Neutral Citation Number: [2017] EWCA Civ 112 0 
  Case No: A3/2015/0188 and 018 4 
IN THE COURT OF APPEAL (CIVIL DIVISION)  
ON APPEAL FROM THE HIGH COURT OF JUSTICE  
QUEEN'S BENCH DIVISION  
COMMERCIAL COURT  
THE HON MRS JUSTICE CAR R 
[2014] EWHC 3233 (Comm)   
  Royal Courts of Justice  
Strand, London, WC2A 2L L 
  28/07/201 7 
B e f o r e :  
LADY JUSTICE GLOSTER  
Vice President of the Court of Appeal, Civil Division  
LORD JUSTICE PATTEN  
and 
LORD JUSTICE BEATSO N 
____________________  
Between:  
 
 SANA HASSIB SABBAGH  Claimant/  
Appellant  
 - and -  
 (1) WAEL SAID KHOURY  
(2) SAID TOUFIC KHOURY  
(3) SAMER SAID KHOURY  
(4) TOUFIC SAID KHOURY  
(5) SAMIR HASSIB SABBAGH  
(6) SUHEIL HASSIB SABBAGH  
(7) WAHBE ABDALLAH TAMARI  
(8) CONSOLIDATED CONTRACTORS 
GROUP SAL (HOLDING COMPANY)  
(9) CONSOLIDATED CONTRACTORS 
INTERNATIONAL COMPANY (SA L) 
(OFFSHORE)  
(10) HASSIB HOLDING SAL   
 
 
 
 
 
 
 
 
 
Defendants/  
Respondents  
____________________  
Mr Laurence Rabinowitz QC, Mr John Wardell QC, Mr Anthony Peto QC, Mr 
Simon Colton, Mr James Walmsley and Mr Peter Head (instructed by Mishcon 
de Reya LLP) for the Claimant  
Mr Andrew Hunter QC and Mr Andrew Scott (instructed by Jones Day) for the 
1st Defendant  
Mr Philip Edey QC and Mr Andrew Fulton (instructed by Baker and McKenzie 
LLP) appeared for the 2nd, 3rd, 4th, 8th and 9th Defendants  
Mr A lexander Layton QC and Ms Jessica Hughes (instructed by Olswang LLP) 
appeared for the 5th, 6th, 7th and 10th Defendants  
 
Hearing dates : 6 -10 February 2017   
____________________  
HTML VERSION OF JUDGMENT APPROVED
 
____________________  
Crown Copyright ©  
Lady Justice Gloster, Lord Justice Patten and Lord Justice Beatson:   
1. Subject to one point, this is the judgment of the Court to which we have all 
contributed. As will be seen below, we disagree about the jurisdictional test 
under Article 6 (1) of the Brussels  Regulation, which, in the event, given our 
agreed determination of the other issues, does not affect the outcome of the 
appeal. While conscious of the disadvantages of adding to the obiter 
statements on the topic, as we heard full argument on it, we set o ut our 
conclusions. Accordingly, the majority views of Patten and Beatson LJJ on 
this point are set out at paragraphs 32 to 72 below, and the minority view of 
Gloster LJ is set out at paragraphs 166 to 220 below.  
Introduction  
2. These appeals raise a number of jurisdictional and other issues which will 
determine whether these proceedings are properly justiciable in England. The 
claimant, Ms Sana Hassib Sabbagh ("Sana" or "the claimant"), is the only 
daughter of the late Mr Hassib Sabbagh ("Hassib") who died i ntestate on 12 
January 2010. It is common ground that along with her two younger brothers, 
Mr Samir Hassib Sabbagh ("Samir") and Mr Suheil Hassib Sabbagh 
("Suheil"), she is one of her father's heirs under Lebanese law and is entitled to 
one-third of his es tate at the time of his death. On 21 April 2010 the Lebanese 
Court made a declaration to that effect. Samir and Suheil are the fifth and sixth 
defendants.  
3. Along with the late Mr Said Toufic Khoury ("Said"), Hassib, a Palestinian, 
founded what became the C onsolidated Contractors Company group of 
companies ("the CCC group") in 1950. The CCC group was subsequently re -
established in Lebanon. The CCC group is referred to in its literature and in a 
number of documents relevant to the appeals as "CCC" but it has no corporate 
identity in its own right. Since its incorporation in 1984 the holding and 
ultimate parent company in the CCC group has been Consolidated Contractors 
Group SAL ("CCG"), the eighth defendant. Another company in the CCC 
group, Consolidated Contr actors International Company (SAL) Offshore 
("CCIC"), is the ninth defendant.  
4. The CCC group is the largest group of engineering and construction 
companies in the Middle East and the evidence is that it is valued in the sum 
of at least US$5 billion. All of  the companies in the CCC group were 
incorporated in Lebanon.  
5. The first defendant, Mr Wael Said Khoury ("Wael"), is the non -executive 
chairman of CCG. His two brothers, Mr Samer Said Khoury ("Samer") and Mr 
Toufic Said Khoury ("Toufic"), the third and fou rth defendants, are directors 
of CCG together with all the other individual defendants except Samir. Wael, 
Samer and Toufic are the three sons of Said and are cousins of Sana. The 
seventh defendant, Mr Wahbe Abdallah Tamari ("Wahbe"), is another cousin.  
6. The tenth defendant, Hassib Holding SAL ("HH"), is a Lebanese company 
owned and controlled by Samir and Suheil of which they, together with Samer 
and Wahbe, are the directors.  
7. On 29 June 2002 Hassib suffered a severe stroke which incapacitated him for 
the rest of his life and, it is alleged, rendered him unable to make any business 
decisions or to manage his own affairs. In proceedings issued in the High 
Court on 9 July 2013 Sana alleged that the principal defendants conspired 
from a date shortly after Has sib's stroke to misappropriate assets belonging to 
Hassib and that since his death in 2010 they have also conspired to deprive her 
of her entitlement to the shares in CCG which she claims belonged to Hassib 
at the date of his death. These two claims have b een labelled the asset 
misappropriation claim and the share deprivation claim and, for convenience, 
we shall adopt the same terminology.  
8. The asset misappropriation claim relates for the most part to dividends from 
Hassib's shares in CCG which were used ei ther to make investments in other 
companies and property or to meet expenses such as the running costs of an 
aircraft. It is not in dispute that before his stroke Hassib used and authorised 
CCIC to pay family expenses and charitable donations out of his in come from 
dividends and other investments. But the allegation is that, following Hassib's 
stroke, accumulated dividends and other income were used knowingly by the 
defendants (other than Wahbe and HH) to make improper or unauthorised 
investments in their o wn names and that, when sold, the proceeds of sale from 
these investments were not accounted for or applied for the benefit of Hassib. 
To the extent that they would otherwise have formed part of Hassib's estate on 
death, Sana seeks damages for conspiracy b ased on the value of the 
misappropriated assets.  
9. The share deprivation claim depends upon Hassib having retained ownership 
of shares in CCG at the date of his death. Sana relies on a confirmation by the 
Commercial Registry in Beirut ("the Commercial Regis try") dated 16 January 
2010 that its register contained an entry which records that, as at 10 May 2009, 
Hassib continued to hold 399,915 shares in CCG. She alleges that following 
her father's death, the defendants conspired to deprive her of her entitlemen t 
under Lebanese law to a third of this shareholding by unlawfully procuring the 
transfer of the shares to HH.  
10. The defendants accept that HH is now the registered holder of 399,915 shares 
in CCG following general meetings of the members of CCG held in Jul y 2010 
which confirmed HH as the holder of the shares. But their case is that there 
was no unlawful conspiracy and that the shares now held by HH are derived 
from transfers of shares in CCG which Hassib made prior to his death (and 
prior to his stroke) in favour of Sana, Samir and Suheil. We will come to the 
detail of this later in the judgment but it is now common ground that by three 
share transfer agreements made in 1993 ("the 1993 Agreements") Hassib 
agreed to transfer to his children 199,960 of his the n holding of 199,970 shares 
in CCG subject to the retention by him of a usufruct in the shares for his life. 
Sana became entitled to receive 20,000 shares (for a stated consideration of 
US$1,333,333) and Samir and Suheil each became entitled to receive 89, 980 
shares at a price of US$6m. In September 1993 Hassib agreed to transfer 2 
more of his remaining shares in CCG to each of his sons leaving him with 
only 6 shares.  
11. Further agreements were entered into in 1995 between Hassib and his children 
and between Sana and her two brothers, the cumulative result of which (after 
taking into account increases in the share capital of CCG) was that Sana 
became entitled to 100,000 shares and Samir and Suheil to 199,960 and 
199,961 shares respectively. Then in 1998 Sana t ransferred her entire holding 
of 100,000 shares back to Hassib who in turn transferred them to CCIC. His 
remaining 3 shares in CCG were transferred to Suheil. If this sequence of 
agreements was effective to pass ownership of the shares and any necessary 
corporate formalities were complied with, the net result of the agreements and 
transfers executed between 1993 and 1998 was that Hassib had ceased to own 
any shares in CCG but had retained his usufruct rights over 399,915 shares. 
By an agreement dated 16 Jul y 2006 (but whose date is in issue) Samir and 
Suheil transferred 399,915 shares to HH subject to Hassib's usufruct. CCIC 
retained the shares it had acquired in April 1998.  
12. Sana's original position was that the family agreements made between 1993 
and 1998 were artificial or sham transactions with no legal effect. But she no 
longer disputes the existence, validity or effectiveness of the agreements as 
such. Her case now is that, as a matter of Lebanese law, the agreements fall to 
be treated as gifts rather t han agreements to sell which would continue to bind 
Hassib (and his heirs) even after his death. As gifts they would lapse on death 
unless completed as transfers before then. She says that the agreements were 
ineffective to divest Hassib of ownership of th e shares which were later 
transferred to HH because the formalities of board approval, registration and 
reissuing of the shares required under Lebanese law and the articles of 
association in relation to the earlier agreements were not complied with. It is 
not disputed that Sana received US$50m at the time she agreed in 1998 to give 
up her shareholding in CCG. But she disputes that the money (or at least all of 
it) was paid as consideration for her shares.  
13. Of the various defendants to the claim only Wael is  domiciled within the 
jurisdiction. He resides in London. The other individual defendants are or, in 
the case of Said, were before death all domiciled abroad: Said, Samer, Toufic, 
Samir and Suheil in Greece; and Wahbe in Switzerland. The corporate 
defendan ts are all incorporated in Lebanon. However, CCG and CCIC 
accepted service of the claim form in Greece (where each has an office) and 
the proceedings have proceeded on the basis that they are domiciled in Greece 
for jurisdictional purposes. HH, by contrast , is domiciled in Lebanon.  
14. Wael is therefore the anchor defendant for the purpose of establishing 
jurisdiction against the other defendants. He is sued under Article 2(1) of 
Regulation 44/2001 ("the Brussels Regulation") on the basis of his domicile in 
England. The original Brussels Regulation is applicable because the claim pre -
dates the recast Brussels Regulation (Regulation 1215/2012).  
15. Jurisdiction is asserted against the other individual defendants, CCG and 
CCIC under Article 6(1) of the Brussels Regu lation or in the case of Wahbe 
under Article 6(1) of the Lugano Convention, which is in the same terms. We 
will refer to these defendants (that is, all of the defendants except Wael and 
HH) as the "non -anchor defendants".  
16. Article 6 of the Brussels Regulat ion provides:  
"A person domiciled in a Member State may also be sued:  
(1) where he is one of a number of defendants, in the courts for the place 
where any one of them is domiciled, provided the claims are so closely 
connected that it is expedient to hear and determine them together to avoid the 
risk of irreconcilable judgments resulting from separate proceedings.  
(2) as a third party in an action on a warranty or guarantee or in any other third 
party pr oceedings, in the court seised of the original proceedings, unless these 
were instituted solely with the object of removing him from the jurisdiction of 
the court which would be competent in his case."  
17. HH is the sole defendant in respect of whom jurisdicti on is asserted under 
domestic private international law. On 22 January 2014 Flaux J permitted HH 
to be served out of the jurisdiction as a "necessary or proper party" to the 
proceedings against Wael in accordance with CPR 6.37 and PD6B para 3.1(3). 
CPR 6.3 7 provides:  
"(1) An application for permission under rule 6.36 must set out:  
(a) which ground in paragraph 3.1 of Practice Direction 6B is relied on;  
(b) that the claimant believes that the claim has a reasonable prospect of 
success;…  
(3) The court will n ot give permission unless satisfied that England and Wales 
is the proper place in which to bring the claim."  
18. So far as material, paragraph 3.1 of Practice Direction 6BPD states:  
"3.1 The claimant may serve a claim form out of the jurisdiction with the 
permission of the court under rule 6.36 where ….  
(3) A claim is made against a person ("the defendant") on whom the claim 
form has been or will be served (otherwise than in reliance on this paragraph) 
and – 
a) there is between the claimant and the defendant a  real issue which it is 
reasonable for the court to try; and  
b) the claimant wishes to serve the claim form on another person who is a 
necessary or proper party to that claim."  
19. It is apparent from the terms of paragraph 3.1 that the joinder of HH as a 
necessary or proper party to Sana's claim depends upon first establishing that 
there is a real issue which it is reasonable for the Court to try here against 
Wael. A real issue for these purposes means a claim which has a real as 
opposed to a fanciful prospec t of success. There are also issues between the 
parties which we will come to in due course as to whether HH is a necessary 
or proper party to be joined under paragraph 3.1, even if a serious issue to be 
tried can be established against Wael. Sana no longe r seeks an order against 
HH for the restitution of the shares. Her only subsisting claim against the 
company is one for damages for conspiracy. But it is common ground that the 
jurisdictional threshold under CPR 6.37 is not crossed unless a sufficiently 
arguable claim is made out against the anchor defendant as well as against 
HH, the defendant domiciled abroad.  
20. The position is not, however, the same in relation to the non -anchor 
defendants sought to be joined under Article 6(1) of the Brussels Regulation 
and the Lugano Convention. They applied to the Commercial Court to set 
aside the service on them of the claim form on the ground that Sana could not 
establish a good arguable case against the anchor defendant or, alternatively, 
against them. Carr J decided  that Sana had established a good arguable case in 
conspiracy for jurisdictional purposes against each of the defendants including 
Wael in relation to the asset misappropriation claim and there is no appeal 
from that part of her decision. But she held that  no such case had been made 
out against Wael in relation to the share deprivation claim and she ordered it to 
be struck out. This is of course, in terms of value, the major part of Sana's 
claim. Part of the defendants' case on this issue was that Sana was in any event 
estopped by the 1995 and/or 1998 agreements, which she signed, from 
asserting any entitlement to such shares as Hassib may have owned in CCG at 
his death. But the judge said that she would not have accepted this alternative 
challenge to the sh are deprivation claim had she been of the view that the 
claim otherwise had a real prospect of success. Sana has been given 
permission to appeal against the judge's determination about the merits of the 
share deprivation claim and the defendants seek to ch allenge the judge's 
rejection of their alternative claim based on estoppel. But Sana has also been 
given permission to appeal in relation to a point which was not taken before 
Carr J. This is whether the Court's jurisdiction to try the share deprivation 
claim against the other defendants depends, as under CPR 6.37, on showing 
that the claim has a real prospect of success against the anchor defendant. This 
point becomes material if the judge was wrong to find that Hassib no longer 
had any interest in the CCG  shares at his death but right to find that Wael did 
not have the knowledge necessary to make him liable as a co -conspirator.  
21. Permission is not required for service of proceedings out of the jurisdiction in 
cases to which the Brussels Regulation and the L ugano Convention apply: see 
CPR 6.33. But, as indicated earlier, the general rule is that defendants should 
be sued in the courts of the member state where they are domiciled (see 
Article 2(1)). Article 6(1) creates an exception to this in the case of mult iple 
defendants with different domiciles only where (as stated earlier) the claims 
are "so closely connected that it is expedient to hear and determine them 
together to avoid the risk of irreconcilable judgments resulting from separate 
proceedings": see Ar ticle 6(1).  
22. Before Carr J a number of arguments were advanced by the defendants as to 
whether a risk of irreconcilable judgments from separate proceedings had been 
made out so as to support joinder of the defendants to the claim against Wael, 
but there wa s no challenge to the judge's view, based on what seems to have 
become established practice in the Commercial Court, that, as under CPR 
6.37, it was still necessary to demonstrate the existence of a good arguable 
case against the anchor defendant as one of  the factors which allows the court 
to take jurisdiction. The claimant now challenges this proposition. She relies 
on the decision of this Court in Joint Stock Co "Aeroflot Russian Airlines" v 
Berezovsky  [2013] EWCA Civ 784 , [2013] 2 Lloyd's Rep 242  ("Aeroflot ") as 
establishing that in a case under Article 6(1) the Court is not required as part 
of the conditions for establishing jurisdiction to assess the merits or strength of 
the claims against the non -anchor defendants. The same logic should be 
applied, she says, to the position of the a nchor defendant, a position she says is 
supported by a number of decisions of the CJEU.  
23. The issues therefore to be decided in relation to Article 6(1) and the merits of 
the claim are:  
(1) whether the judge was wrong to consider the merits of the claim ag ainst 
the anchor defendant for the purpose of establishing jurisdiction against the 
non-anchor defendants under Article 6(1); ("issue 1");  
(2) if a merits test is applicable for jurisdictional purposes, whether the judge 
erred in concluding that Sana has no real prospect of success in relation to the 
share deprivation claim; in particular, was the judge wrong to conclude that 
there was no real prospect of establishing (i) that Hassib owned 399,915 
shares in CCG at his death; and (ii) that there was intentional wrongdoing on 
the part of Wael; ("issue 2");  
(3) was the judge correct to conclude that, having signed the 1995 and/or 1998 
agreements, Sana was not precluded by contractual estoppel or its equivalen t 
under Lebanese law from asserting an entitlement to such shares (if any) in 
CCG as Hassib may have owned at his death; ("issue 3"); and  
(4) if the judge was right to strike out the share deprivation claim against Wael 
on the grounds she gave, is that a f urther reason why (independently of issue 
(1) above) the conditions of Article 6(1) were not satisfied in respect of that 
claim? ("issue 4").  
24. The other jurisdictional issue affecting the non -anchor defendants is whether 
the subject matter of the claim is s uccession within the meaning of Article 
1(2)(a) of the Brussels Regulation ("issue 5"). As the judge recognised, this 
question is logically anterior to the issues arising in relation to Article 6(1) and 
falls to be determined by reference to both the share  deprivation claim and the 
asset misappropriation claim. If the claim is a matter of succession then it falls 
outside the Brussels Regulation and the Court's jurisdiction will depend on 
whether England is the appropriate forum for the determination of the claim. It 
is common ground that any issues of forum conveniens  would have to be 
remitted to the Commercial Court.  
25. Subject to one point, the remaining issues are all concerned with arbitration. 
Following the issue of the claim form, Samir, Suheil, CCG and HH initiated 
arbitration proceedings in Lebanon to which Sana has been made a 
respondent. There are arbitration clauses both in the 1993 Agreements and 
also in Article 45 of CCG's articles of association. In the Lebanese arbitration, 
the defendants have so ught a determination as to their and Sana's entitlement 
to the shares in CCG and a determination of the balance of any monies owed 
from Hassib's shareholder's account in the company. Sana disputes the 
jurisdiction of the arbitrators and has refused to part icipate in the arbitration. 
But the defendants (in the alternative to their challenges to the Court's 
jurisdiction under Article 6(1)) also applied to Carr J for a stay of the English 
proceedings either under s.9 of the Arbitration Act 1996 or under the Co urt's 
inherent or case management jurisdiction.  
26. Having decided to strike out the share deprivation claim, it was only necessary 
for the judge to consider a stay in relation to the asset misappropriation claim. 
This raised the question whether that claim f alls within Article 45 as "any 
dispute arising during the lifetime of the company … whether among the 
shareholders themselves or between them and the Company". Because, on any 
view, Sana has not been a shareholder in CCG since 1998 and the dispute does 
not relate to a period of time in which she was still a shareholder, the question 
largely turns on the consequences under Lebanese law of the fact that she 
brings the claim as Hassib's heir and whether the asset misappropriation claim 
can be said to be based on the articles of association.  
27. The judge held that the claim was not based on CCG's articles of association 
so that neither Sana (nor, if he were still alive, Hassib) would be bound to 
submit the claim to arbitration. The issues on the appeal are whether  the judge 
was right about Article 45 in relation to the asset misappropriation claim 
("issue 6"); and whether (if otherwise triable in these proceedings) the share 
deprivation claim should also be stayed for arbitration under Article 45 or, in 
the alterna tive, under the 1993 Agreements ("issue 7").  
