However, as a matter of practicality and prudence, it chose instead to respond with its own reports. Mr Stephen Midwinter QC, who appeared before me on behalf of Idemia, submitted that the expert evidence on which the Defendants seek to rely consists largely of irrelevant and inadmissible material, and that I should therefore refuse to grant retrospective permission. The parties nevertheless agreed prior to the hearing that I should read all the expert evidence served on both sides de bene esse, and I have done so. Both sides also made submissions at the hearing before me in relation to the expert evidence.

In the circumstances, I propose to take the pragmatic course of granting retrospective permission to both sides to rely upon the expert evidence listed above. I accept Mr Midwinter’s submission that much of the evidence offered by Professor Müller consists of Professor Müller expressing his own views on the proper interpretation of the Decatur Agreement and the Tiger Agreement, rather than setting out the relevant principles of Swiss law, and is therefore inadmissible. It is well-established that “the role of an expert, unless the court is concerned with special meanings, is to prove the rules of construction of the foreign law, and it is then for the court to interpret the contract in accordance with those rules” (Footnote: ¹). However, since parts of the evidence of Professor Müller and of Dr Della Porta do set out the relevant principles of construction under Swiss law, and since I have already read and considered all their evidence, the practical course is for me to give permission for the evidence to be adduced, but to disregard the inadmissible parts. I can deal with any costs consequences at the appropriate time.

The facts which form the background to these applications are not in dispute.

In April 2014, the Bangladesh Election Commission (“the BEC”) invited tenders for the “Procurement, Production and Distribution of Smart NID Cards for Citizens of Bangladesh”. In anticipation of that invitation to tender, Idemia (which was then called Oberthur Technologies SA) invited Tiger to be Idemia’s sub-contractor, and Decatur to be Idemia’s supplier. In January 2014, Idemia entered into a “teaming agreement” with Tiger and Decatur in order to prepare a response to the BEC.

During their negotiations, Tiger and Decatur submitted quotations to Idemia for the products and services that they were to supply, accompanied by a letter dated 23 June 2014 (“the Discount Letter”), signed by Mr Rahman, in which they agreed to grant a discount of USD 5m on the total price to Idemia “if the tender is awarded to [Idemia] and if all the quoted items are purchased without any change of BOM”. The Discount Letter was countersigned on behalf of Idemia.

On 29 July 2014, Idemia and Decatur entered into a Solution Development,

Article 19.2 of the Decatur Agreement made the laws of Switzerland the applicable law of the Decatur Agreement: and Article 19.1 provided that:

Article 6.13 of the Decatur Agreement dealt with the provision of guarantees. It stated as follows:

Schedule 6 to the Decatur Agreement was headed “Schedule 6. Company Guarantee - Template”, and was in the form of a letter addressed to Idemia dated “London,

Idemia and Tiger also entered into a Solution Development, Hardware and Services Purchase Agreement (“the Tiger Agreement”) on 29 July 2014. The material terms of the Tiger Agreement were very similar to those of the Decatur Agreement. In particular, Articles 19.1 and 19.2 of the Tiger Agreement also provided for Swiss law and jurisdiction.

Article 6.13 of the Tiger Agreement, like Article 6.13 of the Decatur Agreement, dealt with guarantees. Its terms were as follows

Schedule 6 to the Tiger Agreement was in identical terms to those set out in paragraph 20 above, except that the first paragraph referred to the Tiger Agreement and identified Tiger as the “Supplier”. Importantly, the second paragraph identifying Tiger as the “Guarantor” was unchanged. Read literally, therefore, Article 6.13 and Schedule 6 involved Tiger in guaranteeing Tiger’s own obligations under the Tiger Agreement.

The Decatur Agreement and the Tiger Agreement were both signed on behalf of Idemia by Mr Didier Lamouche. Mr Rahman signed the Decatur Agreement on behalf of Decatur and signed the Tiger Agreement on behalf of Tiger. Mr Lamouche and Mr Rahman initialled all the pages of the two agreements except for the main signature page of each agreement and for the final page of Schedule 6 of each agreement. Mr Rahman signed the final page of Schedule 6 of each agreement in the space between “Yours faithfully” and his name and description as CEO of Tiger.

In this action, Idemia relies upon the documents at Schedule 6 of the Decatur Agreement and the Tiger Agreement, signed by Mr Rahman, as enforceable contracts. It says that the reference to Tiger as the “Guarantor” in the document at Schedule 6 of the Tiger Agreement is an obvious error that can be corrected as a matter of interpretation, and that these two documents are enforceable crossguarantees by Decatur and Tiger of each other’s obligations. Those assertions are disputed by the Defendants. I shall refer to these documents as “the Schedule 6 Documents”.

On 7 January 2015 the BEC announced that it was accepting Idemia’s tender. The contract between the BEC and Idemia was signed a week later, on 14 January 2015.

On 16 March 2015 the parties entered into Deeds of Variation (“the Deeds of Variation”), which amended the provisions of the Decatur Agreement and the Tiger Agreement. Both Deeds of Variation provided for Swiss law, and for the nonexclusive jurisdiction of the Swiss courts. Article 5.1 of the Deed of Variation relating to Decatur provided that:

The terms of each of the Deeds of Variation replaced the pricing schedules that had previously appeared at Schedule 4 of the original agreements with new arrangements set out in Annex 2 to the relevant Deed of Variation. In the Deed of Variation applicable to Tiger, clause 4 (headed “Clarification of Discount Terms”) provided that:

On 4 August 2016, Decatur served notice on Idemia to terminate the Decatur Agreement. On 10 August 2016, Tiger served notice to terminate the Tiger Agreement.

