HENRY LJ. Captain L is, in the words of Thomas J 'an experienced Greek
shipowner'. He is the defendant in this action, and the appellant before
us. In 1992 he wished to build a new ship. A company, of which he was
the principal shareholder and sole beneficial owner, borrowed a total of $
US10m from the plaintiff bank. He entered into two personal guarantees
in relation to that loan. In August 1994 the plaintiffs served notices of
default and demands for payment under the guarantees on the defendant.
On 14 September 1994 they issued a writ for recovery of the sums due.
That writ was purportedly served in the United Kingdom under submission
to jurisdiction clauses contained in the guarantees. Judgment in default
of acknowledgment of service was obtained on the first available day,
for a sum in excess of US$8m. The defendant applied to set aside that
judgment, first on the ground that he had not been properly served, and
second on the merits. That application was heard by Clarke J and failed.
A stay was refused. The single judge (Saville LJ) refused leave on paper,
but the full court (Aldous and Hutchison LJJ) granted leave to appeal.
However, by order made on 31 July 1995 they refused a stay of execution
save in respect of a sum deposited by way of cash collateral.
That is all by way of background. This appeal stems from the purported
service out of the jurisdiction of an order made under Ord 48, r 1 that the
defendant attend before a court examiner in London to be questioned as
to his assets. By summons dated 6 February 1995 the defendant sought
to set aside this order on the basis that it could not lawfully be served
out of the jurisdiction. Master Miller refused that application in a full and
carefully reasoned judgment. Various points were taken before him --
but the only one which survives is the broad proposition that there was
no jurisdiction in the court to approve such service. That in its turn was
appealed, the appeal coming before Thomas J. He dismissed the appeal
by judgment delivered on 15 February. This appeal is launched against
that dismissal. We heard the appeal on 29 April, the appointed day for
the examination of the judgment debtor as to his assets being 1 May.
The proximity of those two dates is caused by what seemed to Thomas
J as attempts by the defendant to achieve delay by 'playing the system'.
However, as the points before us are pure points of law, we do not find it
necessary to say any more on this score.
The starting point for consideration of this problem lies in the contractual
submission to the jurisdiction to be found in cl 13 of the agreements of
guarantee, which reads:
'13 LAW AND JURISDICTION
13.01 This Guarantee shall be governed by, and construed in accordance
with, English law.
13.02 In relation to any dispute arising out of or in connection with this
Guarantee, and for the exclusive benefit of the Lender, the Guarantor
hereby irrevocably and unconditionally: (a) submits to the jurisdiction
of the High Court of Justice in England and waives any objection to
proceedings with respect to this Agreement in such Court on the grounds
of venue or inconvenient forum; and (b) appoints [Internav (Chartering)
Ltd] of Suite 2, Telford Yard, 6-8 The Highway, London E1 OBQ as his
agent for service of process in respect of proceedings before such Court
and undertakes that, throughout the term of this Guarantee, he will
maintain an agent in England for such purpose. Nothing in this Clause
shall affect the right of the Lender to serve process in any manner
permitted by law or limit the right of the Lender to take proceedings with
respect to this Guarantee against the Guarantor in any jurisdiction nor
shall the taking of proceedings with respect to this Guarantee in any
jurisdiction preclude the Lender from taking proceedings with respect to
this Guarantee in any other jurisdiction, whether concurrently or not.'
Captain L is domiciled in Greece.
The significance of that provision is that it brings into operation art 17 of
the Convention on Jurisdiction and the Enforcement of Judgments in Civil
and Commercial Matters 1968, as set out in Sch 1 to the Civil Jurisdiction
and Judgments Act 1982:
'If the parties, one or more of whom is domiciled in a Contracting
State, have agreed that... the courts of a Contracting State are to have
jurisdiction to settle any disputes which have arisen or which may arise
in connection with a particular legal relationship... those courts shall have
exclusive jurisdiction...'
The preamble to the convention indicates that it operates within the
European Community 'to secure the simplification of formalities governing
the reciprocal recognition and enforcement of judgments', it being
necessary --
'to determine the international jurisdiction of their courts, to facilitate
recognition and to introduce an expeditious procedure for securing the
enforcement of judgments...'
In purported performance of cl 13.02(b) the writ was served at Internav's
office in London.
Before the judge the first point raised on behalf of the plaintiff was that
cl 13.02 only gave jurisdiction to the English courts to adjudicate upon
the dispute, but was not a submission to the jurisdiction of the court for
the purposes of enforcement. This distinction has been drawn in cases
relating to the sovereign immunity of states, but the judge was right to
find that the considerations that led to that distinction in those cases were
not applicable to a commercial agreement between lender and borrower.