28. A final point raised before the judge was whether the joinder of HH under 
CPR 6.37 as a necessary or proper party should be allowed to stand now that 
Sana no longer seeks an order for the re -transfer of the CCG  shares. The judge 
did not have to decide this in the light of her finding that the share deprivation 
claim should be struck out but indicated that had she considered that the claim 
raised a triable issue she would have upheld the order for service out. We  are 
now invited to set service on HH aside regardless of whether the share 
deprivation claim is properly arguable ("issue 8").  
The Ladd v Marshall  application  
29. At the start of the hearing Sana made an application under CPR 52.11(2) and 
(5) seeking permiss ion to rely on new evidence in support of her appeal. Some 
of the new evidence was factual material relating, for example, to the date of 
the transfer of the CCG shares to HH and to certain allegedly unethical 
business practices on the part of the defendan ts. The application included as an 
annex to the skeleton argument a draft Re -Amended Particulars of Claim, 
although the application did not include an application for permission to 
amend. The purpose of the new pleading was to re -formulate Sana's claim by 
linking the facts relied on for the asset deprivation claim and those relating to 
the share deprivation claim as part of a continuing conspiracy rather than two 
separate alleged acts of intentional wrongdoing.  
30. We considered that the application was made f ar too late (coming more than 2 
years after Carr J's judgment) and that it was largely based on a pleaded case 
which the judge was not asked to consider and which has yet to be introduced 
by way of amendment. The application, if otherwise justifiable, was also likely 
to necessitate an adjournment of the appeal at considerable expense in terms of 
time and resources both for the parties and the Court. We therefore refused the 
application save in respect of two items comprising CCG's tax returns for 
2008 and 2 009 and the evidence relating to the progress of the Lebanese 
arbitration. We will come to the significance of these items later in this 
judgment.  
The jurisdiction issues  
Issue 1: What is the jurisdictional test under Article 6(1)?  
Issue 4: if the judge was right to strike out the share deprivation claim 
against Wael on the grounds she gave, is that a further reason why 
(independently of issue 1) the conditions of Article 6(1) were not satisfied 
in respect of that claim?  
31. As stated above, in relation to i ssue 1 the members of the Court disagree. 
Accordingly, paragraphs 32 to 72 below set out only the majority conclusions 
of Patten and Beatson LJJ in relation to this issue.  
32. Decisions as to jurisdiction are made at an early stage in a dispute and the 
decisi ons as to what must be shown at that stage reflect this. As Lord 
Neuberger stated in VTB Capital plc v Nutritek International Corp.  [2013] 
UKSC 5 , [2013] 2 AC 337  at [82] when dealing with disputed applications 
about jurisdiction:  
"[t]here is little point in going into much detail: when determining such 
applications, the court can only form preliminary views on most of the 
relevant legal issues and cannot be anything like certain about which issues 
and what evidence will eventuate if the matter proceeds to trial".  
In Cherney v Deripaska ( No 2) [2009] EWCA Civ 849 ; [2010] 2 All E.R. 
(Comm) 456 at [6], Waller LJ stated that "disputes as to forum should not 
become state trials", and see also the reference at paragraph 94 below to 
Standard Bank plc v Via Mat International Ltd  [2013] EWCA Civ 490 . The 
question is whether in the context of Article 6 the law has moved from the 
traditional position where the court asks whether a claim against an anchor 
defendant raises a serious issue to be tried in the sense of excluding summarily 
cases that are fanci ful or bound to fail. Sana's primary case now is that, unless 
the sole object of bringing the claim against the anchor defendant is to oust the 
co-defendants from the jurisdiction in which they are domiciled, the strength 
of the claim against the anchor de fendant is irrelevant.  
33. On Sana's behalf, Mr Rabinowitz QC submitted that the judge was wrong to 
consider the merits of her claim against Wael, as the anchor defendant, for the 
purpose of establishing jurisdiction under Article 6(1) of the Brussels 
Regulati on. He relied on the decision of this Court (Laws and Aikens LJJ, and 
Mann J) in Aeroflot  about non -domiciled co -defendants, and what is said to be 
the logic underpinning it, and on several decisions of the CJEU between 2006 
and 2015, in particular Reisch Montage  AG v Kiesel Baumaschinen Handels 
GmbH  (Case C -103/05)  [2006] ECR 1 -6827. He also relied on the statement 
of Briggs, Civil Jurisdiction and Judgments (6th ed 2015) at §2.228, that the 
weakness of the claim against the anchor defendant does not affec t the 
existence of the risk of irreconcilable judgments but "just makes it possible to 
say summarily which party will prevail in the English proceedings". He 
maintained that if the claim against Wael as the anchor defendant is struck out, 
this does not pre vent the requirements of Article 6(1) being met.  
34. The defendants' position is that, according to the jurisprudence of the CJEU on 
the co -defendant rule, it must be "expedient" for the claim against the anchor 
defendant to be heard together with the claims against the foreign co -
defendants. That, they submit, necessarily involves considering whether the 
claim against the "anchor" defendant raises serious issues to be tried. If it does 
not, it cannot be expedient to hear and determine it together with claims 
against the foreign defendants. They maintain that Sana's argument misreads 
the observations of the Court of Appeal in Aeroflot and is unsupported by the 
other authorities referred to.  
35. Since we conclude in the next part of this judgment that for the purpo ses of 
Article 6(1) Sana does have a real prospect of establishing the share 
deprivation claim against Wael as the anchor defendant and that the judge 
erred by conducting a mini -trial, it is not necessary to decide this point.  
36. The rival submissions must b e examined in the light of the aim of the Brussels 
Regulation and the general rule contained in Article 2(1) that defendants 
should be sued in the courts of the member state where they are domiciled 
irrespective of their nationality. Recital 11 to the Regu lation states:  
"The rules of jurisdiction must be highly predictable and founded on the 
principle that jurisdiction is generally based on the defendant's domicile and 
jurisdiction must always be available on this ground save in a few well -
defined situatio ns in which the subject -matter of the litigation or the autonomy 
of the parties warrants a different linking factor. The domicile of a legal 
person must be defined autonomously so as to make the common rules more 
transparent and avoid conflicts of jurisdic tion."  
37. In AMT Futures Limited v Marzillier, Dr Meier & Dr Guntner 
Rechtsanwaltsgesellschaft mbH [2017] UKSC 13 , a decision of the Supreme 
Court since the hearing o f this appeal which concerned Article 5(3)'s 
derogation from the general rule, Lord Hodge encapsulated the aim of the 
Regulation and the approach to exceptions to the general rule succinctly.  
38. The aim of the Brussels Regulation is well known. Lord Hodge st ated (at [11]) 
that it is:  
"to prevent parallel proceedings between courts of different member states and 
thereby avoid or limit irreconcilable judgments and non -recognition of 
judgments".  
He also stated that "the compulsory system of jurisdiction which t he … 
Regulation creates is underpinned by the principle of mutual trust between the 
courts of the member states". He cited Overseas Union Insurance Ltd v New 
Hampshire Insurance Co (Case C -351/89) [1992] QB 434 , at [17]; Erich 
Gasser GmbH v MISAT Srl (Case C -116/02)  [2005] QB 1 , at [41] and [72]; 
and Turner v Grovit (Case C -159/02) [2005] 1 AC 101 , at [24] and [28].  
39. As to the general rule,  Lord Hodge stated (at [12], [13] and [40]) that "the 
general principle is that civil actions are to be brought against individuals and 
companies in the courts of the place where they are domiciled" and "the 
derogations from the general rule which confers jurisdiction on the courts of 
the defendant's domicile … must be restrictively interpreted" in order to 
achieve the aims of the Regulation. He cited Kronhofer v Maier (Case C -
168/02) [2004] 2 All ER (Comm) 759 , at [12] – [14]; Coty Germany GmbH v 
First Note Perfumes NV (Case C -360/12) [2014] Bus LR 1294 , at [43] -[45] 
and Kolassa v Barclays Bank Plc (Case C -375/13) [2015] ILPr 14 , at [43]. S ee 
also Kalfelis v Bankhaus Schroder  (Case C -198/97)  [1988] ECR 5565 , at [19] 
and Freeport plc v Arnoldsson  (Case C -98/06)  [2008] QB 634  where it was 
stated (at [35]) that it is settled law that the special rules on jurisdiction must 
be strictly interpreted and c annot be given an interpretation going beyond the 
cases expressly envisaged by the Regulation.  
40. Article 6(1) creates an exception to the rule in Article 2(1). It does so in the 
case of multiple defendants with different domiciles, but only where the 
claims  are "so closely connected that it is expedient to hear and determine 
them together to avoid the risk of irreconcilable judgments resulting from 
separate proceedings". As a derogation from the general rule, Article 6(1) is to 
be construed restrictively. Be fore considering the decision of this court in 
Aeroflot, it is convenient to examine the decisions of the CJEU and to do so 
chronologically.  
41. The first decision is Reisch Montage v Kiesel Baumaschinen Handels GmbH  
(Case C -103/05)  [2006] ECR 1 -6827, [2007] ILPr 10 . It was a reference to the 
CJEU by the Supreme Court in Austria. The question referred was whether a 
claimant could rely on  Article 6(1):  
"when bringing a claim against a person domiciled in the forum state and 
against a person resident in another Member State, but where the claim against 
the person domiciled in the forum state is already inadmissible by the time the 
claim is brought because bankruptcy proceedings have been commenced 
against him, which under national law results in a procedural bar?".  
The CJEU stated (at [32]) that Article 6(1):  
"… cannot be interpreted in such a w ay as to allow a plaintiff to make a claim 
against a number of defendants for the sole purpose of removing one of them 
from the jurisdiction of the courts of the Member State in which that defendant 
is domiciled"  
It then held (at [33]) that Article 6(1):  
".. may be relied on in the context of an action brought in a Member State 
against a defendant domiciled in that State and a co -defendant in another 
Member State even when that action is regarded under a national provision as 
inadmissible from the time when  it is brought in relation to the first 
defendant".  
It is submitted on behalf of Sana that the holding shows "that Article 6(1) 
applies even if the claim against the local defendant is bound to be dismissed".  
42. It is to be noted that Reisch Montage concerned  a procedural bar against the 
anchor defendant rather than weakness in the substantive merits of the claim. 
It was on that ground that Flaux J in Bord Na Mona Horticulture Limited v 
British Polythene Industries plc  [2012] EWHC 3346 (Comm)  at [83] stated 
that, had he not found there was a fully arguable claim against the anchor 
defendant, he would have distinguished the case before him from Reisch 
Montage .  
43. We consider that a distinction between a procedural bar and lack of merits is 
sustainable because the purpose of Article 6(1) is to avoid a risk of 
irreconcilable judgments. Where there is a procedural bar against a claim in 
one Member State, there remains a  risk of irreconcilable judgments, since that 
bar may not apply in another Member State. Where, however, there is no 
serious issue to be tried because a claim is wholly unarguable on the merits, 
that risk is unlikely to arise. This is because "even if the proceedings could be 
and were brought elsewhere, the outcome would be the same, if there is no 
seriously arguable claim": see Hamblen J in Brown v Innovatorone Plc [2010] 
EWHC 2281 (Comm) , [2011] ILPr 118 at [25].  
44. It is also to be noted that the CJEU in Reisch Montage did not elaborate what 
it meant by the "sole purpose" or "sole object" exception it identified at [32]. 
This was understandable because it was  not relevant on the facts of the case: 
there was no suggestion that the claim was not serious or genuine. The 
consequence, however, is that there is no indication in the judgment that the 
claim has to be made fraudulently or in bad faith for this exceptio n to apply. 
Moreover, the proviso to Article 6(1) clearly requires it to be "expedient" to 
hear and determine the claims together to avoid the risk of irreconcilable 
judgments. As Hamblen and Flaux JJ observed in Brown v Innovatorone and 
Bord Na Mona Horti culture cases, it is difficult to see how that requirement 
can ever be satisfied if the claim against the anchor defendant is totally 
without merit and has been struck out.  
45. The next decision is Freeport plc v Arnoldsson  (Case C -98/06)  [2008] QB 
634. The CJEU was asked by the Swedish Supreme Court (Högsta domstolen) 
to determine whether it had jurisdiction under Article 6(1) over an En glish 
company who was sued in contract when the claim against the Swedish 
domiciled co -defendant was in tort or quasi -tort. It was held (at [38] ff) that 
Article 6(1) could apply against a non -domiciled defendant where the actions 
had different legal bases  provided they had a connection that made it 
expedient to determine them together to avoid the risk of irreconcilable 
judgments resulting from separate proceedings. It was (see [41]) for the 
national court:  
"to take account of all the necessary factors in  the case file, which may, if 
appropriate yet without its being necessary for the assessment, lead it to take 
into consideration the legal bases of the actions brought before that court."  
46. Advocate General Mengozzi had considered whether the limitation in Article 
6(2) precluding the jurisdictional linking factor for which it provides in claims 
on warranties, guarantees or third party proceedings where it was used solely 
with the object of removing the defendant from the jurisdiction of the court 
which would  be competent in his case applied to Article 6(1). He considered 
(see AG [62]) that the Regulation is generally limited by "fraud relating to the 
jurisdiction of the courts" which occurs where the rules have been applied as a 
result of manipulation on the part of the claimant designed to oust the 
jurisdiction of the courts of a particular member state over a dispute or to have 
the case heard by the courts of a member state which would not have had 
jurisdiction but for the manipulation. He also stated (see A G [63]) that the 
question whether there is a general prohibition on the abuse of the right to 
choose the court is "more delicate", but (at AG [64] – [65]) that he saw no 
reason that would prevent the approach to cases under Article 6(2) "from 
applying to t he cases regulated by Article 6(1) as well" and that extending the 
prohibition by analogy had been approved by implication in the Reisch 
Montage case, but that the Freeport case did not display any of those features.  
47. The Advocate General also considered ( at [70]) that assessment of the risk of 
irreconcilable judgments "may also include an evaluation of the likelihood that 
the claim brought against the defendant who is domiciled in the forum 
member state will succeed" but recognised (at [71]) that this may be difficult 
to reconcile with Reisch Montage . We observe that, if Reisch Montage is 
interpreted and applied narrowly because, in the case of an anchor defendant, 
its effect is to take co -defendant(s) domiciled in other Member States from the 
jurisdiction of the courts of those states, and derogations from that position are 
to be construed restrictively as applying to procedural bars, there would be no 
inconsistency with the Advocate General's statement.  
48. The CJEU took a different approach to the Advocate G eneral. It had been 
suggested that the suggestion that the "sole purpose"/"sole object" observation 
was a pre -condition or additional hurdle to relying on Article 6(1), but the 
Court stated (at [54]) that Article 6(1) can be applied:  
"without there being any further need to establish separately that the claims 
were not brought with the sole object of ousting the jurisdiction of the courts 
of the member state where one of the defendants is domiciled".  
49. In view of its finding that Article 6(1) could apply ag ainst a non -domiciled 
defendant where the actions had a different legal basis from the action against 
the domiciled defendant provided they had the requisite connection, the CJEU 
(see [56] – [57]) stated there was no need to answer the question whether the  
likelihood of success of an action against a party before the courts of the state 
where he is domiciled is relevant in the determination of whether there is a 
risk of irreconcilable judgments for the purposes of Article 6(1). It therefore 
did not address whether, as the Advocate General had stated (at AG [66]), the 
exception only applies where the action brought against the defendant 
domiciled in the forum member state appears, at the time when it was lodged, 
to be manifestly unfounded, or whether it suffi ces that it appears to be 
unfounded.  
50. It was submitted on behalf of Sana that the question before us was left 
unanswered in the Freeport case but that the indications from that case, and 
what was said by the CJEU and in Cartel Damage Claims SA v Akzo Nobel 
NV, its most recent decision on this matter, shows that the test for "abuse", 
whether as part of the autonomous consideration of the risk of irreconcilable 
judgments, or as part of the "sole object" exception, is "excep tionally high". 
But the passage from [41] of the CJEU's judgment (which is set out at 
paragraph 45 above) which states it may be appropriate for the national court 
to consider the legal bases of the actions brought before it, suggests that 
consideration of  the substantive merits of the claim against the anchor 
defendant may be necessary, rather than prohibited.  
51. The two most recent decisions of the CJEU, Kolassa v Barclays Bank  (Case 
C-375/13)  [2015] ILPr 14  and Cartel Damage Claims SA v Akzo Nobel NV 
(Case C -352/13)  [2015] QB 906 , were respectively decided on 28 January and 
21 May 2015, after the decision of the judge in this case. The same judges of 
the CJEU, in its Fourth Chamber, sat in both cases.  
52. Kolassa v Barclays Bank  was a decision on the derogation in A rticle 5(3) from 
the general rule in Article 2(1). The CJEU held that the Austrian courts had 
jurisdiction to hear a non -contractual action against an English bank in respect 
of a prospectus issued because the loss occurred directly in the claimant's 
accou nt in a bank established in Austria.  
53. Sana relied on the clear statements (at [61] and [63]) about the need to ensure 
legal certainty and to avoid prejudicing the assessment of the substance of a 
claim by demanding a comprehensive assessment of the evidenc e at an early 
stage. But the CJEU also stated (at [64]) that:  
"Although the national court seised is not, therefore, obliged, if the defendant 
contests the applicant's allegations, to conduct a comprehensive taking of 
evidence at the stage of determining jurisdiction, it must be pointed out that 
both the objective of the sound administration of justice, which underlies 
Regulation 44/2001, and respect for the independence of the national court in 
the exercise of its functions require the national court seis ed to be able to 
examine its international jurisdiction in the light of all the information 
available to it, including, where appropriate, the defendant's allegations."  
54. Accordingly, all that Kolassa  expressly precludes is "a full review of the 
evidence", t he sort of mini -trial that is precluded by the traditional English 
approach. The decision does not provide positive support for the proposition 
that there is no need for any assessment of the merits of the dispute. That 
proposition, moreover, appears incon sistent with what the CJEU said in the 
concluding part of [64] about "respect for the independence of the national 
court" and the reference to a "requirement" that the national court "examine its 
international jurisdiction in the light of all the informati on available to it, 
including, where appropriate, the defendant's allegations".  
55. While it is important to ensure that there is legal certainty, and it is 
inappropriate to conduct a full review of the evidence, it does not follow from 
this decision that the re is no need for an assessment of the merits of the 
dispute or that national courts are not able to look at the strength of the claim 
against the defendants to determine whether they have jurisdiction.  
56. The question in Cartel Damage Claims SA v Akzo Nobel  NV concerned 
whether there was an abuse of Article 6(1) in circumstances where a claim 
brought in Germany against a German domiciled anchor defendant and co -
defendants that were not domiciled in Germany was settled against the anchor 
defendant. Could Arti cle 6(1) be relied upon when the applicant appeared to 
have artificially prolonged the settlement proceedings in order to bring the 
claim in Germany? After referring to the need to construe derogations from 
the general rule strictly, and stating that, on t he facts of the case, it was 
expedient to determine the claims against the various defendants together, the 
CJEU turned to the extent to which the applicant's withdrawal of its action 
against the sole co -defendant domiciled in the same member state as the court 
seised was capable of rendering the rule of jurisdiction in Article 6(1) 
inapplicable.  
57. The CJEU stated [at 29]) that the court seised of the case can find that the rule 
of jurisdiction laid down in Article 6(1) "has potentially been circumvented 
only where there is firm evidence to support the conclusion that the applicant 
artificially fulfilled, or prolonged the fulfilment of, that provision's 
applicability". It also stated (at [31]) that "at the time that proceedings were 
instituted", the parties c oncerned "had colluded to artificially fulfil, or prolong 
the fulfilment of" the applicability of Article 6(1). It was argued on behalf of 
Sana that there is nothing artificial in bringing a claim which ultimately fails 
and that what is required to avoid t he ability to rely on Article 6(1) on grounds 
of abuse is proof of collusion.  
58. The fact that there was no consideration of the substantive merits of the claim, 
and what was said (in particular the passage from [29] set out above) must be 
seen in context. T here was no suggestion that the claim itself against the 
German anchor defendant was unmeritorious or hopeless and the CJEU did 
not directly address whether, when applying Article 6(1), Member States may 
take account of the merits of the claim. The case wa s about whether the 
settlement proceedings had been artificially prolonged and whether there had 
been collusion. The statement that "firm evidence" was required where this is 
alleged is understandable because, as the CJEU recognised (at [32]) "simply 
holdi ng negotiations with a view to concluding an out -of-court settlement does 
not in itself prove such collusion". [32]. The Court was clearly concerned to 
ensure that, in the context of withdrawing an action against the sole co -
defendant domiciled in the same  state as the court seised, there was sufficient 
evidence to suggest that this was fraudulent.  