On 22 June 2017, Decatur and Tiger began the Bangladesh Action. Mr Ian Clarke QC, who appeared before me for the Defendants, told me that it is Decatur and

On 23 July 2017, the BEC terminated its agreement with Idemia.

On 18 February 2018, Decatur and Tiger sought and obtained an order in the Bangladesh action restraining Idemia from remitting any of its monies out of Bangladesh.

The claims between the BEC and Idemia were settled by agreement at a meeting in Bangladesh on 14 May 2018. The terms of settlement required the BEC to pay USD 15m to Idemia within five working days, and further sums of USD 7m, USD 10m, and USD 0.5m. The effect of the order made in the Bangladesh Action has in practice been to prevent those sums being paid to Idemia.

The Claim Form in the present action was issued on 6 June 2018. In this action, Idemia asserts (contrary to the position taken by Decatur and Tiger) that the pursuit

Decatur, which was served at its registered office in London, acknowledged service on 14 June 2018. Tiger, which was served in Bangladesh pursuant to the permission given by Robin Knowles J, acknowledged service on 30 July 2018.

Idemia made two attempts to serve Mr Rahman. It first attempted to serve him at

Idemia relies upon a number of different grounds for jurisdiction in relation to each Defendant. It is convenient to take the position of each of the Defendants separately. I propose to begin with Decatur.

It is not in dispute that Decatur is an English company domiciled in England. Article 4 of the Judgments Regulation (recast) (Footnote: ²) provides that:

Decatur, however, submits that the jurisdiction provisions of the Decatur Agreement preclude the present action, since they confer exclusive jurisdiction on the courts of Geneva, Switzerland. Switzerland is not a member state of the European Union, but is a contracting party to the Lugano Convention (Footnote: ³), Article 23 of which provides that: If the parties, one or more of whom is domiciled in a State bound by this Convention, have agreed that a court or the courts of a State bound by this Convention are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise.

At first blush, this submission may seem inconsistent with the position taken by Decatur and Tiger in the Bangladesh Action, where they allege that the underlying commercial dispute between the Defendants and Idemia is one that is not within the scope of the jurisdiction provisions of the Decatur Agreement. However, the jurisdiction dispute between the parties as to whether the subject matter of the Bangladesh Action falls within the scope of the jurisdiction provisions of the Decatur

In my judgment, that conclusion is not affected by the Deed of Variation. The purpose of the Deed of Variation relating to Decatur, as stated in recital (B), was to give effect to the wish of the parties “to clarify and, where appropriate, modify certain of” the terms of the Decatur Agreement. The principal operative provision of the Deed of Variation was Article 2, which stated that “With effect from the Variation Date the Parties agree the following amendments to” the Decatur Agreement. On its true construction, therefore, the Deed of Variation relating to Decatur varied, rather than discharged, the Decatur Agreement, and did not supersede or vary its jurisdictional provisions (Footnote: ⁵).

It follows that, as submitted by Mr Clarke, the provisions of Article 19.1 of the Decatur Agreement would take precedence over Decatur’s domicile, and would prima facie confer exclusive jurisdiction in relation to the jurisdiction dispute upon the Swiss courts.

Idemia, however, has an answer to that submission. Idemia’s case is that the immediate contract which it is seeking to enforce against Decatur in this action is the contract contained in the Schedule 6 Document annexed to the Tiger Agreement, under which (according to Idemia) Decatur guaranteed to Idemia the performance by Tiger of the terms of the Tiger Agreement, including its jurisdiction provisions. In Idemia’s submission, it is the jurisdiction provisions of that Schedule 6 Document which govern the present action, and which confer exclusive jurisdiction on the courts of England. In that connection, Idemia relies upon Article 25 of the Judgments Regulation (recast), which provides that:

As indicated in paragraphs 22 and 23 above, Article 6.13 and Schedule 6 of the Tiger Agreement make no reference to Decatur but - if read literally - instead involve Tiger in guaranteeing Tiger’s own obligations under the Tiger Agreement. As mentioned in paragraph 25 above, the Defendants in any event dispute that the Schedule 6 Documents are themselves enforceable contracts. In order to establish jurisdiction against Decatur on this basis, Idemia therefore faces 3 hurdles. In order to get through this jurisdictional gateway, it must show to the relevant standard:

The relevant standard is that of a good arguable case. The meaning of that expression, as elucidated by recent high authority, was considered by Carr J in her judgment in Tugushev v Orlov (Footnote: ⁶). I gratefully adopt her summary, which was accepted by both Mr Clarke and Mr Midwinter as an accurate statement of the current law:

Mr Clarke also drew my attention to the observations of the Privy Council in Bols Distilleries (trading as Bols Royal Distilleries) v Superior Yacht Services Ltd (Footnote: ⁷) (“Bols”) and of the Court of Appeal in Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV⁸ (“Kaefer”) on the interrelationship between this standard and that required by the jurisprudence of the Court of Justice of the European Union in relation to Article 25 of the Judgments Regulation (recast). Mr Clarke relied, in particular, upon the observations of Green LJ (with whom Asplin and Davis LJJ agreed) in Kaefer (Footnote: ⁸), to the effect that:

Applying those principles, I now turn to the three matters identified in paragraph 44 above. I begin with the third of them, the interrelationship between the jurisdiction provisions of the Decatur Agreement and of the Schedule 6 Document annexed to the Tiger Agreement.

