APOLLO VENTURES CO LTD v SURINDER SINGH MANCHANDA & 7 ORS (2016)

The defendants applied to discharge a worldwide freezing order granted without notice on the claimant’s application. The first, fifth and sixth defendants applied to set aside permission to serve proceedings on them out of the jurisdiction.

 

The claimant was a Thai company of which the first claimant was the founder and a major shareholder. It was alleged that he had procured the claimant to enter into two loans, without the knowledge of other company officers and shareholders and using forged documents, and had paid most of the loan monies to his two sons, who were the second and fifth defendants, to their wives, who were the third and sixth defendants, and to two English companies, which were the seventh and eighth defendants. The first defendant was domiciled in Thailand, the fifth defendant and his wife were domiciled in India, and the remaining defendants were domiciled in England. Civil and criminal proceedings against the first defendant were in progress in Thailand. The claimant began proceedings for unlawful means conspiracy and unconscionable receipt, and obtained permission to serve the claim form out of the jurisdiction on the foreign defendants. The English defendants indicated that they intended to apply to stay the proceedings.

 

The defendants argued that (1) permission to serve out of the jurisdiction should be set aside because there was no serious issue to be tried, the claimant did not have a good arguable case that its claims fell within one of the gateways on the basis of which permission had been given, and England was not clearly the appropriate forum; (2) the freezing order should be discharged because the claimant had failed to disclose that three people who were instigating the claim had received some of the loan proceeds from the first defendant, and had failed to disclose evidence given by one of them in the Thai proceedings.

 

HELD: (1) There was an arguable case that the claimant had been committed to the loans improperly and illicitly, and that the first defendant had applied those sums for his own benefit or at his own direction rather than for the claimant’s benefit. There were serious issues to be tried against his sons and their wives. There was also a serious issue to be tried about whether any knowledge of the first defendant and his sons was attributable to the companies. The claimant had a good arguable case that the claims fell within a jurisdictional gateway. There were real issues to be tried against the English defendants who had been served as of right within the jurisdiction, and the foreign defendants were necessary and proper parties to those proceedings. If the proceedings against the English defendants were to continue, that would in practice conclude the issue of forum conveniens in the claimant’s favour, as that would avoid separate trials in different jurisdictions. A challenge to the grant of permission to serve out of the jurisdiction had to be judged at the time that the order had been made. At that time it had not been known whether the English defendants would be applying for a stay of proceedings. The order granting permission to serve out of the jurisdiction would not be set aside (see paras 26, 29, 31, 33, 35-37, 41, 44 of judgment).

 

(2) The issue of whether the people instigating the claim knew that they had received sums from the loans was strongly in dispute and could not be resolved on the evidence before the court. The fact that one of them had given evidence in the Thai proceedings that was potentially supportive of the defendants’ case should have been drawn to the judge’s attention, but it was not likely to have affected his order. There had not been material non-disclosure. On the claimant’s case, which involved improperly committing it to a loan, moving money to other countries and forging minutes of shareholders’ meetings, a real risk of dissipation of assets had been established. The application to set aside the freezing order was refused, save in respect of the eighth defendant, which was a dormant company and against which there was no seriously arguable claim (paras 57, 61, 63, 65, 68).

 

Applications refused

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