59. We now turn to the Aeroflot case, and its assessment of the impact of the 
jurisprudence of the CJEU. The judgment was given by Aikens LJ. As we 
have stated, it was a case about the position of non -domiciled co -defendants 
rather than the anchor defendant. The judgment of Aikens LJ considered 
Freeport but not Reisch Montage,  and it predates the CJEU's decisions in 
Kolassa and Cartel Damage Claims.   
60. The judgment at [107] and [109] provides strong support for Sana's position in 
the present case. At [109], Aikens LJ stated:  
"I think that a straightforward requirement that, in an Article 6(1) case, the 
claimant must establish a "good arguable case" or "serious issue to be tried" 
against the non -domiciled defendant is inconsistent with the "autonomous" 
construction of Article 6(1) taken by the ECJ in Freeport plc v Arnoldsson. 
Insofar as the Forus argument might be that Aeroflot has joined Holding so as 
to establish English jurisdiction and to avoid the Luxembourg court having 
jurisdiction in any dispute against Holdings, that consideration is 
impermissible, as Freeport plc v Arnoldsson makes plain."  
61. He had previously stated (at [107]) that the CJEU in th e Freeport case held 
that:  
"the national court should not concern itself with the question of whether the 
claim against the non -resident defendant was brought in those proceedings 
with the sole object of ousting the jurisdiction of the court of the Member  
State where that defendant is domiciled. The ECJ therefore specifically 
rejected the proposition that the national court should consider and decide 
whether other possible motives for bringing that defendant into the 
proceedings should be taken into accoun t." 
He concluded that:  
"The whole approach of the ECJ seems to me to be consistent with the 
principle that the Judgments Regulation is only concerned with the basis for 
establishing jurisdiction and has nothing to do with assessing the merits of the 
claims  against the various defendants".  
62. Aikens LJ's statement at [109] that "a straightforward requirement" that the 
claimant must establish a "good arguable case" or "serious issue to be tried" 
against the non -domiciled defendant, is inconsistent with Freeport  plc v 
Arnoldsson  is problematic. So is his statement at [107] that the national court 
is precluded from considering whether a claim was brought with the sole 
object of ousting the jurisdiction of the court of the member state where that 
defendant is domic iled.  
63. The second statement appears to be inconsistent with Reisch Montage  at [32], 
which is set out at paragraph 41 above. The first statement overlooks the fact 
that in Freeport's case, the CJEU held that to determine the single question of 
whether there  is a risk of irreconcilable judgments, the court must "take 
account of all the necessary factors in the case file", which may require it to 
take into consideration also the legal bases of the actions brought before the 
court. Although the court declined t o answer the question whether the 
likelihood of success is relevant in the determination of whether there is a risk 
of irreconcilable judgments for the purposes of Article 6(1), it seems 
inconsistent to recognise that the national court must take account o f all the 
necessary factors in the case file, which may require it to take into 
consideration also the legal bases of the actions brought before the court, but 
then to say that the merits of the claims are necessarily irrelevant. Moreover, 
the fact that th e court declined to opine on whether likelihood of success is 
relevant puts into question Aikens LJ's statement that Freeport makes it plain 
that the Brussels Regulation is not only concerned with assessing the merits of 
the claims against the various defe ndants.  
64. There is no support in the decisions of the CJEU considered above for any 
relaxation of the principle that derogations from the rule conferring 
jurisdiction on a defendant's domicile must be restrictively interpreted. The 
analysis of the judgments  in those cases shows that in each the court was 
answering a limited question and the specific issue of the relevance of merits 
did not arise. There was, for the reasons discussed above, a particular reason 
for requiring "firm evidence" in Cartel Damage Cl aims . For the reasons given, 
we consider it is wrong to conclude that the CJEU jurisprudence precludes 
consideration of the substantive merits of the claims brought against an anchor 
defendant.  
65. Additionally, although there are three references in the judg ment in Aeroflot to 
the "anchor claim" and the "anchor forum", the focus of the key paragraphs on 
this issue is on the merits of the claim against the "non -domiciled defendant": 
see [107] and [109]. The reference in [107] to "the various defendants" does 
not indicate that Aikens LJ considered the specific position of an anchor 
defendant, let alone that he had it in mind to include such a defendant. All 
these factors mean that caution is needed before accepting the argument that, 
even though Aeroflot did not concern an anchor defendant, "the logic" 
underpinning Aikens LJ's judgment means that it should be applied to such a 
defendant.  
66. As to the "logic", we consider that there is a significant distinction between the 
anchor defendant and the foreign co -defendants. The claim against the anchor 
defendant is fundamental to establishing jurisdiction over claims against the 
foreign co -defendants in the jurisdiction in which the proceedings have been 
issued and away from the courts of the state(s) in which they ar e domiciled. If 
the claims against one or more foreign co -defendants fall away, there would 
be no effect upon the claim against the anchor defendant or the claims against 
other foreign co -defendants. In contrast, without a legitimate claim against the 
anchor defendant, there is no reason for the foreign co -defendants to be ousted 
from their jurisdiction of domicile. For the reasons given at paragraph 43 
above, in such a case, the risk of irreconcilable judgments is unlikely to arise. 
Accordingly, how can it  be expedient to determine a claim against an anchor 
defendant that is not seriously arguable together with a claim against a foreign 
co-defendant over whom there would be no jurisdiction under Article 6 apart 
from the link to the anchor defendant?  
67. If the re is a general requirement of evidence of abuse or fraudulent intention 
above and beyond evidence relevant to whether the claimant has "artificially 
fulfilled" the requirement of connection under Article 6(1) this would be very 
difficult to meet. Setting the threshold at requiring proof that the sole object of 
bringing the claim against the anchor defendant is to oust the co -defendants 
from the jurisdiction in which they are domiciled would make it far more 
difficult to ensure that claimants are not forum shopping. The purpose of the 
"sole object" exception is to ensure that Article 6(1) is not wrongfully 
invoked. We consider that it would be wrong to invoke Article 6(1) by 
bringing a claim against an anchor defendant which raises no serious issue to 
be tri ed because that would allow claimants to remove foreign defendants 
from the jurisdiction of the courts of the Member State in which they are 
domiciled, in a way deprecated by the CJEU.  
68. In our view, a claim against an anchor defendant that is hopeless or p resents 
no serious issue to be tried should fall within the "sole purpose" or "sole 
object" exception it identified in [32] of the judgment in Reisch Montage. This 
is particularly because taking jurisdiction is a derogation from the general rule 
which conf ers jurisdiction on the courts of the defendant's domicile, and such 
derogations must be restrictively interpreted. In bringing an unsustainable 
claim against an anchor defendant, it can be inferred that the purpose of 
making the claim is to remove the co -defendant(s) domiciled in other Member 
States from the jurisdiction of the courts of those states.  
69. It is important, and the CJEU is clearly concerned to ensure, that Article 6(1) 
is not misused. In our judgment, it would be a misuse of Article 6(1) to all ow 
hopeless claims to oust the jurisdiction of domicile of foreign co -defendants. 
To allow the claim to proceed in the present appeal would undermine the 
principle that a defendant may be sued only before the courts for the place 
where he is domiciled. It is said that the merit of an approach which eschews 
any examination of the merits of the claim absent evidence of abuse or 
fraudulent intention to artificially fulfil the requirement of connection under 
Article 6(1) is that it avoids the risk of irreconcil able judgments and protracted 
disputes about the substance of a claim at the jurisdiction stage. But it does so 
by a bright line binary rule which does not address the fact that derogations 
from the general principle that civil actions are to be bought aga inst 
defendants in the courts of the place where they are domiciled must be 
restrictively interpreted. It is open to question whether this is justified or 
whether this is the true import of the decisions of the CJEU which have not 
directly addressed the qu estion that is before us. It is also said that defendants 
may, subsequently, if they wish, attempt to strike out the claims. That, 
however, would simply shift to strike out and summary judgment applications 
what is said to be undesirable and impermissible in the context of jurisdiction.  
70. Finally, we turn to the argument that even if the claim against the anchor 
defendant is later struck out, this does not affect the jurisdiction that was 
established at the time when proceedings were instituted. In our view,  it is 
irrelevant that Article 6(1) applies at the time when proceedings were 
instituted (see Linuzs v Latmar Holdings Corp  [2013] EWCA Civ 4  at [30]). 
The ques tion is not whether or not the claim is or has been struck out 
procedurally. The emphasis is on whether there is a serious claim to be tried. 
The latter question can be assessed as at the date proceedings were instituted, 
even if the claim is only later st ruck out. The test proposed by the defendants, 
and applied by the English courts, does not depend on the strike out. A claim 
could be struck out for various reasons, including procedural bars which are 
unrelated to the merits of the appeal. The question he re is whether there is a 
serious issue to be tried against the anchor defendant.  
71. Mr Rabinowitz argued that "there is nothing artificial in bringing a claim 
which ultimately fails". That, however, is not the test applied by the English 
courts which the defendants submit should be applied here. It is certainly not 
artificial to bring a claim which ultimately fails, but it may be artificial to 
bring a claim which is hopeless, though not abusive.  
72. It follows that, for these reasons, had it been necessary to  decide the case on 
this point, we would have rejected Sana's submission that, for the purpose of 
establishing jurisdiction under Article 6(1) of the Brussels Regulation, there is 
no need to consider the merits of the claim against Wael as the anchor 
defen dant. Accordingly, on our view, issue 4 does not arise.  
The merits issues  
Issue 2: Does the share deprivation claim have a real prospect of success 
against Wael?  
Issue 3: Was Sana, having signed the 1995 and/or 1998 agreements, in any 
event precluded by contractual estoppel or its equivalent under Lebanese 
law from asserting an entitlement to such shares (if any) in CCG as 
Hassib may have owned at his death?  
73. The remainder of this judgment, from paragraphs 74 to 165 is the unanimous 
judgment of all members  of the constitution.  
74. On the basis of the majority's conclusion that it is necessary to demonstrate 
that the share deprivation claim does have a real prospect of success against 
Wael as the anchor defendant in order to establish jurisdiction against the n on-
anchor defendants under Article 6(1) of the Brussels Regulation and the 
Lugano Convention, various issues have to be resolved. Sana must show that 
there is a real prospect of establishing at trial that Hassib owned the 399,915 
shares in CCG at his death ; that Wael was aware of this and was therefore 
engaged in intentional wrongdoing in relation to the transfer of the shares to 
HH after Hassib's death; and that she is not estopped as a matter of Lebanese 
law from asserting a claim to the shares as a resul t of being party to the 1995 
and the 1998 agreements.  
75. When it was established in 1984, CCG adopted Articles of Incorporation ("the 
1984 Articles") which required any transfer of shares to be approved by a two -
thirds majority of its directors; for the rele vant share certificates to be replaced 
by the issue of new shares; and for the new shares to be registered in the 
company's share register. The material provisions of the 1984 Articles were as 
follows:  
"Article 9) – Form of Stocks  : 
A) All the shares of t he company are nominal shares.  
B) The shares are to be recorded on certificates to be cut from logbook papers 
bearing counterfeit protection, and the serial numbers and stamps of the 
company shall be placed on them, along with the signature of two members of 
the board of directors appointed for this purpose, one of whom shall be the 
chairman."  
Article 10) – Divestment from Stocks  :  
A) Any divestment from ownership of any stocks among living individuals in 
return for compensation or without compensation on the interests of natural or 
legal persons who are not shareholders in the company must be approved by 
the board of directors with a two thirds majority of its members. The same 
shall apply for any divestiture from the right of ownership or the right of usa ge 
of any shares. The Board of Directors is not obliged to provide a justification 
for its decision, which in this regard shall be final and non -contestable through 
any means.  
However this approval is not required when transferring the shares through 
inher itance.  
… 
C) The divestiture processes done in accordance with the law and these 
articles of incorporation shall take legal effect, and shall not be able to be used 
as evidence toward other parties, toward the shareholders, and toward the 
company, until af ter the original share certificates have been handed over to 
the company in order for them to be replaced by new shares to be issued by 
the company, and after they have been properly registered in the shareholders' 
registry with the company. This registry must contain the following 
information:  
o Certificate number  
o Numbers of the shares  
o The name of the shareholder, and his real or selected address where he 
can be reached at any time  
o The date of purchase of the shares  
The contents of this registry must always be kept in accordance with the actual 
situation, and be signed off by the chairman, as well as one of the members of 
the board of administration."  
Article 11) – Rights and Obligations of the Shareholders  :  
…  
No d ividing of the shares shall be accepted, nor shall the company recognize 
more than a single owner per single share. If a single share ends up being 
owned by several people through inheritance or other circumstances, these 
persons will have to appoint one p erson to represent them before the company. 
This latter person shall be considered the sole owner of the share towards the 
company.  
However, the shareholder shall have the right to divest from the right of 
ownership or the right of usage to shares, with th e divestiture document to 
specify the rights and obligations of the right of ownership and the right of 
usage holder. The document shall be conveyed to the issuing company and 
recorded in the registry of shareholders mentioned above.  
Article 13) – The Boar d of Directors and Duration of its Term  : 
A Board of Directors consisting of at least three members and at most twelve 
members to be elected by the regular general shareholders assembly from 
among the shareholders shall manage the affairs of the company. A mong them 
shall be at least two natural persons who are Lebanese citizens…"  
76. The 1984 Articles therefore prescribe the formalities necessary for the transfer 
of legal ownership of the shares but also recognise (in Article 11) the right of 
the registered sha reholder to hold the share for the benefit of others and to 
separate legal ownership from a usufruct of the shares subject to recording the 
arrangements in the share register. The 1984 Articles were replaced by new 
Articles of Incorporation ("the 1997 Arti cles") which contained materially 
identical provisions governing the transfer and registration of shares. Both sets 
of Articles also included arbitration provisions in relation to certain types of 
dispute between shareholders which we will come to when con sidering the 
appeal relating to the judge's refusal of a stay.  
77. Sana's claim that her father still owned 399,915 shares in CCG at his death as 
opposed to merely having retained a usufruct over those shares depends, as 
noted earlier, on the legal effect of the agreements between 1993 and 1998 and 
on whether the formalities prescribed by the articles of CCG had been 
complied with. The judge began her consideration of these issues by accepting 
the defendants' submission that the share deprivation claim was, as  she put it, 
profoundly unattractive given that Sana had in 1998 sold back to Hassib the 
entirety of her shareholding in CCG which necessarily included the shares she 
had received under the 1993 and 1995 share transfer agreements whose 
effectiveness she is  now seeking to impugn. The payment of the US$50m was, 
the judge held, received in return even if not strictly consideration for the sale.  
78. The judge said that the 1998 transfer agreement is relevant to the credibility of 
the share deprivation claim in the  sense that it is difficult for Sana to allege 
that the defendants were carrying out an unlawful conspiracy if all that they 
were doing was to give effect to the arrangements stemming from the 1993 
agreements. But that is to mischaracterise the claim. Sana  now accepts (even if 
she did not before) that the agreements made between 1993 and 1998 took 
effect according to their terms under Lebanese law. She disputes that the 
agreements took effect as sales of the shares rather than gifts, but her ultimate 
positi on is that the share transfer formalities prescribed by the Articles were 
not complied with so that, at his death, Hassib retained ownership of the 
shares (and any accretions to the holding) which he transferred to Sana and her 
brothers in 1993. It is comm on ground that until 1993 the ownership of CCG 
was split between Hassib and Said and that all the shares owned by Samir and 
Suheil (and before 1998 by Sana) were derived from the 1993 transfers.  
79. The share deprivation claim is based on an alleged conspirac y which post -
dates Hassib's death in 2010 and was given effect to by the transfer of the 
399,915 shares by Samir and Suheil to HH. It therefore focuses on the 
ownership of those shares as at Hassib's death and in particular on whether 
they had by then beco me the property of Sana's two brothers by virtue of the 
various share transfer agreements executed between 1993 and 1998. It is not 
alleged that these agreements were procured by deception or some other 
unlawful means. Sana's case is and has to be that tit le to the shares remained 
with Hassib at his death as confirmed by the entry in the Beirut Commercial 
Registry and that the defendants were aware of this when they contrived to 
transfer the 399,915 shares to HH in 2010. Knowledge of Hassib's continued 
owne rship of the shares is pleaded by reference to the fact that the request to 
the Commercial Registry for the names of the shareholders in CCG was made 
on 13 January 2010 (the day after Hassib's death) by CCG itself; that on 21 
April 2010 the Civil Magistrat e in Beirut (at Sana's request) made a 
declaration that Samir, Suheil and Sana were Hassib's legal heirs; and that in a 
subsequent tax filing by CCG made on 27 December 2011 Hassib was listed 
as the registered owner of the 399,915 shares as at 21 December 2010.  
80. Sana alleges that knowledge of Hassib's shareholding in CCG is to be imputed 
to the defendants (in the sense of it being inferred that they had actual 
knowledge of these facts) by reason of their control of CCG or the close co -
operation and relation ship between the Khoury and Sabbagh families in 
relation to the affairs of CCG. She also relies on the appointment of Wahbe on 
19 February 2010 by her and her brothers to act in the identification and 
gathering in of the assets of Hassib following his deat h. If, as alleged, the 
defendants knew that the 399,915 shares belonged to Hassib at his death and 
that she as one of his heirs was therefore entitled to a third of them, it must 
follow, she alleges, that their subsequent transfer to HH was unlawful. She 
was not informed of the proposed transfer or asked to consent to it and did not 
discover it had taken place until 2012.  
81. In relation to Hassib's continued ownership of the 399,915 shares, the first 
issue considered by the judge was whether the formalities p rescribed by 
Article 10 had been complied with in relation to the transfers of the shares. At 
the time of the 1993, 1995 and 1998 agreements, Hassib and Said were the 
directors of CCG. When Hassib entered into the 1993 agreements he had 
already (in March 1 992) transferred to Said his 50% interest in Consolidated 
Investment Company SARL ("CIC") which owned 60 shares in CCG. Until 
then Hassib and Said each held 199,970 shares in CCG so that the transfer to 
Said of the ownership of CIC gave him control of CCG,  although only 
indirectly via his interest in CIC.  
82. The 1993 Agreements (each in materially identical terms) gave Sana and her 
brothers bare ownership of the shares transferred whilst preserving a usufruct 
in favour of Hassib for his life. Although not rel evant to the issue of whether 
the necessary formalities for the completion of the transfers were complied 
with, it is convenient if we set out at this stage the material parts of those 
agreements using the agreement that was entered into by Sana:  
"AGREEME NT FOR THE TRANSFER OF BARE OWNERSHIP RIGHTS 
ON SHARES  
This Agreement is made by and between :  
Hasib … ("the First Party") and …  
Sana … ("the Second Party") …  
WHEREAS, the First Party is a shareholder in [CCG] ("the Company")  
….. 
WHEREAS, the First Party desires to sell to the Second Party, and the Second 
Party desires to purchase from the First Party, the bare ownership rights 
relating to some of the CCG Shares provided that the First Party shall retain 
the usufruct rights to such  shares during his lifetime.  
NOW, THEREFORE, it is agreed as follows:  
ARTICLE 1: The above preamble constitutes an integral part of this 
Agreement.  
ARTICLE 2:  
(a) The First Party hereby sells, assigns and transfers to the Second Party, who 
accepts such sal e, assignment and transfer, all of the First Party's right, title 
and interest, including ownership, in and to 20,000 … shares of the Company 
("the Transferred Shares"), subject only to the First Party's rights pursuant to 
Article 3 hereof, for a total pur chase price of US$1,333.333 …  
b) The First Party hereby acknowledges that he has received full payment of 
the purchase price from the Second Party and that the purchase price 
constitutes consideration for future transfers of shares from the First Party to 
the Second Party pursuant to this Article.  
..… 
ARTICLE 3:  
The First Party shall retain during his lifetime the usufruct rights to … the 
Transferred Shares and to any other shares conveyed to the Second Party 
hereunder. After the unfortunate passing away o f the First Party, the usufruct 
rights retained hereunder by the First Party shall automatically and without 
limitation whatsoever be transferred to the Second Party.  