As Robin Knowles J observed in BNP Paribas SA v Trattamento Rifiuti

On this issue, I have no doubt that Idemia has the better of the argument. The provisions of Article 19.1 are expressed in broad terms. However, the Tiger

Decatur is, of course, a party to the Decatur Agreement, and is bound by Article 19.1 of the Decatur Agreement. But those jurisdiction provisions are concerned with disputes “over the construction, validity, performance or non-performance, or ceasing” of the Decatur Agreement, not with “any suit, action or proceedings which may arise out of or in connection with” the Schedule 6 Document annexed to the Tiger Agreement.

Quite apart from any issue of privity, the English jurisdiction provisions of the Schedule 6 Documents would be redundant if claims to enforce the provisions of those documents were governed by the Swiss jurisdiction provisions in Article 19.1 of the Decatur Agreement and/or of the Tiger Agreement. In order to give effect to the provisions of the documents as a whole, it is therefore necessary to give the jurisdiction provisions of the Schedule 6 Documents a scope that is carved out from the broad jurisdictional requirements of Article 19.1.

Taking all these matters into account, it seems to me that the parties should be taken to have intended that claims such as those made in this action to enforce the Schedule 6 Documents should be subject to the jurisdiction provisions of those documents, which confer jurisdiction on the English courts.

For simplicity’s sake, I have hitherto referred to the obligations provided for in the Schedule 6 Documents as a “guarantee”: and clause 1 of those documents is in the standard form of a “see to it” guarantee (Footnote: ¹⁰). However, although clause 2 of those documents bears some of the hallmarks of a “conditional obligation” guarantee, the obligations which it creates are expressed to arise on “first demand” and to be “as primary obligor”. It also includes an express indemnity. In the circumstances, Mr Clarke has accepted (at least for the purposes of these applications) that those obligations are not subject to the particular rules applicable to contracts of guarantee, properly so called. In particular, he has expressly disavowed any reliance upon the Statute of Frauds 1677, even though the Schedule 6 Document annexed to the Tiger Agreement does not purport to bear any signature on behalf of Decatur.

Whatever the true nature of the obligations created by the Schedule 6 Document annexed to the Tiger Agreement, it is a necessary part of Idemia’s case that those obligations bind Decatur, despite the definition of “Guarantor” referring to Tiger. Mr Midwinter submits that, reading the two Schedule 6 Documents in the context of the various contractual documents as a whole, it is obvious that the intention was for there to be cross-guarantees, and that the mis-naming of the “Guarantor” in the Schedule 6 Document annexed to the Tiger Agreement is a simple drafting error that can readily be corrected as a matter of construction under the principles discussed in Chartbrook v Persimmon Homes (Footnote: ¹¹).

Mr Clarke, by contrast, submitted that what was required by Article 6.13 of the Tiger

Mr Clarke also relied upon the evidence of Professor Müller to the effect that the concept of a self-or performance guarantee is one that is known to Swiss law¹³:

I bear in mind that the applicable law of the Decatur Agreement and the Tiger Agreement is Swiss, not English, and that those agreements are therefore to be interpreted in accordance with Swiss law principles. However, Mr Clarke was unable to identify any specific interpretative principle of Swiss law that was materially at variance with the approach which English law would take to commercial contracts such as this, other than that Swiss law takes a more subjective approach.

Professor Müller (Footnote: ¹²) and Dr Della Porta¹⁵ both cite Article 18(1) of the Swiss Code of Obligations, to the effect that:

Nevertheless, both Professor Müller and Dr Della Porta agree that, unlike English law, in Swiss law “the subjective interpretation prevails over the objective interpretation” (Footnote: ¹⁴). Accordingly, Professor Müller notes that (Footnote: ¹⁵):

Similarly, in Dr Della Porta’s view (Footnote: ¹⁶):

Applying these principles, Mr Clarke’s submissions are not, in my judgment, persuasive. It seems to me that Mr Clarke’s reliance upon the wording of Article 6.13 of the Tiger Agreement is undermined by the comparison with the equivalent provisions in the Decatur Agreement. Article 6.13 of the Decatur Agreement requires Decatur to provide “a company guarantee issued by Decatur”. Yet Schedule 6 to the Decatur Agreement names Tiger, not Decatur, as the “Guarantor”.

Mr Clarke’s answer to this point is to say that the error is in Schedule 6 to the Decatur Agreement, which should have named Decatur, not Tiger, as the

“Guarantor”, since that is what Article 6.13 (which has primacy) requires. What was intended in both cases, according to Mr Clarke, was a self-guarantee.

As Mr Midwinter points out, that submission would not really help Decatur (or Tiger) in relation to jurisdiction (at least in the long run) since, on that basis, both companies would still be a party to a Schedule 6 Document guarantee containing an English jurisdiction provision - albeit a different guarantee to the one on which Idemia now relies.

But in any event, Decatur’s case on this point seems to me to be inconsistent with the contractual context and to be contrary to commercial common sense. I, of course, accept Professor Müller’s evidence that self-guarantees are not inherently nonsensical or worthless under Swiss law. The papers in the present case also contain examples of self-guarantees governed by English law issued on 23 March 2015 by Idemia in favour of Decatur and Tiger. However, as Dr Della Porta notes, those documents and the Swiss law examples which Professor Müller cites are very different to the Schedule 6 Documents, both in their commercial context and in the terms of the relevant guarantees.

In the present case, the wording of the Schedule 6 Documents in both the Decatur and the Tiger Agreements is - except for the misnaming of Tiger as the “Guarantor” in that annexed to the Tiger Agreement - plainly that of a cross-guarantee. To take just one example, the wording of clause 3, which requires the “Guarantor” to enter into a replacement agreement if the liquidator of the “Supplier” disclaims the “Guaranteed Agreement”, would make no practical or legal sense whatsoever if the “Guarantor” and the “Supplier” were one and the same.

As for Mr Clarke’s point that Article 6.13 has primacy, it is necessary to interpret what Article 6.13 means in its commercial and legal context - in the words of Professor Müller “by having regard to the structure of the document and the relationship of this document with other documents”. The drafting of Article 6.13 appears somewhat repetitive and confused, something which may perhaps partly be explained by the fact (recorded in an email dated 25 July 2014 from Mr Rahman to Idemia) that Article 6.13 was originally drafted so as to require the contracting party to provide a bank guarantee. In context, however, it seems to me to be plain what these commercial parties ultimately intended to achieve by these provisions.

On this issue also, I therefore conclude that Idemia has the better of the argument.

That brings me to the final hurdle facing Idemia, which is to establish to the relevant standard that the Schedule 6 Document annexed to the Tiger Agreement is in itself an enforceable contract, even though it is only to be found as a Schedule to the Tiger Agreement under the heading “Template”.

It is, of course, correct that Article 25 of the Judgments Regulation (recast) requires the existence of a consensus in fact, rather than a legally binding agreement, and that the issue of whether the parties “have agreed that a court or the courts of a Member State are to have jurisdiction” for the purposes of Article 25 is to be regarded as involving an independent concept of EU law (Footnote: ¹⁷). Furthermore, Article 25(5) requires that “An agreement conferring jurisdiction which forms part of a contract shall be treated as an agreement independent of the other terms of the contract”.

However, on the facts of this case, it seems to me that the jurisdiction provisions of the Schedule 6 Documents can have no legal effect, either as the manifestation of a “consensus in fact” or as “an agreement independent of the other terms of the contract” unless and until the Schedule 6 Document which contains those provisions itself has legal effect as a binding contract. First of all, the Schedule 6 Documents do not, on their face, purport to be contracts, but rather “templates” for the contracts which Article 6.13 requires to be delivered. While they remain simply schedules to the Decatur Agreement and the Tiger Agreement, they form part of those agreements, and are subject to the jurisdiction provisions of those agreements.

Secondly, it is not Idemia’s case that Tiger is a party to the Decatur Agreement, or Decatur a party to the Tiger Agreement, otherwise than in relation to the Schedule 6 Documents. What Idemia says is that Mr Rahman, by signing the Schedule 6

It follows that it can only be when the Schedule 6 Documents take independent life as contracts in their own right that the separate and different jurisdiction provisions which they contain can then come into effect. The issue which I have to decide is therefore whether Idemia has established to the required standard that the Schedule 6

The relevant principles of English law, which were not in dispute, are to be found in the judgment of the Supreme Court in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG (Footnote: ¹⁹):

As Aikens LJ observed in Barbudev v Eurocom Cable Management (Footnote: ²⁰):

On behalf of Idemia Mr Midwinter submits that, on this issue also, Idemia has the better of the argument. In Mr Midwinter’s submission, any reasonable objective observer would conclude that the Schedule 6 Documents (or, more precisely, the jurisdiction agreements at clause 8) were intended by the parties to be legally binding and not merely to be templates of something that might be agreed at a later date. In support of that submission, Mr Midwinter points out that the Schedule 6 Documents are complete in themselves, are written in terms of immediate enforceability, and are dated “London, Tuesday 29^th [July] 2014”, the same date as the Decatur Agreement and the Tiger Agreement. He submits that there is no sensible reason why they should have been signed and dated if they were not intended to be immediately binding.

In Mr Midwinter’s submission, it also makes commercial and logical sense that the Schedule 6 Documents should have been signed and become binding at the same time as the underlying obligations the performance of which they guaranteed. There is, conversely, no sensible reason why those documents should not have been immediately binding, or why the conclusion of those contracts should have been delayed to a later date. In that connection he relies (inter alia) on the matters set out in paragraphs 13 to 18 of Mr Gadhia’s third witness statement. Mr Midwinter also submitted that the short period between the date when the BEC accepted Idemia’s tender, and the date when the contract between the BEC and Idemia was signed, shows that it would not have been sensible for the parties to wait for that acceptance to happen before executing the Schedule 6 Documents as guarantees. Conversely, since the obligations which they guaranteed remained conditional until the BEC contract was signed, there was no detriment to the “Guarantors” in executing them straightaway.