ARTICLE 4:  
As per Article 11 of the Articles of Association of the Company whereby a 
shareholder may sell the usufruct right or the bare ownership right on part or 
all of the shares in the Company …. the Parties agree that after the unfortunate 
passing away of the First Party, the Second Party shall be the full, sole, legal 
and beneficial own er of the Transferred Shares and to any other shares 
conveyed to the Second Party hereunder, including all rights and obligations 
attaching thereto. During the lifetime of the First Party, such rights and 
obligations shall be determined as follows:  
(a) The  First Party … shall be exclusively entitled to attend all ordinary and 
extraordinary general meetings and to vote thereat on all resolutions and on all 
items of the agenda thereof…;  
(b) The First Party shall be exclusively entitled to receive all dividend s 
approved for distribution by the General Meetings in proportion to the First 
Party's usufruct right or full ownership of the shares of the Company;  
(c) Preemptive rights and the rights to purchase shares offered for sale by a 
shareholder of the Company… attaching to the Transferred Shares and other 
shares of the Company covered hereby shall belong to, and be exercisable by 
the Second Party.  
..… 
ARTICLE 5:  
The First Party hereby represents, warrants and agrees with the Second Party 
that (a) all shares tra nsferred or to be transferred to the Second Party 
hereunder … have been (or as the case may be, shall be) sold or transferred to 
the Second Party free and clear of all liens, claims and encumbrances … and 
(b) the First Party shall not sell, assign or encum ber his usufruct rights 
hereunder in any manner without the written consent of the Second Party.  
..… 
ARTICLE 7:  
Any dispute, controversy or question of interpretation arising under, out of, or 
in connection with this Agreement, or any breach or default her eunder shall be 
submitted to, and determined and settled by, arbitration in accordance with the 
following procedures.  
..… 
(c) The parties agree that Article XLV of the Articles of Incorporation of the 
Company shall not apply to any dispute hereunder and ex pressly waive 
application of such Article. The parties acknowledge that any dispute or 
controversy arising hereunder is outside the scope of the disputes 
contemplated or covered by Article XLV.  
ARTICLE 8:  
This Agreement embodies the entire agreement and understanding between 
the parties hereto with respect to the Transferred Shares, and supersedes all 
prior agreements and understandings with respect thereto…."  
83. Each of the 1993 Agreements was signed by the contracting parties and 
initialled on each page. T hey were also signed by Said. The 1995 agreements 
(all of which involved the transfer of the bare ownership of shares to Sana by 
Hassib, Samir and Suheil) were in a similar form and were also signed by Said 
as well as being executed by the contracting part ies. The evidence also 
includes an undated declaration by Hassib as follows:  
"... The sale and transfer of the bare ownership right of [CCG] o[f] 14997 
shares by my son Suheil Sabbagh and o[f] 14996 shares by my son Samir 
Sabbagh in favour of my daughter Sana Sabbagh were executed, done and 
implemented upon my direct instructions. Further, Mr  Said T. Khoury's 
approval thereon and Mr Said T. Khoury's signature on the sale deeds 
evidencing such sale and transfer on behalf of [CCG] in his capacity as 
Presiden t of [CCG] were executed, undertaken and achieved upon my 
recommendation, request and perseverance even though Mr Said. T. Khoury 
personally did not approve such sale and transfer."  
84. The 1998 agreements under which Sana (on 9 April) transferred her bare 
ownership of 100,000 shares to Hassib and Hassib (on 14 April) transferred 
bare ownership of the same shares to CIC for US$10m were also signed by 
Said. In the Preamble to the 9 April agreement Sana acknowledges that she 
owns the bare ownership of the 100,000  shares referred to and declares (in 
Article 5) that " the shares sold by virtue of this agreement are free and not 
encumbered by any encumbrance or pledge or seizure or any other right and 
she had already delivered the original share certificate to the Sec ond Party ". 
The 1998 agreements are not directly relevant to the issue of whether Hassib 
continued to own the 399,915 shares at his death because the claim relates to 
the shares acquired by Samir and Suheil under the 1993 agreements which 
they proceeded to  transfer to HH after Hassib's death. The terms of the 1998 
agreements are, however, relied on by the defendants for their case that Sana 
is estopped from now seeking to deny the effectiveness of the 1993 transfers 
to Samir and Suheil out of which Sana acq uired part of the holding of 100,000 
shares which she agreed to transfer to Hassib in 1998. The judge also treated 
them as having some evidential relevance to whether the 1993 transfers were 
legally effective.  
85. The judge regarded the signature by both Hass ib and Said of the 1993 -1998 
agreements as evidence that the transfers were approved by the board of 
directors of CCG with a two -thirds majority of its members as required under 
Article 10A of the 1984 Articles. She noted that there was no primary 
evidence  of board approval (in the form of minutes) or of the re -issue of the 
shares in accordance with Article 10C apart from the reference to specific 
share numbers in the 1998 agreements. (We interpose that board minutes 
approving various share transfers have n ow been disclosed, a point which we 
deal with below.) But she accepted the evidence of Mr Ahmad Ladiki, the 
Secretary of CCG, that he was satisfied that the transfers had been properly 
effected in accordance with Lebanese law and the company's Articles of 
Incorporation.  
86. Mr Ladiki's involvement with the CCC group began only in 2005 when he was 
a legal counsel working in the corporate secretarial department of CCG. He 
was appointed company secretary in 2013. In his first witness statement Mr 
Ladiki explains how details of each shareholder's shareholdings are recorded 
on pages of the register dedicated to that shareholder and that the register 
records both full ownership of the shares and bare ownership or a usufruct 
where applicable. Each entry is signed by t he Chairman of CCG and a director 
and then stamped with the corporate seal. Some pages extracted from the 
register are exhibited to the witness statement.  
87. In [18] -[27] of his witness statement Mr Ladiki sets out the details of the 
shares transferred under  the various agreements which we summarised earlier. 
He makes the point (which is not in dispute) that if the agreements took effect 
as transfers which were then completed in accordance with the formalities 
stipulated by the articles, Hassib held only a us ufruct in respect of the 399,915 
shares at his death in 2010. He says that the Commercial Registry in Beirut 
operates to provide information in the form of a certificate the purpose of 
which is to verify the identity of the persons who are properly authori sed to act 
on behalf of a particular company. The information is publicly available on 
request on payment of a fee and CCG and other companies will routinely 
obtain certificates relating to themselves for use in their commercial dealings.  
88. The request by C CG of 13 January 2010 which is relied on to support the 
share deprivation claim was made, according to Mr Ladiki, in connection with 
the opening of two new bank accounts. The timing in relation to Hassib's 
death was coincidental. The information contained in the certificate from the 
Registry was, Mr Ladiki says, based on an attendance sheet of 30 May 2009 
and refers to the usufruct in the 399,915 shares to which Hassib was entitled 
up to his death.  
89. The other piece of evidence which Mr Ladiki deals with is the tax filing by 
CCG which is relied on by Sana in the particulars of claim in support of the 
allegation that the defendants knew that Hassib was the registered owner of 
the 399,915 shares as at 21 December 2010: see paragraph 79 above. Mr 
Ladiki exhibits  a copy of the filing (which is dated 27 December 2011, not 
2012) which covers the period from 1 January to 31 December 2010. The 
filing is, he says, clearly incorrect insofar as it suggests that Hassib continued 
to own the 399,915 shares in CCG for the wh ole of 2010. This was corrected 
in the filing for the following year. He repeats that the reference to the 399,915 
shares was in any event a reference to Hassib's usufruct in those shares. In his 
third witness statement Mr Ladiki returns to the tax filing for 2010 to confirm 
that the return was intended to state the position as at the end of 2010 and so 
was clearly inaccurate in stating that Hassib's usufruct rights were still in 
existence. This was, he said, an error on the part of the employee who 
compile d the return.  
90. The judge attached no real significance to either the certificate from the 
Commercial Registry or the 2010 tax filing. She accepted Mr Ladiki's 
evidence that the report of 16 January 2010 merely confirmed the position as 
at 30 May 2009 and m ust be interpreted as referring to Hassib's usufruct in 
relation to the 399,915 shares which subsisted until his death. It did not, she 
held, establish that Hassib held any shares in CCG as at 16 January 2010. She 
also accepted Mr Ladiki's suggestion that the tax filing must have been 
compiled in error insofar as it related to any period after 12 January 2010 but 
that even as of that date the reference to Hassib holding shares in CCG was 
accurate if interpreted as referring to his usufruct. The position was , she said, 
corrected in the return filed for the following year which did not show Hassib 
as a shareholder. What the judge did not have were copies of the returns for 
the previous two years which we allowed to be adduced in evidence for the 
purpose of the  appeal. These are in the same form as the return for 2010 and 
on their face refer to Hassib as the holder of the 399,915 shares. The claimant 
made the obvious forensic point that what might have been an error in one 
year is less likely to be an error if r epeated over a period of three years. On the 
other hand, if the maker of the return drew no distinction for tax purposes 
between the holder of the shares and a usufructary (both were entitled to the 
dividends) then the repetition of the entry over three ye ars may not add very 
much.  
91. Carr J concluded that there was no more than a purely speculative case that the 
necessary board approval and re -issue of the shares did not take place. The 
general impression to be gleaned from the available documentation was, s he 
said, that the parties intended to comply with the requisite formalities. Said 
and Hassib signed each of the transfer agreements; the 1998 agreements refer 
to specific share numbers which are indicative of the new share certificates 
being issued followi ng the 1993 and 1995 transfers; and the 1998 agreement 
between Sana and Hassib expressly records in Article 7 that:  
"Both parties declare that they have obtained the agreement of the Board of 
Directors of the issuer company according to the principles pro vided for in 
Article 10 of the Articles of Incorporation and therefore they have agreed to 
notify the issuer company, a copy of this agreement to be registered in the 
register of shareholders and consequently to transfer the bare ownership of the 
sold shar es in the name of the Second Party."  
92. On the issue of whether the transfers had been recorded in the share register, 
the judge only had Mr Ladiki's evidence to go on. Mr Noureddin, who was 
CCG's company secretary in 1993, did not give evidence. The judge sa id that 
all of the transfers involving Hassib or Sana appeared to have been recorded 
on their pages in the share register and that there was no reason to disbelieve 
Mr Ladiki's evidence about the authenticity of the register. A challenge by 
Sana to the aut henticity of the entries on her own pages was described by the 
judge as preposterous given the terms of the 1998 agreement and her 
acceptance that they and the 1993 and 1995 agreements were valid and 
effective. There was also the difficulty that the allege dly false entries on 
Hassib's pages corresponded to those on her genuine pages.  
93. As to Sana's complaint that the original pages of the register had not been 
produced for her inspection in London, the judge said:  
"… the entire original register has been offered to Sana's English or Lebanese 
advisers for inspection in Beirut, where the register is, in Arabic. Such offer 
was made in March 2014 and repeated in June 2014. Sana could readily have 
instructed her Lebanese  lawyers or other experts (as she did in 2012) to 
inspect in Beirut, which might be thought to be the most effective and reliable 
method of inspection in any event. No explanation was advanced as to why 
such inspection has not taken place, save that Sana w ished to have her London 
advisers carry out the inspection in London. Mention is also made for Sana 
that the register pages for Suheil and Samir have not been made available. But 
this is because they had not been requested by Sana. Nor is there any reason to 
think that they would be at odds with the pages for Hassib and Sana. And, as 
already indicated, the entire original register has been offered for inspection. 
There is the additional forensic point that, given the sequential nature of the 
entries on the register and the lack of challenge to the transfers in 1995 and 
1998, the forgerer would have had to have the foresight to leave a perfect gap 
for the 1993 transfers when making the entries for 1995 and 1998 - an 
implausible scenario. I do not consider the re to be a real prospect of successful 
challenge to the authenticity of CCG's share register."  
94. In considering whether the claimant has established a real prospect of success 
in relation to the share deprivation claim, the judge cautioned herself at the 
outset against conducting some form of mini -trial on the merits of the claim. 
The principles are not in dispute. The purpose of the real prospect test is to 
exclude summarily cases that are fanciful or bound to fail: not to conduct an 
abbreviated form of tria l on the basis of incomplete evidence: see Standard 
Bank plc v Via Mat International Ltd  [2013] EWCA Civ 490  per Moore -Bick 
LJ at [17].  
95. Mr Wardell QC for San a submitted that the judge's starting point was wrong. 
She was in no position to assess the attractiveness or otherwise of the claim 
without a trial and her view that the claim was unattractive was based upon a 
false assumption that the alleged conspiracy necessarily involved treating the 
taking of steps contemplated by the 1993 and subsequent agreements as steps 
in the conspiracy. Sana's evidence was that she believes Hassib had never 
intended to give outright ownership of the shares transferred under the 1993 
agreements to Samir and Suheil. She contends that the transfers were 
purposefully not registered by Hassib prior to his stroke because he had made 
no final decision about the eventual disposal of his shares. Subsequent changes 
in the value of his asse ts would also have necessitated adjustments to ensure 
that each of his three children obtained equal shares in his estate. In short, the 
non-registration of the transfers was deliberate. Mr Wardell also challenges 
the judge's treatment of the payment of US $50m as related to her 1998 transfer 
of her shares back to her father. The payment, he says, was made to resolve a 
separate dispute about the articles of association of CCG: not as consideration 
for the sale of her shares.  
96. More particularly, in relation t o the question whether Hassib retained 
ownership of the 399,915 shares at his death, Mr Wardell emphasises that the 
judge had little or no direct evidence as to whether the requirements for board 
approval, the re -issue of the shares and the registration of  the transfers had 
been complied with. Mr Ladiki's involvement with CCG post -dates the 
relevant events and the judge was left to rely on statements in the 1998 
agreements that board approval had been given to those transfers as 
confirmation that it had bee n given to the earlier transfer in 1993.  
97. Mr Wardell submits that Mr Ladiki's professed belief that the entries in the 
share register were authentic was not a sound or adequate basis for a 
determination of that issue on a summary basis. As an existing empl oyee of 
CCG, he is not an independent witness and no board minutes, for example, 
were initially produced to substantiate board approval of the 1993 transfers. 
The judge felt able to overcome this difficulty, in part, by relying on evidence 
from one of the defendants' Lebanese lawyers, Mr Abirached, that there was 
compliance with the requirement for board approval under Article 10 if all 
those entitled to attend and vote at the board meeting had approved the 
transfer. But even if this is correct as a matter of Lebanese law, the factual 
question of whether such consent was actually given remains. Although Said 
signed the various agreements, there is no reference in the agreements, says 
Mr Wardell, to consent being given by CIC and the evidence is that the 
shareholders in CIC included not only Said but also Toufic and Samer. No -one 
suggests that they were ever consulted. Finally, whilst board minutes 
approving various share transfers, including the 1993 and 1995 agreements, 
have now been disclosed, the claimant challenged the authenticity of those 
minutes.  
98. Similar points are made about the re -issue of the shares. The defendants 
produced no direct evidence that new share certificates had been issued in 
respect of the 1993 transfers. Again the judge relied on Mr L adiki's opinion 
that the necessary steps had been taken or could be presumed. Part of the 
defendants' case on this issue was based on a pledge of shares by Suheil in 
1998 to Arab Bank (Switzerland) Limited which the judge refers to in [116] of 
her judgment . There is a letter from the bank to Suheil dated 6 April 1998 
which refers to the receipt of share certificates numbers 198 to 200152. Mr 
Wardell says that Sana was not given a proper opportunity to deal with this 
evidence which was relied on by the defen dants only in reply before Carr J but 
that the documents produced are in fact inconsistent with each other. In one 
letter dated 3 April 1998 Mr Noureddin refers to Suheil having pledged 
199,955 of his shares in CCG but in a letter from the bank to Suheil o f 6 April 
refers to the share certificates mentioned above being credited to his account. 
The share register extract produced by the defendants also refers to bare 
ownership of shares nos. 150,083 to 240,062 having been transferred in 1993 
to Samir rather than to Suheil. The judge, to be fair, seems to have placed very 
little weight on these documents but the inconsistencies, says Mr  Wardell, 
make them inherently unreliable as the basis for any finding that new 
certificates had been issued.  
99. Sana challenges  the authenticity of the relevant entries in the share register. It 
is common ground that this formality has to be complied with and cannot be 
satisfied simply by demonstrating the consent of all interested parties as in the 
case of board approval. Mr  Ward ell submits that there is a real prospect of 
showing that the entry in relation to the transfers dated 18 August 1993 is not 
genuine and that it was made after Hassib's death. As mentioned earlier, the 
judge effectively discounted the evidence of the entry  in the Commercial 
Registry as probative of the ownership of the 399,915 shares by Hassib at the 
time of his death treating it instead as consistent with his continued enjoyment 
of a usufruct. But Mr Wardell contends that this conclusion was not open to 
the judge at an interlocutory stage and that the Commercial Registry 
information was important evidence which tended to suggest that the entries in 
the share register had been falsified. He points to the fact that the Registry 
certificate of the entry was pr oduced in response to a request from 
Mr Noureddin for details of the "names of the shareholders with their shares" 
and that there was nothing in the request to limit it to details of usufruct 
interests. The certificate produced refers in terms to CCG havin g a share 
capital of US$100m "divided into one million shares of 100 USD each 
distributed according to the attendance sheet added to the General Assembly 
held on 30 May 2009 as follows: Hassib Sabbagh 399,915 shares …". The 
same point can be made in relati on to the attendance sheet which records 
Hassib's entry in the column headed "Number of Shares".  
100. Mr Wardell also refers to other material which he says casts doubt on 
the reliability of the share register. Hassib's page in the register for 20 May 
1998 ref ers incorrectly to the transfer of a usufruct rather than the bare 
ownership of the shares. The register also refers to the transfer to Sana in 1995 
of numbered shares which appear to belong to Said rather than Hassib. More 
generally, the judge was wrong, he says, to have criticised Sana's advisors for 
not travelling to CCG's offices in Beirut to inspect the register. There was 
evidence of the security risks involved which made the requirement to inspect 
the register in loco unacceptable. It was open to the  defendants to bring the 
register to London for inspection and expert examination but they chose not to 
do so.  
101. Of more direct relevance to the claim that relevant entries may have 
been forged is the evidence before the judge that cast into doubt the 
authe nticity of other documents. The judge herself noted that in relation to a 
2004 power of attorney purportedly signed by Hassib after his stroke there 
were concerns about the circumstances surrounding its execution. There is 
also a serious issue about the ag reement under which Samir and Suheil 
transferred their shares to HH. The document is dated 16 July 2006. But this is 
inconsistent with the 2011 tax filing referred to earlier which refers to Hassib 
owing 399,915 shares in 2010. The defendants have changed their position on 
when the 399,915 shares were transferred to HH. The original position of the 
defendants in 2013 was that the brothers retained bare ownership of the shares 
up to Hassib's death and that the shares were transferred to HH in July 2010. 
But in response to a request for information in 2014 their solicitors stated on 
instructions that HH had obtained bare ownership of the shares in 2006. The 
defendants' position is that the original information was erroneous but the 
judge dismissed the discrepa ncy as irrelevant to the share deprivation claim 
because Hassib was not a party to the 2006 agreement and received no shares 
under it. Mr Wardell says that this misses the point. If there is at least an 
arguable case that the 2006 agreement was backdated i n 2010 to before 
Hassib's death this demonstrates a propensity on the part of the defendants to 
manipulate documents for their own purposes and supports Sana's case that the 
share entries in the register may similarly have been falsified. We were also 
referred to the minutes of a meeting of the board of CCIC held on 25 October 
2002 which Hassib is recorded as having attended. The meeting took place at 
the company's offices. Mr Wardell submitted that this was after Hassib's 
stroke and that it was most unlike ly that he would have been able to attend. 
There is also a power of attorney which purports to have been executed and 
then registered by Hassib before a notary at the Jordanian Embassy in Athens. 
Mr Wardell submits that Hassib could not have travelled to A thens in 2004 
given his state of health and that both these documents carry with them a 
strong suspicion that the details they purport to record were false. If so, this 
supports Sana's case that the defendants have a propensity to produce false 
minutes and  other documents when it suits them.  
102. For these reasons, Sana contends that she does have a realistic claim to 
challenge the authenticity of the share register and that the judge was wrong to 
attempt to resolve the issues on the documents against her on a summary basis. 
To establish liability on the part of Wael, she of course needs to show that he 
had the requisite knowledge that Hassib had retained ownership of the 399,915 
shares as at his death. The pleaded claim relies on all of the defendants having 
become aware of the situation at or shortly after Hassib's death on 12 January 
2010. In part this is based on the timing of the request to the Beirut 
Commercial Registry by CCG which was made on 13 January. The judge said 
that this was hopeless because the r equest was prompted by the opening of the 
two bank accounts referred to in Mr Ladiki's evidence and its proximity to 
Hassib's death was therefore fortuitous. The claimant's reliance more generally 
on Wael's connection with the other defendants through CCG and what is 
referred to in the judgment as the Masri litigation provided no basis, she said, 
for inferring knowledge on the part of Wael of Hassib's ownership of the 
shares.  