On behalf of Decatur, Mr Clarke submits that these arguments are misconceived. Mr Clarke submits that, when read together with Article 6.13, the Schedule 6 Documents were plainly not intended to be immediately binding contracts. Article 6.13 is expressed in terms which are both future (“shall provide”) and conditional (“at [Idemia’s] first demand but not later than the signature of the contract between [the BEC] and [Idemia]”): and Schedule 6 is itself headed “Template”. Moreover, there is no separate and independent document of guarantee. The document relied upon by Idemia was never separated from the Tiger Agreement, but remained as a schedule.

Mr Clarke also relies on two pieces of evidence. The first is the explanation given by Mr Rahman in his second witness statement for why his signature appears on the Schedule 6 Documents:

The second is an exchange of correspondence between the parties in 2015, in which Idemia calls for the issue of the guarantees provided for by Article 6.13.

On this issue, I have come to the conclusion that Idemia does not have the better of the argument. My reasons are as follows:

Given the importance of this conclusion, I have given anxious consideration to the question of whether I can reliably take a view on the material available at this preliminary stage, or whether that material is insufficient for me to form a decided conclusion, and it would therefore be unfair for the claim to jurisdiction to fail since, on fuller analysis, it might turn out that the Idemia did have the better of the argument. I have, however, concluded that the available material is sufficient to enable me to form a view as to the relative merits of the parties’ cases which is sufficiently reliable for present purposes. The clear view which I have formed is that, on this issue, it is Decatur not Idemia which has the better of the argument.

For these reasons, Idemia has in my judgment failed to make out a good arguable case that the English court has jurisdiction over Decatur either on the basis of its domicile or on the basis of the jurisdiction provisions in the Schedule 6 Document annexed to the Tiger Agreement.

Idemia was granted permission by Robin Knowles J on 15 June 2018 to serve Tiger out of the jurisdiction in Bangladesh.

To the extent that that permission was based upon Idemia’s case that the English court has jurisdiction over Tiger by virtue of the jurisdiction provisions in the

Idemia’s case in relation to Tiger does not face the hurdle of any mis-identification of the “Guarantor”. However, on that issue, I have found in favour of Idemia. On the issue on which Idemia has lost - whether the Schedule 6 Documents themselves constitute independently enforceable contracts - there are no material differences between the position with regard to Decatur and that with regard to Tiger.

In my judgment, therefore Idemia has failed to make out a good arguable case that the English court has jurisdiction over Tiger on the basis of the jurisdiction provisions in the Schedule 6 Document annexed to the Decatur Agreement. For similar reasons, Idemia has failed to make out a good arguable case that the English court has jurisdiction over Tiger because the claim is made in respect of a contract governed by English law under CPR 6BPD 3.1(6).

Since, as I have found, the English court does not have jurisdiction over Decatur in relation to this action, Decatur cannot be an “anchor defendant” for Tiger (or Mr Rahman) so as to found jurisdiction on the basis that Tiger and/or Mr Rahman is “a necessary or proper party” within CPR 6BPD 3.1(3)(b).

Idemia’s case for jurisdiction over Mr Rahman was originally based upon the assertion that he was domiciled in England. Mr Rahman accepts that he moved to London with his then wife and son of the start of 2014, and rented and lived at York Way. His evidence is that he subsequently acquired the long leasehold interest in two apartments at the Plimsoll Building, 1 Handyside Street London, and that he and his family moved into the larger of these two properties (F9-02) in about November 2015.

However, according to Mr Rahman, his marriage broke down in 2016 and there were divorce proceedings. His ex-wife returned to Bangladesh in about March 2017, leaving their son with him in London. At the start of 2018, his mother was diagnosed with motor neurone disease. Mr Rahman says that, because of these personal considerations, and the fact that his European business had not proved as successful as he had hoped, in January 2018 he ceased to live in London and returned to live in Bangladesh permanently. Mr Rahman therefore asserts that, since January 2018, he has been resident and domiciled in Bangladesh.

Mr Midwinter, on behalf of Idemia, has made it clear that Idemia does not accept the truthfulness of Mr Rahman’s assertions about his domicile and residence. Nevertheless, Mr Midwinter realistically accepts that he cannot effectively challenge

Idemia, however, also bases its claim that the English courts have jurisdiction over Mr Rahman on its assertion that he has been validly served within the jurisdiction, either at York Way or at Morris Place (Footnote: ²¹).

Under Article 6(1) of the Judgments Regulation (recast):

Idemia’s case that service at York Way was good and effective service on Mr Rahman is based on its assertion that York Way was, as at the date of service, Mr Rahman’s “last known residence”, even though he was not actually resident there, either at the date when proceedings were commenced or at the date of service.

CPR 6.3(1) provides that:

CPR 6.9(2) then provides that, where that rule applies:

Paragraphs (3) to (6) of CPR 6.9 then specify what is to happen if the claimant has reason to believe that the defendant no longer resides at his last known address.

The meaning of the phrase “last known residence” in the predecessor to the present CPR 6.9 (Footnote: ²³) was considered by the Court of Appeal in Collier v Williams²⁷. Dyson LJ, giving the judgment of the court, gave the following guidance (Footnote: ²⁴):

In Mr Midwinter’s submission, to the best of Idemia’s actual or constructive knowledge at the material time, York Way was still Mr Rahman’s residence. He relies upon the evidence in Mr Gadhia’s first witness statement that York Way appeared in the Companies House records for Decatur as Mr Rahman’s “Service Address” and that, before serving Mr Rahman, Mr Gadhia’s firm had on 25 May 2018 sent a pre-action letter by courier to Mr Rahman at the York Way address:

On behalf of Mr Rahman, Mr Clarke submits that Idemia already had reason to believe that Mr Rahman no longer resided at York Way by the time that it purported to serve him there. In those circumstances, according to Mr Clarke, Idemia was obliged by CPR 6.9(3) to “take reasonable steps to ascertain the address of the defendant’s current residence”, and could no longer rely upon its belief that York Way was Mr Rahman’s residence.