103. Mr Wardell's response to this is that the judge approached this question 
too narr owly. What the judge should have asked herself, he says, was whether 
Wael is likely to have been informed once the problem of non -registration had 
been discovered. The records show that he had been a member of the board of 
CCG in 2002 and subsequent years and had attended shareholders meetings in 
2010. The overwhelming likelihood is that he would have been informed of 
the position and become involved in the steps taken to deal with the transfer 
and registration of the shares in the name of HH.  
104. Although ref erred to as the tort of conspiracy in these proceedings, 
Wael and the other defendants are being sued for what under Lebanese law or 
Greek law amounts to intentional wrongdoing. Sana must establish that Wael 
and the others were aware that the requisite cor porate formalities (including 
registration of the shares in the names of Samir and Suheil) had not been 
completed and that steps were taken by them to back -date the requisite entries 
in the share register. This is of course an allegation of dishonesty but 
Mr Wardell does not shrink from that. He says that a significant failing by the 
judge was not to import into her consideration of these issues the conclusions 
which she had reached in relation to the asset misappropriation claim. The 
defendants had concede d that there were triable issues on Hassib's capacity 
following his stroke to authorise the transactions complained of and as to the 
use of a power of attorney to carry out the transactions. But they continued to 
dispute the merits of the claim on the basi s that knowledge of and involvement 
in the alleged misappropriations of Hassib's property could not be attributed to 
Wael. The judge held that there was a real issue to be tried that Wael was 
complicit in the alleged wrongdoing.  
105. The judge said that her conclusions about Wael's knowledge in relation 
to the asset misappropriation claim and those in relation to the share 
deprivation claim were not inconsistent because the nature of the alleged 
wrongdoing in each case was different. T he impropriety in the impugned 
transactions would have been apparent to Wael whereas the failure by Hassib 
and others to complete the formalities for the transfer of the shares was not. 
Mr Wardell submits that this misses the point. Wael's involvement with  the 
defendants and the affairs of CCG means that there was an equal likelihood 
that once the fact of non -registration had been discovered, with its 
consequences for Samir and Suheil, these matters would have been brought to 
his attention. His arguable wil lingness to endorse the misappropriation of 
Hassib's own property is a strong indicator that he would have had no 
difficulty in accepting or participating in the retrospective alteration of the 
share register in order to defeat Sana's claim. The imputation  of such conduct 
to Wael cannot be excluded in the light of all the other material.  
106. Mr Hunter QC provided us with a detailed riposte to a number of these 
arguments. He emphasised that Sana does not dispute the validity of the 1993 -
1998 agreements and that  the transfers of shares with which we are concerned 
were all provided for under those agreements. In particular, her concession 
that the agreements in 1995 and 1998 were valid and effective necessarily 
involved an acceptance that by 1995 Samir and Suheil were the owners of the 
shares acquired under the 1993 agreements. The 1995 agreements contained 
recitals which confirmed in terms that the transferor "now owns" the shares to 
be transferred to Sana. Mr Hunter accepts that Sana might in signing the 
agreemen ts have assumed that the necessary formalities were complied with. 
But Samir and Suheil would have known what the true position was because 
they were required to sign the relevant pages of the share register. As the 
judge observed, the 1998 agreements give  the numbers of the shares to be 
transferred which indicate that the formalities must have been complied with. 
They correspond to the numbers on the share registers and many of the shares 
transferred by Sana to her father were derived from the shares previ ously held 
by her brothers after the 1993 agreements. Sana, Mr Hunter says, has always 
made clear that the only agreements she challenges for non -compliance with 
the requisite formalities are those in favour of her brothers. But the shares she 
transferred to Hassib allegedly in return for the US$50m were originally part 
of those holdings. (We should interpose that, leaving aside whether the 
position had previously been obscure, on appeal Mr Wardell was clear that 
Sana's submission was that the formalities w ere also unfulfilled in relation to 
the 1993 agreement with her and that all the share entries were inauthentic.)  
107. In relation to the share register, Mr Hunter says that all of the 1993 to 
1998 transfers are recorded in the register and that Hassib and San a's pages 
have been produced. The entries are signed by Hassib and Said and are 
stamped. Inspection of the entire register was offered in Beirut. There is, he 
says, no expressly pleaded allegation of forgery although that claim is made in 
one of the witnes s statements and at the hearing before the judge Lord 
Grabiner QC (for Sana) said that the authenticity of the register is disputed. 
But if Sana's page is accurate and effective then so is Hassib's which has 
corresponding entries. Put simply, there is no b asis, says Mr Hunter, for 
suggesting that the whole of the register has been re -created which is what the 
judge would had have to find in order to meet the point made by her in [120] 
of her judgment that given the sequential nature of the entries and the l ack of 
any challenge to the transfers in 1993 -1998 a person intending to forge only 
the 1993 entries would have had to have left a gap when making the 
subsequent entries. Inaccuracies in board minutes and other documents are not 
sufficient in themselves to  prove the alleged conspiracy.  
108. Despite the force and attractiveness of these submissions, we remain of 
the view that the judge did conduct a mini -trial in respect of the allegations of 
non-compliance with the corporate formalities in respect of the 1993 s hare 
transfers and in respect of the allegations of forgery and knowledge which 
form a necessary part of the claim against the anchor defendant. Although the 
claim may not, on the material currently available, appear to be a strong one, 
the judge was in ou r view over -ambitious in attempting to resolve these issues 
simply as questions of fact having found that there were triable issues both in 
respect of whether the 1993 agreements took effect as gifts as opposed to sales 
and in relation to the issue of whet her Sana is estopped by the 1998 agreement 
from challenging her brothers' (and therefore HH's) title to the shares.  
109. The claims that the formalities of board approval, the issue of new 
shares and registration were not completed in respect of the 1993 trans fers are 
not precluded factually by the form and contents of the later agreements. Nor 
are they excluded by Sana's concession that the agreements were valid and 
effective according to their terms. If arguably gifts the agreements were not 
effective to tran sfer title unless the requisite formalities had been completed 
by Hassib's death. The bulk of the shares were unaffected by the 1995 and 
1998 agreements. We are concerned with the shares which Hassib transferred 
to his sons under the 1993 agreements and th e transfer of title depends upon an 
examination of the share register and the other original documentation full 
disclosure of which has yet to occur. The judge relied upon the evidence of Mr 
Ladiki to fill many of these admitted gaps but that is not in our  view a 
satisfactory basis for the determination and striking out of the share 
deprivation claim on a summary basis.  
110. We accept that forensic points can be made: on one view, the later 
share transfer agreements only make sense if the earlier agreements wer e fully 
performed (for example, if Sana is correct that Hassib deliberately retained 
ownership of the shares throughout, there was simply no need for the 1998 
agreement to transfer those same shares 'back' to Hassib); the fact that the 
1995 agreements cont ain share numbers in respect of shares derived from the 
brothers' original 1993 holdings; and that the entries in the Beirut Commercial 
Register is at best secondary evidence about the true state of the share register. 
But these points require in our view to be resolved at trial or at the very least 
after full disclosure and inspection and are simply not suitable for the detailed 
forensic examination to which the judge submitted them on an interlocutory 
application.  
111. We consider that the specific issue abou t Wael's knowledge is, if 
anything, even more obviously a triable issue in the light of the judge's 
findings about his arguable participation in the misappropriation of Hassib's 
property during his lifetime. Although the share deprivation claim arises in 
respect of a later period in time, it seems to us that there is a real prospect 
(based on the judge's earlier findings) of establishing that if the shares had not 
yet been registered in the brothers' names by the time of Hassib's death this 
would have come to Wael's attention given his close involvement in the affairs 
of CCG and that he may well have been prepared to support the brothers' 
efforts to secure what they regarded as their own even if that involved being 
complicit in a falsification of the registe r and possibly other documents. We 
make it clear that we are not making any such findings. But the judge was 
wrong to treat the allegation as unarguable.  
112. In these circumstances we consider that there is a real prospect of 
establishing the share deprivatio n claim against Wael as the anchor defendant 
if this is required in order to exercise jurisdiction under Article 6(1). We do 
not propose to deal at any length with the two issues which the judge decided 
in the claimant's favour (whether the 1993 agreements  arguably took effect as 
gifts and whether Sana is estopped by virtue of the 1995 and/or 1998 
agreement) because we consider that the judge was right for the reasons which 
she gave to find that neither was capable of determination on a summary basis.  
113. The first of these issues requires the Court to consider Sana's argument 
that, although expressed in terms as sales agreements, the 1993 agreements 
operated as gifts and ceased to have effect on Hassib's death. This is a question 
of Lebanese law and the judge had evidence from a Lebanese expert 
(Professor Bacache) that in Lebanon contracts between father and son are 
presumed to be gifts unless the contrary is proved and cease to have effect on 
the donor's death. The defendants have provided expert evidence to t he 
contrary including evidence from a Professor Najm that the re -characterisation 
of a sale agreement as a gift depends upon an order being made by the court 
and that no application for such an order has yet been made. The judge was 
attracted by this point  but considered that it was at least arguable that an 
application for re -characterisation could still be made. We can see nothing 
wrong in her treatment of that as a triable issue.  
114. The estoppel argument is only effective to bind Sana against the other 
parties to the relevant agreement relied on. Since the share deprivation claim is 
principally directed at the position of her brothers, the focus of the argument 
has to be on the acknowledgments of title in the 1995 agreements. The point 
was raised in the def endants' opening submissions to the judge and she 
decided that it was not appropriate to hear argument on the point in 
circumstances where Sana had not had the opportunity of adducing expert 
evidence on Lebanese law to meet the point.  
115. Mr Hunter has submit ted that the position would be clear under 
English law and that, in the absence of evidence to the contrary, the Court 
should assume that the position would be the same under Lebanese law. The 
judge declined to take this course and there has been no applic ation by the 
defendants to adduce any additional expert evidence for the purposes of the 
appeal. Instead Mr Hunter referred us to the same material served in the 
Lebanese arbitration which touches on this issue. But in our view this is not a 
satisfactory w ay of deciding a point of foreign law. We consider that the judge 
made a case management decision which was not wrong in principle and that 
there is no basis on which we can properly interfere with her refusal to 
entertain this argument in support of the d efendants' application. It is not 
therefore necessary to deal with Mr Wardell's other argument that the 1995 
agreements on their true construction do not contain an acknowledgement of 
title sufficient to raise the alleged estoppel.  
116. It follows that for the  purposes of Article 6(1) Sana does in our view 
have a real prospect of establishing the share deprivation claim against Wael 
as the anchor defendant. Accordingly, issue 4 does not arise for determination.  
The arbitration issues  
Issue 6: was the judge right to hold that the asset misappropriation claim 
was not based on CCG's articles of association so that neither Sana (nor, 
if he were still alive, Hassib) would be bound to submit the claim to 
arbitration under Article 45 in relat ion to the asset misappropriation 
claim?  
Issue 7: whether the share deprivation claim should also be stayed for 
arbitration under Article 45 or, in the alternative, under the 1993 
Agreements.  
The submissions of the parties  
117. As we have said, the defendants s ubmitted that both the asset 
misappropriation claim and (if we found it to be arguable) the share 
deprivation claim must be stayed for arbitration. On appeal we were concerned 
only with the question of whether a mandatory stay must be granted in respect 
of all or part of the two claims, under section 9 of the Arbitration Act 1996. It 
was agreed that any question of a discretionary stay over the balance of any 
issues which were not mandatorily stayed would be remitted to the 
Commercial Court.  
118. The basis for the defendants' submission that the asset 
misappropriation claim, or key parts thereof, had to be stayed was Article 45 
of CCG's articles of association. Strictly there are two different versions of this 
arbitration clause, under the 1984 and 1997 articles  of association. However, 
they are substantially identical and it is sufficient to quote only the former:  
"Disputes  
Every dispute arising during the course of the existence of the company or 
during its liquidation, whether between shareholders themselves  or between 
shareholders and the company itself, shall be solved through mediation or else 
through arbitration according to the regulation put in place by the First Board 
of Directors [for this purpose], provided that the general shareholders 
assembly has approved it.  
Disputes are divided into two kinds:  
A) Individual disputes in which the aggrieved party has the right to file a claim 
according to the directives of Article 166 of the Trade Act against the 
company, and which the shareholders are not permit ted to halt through the 
balloting process via the general shareholders assembly for the purpose of 
releasing from responsibility the members of the Board of Directors  
B) Disputes involving the general interests of the company; these cannot be 
directed aga inst the Board of Directors or against one of its members except in 
the name of and on behalf of a group of shareholders, and in accordance with a 
decision from the regular general shareholders assembly."  
119. In relation to the share deprivation claim, the def endants argued that it 
must (at least in large part) be stayed under Article 45 or, alternatively, under 
Article 7 of the 1993 Agreements, which provided:  
"Any dispute, controversy or question of interpretation arising under, out of, 
or in connection with  this Agreement, or any breach or default hereunder shall 
be submitted to, and determined and settled by, arbitration in accordance with 
the following procedures".  
120. It is therefore convenient to consider in turn the potential application 
of:  
i) Article 45 to the asset misappropriation claim;  
ii) Article 45 to the share deprivation claim; and  
iii) the 1993 Agreements to the share deprivation claim.  
121. Each of these possible instances of a mandatory stay give rise to two 
questions: first, is Sana bound by the ar bitration clause under Lebanese law; 
and, second, is the claim within the scope of that clause? Both Mr Edey QC, 
on behalf of the defendants, and Mr Rabinowitz, for the claimant, approached 
the matter on this basis, as indeed had the judge at [233].  
Artic le 45: asset misappropriation claim  
122. It was common ground that the only way by which the claimant could 
be bound by Article 45, in relation to the asset misappropriation claim, was in 
her capacity as Hassib's heir. Sana was not, and nor did she claim an 
entitlement to have been, a shareholder in CCG at any time relevant to this 
claim.  
123. Moreover, as the judge recorded at [246] -[248], the parties' experts on 
Lebanese law were in effect agreed that Sana would only be bo und insofar as 
the asset misappropriation claim was based on the contract containing the 
arbitration clause; that is, the articles of association. Therefore, regardless of 
the scope of Article 45, the claimant would only be bound by it if the asset 
misappr opriation claim was based on CCG's articles of association.  
124. In our view the asset misappropriation claim is not based on CCG's 
articles of association, either when made by Sana in her own right or when 
brought in her capacity as Hassib's heir. Accordingly , Sana is not bound by 
Article 45 and questions of the scope of the clause fall away. As the judge 
found, the proper characterisation of the asset misappropriation claim, 
evaluated as a matter of substance and not form, is a claim based on the 
general Leba nese law concerning an alleged conspiracy to deprive Sana of 
what is said to have been Hassib's property. The claim is not concerned with 
breaches of the articles of association, and is essentially no different from a 
(hypothetical) claim that the defendan ts conspired to take other property from 
Hassib which Sana would otherwise have inherited. This is not merely due to 
the fact that the claim is framed in non -contractual terms, nor is it a matter of 
clever pleading. The claim is in substance different from  a claim based on the 
articles of association.  
125. For these reasons, we also agree with the judge that the claim is not an 
accounting claim in relation to Hassib's "shareholder account", and that it is 
not appropriate to siphon off a part of this claim for a  mandatory stay. To the 
extent that there is an accounting exercise, it relates to a quantification of the 
claim based on the general law. Nor, similarly, is the claimant asserting a right 
to receive dividends qua shareholder: rather, the claim is that div idends which 
were declared were improperly diverted away from Hassib (and thus Sana).  
126. Finally, in relation to why Sana is not bound by Article 45, it is no 
answer for the defendants to suggest that the judge overlooked or failed to 
apply the evidence of P rofessor Slim to the effect that the asset 
misappropriation claim could only have been brought as a claim in contract in 
Lebanon. The obvious and dispositive reason is that the defendants did not 
challenge on appeal the judge's conclusion that the asset mi sappropriation 
claim, as framed as a non -contractual claim, was arguable. This contention 
therefore simply goes to the merits of the asset misappropriation claim as a 
matter of Lebanese law. Secondarily, it follows from our conclusion above 
concerning char acterisation that, in fact, the asset misappropriation claim 
could not have been brought as a contract claim based on rights derived from 
the articles of association.  
127. It follows that it is not necessary to consider whether the asset 
misappropriation claim  falls within the scope of Article 45. However, our 
view is that, even if the claimant had been bound by the arbitration clause, the 
asset misappropriation claim would not have been within its scope. This is 
because the scope of Article 45 is limited by Ar ticle 762 of the Lebanese Code 
of Commerce, which prescribes that arbitration clauses are only valid insofar 
as they relate the interpretation, enforcement or performance of the contract in 
question. Moreover, Article 45 is expressly confined to the two ki nds of 
disputes identified as 'A' and 'B', and the asset misappropriation claim does not 
fall into either category.  
Article 45: share deprivation claim  
128. The claimant could only be bound by Article 45 if the share 
deprivation claim was brought as Hassib's h eir or if Sana was claiming to be 
entitled to be recognised as a shareholder.  
129. In our view, Sana is again not bound by Article 45. It is clear that she 
is not claiming as heir: the claim was in no sense inherited from Hassib, and 
indeed Hassib could not ha ve brought the claim which the claimant does 
bring. The claim is not based on the articles of association, but on the general 
law. Similarly, we are inclined to accept that Sana is not claiming an 
entitlement to be recognised as a shareholder, but rather i s claiming that the 
defendants have deprived her of this entitlement. The relationship is tripartite: 
whilst Hassib would have been bound to arbitrate an assertion that he was 
entitled to be recognised as shareholder, as against the defendants, this cannot  
bind Sana  to arbitrate her claim even if her claim depends in part on the 
question of Hassib's ownership, since she does not claim on Hassib's behalf.  
130. In any event we would also accept that the share deprivation claim is, 
like the asset misappropriation claim, outside the scope of Article 45 since the 
arbitration clause is confined to the two specified kinds of disputes.  
1993 Agreements: share deprivation claim  
131. Once again, in our view Sana is not bound by the arbitration clauses in 
question since she was  not a party to the agreement, and nor does Sana seek to 
enforce or defend claims on the contract as Hassib's heir. We would also reject 
the argument that Sana must necessarily bring the claim as heir in order to be 
able to contend that the 1993 Agreements  are properly characterised as gifts. 
On the very limited expert evidence bearing on this point, it appears that this is 
a procedural requirement of Lebanese law which does not affect the proper 
characterisation of the claim.  
132. Further, and finally, the sha re deprivation claim would fall outside the 
scope of the arbitration clauses in the 1993 Agreements, since the claim does 
not relate to the interpretation, enforcement or performance of the contract in 
question, which are the only proper subjects of the cl ause under Article 762 of 
the Lebanese Code of Commerce.  
Conclusion in relation to the arbitration issues  
133. For the above reasons, which reflect those of the judge, we decide 
issues 6 and 7 in Sana's favour and refuse to grant a mandatory stay of the 
proceedings.  
The succession issue  
Issue 5: is the subject matter of the claim succession within the meaning 
of Article 1(2)(a) of the Brussels Regulation?  
134. As a separate challenge to being joined under Article 6(1) of the 
Brussels Regulation and the Lugano Convention the defendants submit that 
the principal subject matter of both the share deprivation claim and the asset 
deprivation claim is succession. If so, the claims fall outside the Regulation 
and Convention by virtue of Article 1(2)(a). Logically this is a preliminary 
issue about jurisdiction which should be decided at the outset. But we have 
decided to deal with the issues in the order in which they were argued.  
135. The judge rejected the argument that either of the clai ms fell within the 
concept of succession as set out in Article 1(2). She said:  
"272. Put simply, Sana's claims are for tortious conspiracy (or the Lebanese or 
Greek law equivalents) on the part of the Defendants to deprive her father 
and/or herself of val uable assets. The root of her entitlement (and an essential 
element of her claims) may be her position as heir and her inheritance but that 
status is not the principal subject matter. There is in fact no dispute that as 
Hassib's daughter she is entitled to  bring the asset misappropriation claim as 
Hassib's heir or her own claim on the asset misappropriation claim to a one 
third share of Hassib's assets on his death or on the share deprivation claim. 
No relevant issue of Lebanese succession law arises in the se claims, and I was 
not taken to any expert evidence in this regard.  