Mr Clarke relies upon the evidence given by Mr Gadhia in his second witness statement (Footnote: ²⁸) to the effect that, when on 6 June 2018, the courier attempted to deliver the claim documents at York Way:

Mr Clarke also relies on two letters sent on behalf of Mr Rahman to Idemia’s solicitors by a Polish lawyer, Ms Magdalena Selwa, of Sadkowski i Wspolnicy sp k legal office (“Sadkowski”). The first letter, dated 4 June 2018, stated:

The issue which I have to decide is whether, in those circumstances, Idemia could still properly serve these proceedings on Mr Rahman at York Way as his “last known” residence. In my judgment, that was not a course which was open to Idemia. It seems to me that, by the time that the service on which Idemia now relies was effected, Idemia had sufficient reason to believe that Mr Rahman no longer lived at York Way. It had been told by the concierge at York Way that Mr Rahman was not on the list of people who lived there and had been told by Sadkowski that Mr Rahman was now living in Bangladesh. In those circumstances, Idemia was no longer entitled to effect service there, but was required by CPR 6.9(3) to take reasonable steps to ascertain the address of the defendant’s current residence, and thereafter to follow the procedure set out in sub-paragraphs (4), (5) and (6) of the rule.

The intention behind these substituted provisions of the CPR is plain. It is to provide a simple, clear and straightforward code relating to service, balancing the interests of claimants against the:

Under that code, a claimant is entitled to serve a defendant at his “usual or lastknown residence” within the jurisdiction. However, the claimant can only rely upon “last-known” if it he has no reason to believe that that is not still the defendant’s usual residence. If the claimant does have reason to believe that the defendant is no longer usually resident at that address, the claimant cannot validly serve the defendant at that address, but must take reasonable steps to find out where the defendant does now live, or a place and/or method by which the proceedings may effectively be brought to the defendant’s attention. If the claimant can ascertain the current address or a way in which the proceedings can effectively be brought to the defendant’s attention, the claimant must apply to the court under CPR 6.15 for an order permitting service by an alternative method or at an alternative place. Only in the exceptional case where, having taken the required reasonable steps, the claimant cannot discover the defendant’s current address or any alternative means of bringing the proceedings effectively to the defendant’s attention, can the claimant revert to service at the “last-known” address of the defendant.

The scheme of this code gives rise to 2 subsidiary questions: first, what is the date by reference to which the claimant’s knowledge and belief is to be assessed; and, secondly, what standard of “reason to believe” is required in order to trigger the procedure required by CPR6.9(3)?

With regard to the relevant date, questions of jurisdiction are normally to be determined by reference to the date of the commencement of proceedings, here 6 June 2018 (Footnote: ³⁰). The reason for that is to enable the claimant to know at the time proceedings are commenced that they have been commenced on the right court. In accordance with that principle, in her recent judgment in the case of Tugushev v Orlov (Footnote: ³¹), Carr J held that:

The use of the date of the commencement of proceedings, however, makes much less practical sense in the context of the code which I have just described. In the present case, Idemia properly wrote pre-action letters. However, the position can better be tested by considering a claimant who has failed to take that sensible course, has issued proceedings believing that the defendant is usually resident at a particular address within the jurisdiction, but has thereafter expressly been told that the defendant has moved to a different address within the jurisdiction (which is supplied). Could it be right that that claimant could still validly serve at the original address as the “last-known” address, while actually knowing that it was no longer a valid address for the defendant? It seems to me that that is unlikely to have been what the framers of the code intended.

As is pointed out in the notes at paragraph 12.3.2 of Civil Procedure, a default judgment obtained after valid service under CPR 6.9 at the defendant’s last-known address cannot be set aside as of right simply because the proceedings have not come to the attention of the defendant. Such a defendant must comply with CPR 13.3(1), and must satisfy the court that they have applied promptly and that their defence has a real prospect of success or that there is some other compelling reason why a trial should be conducted. That all suggests that the rules should be interpreted in a way which limits the circumstances in which valid service can be effected at an address

As for what amounts to “reason to believe”, it would not be helpful for me to attempt to gloss the words of the CPR. However, the fact that Idemia persisted in serving the present action at York Way, despite having been expressly told that Mr Rahman no longer lived there, may perhaps indicate their belief that claimants are entitled under CPR 6.9 to disregard what they are told by defendants about where they actually live, on the basis that defendants have an incentive to lie about such matters in order to evade service.

In my judgment, the wording and structure of the new code means that any such belief would be misconceived. There may, perhaps, be cases in which a claimant would be entitled to continue to believe (for the purposes of relying on an address as the “last-known” address) that a defendant continued to live at a particular address, despite that defendant’s protestations to the contrary. But, in my judgment, such cases will be rare. The requirement under CPR 6.9(3) to “take reasonable steps to ascertain the address of the defendant’s current residence” is not an onerous one. If, as in the present case, the defendant can be contacted, a simple first step would be to ask the defendant for their address. Claimants who choose not to take such reasonable steps, in the face of protestations by a defendant that the address which the claimant has for them is wrong, do so at their own risk.