273. As already indicated, I do not accept the Defendants' central submission 
that the claim for conspiracy is merely a " bolt-on". It is a substantive claim 
which carries with it signif icant additional hurdles on the merits on which the 
Defendants heavily rely elsewhere in their attacks on the claims (for example 
as to knowledge). The Defendants cannot seek to reap the benefit of that but 
then seek to escape its burden. If the focus is t o be on the nature of the rights 
being litigated, the rights sought to be protected are the personal rights of 
Hassib, through Sana as his heir, and of Sana herself not to be defrauded. I do 
not accept that those rights are purely incidental to the questio n of ownership. 
They are central. Nor do I accept that the fact that Sana may claim by way of 
remedy on the alleged conspiracy delivery up of shares in, for example, S & K 
(to the extent that she still does, since she withdrew her claim for delivery up 
of shares in CCG), or an account, alters the fact that the focus of the 
proceedings is the alleged conspiracy."  
136. Mr Layton QC for the defendants submits that the judge has failed in 
her analysis of the subject matter of the claims to identify their substance 
rather than their form and has misunderstood the correct principles of EU law 
which govern the characterisation of the claims.  
137. The relevant provisions of the Brussels Regulation and the Lugano 
Convention are identical and, for convenience, we shall concent rate on the 
Regulation. Article 1 provides:  
"1. This Regulation shall apply in civil and commercial matters whatever the 
nature of the court or tribunal. It shall not extend, in particular, to revenue, 
customs or administrative matters.  
2. The Regulation shall not apply to :  
a) the status or legal capacity of natural persons, rights in property arising out 
of a matrimonial relationship, wills and succession; …"  
138. There is no definition of succession in the Regulation but by way of 
background we were referred  to the Jenard Report which was the explanatory 
report provided to the governments of the member states in relation to the 
Brussels Convention which was signed in September 1968. The report was 
prepared by the Committee who drafted the Convention and takes  the form of 
a commentary on its terms. In the section on succession the report notes the 
views of some consultees that a regulation for the recognition and enforcement 
of judgments on matters relating to succession would in due course become 
increasingly necessary within the EC but that it would be necessary first to 
unify the relevant conflict rules of the member states. The Committee also 
drew attention to the differences between member states in the laws governing 
succession.  
139. In support of the submissi on that the Court in applying the Regulation 
should look to the substance rather than the form of the claim, Mr Layton 
referred us to the well -known decision of the ECJ in Marc Rich & Co. A.G. v 
Societa Italiana Impianti P.A.  [1991] ECR I -3855 ; [1992] 1 Lloyd's Rep 342 
in which the issue was whether English proceedings commenced to enforce an 
arbitration agreement in a contract were e xcluded from the Convention by 
Article 1(4). One of the issues was whether the exclusion of "arbitration" from 
the Convention extended to proceedings in which the existence or validity of 
the arbitration agreement was also in issue. The Court said:  
"26. T hose interpretations cannot be accepted. In order to determine whether a 
dispute falls within the scope of the Convention, reference must be made 
solely to the subject -matter of the dispute. If, by virtue of its subject -matter, 
such as the appointment of a n arbitrator, a dispute falls outside the scope of 
the Convention, the existence of a preliminary issue which the court must 
resolve in order to determine the dispute cannot, whatever that issue may be, 
justify application of the Convention.  
27. It would a lso be contrary to the principle of legal certainty, which is one of 
the objectives pursued by the Convention (see judgment in Case 38/81 Effer v 
Kantner  [1982] ECR 825 , paragraph 6) for the applicability of the exclusion 
laid down in Article 1(4) of the Convention to vary according to the existence 
or otherwise of a preliminary issue, which might be raised at any time by the 
parties.  
28. It follows that, in the case before the Court, the fact that a preliminary 
issue relates to the existence or validity of the arbitration agreement does not 
affect the exclusion from the scope of the Convention of a dispute concerning 
the appointment of an arbitrator.  
29. Consequently, the reply must be that Article 1(4) of the Convention must 
be interpreted as meaning that the exclusion provided for therein extends to 
litigation pending before a national court concerning the appointment of an 
arbitrator, even if the existence or validity of an arbitration agreement is a 
preliminary issue in that litigation."  
140. West Tankers Inc v Allianz SpA : Case C -185/07; [2009] 1 AC 1138  
concerned the ability of the English Court to grant an anti -suit injunction 
restraining the continuation of Italian proceedings on the ground that they 
were commenced in breach of an arbitration agreement which required all 
disputes to be determined by arbitration in London. The House of Lords 
referred the case to the ECJ for a preliminary ruling as to whether the claim 
for an anti -suit injunction was compatib le with the Brussels Regulation. The 
argument for the claimant was that such proceedings were excluded from the 
scope of the Regulation because they fell to be treated as "arbitration" under 
Article 1(2)(d).  
141. The ECJ held that the injunction proceedings we re incompatible with 
the Regulation because they prevented the Italian Court which was seized of 
the proceedings between the parties from exercising its jurisdiction in order to 
determine whether the claimant's objection to these proceedings was well 
found ed under Article 1(2)(d). But for our purposes the decision is relevant for 
its re -affirmation of the jurisdictional test in Marc Rich :  
"21. Both the claimant and the United Kingdom Government submit that such 
an injunction is not incompatible with Regula tion No 44/2001 because article 
1(2)(d) thereof excludes arbitration from its scope of application.  
22. In that regard it must be borne in mind that, in order to determine whether 
a dispute falls within the scope of Regulation No 44/2001, reference must b e 
made solely to the subject matter of the proceedings: the Marc Rich case 
[1991] ECR I -3855 , para 26. More specifically, its place  in the scope of 
Regulation No 44/2001 is determined by the nature of the rights which the 
proceedings in question serve to protect: the Van Uden case [1999] QB 1225 , 
para 33.  
23. Proceedings, such as those in the main proceedings, which lead to the 
making of an anti -suit injuncti on, cannot, therefore, come within the scope of 
Regulation No 44/2001."  
142. The next case we were referred to was Lechouritou & Others v 
Dimosio tis Omospondiakis Dimokratias tis Germanias  (Case C -292/05) 
[2007] 2 All ER (Comm) 57 in which the claimants sough t compensation from 
Germany for loss arising from a massacre carried out by German soldiers in 
1943 during the occupation of Greece. The ECJ was asked for a ruling on 
whether the action fell within the scope of "civil matters" referred to in Article 
1 of t he Brussels Convention. The established jurisprudence of the Court is 
that acts carried out by a public authority in the exercise of its public powers 
fall outside the ambit of the Convention even if compensation arising from 
those acts is sought by means of a civil action. Such proceedings are not 
within the objectives and scheme of the Convention:  
"39. Having regard to the case law recalled in paragraph 30 of this judgment, a 
legal action such as that brought before the referring court therefore does not  
fall within the scope ratione materiae  of the Brussels Convention as defined in 
the first sentence of the first paragraph of Article 1 thereof.  
40. Such an interpretation cannot be affected by the line of argument, set out 
in greater detail by the plainti ffs in the main proceedings, that, first, the action 
brought by them before the Greek courts against the Federal Republic of 
Germany is to be regarded as constituting proceedings to establish liability 
that are of a civil nature and, moreover, covered by A rticle 5(3) and (4) of the 
Brussels Convention, and second, that acts carried out iure imperii  do not 
include illegal or wrongful actions.  
41. First of all, the Court has already held that the fact that the plaintiff acts on 
the basis of a claim which aris es from an act in the exercise of public powers 
is sufficient for his action, whatever the nature of the proceedings afforded by 
national law for that purpose, to be treated as being outside the scope of the 
Brussels Convention (see Rüffer's  case (paras 13 , 15). The fact that the 
proceedings brought before the referring court are presented as being of a civil 
nature in so far as they seek financial compensation for the material loss and 
non-material damage caused to the plaintiffs in the main proceedings is  
consequently entirely irrelevant."  
143. The judgment in Lechouritou  is relied on by Mr Layton to re -inforce 
his submission that the proper characterisation of the claim depends upon the 
identification of the underlying right which the proceedings seek to enfor ce. 
The judge, he says, was wrong to accept Sana's formulation of her claim as 
one in tort as being determinative of this issue. The rights which she is seeking 
to vindicate are her rights as an heir to her father's property: not her right not 
to be the vi ctim of the defendants' allegedly tortious behaviour. The fact that 
she has chosen for jurisdictional reasons to seek to enforce those rights by way 
of a claim in damages for conspiracy cannot be used to mask the true nature of 
the rights which she seeks t o vindicate.  
144. Similar statements of principle can be found in Realchemie Nederland 
BV v Bayer CropScience AG  (Case C -406/09); [2012 ] Bus LR 1825  (where 
committal proceedings for the breach of an injunction not to infringe a patent 
which resulted in a fine were treated as within the scope of "civil and 
commercial matters" because they were merely ancillary to the enforcement 
and protec tion of private intellectual property rights) and in Gazdasági 
Versenyhivatal v Siemens  (Case C -102/15): [2016] 5 CMLR 14 (where by 
contrast a dispute between Siemens and the Hungarian competition authority 
about the recovery of interest paid on a fine imp osed for anti -competitive 
behaviour was held to involve the exercise of public or administrative powers 
and therefore to fall outside the Regulation. The fact that the authority sought 
to recover the interest by civil action was irrelevant).  
145. A case relied  on by Sana is The Commissioners for Her Majesty's 
Revenue & Customs v Sunico  (Case C -49/12); [2014] QB 391  which 
concerned an alleg ed carousel fraud designed to evade output VAT. The 
defendants who had obtained the benefit of the fraud were all domiciled in 
Denmark and were not subject to VAT in the UK. The Commissioners 
therefore sought to recover the fraudulently evaded tax by suing  them for 
damages for conspiracy to defraud. They also commenced parallel 
proceedings against the defendants in Denmark and obtained attachment 
orders from the Danish Court in respect of assets of the defendants within that 
jurisdiction. The defendants con tended that since the purpose of the 
proceedings was the recovery of tax they fell outside the definition of a civil 
matter in the Regulation.  
146. The ECJ held that the legal relationship involved in the claim for 
damages was not based on public law or the ex ercise of powers by a public 
authority because the Revenue had no such powers which they could exercise 
against the defendants. The claim was based on the tortious conspiracy to 
defraud. The Court said:  
".. The claim for damages in question does not accru e to the State in its 
capacity as an organ of sovereign power. On the contrary, it is based on an 
alleged infringement of a legally -protected right by the defendants and hence 
from an act whose victim can in principle be anyone, since suffering an 
infringe ment of a legally -protected right is precisely not a genuine sovereign 
act.  
49. A connection with public powers might, however, arise from the fact that, 
behind the damages arising, there ultimately lies a tax claim and hence a 
sovereign relationship that  is crucial to the amount of the claim being 
enforced. The claim for damages corresponds, in terms of its amount, to the 
value added tax lost. However, in assessing the question whether it is a civil 
and commercial matter, only the actual subject matter of  the dispute must be 
taken into account, and not its background: see Préservatrice Foncière TIARD 
SA v Staat de Nederlanden  (Case C -266/01) [2003] ECR I -4867, para 42."  
147. Although these authorities are relied on as identifying the correct 
approach for the Co urt to take in characterising a claim for the purposes of 
Article 1 of the Regulation, there is no European authority which has 
attempted to define the content of the word "succession". As anticipated by the 
Jenard Report, there is now a regulation (No. 65 0/2012) governing succession 
from which the United Kingdom has opted out. But we were taken to it by Mr 
Layton for the assistance which he says it provides in determining the scope of 
the Article 1(2) exclusion.  
148. Recitals (9) and (11) set out the intended scope of the regulation:  
"(9) The scope of this Regulation should include all civil -law aspects of 
succession to the estate of a deceased person, namely all forms of transfer of 
assets, rights and obligations by reason of death, whether by way of a 
voluntary transfer under a disposition of property upon death or a transfer 
through intestate succession.  
….. 
(11) This Regulation should not apply to areas of civil law other than 
succession. For reasons of clarity, a  number of questions which could be seen 
as having a link with matters of succession should be explicitly excluded from 
the scope of this Regulation."  
149. Succession is then defined in Article 3(1):  
"1. For the purposes of this Regulation:  
(a) 'succession' m eans succession to the estate of a deceased person and covers 
all forms of transfer of assets, rights and obligations by reason of death, 
whether by way of a voluntary transfer under a disposition of property upon 
death or a transfer through intestate succ ession;  
(b) 'agreement as to succession' means an agreement, including an agreement 
resulting from mutual wills, which, with or without consideration, creates, 
modifies or terminates rights to the future estate or estates of one or more 
persons party to t he agreement;"  
150. Article 21(1) states that the general rule is that the law applicable to the 
succession as a whole shall be the law of the state where the deceased was 
habitually resident. Article 23(2) provides that:  
"2. That law shall govern in particula r:  
(a) the causes, time and place of the opening of the succession;  
(b) the determination of the beneficiaries, of their respective shares and of the 
obligations which may be imposed on them by the deceased, and the 
determination of other succession righ ts, including the succession rights of the 
surviving spouse or partner;  
(c) the capacity to inherit;  
(d) disinheritance and disqualification by conduct;  
(e) the transfer to the heirs and, as the case may be, to the legatees of the 
assets, rights and obl igations forming part of the estate, including the 
conditions and effects of the acceptance or waiver of the succession or of a 
legacy;  
(f) the powers of the heirs, the executors of the wills and other administrators 
of the estate, in particular as regard s the sale of property and the payment of 
creditors, without prejudice to the powers referred to in Article 29(2) and (3);  
(g) liability for the debts under the succession;  
(h) the disposable part of the estate, the reserved shares and other restrictions  
on the disposal of property upon death as well as claims which persons close 
to the deceased may have against the estate or the heirs;  
(i) any obligation to restore or account for gifts, advancements or legacies 
when determining the shares of the differe nt beneficiaries; and  
(j) the sharing -out of the estate."  
151. None of these provisions is at all surprising. The elaboration in Article 
23(2) of the type of succession issues to which the general rule will apply 
comprises what one would naturally expect to se e in terms of the composition 
of the estate; the rights of the heirs or beneficiaries under a will or intestacy; 
and the administration of the estate. But none of the various items is obviously 
descriptive of a claim by an heir to recover compensation agai nst third parties 
for the loss which he or she has suffered by the unlawful disposition of the 
property of the deceased. Nor does the list include, at least expressly, a claim 
by the deceased's personal representatives or in default by one of his heirs to 
recover such assets on behalf of the estate. The list is largely restricted to what 
might be described as technical issues of succession including the distribution 
of the estate.  
152. On the basis that these provisions can be treated as setting the 
parameters of the succession exception in Article 1 of the Regulation, Mr 
Layton submitted that they could be applied, at least analogously, to Sana's 
claims in the present proceedings. Applying the test described earlier, the 
rights which the action seeks to protect  are, he says, those which she possesses 
as heir and the critical question in the proceedings is what Hassib stood 
possessed of at his death. Questions about the composition of the estate and 
the entitlement of Hassib's heirs are all issues of succession u nder the 
Succession Regulation. At the very least, he submits they concern the sharing 
out of the estate: see Article 23(2)(j).  
153. A recent decision which touches on some of these issues is that of 
Henry Carr J in Winkler & Anor v Shamoon & Ors  [2016] EWHC 217 (Ch) ; 
[2016] WLR(D)  101. It concerned a claim against the estate of an Israeli 
businessman for shares which the claimant alleged had been promised to him 
by the deceased. The claimant commenced proceedings in England against the 
deceased's residuary legatees seeking a declar ation that he was entitled to the 
shares and an order for their transfer. The defendants objected to the Court's 
jurisdiction on a number of grounds including that the claim was in respect of 
wills and succession and therefore outside the scope of the Brus sels 
Regulation. Henry Carr J held that the exclusion of "succession" from the 
Brussels Regulation had to be given a meaning that was consistent with the 
Succession Regulation and which therefore ensured a uniform application of 
EU law. The subject matter of the claim was succession because the claimant 
was in substance seeking to establish his entitlement to succeed to part of the 
estate. It therefore fell within the definition of succession in Article 3.1(a) of 
the Succession Regulation and the sub -catego ries of succession claims 
specified in Article 23(2)(h), (i) and (j). The claim related to the sharing out of 
the estate and it mattered not that the claimant had chosen to bring the claim 
against the beneficiaries rather than the administrator of the esta te.  
154. Mr Layton submits that in the present case the dispute between Sana 
and the defendants relates to what assets were in Hassib's ownership at death 
and whether Sana is entitled to a portion of those shares and other assets. 
There is no disagreement betw een the experts as to the relevant principles of 
Lebanese law which govern title to the deceased's property on death. Unlike 
English law, there is no concept of an estate which continues after death and 
until the completion of administration. The deceased' s property passes directly 
to the heirs thus giving them a title to the assets which they can assert in their 
own right.  
155. Sana's claim was originally formulated as what would amount in 
English terms to a proprietary claim to the shares and the missing asse ts. But 
she has now limited her claim (Mr Layton says for jurisdictional reasons) to a 
personal claim for damages for the loss of the property to which she would 
otherwise be entitled. There is now no claim against HH, for example, for the 
delivery up of t he CCG shares. The judge, in the paragraphs quoted above, 
accepted that a claim for damages for tortious conspiracy was not a matter of 
"succession" because Sana's entitlement to the shares (if part of her father's 
estate) was not in dispute. The focus of the action is on the fraud of the 
defendants who have deprived her of her inheritance. Mr Layton says that this 
misses the point. The core issue is what assets remained Hassib's property at 
death. Sana is asserting title to those assets against the defenda nts. The 
underlying rights which are being protected are her rights as an heir.  
156. A significant aspect of the succession issue is whether the judge was 
right to place the emphasis she did on the fact that there is no challenge by the 
defendants to Sana's st atus as one of Hassib's heirs. It is said that the judge 
was wrong to regard the existence of a dispute about entitlement as critical to a 
determination of whether the subject matter of the claim is succession. A 
dispute as to whether certain assets formed  part of the estate was sufficient to 
bring the claim within the succession exception.  
157. The judge refers in her judgment to various decisions about the 
exclusion of bankruptcy from the Regulation. In Gourdain v Nadler  (Case 
133/78) [1979] ECR 733  the ECJ at [4] said:  
"If decisions relating to bankruptcy and winding -up are to be excluded from 
the scope of the convention, they must der ive directly from the bankruptcy or 
winding -up and be closely connected with the proceedings for the "liquidation 
des biens" or the "reglement judiciaire".  
158. In Re Hayward  [1997] 1 Ch. 45 Rattee J had to consider whether a 
claim by a trustee -in-bankruptcy to  a half share in a property which belonged 
to the bankrupt was excluded from the Brussels Convention. He said:  
"The only connection between these proceedings and bankruptcy, it seems to 
me, is that the title sought to be established by the trustee depends , as a first 
step, on the fact that, as trustee in bankruptcy under the English statute, the 
trustee is entitled to whatever property was vested in Mr Hulse at the date of 
the bankruptcy. That does not, in my judgment, make bankruptcy the principal 
subject -matter of the proceedings…"  
159. It seems to us that the central question is whether the subject matter of 
the dispute is to be regarded as being whether the CCG shares and the other 
assets formed part of Hassib's estate at death or whether the claim to recove r 
the value of those assets from the defendants is a claim for damages in tort. In 
one sense the answer is that it is both in that the damages claim (particularly 
the share deprivation claim) depends upon the Court making a finding that the 
shares and othe r assets remained Hassib's property at his death. To succeed 
however in the action, Sana must establish that there was intentional 
wrongdoing on the part of one or more of the defendants so as to make them 
liable for the value of the relevant assets.  
160. We c an see the force of the argument that proceedings which seek to 
establish no more than whether particular assets do or do not form part of an 
estate can be regarded as a matter of "succession" within the Brussels 
Regulation just as the claim that was made to the shares in Winkler v 
Shamoon . But this is not a claim against the estate and if the claim is brought 
in tort or deceit to recover the value of assets to which Sana as heir has title 
then it becomes more difficult to see why that should be treated as a matter of 
succession simply because the claimant's title derives from the Lebanese law 
on heirship as opposed to being based on a contractual purchase or inter -vivos 
gift. By the same token, it would be difficult to characterise a claim by an heir 
to rec over property stolen from her by an unconnected third party as 
succession simply because she had inherited it. The same would apply to a 
claim by an estate to recover the property of the deceased which a third party 
had misappropriated. The nature of the r ights being protected by the action is 
the ownership by the heir or administrator of the relevant asset: not their right 
to succeed to or administer the estate. Why, one asks, should the analysis be 
any different merely because the alleged misappropriation  has been carried out 
by defendants who include the other heirs or beneficiaries?  
161. If one applies the test of identifying the nature of the rights which the 
proceedings serve to protect, it seems to us that this is undeniably Sana's 
ownership of any shares  or other assets which Hassib held at his death. The 
fact that in order to determine the scope of the claim it is necessary first to 
decide whether specific assets such as the shares were still owned by Hassib 
when he died is not sufficient in itself to ch aracterise the subject matter of the 
claim as succession. That much is clear from the judgment in Marc Rich . Nor 
do we accept Mr Layton's submission that the fact that Sana's rights derive 
from her position as one of her father's heirs is sufficient in its elf to designate 
the claim as a matter of succession. The source of the ownership is irrelevant 
to the nature of the claim. In terms of legal effect, it is no different from the 
title of the trustee -in-bankruptcy in Re Hayward . The subject matter of the 
dispute is not whether Sana is an heir, but whether the defendants have 
misappropriated her property.  
162. If one looks to the Succession Regulation for assistance as to the scope 
of the succession exception this, in our view, merely serves to confirm the 
result  of applying the jurisdictional test. We do not accept that Sana's claim 
can be described as the determination of the disposable part of the estate or its 
sharing out. It seems to us that those sub -categories are descriptive, as we said 
earlier, of issues about entitlement and administration which are not in issue in 
these proceedings. For these reasons, we consider that the judge was right to 
reject the objections to jurisdiction based on the claim being a matter of 
"succession".  
HH  
Issue 8: should the joinder of HH under CPR 6.37 as a "necessary or 
proper party" be allowed to stand now that Sana no longer seeks an order 
for the re -transfer of the CCG shares  
163. The judge indicated that she would have upheld the order for service 
out on H H on the basis that it is alleged to have been a party to the conspiracy 
to deprive Sana of her share of her father's property and that not to join the 
company as a defendant to the English proceedings would create the risk of 
inconsistent judgments in dif ferent jurisdictions. The defendants say that the 
judge left out of account a critical factor which is Sana's decision no longer to 
seek the re -transfer of the shares. The fact that HH may also be a relevant 
source of disclosure is not enough in itself, it  is said, to justify it remaining a 
defendant to the claim.  
164. We are not persuaded that this is a proper issue for us to determine as 
part of this appeal. The judge did not have to decide the question whether HH 
was properly joined and it is common ground t hat any residual issues about 
forum should be remitted for determination in the Commercial Court. If it is 
now being said that Flaux J's ex parte  order should be set aside because of the 
change in the nature of Sana's case or for any other reason, that is an argument 
which should take place at the same hearing.  
Disposition  
165. For the above reasons we allow this appeal.  
Lady Justice Gloster:  
166. Paragraphs 167 – 220 below set out my minority view in relation to 
issues 1 and 4, namely the requirements of Article 6 (1).  
The parties' submissions in relation to issues 1 and 4  
167. As already stated above, Sana's basic submission on this issue is that it 
was not necessary to show that the claim against the anchor defendant was 
arguable in order to comply with the requiremen ts of Article 6(1), and thereby 
to establish jurisdiction in relation to the non -anchor defendants. I refer to this 
putative requirement as a "merits test".  
168. I also emphasise that that, whilst the defendants submitted that there 
was a need to show an argua ble claim against the anchor defendant, they did 
not seek to argue that there was an additional need to show that the claims 
against the non -anchor defendants were also arguable.  
169. Mr Rabinowitz QC, on behalf of the claimant, did not shy away from 
the fact that the existence of a merits test in relation to the claim against the 
anchor defendant represented the "well -established practice of the English 
courts", as the judge had described it at [98] of her judgment. The arguments 
which he advanced as to why, n evertheless, a merits test did not form a part of 
Article 6(1) may be summarised as follows:  
i) There was clear and binding CJEU authority that the merits of the claim 
against the anchor defendant were irrelevant to the application of Article 6(1). 
The cu mulative effect of the CJEU decisions was that a claimant could use 
Article 6(1) to establish jurisdiction against the non -anchor defendants, even if 
the claim against the anchor defendant was, for any reason, not going to 
proceed. So long as the requireme nt specified by Article 6(1) was met, the 
only qualification was that it could not be invoked where the sole purpose of 
bringing a claim against the anchor defendant was to remove the non -anchor 
defendants from the courts of their member state(s) of domici le. (I refer to this 
situation, by way of shorthand, as "fraudulent abuse" of Article 6(1).)  
ii) The merits of the claim against the anchor defendant were irrelevant to the 
requirement of Article 6(1) that the claims against the non -anchor defendants 
were so closely connected to the claim against the anchor defendant that it was 
expedient to determine them together to avoid the risk of irreconcilable 
judgments. Accordingly, that requirement could be satisfied even where the 
claim against the anchor defendan t would not proceed due to a lack of merit. 
In the discussion below I refer to this as the requirement of a close connection.  
iii) Fraudulent abuse of Article 6(1) did not encompass the situation where the 
claim against an anchor defendant was found to be unarguable, without there 
having been any contrivance in suing the anchor defendant. Thus, a claimant 
could rely on Article 6(1) in that situation.  
iv) Aeroflot  held that consideration of the merits of the claims against non -
anchor defendants formed no par t of the Article 6(1) test, and this analysis also 
transposed to the merits of the claim against the anchor defendant.  
170. Mr Hunter QC, on behalf of the defendants, essentially contended for 
the inverse of each of those four submissions. The arguments which h e 
advanced as to why a merits test did indeed form a part of Article 6(1) may be 
summarised as follows:  
i) There was no CJEU authority prescribing that Article 6(1) could be used to 
establish jurisdiction against the non -anchor defendants even where the c laim 
against the anchor defendant would not proceed due to lack of merit. The 
CJEU authorities only established that Article 6(1) could be invoked where the 
reason why the claim against the anchor defendant would not proceed was a 
procedural bar, and that Article 6(1) could not be fraudulently abused (in the 
sense identified above).  
ii) Accordingly, it was permissible for English courts to take the view that the 
requirement of a close connection was not satisfied if the claim against the 
anchor defendant would not proceed due to lack of merit. I interpose to 
comment that Mr Hunter accepted that a merits test was not mandated by 
Article 6(1) but, rather, submitted that it was open to the English courts to 
incorporate a mer its test when verifying whether the specified requirement of 
a close connection was satisfied.  
iii) Bringing a hopeless claim against the anchor defendant was tantamount to 
fraudulent abuse of Article 6(1).  
iv) The decision in Aeroflot  did not affect the e stablished approach to apply a 
merits test in relation to the claim against the anchor defendant.  
Discussion and determination of issues 1 and 4  
171. There are therefore four sub -issues arising in the determination of 
issues 1 and 4, which I will address in tur n. As the scope of argument makes 
clear, the overarching question is whether there is any principle of EU law 
which precludes the well -established practice of the English courts to consider 
the merits of the claim against the anchor defendant. This was the  cornerstone 
of Mr Rabinowitz's submissions that the court should not follow the existing 
authorities which supported the existence of a merits test. These included 
several Court of Appeal authorities which had proceeded on the basis that 
Article 6(1) inco rporated a merits test, albeit always in the absence of 
argument, such as The Rewia [1991] 2 Lloyds Rep 325 at [24], [31], [36] in 
the context of the Brussels Convention. In addition, there is at least one 
Commercial Court decision to that effect, followin g argument: Bord Na Mona 
at [83]. Mr Hunter submitted that we should follow these authorities, whether 
or not they were strictly binding on us.  
Sub-issue (i): EU authority  
172. Nothing in the language of Article 6(1) itself, or the Brussels 
Regulation more gen erally, provides any direct indication as to whether it is 
permissible to incorporate a merits test within Article 6(1). However, the 
parties referred to or relied upon a number of CJEU decisions, which it is 
convenient to consider chronologically.  
173. The fi rst important decision is Reisch Montage v Kiesel Baumaschinen 
Handels GmbH  (Case C -103/05) [2006] ECR I -6827 , [2007] ILPr 10 . It was a 
reference to the CJEU by the Supreme Court in Austria. The question referred 
was whether a claimant could rely on Article 6(1)  
"when bringing a claim against a person domiciled in the forum state and 
against a person resident in another Member State, but where the claim against 
the person domiciled in the forum state is already inadmissible by the time the 
claim is brought because bankruptcy proceedings have been commenced 
against him, which under national law results in a procedural bar?".  
174. The CJEU held that, despite the fact that the claim against the anchor 
defendant would not proceed, the claimant could no netheless use Article 6(1) 
to establish jurisdiction against the non -anchor defendants. The court's 
reasoning was expressed at [27] -[30]:  
"27 In that regard, it must be found, first, that [Article 6(1)] does not include 
any express reference to the applic ation of domestic rules or any requirement 
that an action brought against a number of defendants should be admissible, 
by the time it is brought, in relation to each of those defendants under national 
law. 
28 Second, independently of that first finding, th e question referred seeks to 
determine whether a national rule introducing an objection of lack of 
jurisdiction may stand in the way of the application of Article 6(1) of 
Regulation No 44/2001.  
29 It is settled case -law that the provisions of the regulati on must be 
interpreted independently, by reference to its scheme and purpose …… .  
30 Consequently, since it is not one of the provisions, such as Article 59 of 
Regulation No 44/2001, for example, which provide expressly for the 
application of domestic rul es and thus serve as a legal basis therefor, Article 
6(1) of the Regulation cannot be interpreted in such a way as to make its 
application dependent on the effects of domestic rules.  
31 In those circumstances, Article 6(1) of Regulation No 44/2001 may be 
relied on in the context of an action brought in a Member State against a 
defendant domiciled in that State and a co -defendant domiciled in another 
Member State even when that action is regarded under a national provision as 
inadmissible from the time it is  brought in relation to the first defendant."  
Whilst noting that it was not relevant in that case, the CJEU identified at [32] 
the qualification that Article 6(1) could not be fraudulently abused:  
"[T]he special rule on jurisdiction provided for in Article  6(1) of Regulation 
No 44/2001 cannot be interpreted in such a way as to allow a plaintiff to make 
a claim against a number of defendants for the sole purpose of removing one 
of them from the jurisdiction of the courts of the Member State in which that 
defendant is domiciled (see, in relation to the Brussels Convention, Case 
189/87 Kalfelis [1988] ECR 5565 , paragraphs 8 and 9, and Réunion 
européenne and Others , paragraph 47). However, this does not seem to be the 
case in the main proceedings."  
The CJEU concluded at [33] that, in light of these considerations, it must be 
possible to invoke Article 6(1) even where the claim against the a nchor 
defendant "is regarded under a national provision as inadmissible from the 
time it is brought". It said:  
"In the light of all of the above considerations, the answer to the question 
referred must be that Article 6(1) of Regulation No 44/2001 must be 
interpreted as meaning that, in a situation such as that in the main proceedings, 
that provision may be relied on in the context of an action brought in a 
Member State against a defendant domiciled in that State and a co -defendant 
domiciled in another Memb er State even when that action is regarded under 
a national provision as inadmissible from the time it is brought in relation 
to the first defendant." (My emphasis.)  
175. I do not accept the defendants' argument that Reisch Montage only 
prohibited procedural ru les from preventing the application of Article 6(1), 
whilst permitting national rules which concerned the merits of the claim 
against the anchor defendant to do so. I find such an argument counter -
intuitive for four reasons.  
176. First, the court's reasoning i n Reisch Montage is expressed in general 
terms which were not contingent on the fact that the bar to the claim against 
the anchor defendant was procedural. On the contrary, the emphasis was to 
preclude any domestic impediments to the autonomous application  of the 
Brussels Regulation, which was subject only to a qualification concerning 
fraudulent abuse.  
177. Second, there is no sensible rationale for a distinction between 
procedural rules and rules relating to the merits of the claim against the anchor 
defendant. Mr Hunter submitted that there was no risk of irreconcilable 
judgments when the claim against the anchor defendant would not proceed 
due to a lack of merit. The same point was made by Flaux J (as he then was) in 
Bord Na Mona Horticulture Limited v British Polythene Industries plc  [2012] 
EWHC 3346 (Comm) , at [79] -[83], when suggesting that Reisch Montage  
could be confined to procedural bars.  
178. I do not agree. The operation of a merits test within Article 6(1) does 
give rise to risk of irreconcilable judgments, which can be demonstrated by 
reference to the present facts. There is currently an English judgme nt that the 
share deprivation claim against Wael fails on the basis of various factual 
findings. For example: the judge found that the relevant formalities prescribed 
by the 1993 Agreements were fulfilled and that the share register extracts were 
genuine, with the result that Hassib did not own the shares at the time of his 
death. Yet it would, theoretically, be open to the claimant to bring an identical 
claim against the non -anchor defendants in Greece and (at least in theory) to 
obtain a judgment which co ntradicted the findings of the English judgment. A 
Greek judgment of this kind would plainly be irreconcilable with the existing 
English judgment in the sense articulated by the CJEU authorities. Mr Hunter 
expressly accepted that this could occur and did n ot, for example, seek to 
suggest that the Greek court would be required to recognise the English 
judgment or abide by it. In fact, this risk arises precisely because the English 
court has not exercised jurisdiction over the non -anchor defendants. If the no n-
anchor defendants were subject to English jurisdiction, an English judgment 
could not be circumvented by new proceedings in other member states, and 
the risk of irreconcilable judgments would be eliminated.  
179. I accept the observation in Brown v Innovatoro ne Plc [2010] EWHC 
2281 (Comm) , [2011] ILPr 118 at [25], by Hamblen J (as he then was), that 
this risk may be unlikely to materialise because the Greek cour t might be 
expected to arrive at the same factual findings as the English judgment – but 
not necessarily. However, the overwhelming tenor of the CJEU authorities is 
to emphasise the fundamental aim of eliminating, rather than simply reducing, 
a risk of irr econcilable judgments. This aim is achieved if Article 6(1) does not 
incorporate a merits test and is undermined if it does do so.  
180. Third, the CJEU in Reisch Montage must be read as rejecting this 
latent risk of irreconcilable judgments since, even on the defendants' case, the 
CJEU held that a procedural bar could not impede Article 6(1); yet in my view 
a procedural bar necessarily gives rise to a less acute risk of irreconcilable 
judgments. If the claim against the anchor defendant will not proceed purely 
due to a procedural bar, the operative finding of the court is that the claim, 
however meritorious, cannot proceed in that member state. The court has not 
made a finding that relates in any way to the claim against the non -anchor 
defendants. There is no st rict irreconcilability with a judgment in another 
member state that the claim against the non -anchor defendants can proceed or 
succeed there. Yet the CJEU in Reisch Montage accepted that Article 6(1) 
could apply where the risk of irreconcilability was betw een a judgment that 
the claimant could not proceed against the anchor defendant in Austria, for a 
procedural reason, but could proceed in Germany.  
181. Fourth, not only is a distinction between procedural rules and rules 
relating to the merits unsustainable, g iven the reasoning in Reisch Montage , 
but it is not immediately apparent where that line is supposed to be drawn. For 
example, if an English court struck out a claim in contract against the anchor 
defendant on the basis that the contract lacked a requisite  formality, this could 
be understood as a procedural rule or a rule relating to the merits of the claim. 
Yet, either way, it would give rise to a risk of inconsistency if the English 
court declined jurisdiction over non -anchor defendants who were party to the 
same alleged contract, with the result that it was open to another member state 
court to hear the claims against them. At least in theory, that court could then 
find that the relevant formality was fulfilled. More generally, a domestic rule 
that claims  against non -anchor defendants cannot proceed if the claim against 
the anchor  defendant is unmeritorious could itself be described as procedural: 
such a rule has nothing to do with the merits of the claim against the non -
anchor defendants.  
182. The next case w as Freeport plc v Arnoldsson  (Case C -98/06) [2008] 
QB 634 . The CJEU was asked by the Swedish Supreme Court (Högsta 
Domstolen) to det ermine whether it had jurisdiction under Article 6(1) over an 
English company which was sued in contract when the claim against the 
Swedish domiciled co -defendant was in tort, delict or quasi - delict. The first 
question, as reformulated by the CJEU, was wh ether these claims could satisfy 
the requirement of being closely connected despite having differing legal 
bases. The second question was whether Article 6(1) was subject to a 
precondition that it was not being fraudulently abused, in the sense articulated  
by Reisch Montage . The third  question was whether the likelihood of success 
of the claims was relevant to the application of Article 6(1).  
183. Before considering the CJEU decision, I note that the opinion of 
Advocate General Mengozzi on the second and third questions supported the 
view that Reisch Montage  precluded any domestic rules, whether procedural 
or relating to merits, from impeding the application of Article 6(1). The 
Advocate General considered at [62] that the decision established, first, that 
Artic le 6(1) could not be relied on if the claim against the anchor defendant 
was fraudulently abusive in the sense of involving  
"manipulation on the part of the claimant which is designed to oust and has the 
effect of ousting the jurisdiction of the courts [o f other member states]".  
184. At [65], the Advocate General added that whether this was the "sole 
object" of the claim against the anchor defendant "will be for the court hearing 
the case to determine". Further, this was a high threshold: it was not sufficient 
that the claim  
"appears to be unfounded , since that action must, at the time when it was 
lodged appear to be manifestly  unfounded in all respects – to the point of 
proving to be contrived – or devoid of any real interest for the claimant". 
[Emphasis origi nal.] 
185. At [70] -[71] the Advocate General considered that, second, Reisch 
Montage  "seems to contradict" the view that Article 6(1)  
"may also include an evaluation of the likelihood that the claim brought 
against the [anchor] defendant …… will succeed".  
Indeed, whilst the Advocate General himself inclined to the view that Article 
6(1) could involve an analysis of the merits of the claim against the anchor 
defendant, such analysis was only relevant in his view insofar as it related to 
the qualification about f raudulent abuse:  
"[T]hat evaluation will be of real practical relevance for the purpose of 
excluding the risk of irreconcilable judgments only if that claim proves to be 
manifestly inadmissible or unfounded in all respects."  
186. However, the CJEU itself took a  different approach. In relation to the 
second question (viz. whether Article 6(1) was subject to a precondition that it 
was not being fraudulently abused), the CJEU, despite Reisch Montage and 
the Advocate General's opinion, appeared to express the view a t [54] that it 
was not a requirement of Article 6(1) for a claimant to demonstrate that it was 
not fraudulently abusing the jurisdiction afforded by Article 6. The court 
stated:  
"[A]rticle 6(1) …… applies where claims brought against different defendants 
are connected when the proceedings are instituted, that is to say, where it is 
expedient to hear and determine them together to avoid the risk of 
irreconcilable judgments resulting from separate proceedings, without there 
being any further need to establis h separately that the claims were not 
brought with the sole object of ousting the jurisdiction of the courts of the 
member state where one of the defendants is domiciled. " [My emphasis.]  
187. The CJEU did not consider it necessary to answer the third question 
(viz. whether the likelihood of success of the claims was relevant to the 
application of Article 6(1), in light of its answer to the first question (which I 
consider below). So it is certainly the case that Freeport  does not directly 
address the question of  whether a merits test is, or can be, a precondition to the 
founding of jurisdiction. However, the fact that the CJEU did not think that 
there was "any further need to establish separately that the claims were not 
brought with the sole object of ousting th e jurisdiction", strongly suggests, in 
my judgment, that its view was that the merits of the claim against the anchor 
defendant were irrelevant for the purposes of founding jurisdiction under 
Article 6(1). In order for the sole object of a claim against th e anchor 
defendant to be to oust other member states' jurisdiction, a claim necessarily 
could not have merit. Thus if Article 6(1) can be relied upon even where it is 
fraudulently abused, which entails a lack of merit, it would be perverse if it 
could not be invoked where the claim against the anchor defendant lacked 
merit but was not fraudulently abusive.  
188. It is also important to clarify why, in my view, the answer to the first 
question (viz. whether relevant claims could satisfy the requirement of being 
closely connected despite having differing legal bases) does not support the 
defendants' interpretation of Reisch Montage . The CJEU in  Freeport  held at 
[38] that Article 6(1) could apply even where the claim against the anchor 
defendant and the claim agains t the non -anchor defendant had different legal 
bases, provided those claims were closely connected:  
"38 It is not apparent from the wording of article 6(1) that the conditions laid 
down for application of that provision include a requirement that the acti ons 
brought against different defendants should have identical legal bases.  