Fortunately, I am not required finally to decide either of these questions for the purposes of these applications. Mr Midwinter and Mr Clarke both argued the applications before me on the basis that the relevant date was the date of purported service: and I am, in any event, satisfied that at both dates Idemia had sufficient

“reason to believe” that Mr Rahman no longer lived at York Way to prevent that address from being his “last-known” address unless and until Idemia had followed the procedure laid down in CPR 6.9(3).

Mr Rahman’s challenge to the purported service of this action on him at York Way therefore succeeds.

Idemia, however, has a second basis for its argument that Mr Rahman has validly been served within the jurisdiction. It relies upon the Companies Act 2006 s 1140.

It is common ground that, both at the date when this action was commenced and at the time of service, Mr Rahman was a director of various UK companies (including

The scope of s 1140 was considered by Master Marsh (before his appointment as Chief Master) in Key Homes Bradford Ltd v Patel (Footnote: ³²). Master Marsh held that the effect of s 1140 is that, when a company director gives an address for service in England and Wales, he can validly be served at that address, even if he is domiciled and resident overseas. Master Marsh’s decision was recently followed and applied by ICC Judge Jones in Brouwer v Anstey (Footnote: ³³).

It is also common ground that, if the decision in Key Homes is correct, Mr Rahman has been validly served at Morris Place, and that the English court therefore has jurisdiction over him. What Mr Clarke submits on behalf of Mr Rahman is that Key Homes was wrongly decided, and should not be followed. In Mr Clarke’s submission (and contrary to the view taken by Master Marsh), the fundamental principles of the common law have not been abrogated by this statutory provision. Service under s 1140(1) at a registered address within the jurisdiction will therefore only be valid if the person to be served is within the jurisdiction of the time of service. That that is the case is shown, in Mr Clarke’s submission, by s 1140(8) which expressly preserves “any .. rule of law under which permission is required for service out of the jurisdiction”.

This fundamental principle of the common law was considered by Master Marsh in his judgment in Key Homes (Footnote: ³⁴). He began by citing the well-known statement of the principle by Lawrence Collins J (as he then was) in Chellaram v Chellaram (No 2) (Footnote: ³⁵) that:

After examining the consideration of this principle by the Court of Appeal in the cases of Rolph v Zolan (Footnote: ³⁶); City & Country Properties Limited v Kamali (Footnote: ³⁷); and SSL International Plc v TTK LIG Ltd (Footnote: ³⁸), Master Marsh concluded that that principle did not preclude service under s 1140 on a registered address within the jurisdiction from being effective, even if the person to be served was not in fact resident or physically present within the jurisdiction at the time of service:

In Mr Clarke’s submission, this reasoning it is not consistent with the analysis of the authorities by Warren J in Clavis Liberty Fun I LP v Revenue & Customs Commissioners (Footnote: ³⁹), which was adopted by Teare J in Libyan Investment Authority v SGA Société Général (Footnote: ⁴⁰). In those two cases, both of which were concerned with witness summonses, Warren J and Teare J accepted as authoritative the following statement of principle by Stanley Burnton LJ in SSL International (Footnote: ⁴¹):

Chellaram, “if read with that qualification” – that is, if the reference to persons

“present in the jurisdiction” is read as meaning persons “subject to, ie within, the jurisdiction”.

In Mr Clarke’s submission, the analysis of the authorities by Warren J in Clavis (Footnote: ⁴²) shows that Master Marsh fell into error in relying on “the disapproval by the Court of Appeal in Kamali of the general principle enunciated by Lawrence Collins J in

Like Master Marsh, Warren J and Teare J, I too am bound by the decision and reasoning of the Court of Appeal in SSL International. It seems to me that Mr Clarke is therefore right to say that Master Marsh should not have relied on the view expressed in Kamali by May LJ that “there is not, or at least no longer is, the fundamental principles such as Lawrence Collins J supposed” (Footnote: ⁴³). In my judgment, however, there is no tension between the actual decision in Key Homes and the common law principle that was re-stated by the Court of Appeal in SSL

First of all, the re-statement of the principle by the Court of Appeal in SSL

Secondly, and perhaps more importantly, the Court of Appeal’s re-statement of the principle (unlike the earlier formulation by Lawrence Collins J in Chellaram) makes it clear that what is required is that the person served should be “subject to” the jurisdiction. Actual physical presence at the moment of service is not necessary. As

Teare J was there speaking of persons who are subject to the jurisdiction of the court because they are resident within the jurisdiction, even though temporarily absent. However, there are many other ways in which persons can make themselves subject to the jurisdiction of the court, though not physically present here. One such way, provided for by s 1140, is to register a “service address” that is within the jurisdiction.

As for Mr Clarke’s reliance upon s 1140(8), the answer to that submission was cogently provided by Master Marsh in his judgment⁴⁹:

Section 1140 was a new provision in company legislation, and was brought fully into force on 1 October 2009. In paragraph [13] of his judgment, Master Marsh quoted the DTI’s consultation paper on Company Law Reform dated March 2005 which, at paragraph 5.3, stated under the heading “Directors’ Home addresses”:

Master Marsh might also have referred to the following further provisions of the Companies Act 2006:

These materials, and the ordinary and natural meaning of the words used in s 1140 itself, all show that the statutory intention was to have a definitive public record of the address at which the persons within this section could validly and effectively be served. That purpose would entirely be defeated if the validity of the address on the register depended upon the accident of whether the person concerned was physically present within the jurisdiction at the moment of service.

A company director or secretary resident abroad is under no obligation to register an address for service that is within the jurisdiction. Mr Rahman could (and should, if he wished to avoid the jurisdiction of the English courts over him) have changed his registered address to his new address in Bangladesh when he ceased to be resident in England. He did not do so. His omission to do so meant that he remained subject to the jurisdiction of the English court, by virtue of having a registered service address that was within the jurisdiction.

In my judgment, therefore, Mr Rahman was validly served at Morris Place, and his challenge to that service and to the exercise by the English court of jurisdiction over him on that basis must be dismissed.

In the event that I determine (as I have) that Mr Rahman has validly been served at Morris Place, Mr Rahman’s Application Notice dated 11 September 2018 nevertheless seeks to have the proceedings against him stayed “because the Swiss courts and/or the Bangladeshi courts are the proper place in which to bring the claims and so the Court should make the order sought on the grounds of forum non conveniens”.

As Lord Briggs noted in Vedanta Resources PLC v Lungowe (Footnote: ⁴⁶) (a decision handed down after argument in the present applications had concluded):

In support of his application for a stay, Mr Rahman states in his second witness statement (at paragraph 8.1) that:

In opposition to that application, Mr Gadhia’s third witness statement relies (inter alia) upon what he says are the following factors:

This last point is acknowledged by Mr Mahmud on behalf of the Defendants. Mr Mahmud, states in paragraph 5.6 of his second expert report that:

In my judgment, Idemia is right to submit that the choice is one between England and Bangladesh. So far as I can tell from the Particulars of Claim and the evidence before me, the central issues in the tortious claims made against Mr Rahman involve the interpretation of the Discount Letter, the Decatur Agreement and the Tiger Agreement (both governed by Swiss law) and the Deeds of Variation (also governed by Swiss law). The fact of the Bangladesh Action is not in dispute. What is in issue is whether the bringing of that action amounted to a breach of the jurisdiction provisions of these various agreement - and, perhaps, whether Mr Rahman personally procured or conspired to effect any such breach. On the material presently before me, the natural home for such a claim would seem to be the Swiss courts.

However, Mr Rahman is not party to any jurisdiction agreement conferring jurisdiction on the Swiss courts, is not domiciled or resident in Switzerland, and has not otherwise submitted to the jurisdiction of the Swiss courts. There are no proceedings currently afoot in Switzerland involving Decatur and/or Tiger to which Mr Rahman could be joined as a necessary or proper party and no suggestion in the evidence that any such proceedings are contemplated. In the circumstances, it is impossible for me to say at this point that the courts of Geneva are the forum in which the action against Mr Rahman could most suitably be tried in the interests of the parties and for the ends of justice. It is simply not an available forum for these claims.

As between England and Wales and Bangladesh, the evidence before me at present fails to establish any relevant factor connecting the tortious claims against Mr Rahman with England. The evidence does not indicate that England is the place where the wrongful acts occurred or the place where the harm occurred. In those circumstances, English law is unlikely to be the system of law which will be applied to decide the issues. On the view which I have taken of the Schedule 6 Documents, the relevant contracts are governed by Swiss law, not English law. Decatur is an English company. However, there is no evidence that any relevant witnesses are in England, or any relevant documents. By contrast, Tiger is a Bangladeshi company and Mr Rahman himself is resident in Bangladesh. The commercial background to the dispute is the contract with and subsequent supply to the BEC in Bangladesh.

As for the points made in Mr Gadhia’s third witness statement, there is no rule that the English court will not examine the question of whether there is a risk that justice will not be done in a foreign court: but there is a heavy burden on a claimant seeking to rely upon such matters to resist an application for a stay. As Lord Bingham noted in Lubbe v Cape plc (Footnote: ⁴⁹) (citing Lord Goff in the Spiliada and Connelly (Footnote: ⁵⁰) cases):

In my judgment, the evidence relied upon by Idemia is wholly insufficient to discharge that burden.

Mr Midwinter submits that, if I were to stay this action in favour of Bangladesh, I would defeat the whole object, which is to bring the Bangladesh Action to an end. However, on the view which I have taken of the Schedule 6 Documents, the right which Idemia is entitled to protect is a right not to have its disputes with Decatur and Tiger litigated (except by agreement) anywhere other than in the courts of Geneva.

Not without some reluctance, I therefore conclude that Mr Rahman has made out the grounds for a stay of this action against him.

For the reasons which I have given above:

I invite the parties to seek to agree the terms of a Minute of Order giving effect to this judgment, and dealing with all consequential issues. In the event that agreement cannot be reached, I will give directions for any points of disagreement to be resolved on the basis of written submissions. Pursuant to CPR PD 52A 4.1(a), I adjourn all applications for permission to appeal together with all other consequential applications to be determined in that way, and extend time under CPR 52.12(2)(a) until 21 days after that determination. In the circumstances, there is no need for the parties to attend the formal handing down of this judgment. I am grateful to both counsel and to the teams behind them for their assistance.