39 As the court has already held, for article 6(1) of the Brussels Convention to 
apply, it must be ascertained whether, between various claims brought by the 
same plaintiff against  different defendants, there is a connection of such a kind 
that it is expedient to determine those actions together in order to avoid the 
risk of irreconcilable judgments resulting from separate proceedings: Kalfelis 
v Bankhaus Schröder Münchmeyer Hengst & Co  (Case 189/87) [1988] ECR 
5565 , para 13."  
189. The CJEU further explained at [41]:  
"It is for the national court to assess whether there is a connection between the 
different claims brought before it, that is to say, a risk of irreconcilable 
judgments if those claims were determined separately and, in that regard, to 
take account of all the necessary factors in the case file, which ma y, if 
appropriate yet without its being necessary for the assessment, lead it to take 
into consideration the legal bases of the actions brought before that court."  
190. The CJEU therefore accepted that a national court could (though it 
need not) take into accou nt the legal bases of the actions when verifying 
whether the requirement specified by Article 6(1) was satisfied. However, this 
was because the CJEU accepted that the legal bases of the actions were 
relevant to an assessment of the criterion of close conne ction. The CJEU 
effectively rejected, at [38], that one could insert into Article 6(1) a discrete 
requirement that the claims had identical legal bases. Thus, in order for the 
merits of the claim against the anchor defendant to have any role in the 
applica tion of Article 6(1), it too would have to be relevant to the requirement 
of a close connection. But the CJEU in Freeport did not suggest that the 
merits of the claim against the anchor defendant were relevant to this 
requirement. Moreover, for the reasons  given below on the second issue, I do 
not accept that the merits of the claim can be relevant to the requirement in 
Article 6(1) of a close connection.  
191. The two most recent decisions of the CJEU, Kolassa v Barclays Bank  
(Case C -375/13) [2015] ILPr 14  and Cartel Damage Claims SA v Akzo Nobel 
NV (Case C -352/13) [2015] QB 906 , were respectively decided on 28 January 
and 21 May 2015, after the decision of the judge in this case. The same judges 
of the CJEU, in its Fourth Chamber, sat in both cases .  
192. Kolassa v Barclays Bank  did not directly concern Article 6(1). The 
claimant submitted that the Austrian courts had jurisdiction on the basis, inter 
alia, that the claim was one in tort, delict or quasi -delict so as to satisfy Article 
5(3). The defendant  submitted that the claim did not fall into any of those 
categories since a number of the claimant's factual assertions were false, with 
the consequence that there was no non -contractual claim. The fourth question 
referred to the CJEU was whether it was ne cessary for a national court, when 
determining jurisdiction, to conduct a comprehensive taking of evidence in 
relation to disputed facts (which were relevant to both jurisdiction and the 
merits of the claim) or whether the allegations should be assumed to be true.  
193. The CJEU's answer, at [64], was that:  
"Although the national court seised is not, therefore, obliged, if the defendant 
contests the [claimant]'s allegations, to conduct a comprehensive taking of 
evidence at the stage of determining jurisdiction,  it must be pointed out that 
both the objective of the sound administration of justice, which underlies 
Regulation 44/2001, and respect for the independence of the national court in 
the exercise of its functions require the national court seised to be able  to 
examine its international jurisdiction in the light of all the information 
available to it, including, where appropriate, the defendant's allegations."  
194. This does not assist the defendants for the same reason that the answer 
to the first question in Reisch Montage  does not assist. The CJEU in Kolassa  
accepted that national courts can take into account all available information in 
determining whether the requirements set out in the Brussels Regulation are 
fulfilled. But this simply begs the question of wh ether the merits of the claim 
against the anchor defendant are relevant to the criterion specified by Article 
6(1). For the reasons given below, I answer this question in the negative.  
195. In fact, there is a further reason why Kolassa  does not support the 
defendants' view of Article 6(1). The decision was that the defendants' 
allegations  could be taken into account in determining whether the claim 
against the anchor defendant was a non -contractual claim for the purposes of 
Article 5(3). The CJEU did not hold that the merits of the claim were relevant 
to that question of characterisation, and nor would this necessarily transpose to 
the very different requirement of a close connection under Article 6(1).  
196. The final CJEU decision is CDC . In that case the claim against the 
German -domiciled anchor defendant was settled shortly after the claim was 
brought. There was a suspicion that this settlement had been reached before 
the claim was issued but had been postponed, by collusion between the 
claimant and the anchor defendant, so as to enable the claimant to establish 
jurisdiction against various non -anchor defendants using Article 6(1).  
197. In considering the relevance of the withdrawal of the claim, the CJEU 
reasserted that Article 6(1) could not  be fraudulently abused and presented 
Freeport  as a gloss on how this qualification operated. The CJEU considered 
that it was "settled case law" that Article 6(1) could not be fraudulently 
abused. The court then referred at [28] to Freeport  at [54], which I have 
already quoted above. In the CJEU's view, at [29] -[32], it followed that in 
order for a national court to "exclude the applicability" of Article 6(1) there 
must be "firm evidence that, at the time that proceedings were instituted, the 
parties concer ned had colluded to artificially fulfil, or prolong the fulfilment 
of, that provision's applicability". The court said:  
"28 The court has nevertheless stated that, where claims brought against 
various defendants are connected within the meaning of article  6(1) of 
Regulation No 44/2001 when the proceedings are instituted, the rule of 
jurisdiction laid down in that provision is applicable without there being any 
further need to establish separately that the claims were not brought with the 
sole object of ous ting the jurisdiction of the courts of the member state where 
one of the defendants is domiciled: Freeport plc v Arnoldsson  [2008] Q B 634 , 
para 54.  
29 It follows that where, when proceedings are instituted, claims are 
connected within the meaning of article 6(1) of Regulation No 44/2001, the 
court seised of the case can only find that the rule of jurisdiction laid down in 
that provisio n has potentially been circumvented only where there is firm 
evidence to support the conclusion that the applicant artificially fulfilled, or 
prolonged the fulfilment of, that provision's applicability.  
30 [The court referred to the allegations made by som e of the defendants.]  
31 In order to be able to exclude the applicability of the rule of jurisdiction 
laid down in article 6(1) of Regulation No 44/2001, an allegation of that nature 
must nevertheless be supported by firm evidence that, at the time that 
proceedings were instituted, the parties concerned had colluded to artificially 
fulfil, or prolong the fulfilment of, that provision's applicability.  
32 Although it is for the court seised of the case to assess such evidence, it 
must nevertheless be made cle ar that simply holding negotiations with a view 
to concluding an out -of-court settlement does not in itself prove such 
collusion. However, it would be otherwise if it transpired that such a 
settlement had, in fact, been concluded, but that it had been conc ealed in order 
to create the impression that the conditions of application of article 6(1) of 
Regulation No 44/2001 had been fulfilled.  
198. This represented a synthesis of Reisch Montage and Freeport : a 
claimant could not fraudulently abuse Article 6(1), but n or was it incumbent 
on them to show that the claim was genuine. The qualification would therefore 
only arise when the national court was satisfied that there was firm evidence to 
demonstrate fraudulent abuse.  
199. The decision in CDC  supports the claimant's ca se that the qualification 
concerning fraudulent abuse is the only restriction on the operation of Article 
6(1). The court expressly stated, at [29], that a national court could find "that 
[Article 6(1)] has potentially been circumvented only where" the cla im against 
the anchor defendant was fraudulent. There was no suggestion that the 
application of Article 6(1) was also restricted by reference to national rules 
concerning the merits of the claim against the anchor defendant.  
200. Accordingly, in my judgment, l ooking at the CJEU decisions as a 
whole, I accept the claimant's submission on the first issue. There is clear 
CJEU authority that Article 6(1) can be used to establish jurisdiction against 
non-anchor defendants even if the claim against the anchor defenda nt will not 
proceed, unless the claimant is engaged in a fraudulent abuse of Article 6(1).  
Sub-issue (ii): the requirement of a close connection  
201. I now turn to the second sub -issue, namely whether it was permissible 
for the English courts to incorporate a  merits test within the process of 
verifying that Article 6(1)'s requirement of a close connection was met. There 
were two strands to the defendants' submission that it was permissible, 
although only the second was pursued in oral argument.  
i) The first d erived from the requirement of Article 6(1) that "the claim s are so 
closely connected". The defendants submitted that if the claim against the 
anchor defendants was struck out at a summary stage, there would not be 
"claim s" which could share any connection  whatsoever. Without the claim 
against the anchor defendant, there was only the claim against the non -anchor 
defendants.  
ii) The second was that if the claim against the anchor defendant was struck 
out, the claims against the non -anchor defendants could be  heard elsewhere 
without any risk of irreconcilable judgments. In the absence of such a risk, it 
was not expedient to hear the two claims together and thus the requirement of 
Article 6(1) was not met. I interpose that this is the rationale given by the 
modern cases as to why the English courts are entitled to assess the merits of 
the claim against the anchor defendant: see for example, Brown at [25] -[27] 
and Bord Na Mona at [79].  
202. However, I do not accept that the English courts can incorporate a 
merits test  in relation to the claim against the anchor defendant within the 
requirement of a close connection.  
203. The CJEU authorities are inconsistent with the defendants' submission. 
As discussed above,  Reisch Montage , Freeport  and CDC  establish that a 
domestic rule  which has the effect that the claim against the anchor defendant 
will not proceed will not prevent the requirement imposed by Article 6(1) of a 
close connection from being satisfied.  
204. Indeed, even on the defendants' interpretation of those authorities, it is 
difficult to see how the merits test could be incorporated within the 
requirement of a close connection. Reisch Montage demonstrates that, as a 
matter of EU law, claims can be so closely connected that it is exped ient to 
hear and determine them together to avoid the risk of irreconcilable 
judgments, even when the claim against the anchor defendant will not 
proceed. There is no reason why the position is any different where the claim 
will not proceed due to a lack o f merit, rather than a procedural bar. I have 
already explained why there is at least as great a risk of irreconcilable 
judgments in the situation of a lack of merit. Thus the CJEU authorities refute 
the proposition that claims can be closely connected onl y if both claims are 
proceeding.  
205. The CJEU decisions also disclose an emphasis on the connection 
between the claims  as opposed to whether, as a matter of factual likelihood, 
there is a risk of irreconcilable judgments. For example, there are multiple 
CJEU authorities stating that the question of whether the claims are closely 
connected is to be evaluated as at the time the proceedings were instituted, 
such as Reisch Montage at [31] and [33], which is a complete answer to the 
first strand of the defendants' submission since the claims are extant at that 
time. No CJEU decision actively supported the evaluation of the merits of the 
claims, as at a later point in time, as part of the Article 6(1) requirement. The 
fact that a court can say at a summary stage whic h party is likely to prevail is 
simply irrelevant to the enquiry of whether the claims are closely connected 
for the purpose of Article 6(1).  
206. Statements in Freeport  and Kolassa that it was permissible for the 
national courts to use all available informati on to verify that there was a close 
connection do not alter the content of the requirement of a close connection. 
Therefore, whilst English courts may apply a commonsense approach in 
evaluating (for example) whether the claims arise from the same facts, th ey 
may not, in my judgment, introduce a new, additional condition that the claim 
against the anchor defendant is arguable. That would not be consistent with 
the wording of Article 6(1).  
207. If the merits of the claim against the anchor defendant were relevant  to 
the requirement of a close connection, it would be inconsistent for the merits 
of the claim against the non -anchor defendant to be ignored. This is, first and 
foremost, as a matter of principle. If the logic is that when one claim is going 
to fail ther e is no need to hear the claims together, this applies just as much to 
the claim against the non -anchor defendant as it does to the claim against the 
anchor defendant. Secondly, if it is unacceptable to bring a non -anchor 
defendant to England where the cla im against the anchor defendant is 
hopeless, it should also be impermissible to exercise jurisdiction when the 
claim against them is hopeless.  
208. Whilst it was not explored in argument, and accordingly I do not place 
particular emphasis on the point, if the defendants' submission were correct it 
would seem also inconsistent not to apply a merits test in the context of Article 
28, too. Article 28 confers discretion on national courts to stay a claim over 
which they would otherwise have jurisdiction under the B russels Regulation 
if, inter alia, it is related to a claim which is pending in another member state. 
Article 28(3) defines related claims in terms identical to the close connection 
test in Article 6(1). Yet it was not suggested that the English courts do or 
should decline to stay a claim on the basis that the claim brought in England 
will fail, so there ought not to be any risk of inconsistency with extant 
proceedings in other member states. Indeed the English courts seem to take the 
approach that the meri ts of the claims are not relevant to consideration of 
whether claims are related for Article 28: for example, Casio Computer Co 
Ltd v Sayo [2001] ILPr 43  at [38].  
209. I do not accept the argument that the merits test is appropriate in order 
to restrict Article 6(1) on the basis that it is a special rule of jurisdiction which 
derogates from the general jurisdictional rule of Article 2. Th e CJEU 
authorities do of course state that special rules of jurisdiction are to be 
construed restrictively. However, the decisions also state that the Brussels 
Regulation is to be interpreted independently and that well -informed 
defendants should be able t o anticipate which courts they may be brought 
before. For example: Reisch Montage  at [25] and [29] -[30]; Freeport  at [36]; 
and CDC  at [16]. It is therefore just as important that courts do not unduly 
restrict  the application of Article 6(1) through nationa l rules, as it is that 
national courts do not unduly expand its application. As I have attempted to 
demonstrate, the incorporation of a merits test would be a restriction which the 
CJEU authorities do not permit. Moreover, a merits test fundamentally 
under mines the certainty, predictability and efficiency of the application of 
Article 6(1). The merits test produces protracted disputes in relation to the 
substance of the claim at the jurisdiction stage, of the sort seen here, which 
have been specifically dep recated by the CJEU - as indeed they have by 
English authorities in relation to what is now CPR 6.37: see for example Lord 
Templeman in Spiliada Maritime Corp v Cansulex Limited  [1987] 1 AC 460 
at 465G -H and Lord Neuberger in VTB Capital plc v Nutritek Int ernational 
[2013] UKSC 5  at [82] -[83].  
Sub-issue (iii): tantamount to fraudulent abuse  
210. The third point can be dealt with shortly. The defendants submitted 
that, in  any event, bringing a claim against an anchor defendant which is liable 
to be struck out on a summary basis would amount to fraudulent abuse of 
Article 6(1).  
211. I do not accept this argument. The CJEU in CDC  emphasised the 
narrow scope of this qualification : there must be firm evidence that, at the time 
that proceedings were instituted, the claimant was artificially fulfilling Article 
6(1). In this case, at [300] the judge specifically rejected the suggestion that 
the claimant had acted in "bad faith" in bri nging the claims. Further, the judge 
clarified that the very reason she found that the share deprivation claim lacked 
merit was due to the emergence of evidence since the claim was issued. On the 
unchallenged findings, therefore, this was not a claim where  the sole purpose 
was a fraudulent abuse of Article 6(1). There was, at least when issuing the 
claim, a legitimate purpose to the claim against the anchor defendant, beyond 
the fact that this would enable the claimant to rely on Article 6(1).  
212. Moreover, th e defendants' submission would produce a striking 
inconsistency with the decision in Reisch Montage . There the CJEU plainly 
did not think that it was a fraudulent abuse of Article 6(1) to bring a claim 
which was entirely inadmissible even at the time of issuing the claim. It would 
be perverse if, on the other hand, it was fraudulently abusive to bring a claim 
which, because of evidence submitted subsequently, turned out to be hopeless.  
Sub-issue (iv): Aeroflot  
213. The relevance of Aeroflot  is as follows. The issue in that case was 
whether there was a merits test in relation to the claims against the  non-anchor 
defendant , as opposed to the claim against the anchor defendant.  
214. Aikens LJ, with whom Laws LJ and Mann J agreed, held that there 
was no me rits test in relation to the claim against the non -anchor defendant for 
three reasons, stated at [106] -[109]. First, the sole question was whether the 
requirements set out by Article 6(1) were satisfied. It was "inappropriate 
simply to import into Judgment  Regulation" the requirement for an arguable 
case against the non -anchor defendants prescribed by CPR 6.37 and PD6B 
para 3.1(3). Second, Freeport  held that "the national court should not concern 
itself with the question of whether the claim against the non -domiciled 
defendant was brought in those proceedings with the sole object of ousting the 
jurisdiction of the court of the Member State where that defendant is 
domiciled". Third, Aikens LJ would have distinguished the English case said 
to mandate a merits test in relation to the non -anchor defendant.  
215. Aeroflot  must be approached with a degree of caution. Aikens LJ 
considered Freeport but not Reisch Montage,  and the judgment predated the 
decisions in Kolassa and CDC  (the latter of which is very relevant to an 
understanding of Freeport ). Further, Aeroflot  also did not consider Brown , 
which had held that there was a merits test in relation to the non -anchor 
defendants. Finally, it will be recalled that Freeport  was in f act concerned 
with the question of whether the claim against the anchor defendant was 
brought fraudulently, not the claim against the non -anchor defendants.  
216. Nonetheless, the decision in Aeroflot  accords with the view of Article 
6(1) and the CJEU authoriti es which I have expressed above and would be 
inconsistent with the contrary view. As I have stated, in the present case the 
defendants accepted the conclusion reached in Aeroflot , namely that there was 
not a further merits test in relation to the non -ancho r defendants. The 
submission that, nonetheless, there was a merits test in relation to the claim 
against the anchor defendant therefore depends on it being possible to 
distinguish the two. For the reasons given, I do not see any distinction. 
Aeroflot  illus trates that the common law regime is entirely separate to the 
Brussels Regulation, and there is no basis on which to incorporate within 
Article 6(1) the requirements under English law that the claims against the 
anchor and non -anchor defendants are arguabl e.  
The consequence of my conclusion in relation to Article 6(1)  
217. In my judgment a construction of Article 6(1) which precludes a 
challenge to the merits of the claim against the anchor defendant or of the 
claim against the non -anchor defendants will substa ntially reduce the number 
of long drawn -out jurisdictional disputes and thereby promote the overriding 
objective. This approach will ensure that Article 6(1) will apply "in such a 
way as to enable a normally well -informed defendant reasonably to foresee 
before which courts, other than those of the State in which he is domiciled, he 
may be sued" (CJEU in Reisch Montage at [25]). More generally it will further 
the hope, to which I have already referred, that "the issue of appropriate forum 
should not involve masses of documents, long witness statements, detailed 
analysis of the issues, and long argument" (Lord Neuberger in VTB at [82]).  
218. Applying the Brussels Regulation, the English court will have 
jurisdiction under Article 6(1) if the claims are so closely c onnected that it is 
expedient to hear and determine them together to avoid the risk of 
irreconcilable judgments resulting from separate proceedings. In verifying 
whether this requirement is satisfied, the court will use all available 
information and take a  common -sense approach. However, the court will not 
have regard to whether the claim against the anchor defendant or the claim 
against the non -anchor defendant will fail due to a procedural bar or due to a 
lack of merit. As a matter of EU law, whether a cl aim will succeed is 
irrelevant to the question of whether the claims are closely connected, because 
the function of Article 6(1) is to avoid a risk of irreconcilable judgments. If the 
requirement is fulfilled, the English court can only deny the applicatio n of 
Article 6(1) if the sole purpose of bringing a claim against the anchor 
defendant was to remove the non -anchor defendants from the courts of their 
member state(s) of domicile, in the sense articulated by Reisch Montage , 
Freeport  and CDC .  
219. Jurisdiction  will thus have been established in line with the mandated 
principles of certainty, predictability and efficiency. It will not be possible 
significantly to prolong the determination of jurisdiction issues by raising a 
dispute about the merits of one claim or another. Assuming the claims are 
closely connected, the defendants may, subsequently, if they wish, attempt to 
strike out the claims. In any event, the risk of irreconcilable judgments is 
avoided. This will also avoid the peculiarity displayed in the pr esent case, 
where the non -anchor defendants argued that the court should strike out the 
claim against the anchor defendant, in circumstances where the anchor 
defendant himself was not able do so without submitting to the jurisdiction of 
the English courts.   
220. For the above reasons, I would also have allowed Sana's appeal on 
issue 1. I would also reject the defendants' arguments under issue 4. In my 
view the fact that a claim against an anchor defendant will not proceed due to 
being struck out is irrelevant to  the application of Article 6(1): see paragraphs 
203 to 205 above. Since whether Article 6(1) applies is determined notionally 
(albeit retrospectively) as at the date proceedings are issued, it cannot matter 
whether the claim against an anchor defendant is  in fact struck out before the 
court determines whether it had/has jurisdiction, at the time it does so or 
(needless to say) after it has done s o