He was satisfied that cl 13.02 was a submission both to the adjudicative
and enforcement jurisdiction of the court. In this he was clearly right, and
Mr Stephen Gee QC realistically no longer relies on this ground of appeal.
The question therefore is whether the enforcement jurisdiction of the
court was effectively invoked by the purported personal service of the Ord
48, r 1 order on Capt L, in Greece for one appointment, and in New York
for another. It is not necessary for us to consider whether service of the
order might not have been validly achieved under cl 13.02, because that
was not done. The actual service was either authorised by the rules, or it
was not good service.
I have no problem in uncritically accepting Mr Gee's initial propositions:
first, that Ord 11 contains the entire code authorising service out of the
jurisdiction, and second, that any gaps in that code cannot be filled by
the court's inherent powers, but require statutory authority (ie express
provision under Ord 11) to permit such service (see Re Busfield, Whaley
v Busfield (1886) 32 Ch D 123 at 132 and 133 and Re Anglo African
Steamship Co (1886) 32 Ch D 348 at 350).
The scheme of Ord 11 is that r 1 applies to the service of writs out of the
jurisdiction and r 9(1) extends Ord 11 beyond writs to the service out of
other sorts of originating process 'originating summons, notice of motion
or petition as it applies to service of a writ'. Those rules do not cover the
service of this order.
Order 11, r 9(4) deals with the service out of certain formal documents
ancillary to the process 'any summons, notice or order issued, given or
made in any proceedings'. The order made under Ord 48 for the judgment
debtor to attend for examination is clearly such an 'order... made in any
proceedings', as Mr Gee accepts. Nor does he contend (as counsel for
Capt L did before the judge) that the 'proceedings' in question finished
with the signing of judgment. The word covers both the adjudicative
proceedings leading to judgment and the enforcement proceedings
consequent upon that adjudication.
The rule then goes on to provide the two circumstances in which such
ancillary orders may be served out of the jurisdiction. First, with the leave
of the court. That was neither sought nor obtained in this case. Second,
the second limb of the rule provides:
'... leave shall not be required for [service out of the jurisdiction of, eg
Ord 48, r 1 orders] in any proceeding in which the writ... may by these
rules or under any Act be served out of the jurisdiction without leave.'
The competing arguments may be shortly stated. The plaintiff's first
contention is that the writ here could have been served out of the
jurisdiction without leave under Ord 11, r 1(2):
'Service of a writ out of the jurisdiction is permissible without the leave
of the Court provided that each claim made by the writ is either: -- (a)
a claim which by virtue of the Civil Jurisdiction and Judgments Act 1982
the Court has power to hear and determine, made in proceedings to which
the following conditions apply -- (i) no proceedings between the parties
concerning the same cause of action are pending in the courts of any
other part of the United Kingdom or of any other Convention territory, and
(ii) either -- the defendant is domiciled in any part of the United Kingdom
or in any other Convention territory, or the proceedings begun by the
writ are proceedings to which Article 16 of Schedule 1, 3C or 4 refers, or
the defendant is a party to an agreement conferring jurisdiction to which
Article 17 of Schedule 1, 3C or 4 to that Act applies...'
That submission is right in so far as it goes. The 1982 Act applies, Capt
L is domiciled in a convention territory, and there is an agreement
conferring jurisdiction to which art 17 of Sch 1 to the 1982 Act applies.
That much is clear.
But Mr Gee argues that, while the writ in this case might have been
served out of the jurisdiction without leave, in fact it was not. It was
served within the jurisdiction and the writ actually used was not suitable
for service out in that: (1) the time for acknowledgment of service was
14 days (the normal time in relation to service within the jurisdiction)
and not 21 days (as required by Ord 11, r 1(3)), and (2) the writ
actually served did not carry the indorsement required by Ord 6, r 7(1)b.
Therefore, it is submitted that Ord 11, r 9(4) is not complied with.
The point of construction at issue then is whether this limb of Ord 11, r
9(4) comes into play where the nature of the process complies with the
rule, or only where the writ on its face complies with the rule, ie was a
writ in proper form for service out of the jurisdiction (even though it was
to be served within the jurisdiction)?
I am in no doubt as to the answer. The rule is concerned with the
substance (the nature of the process) and not with mere form. The use
of the word 'may' recognises that the writ might not be served out of
the jurisdiction, and will not be in art 17 cases. If the proceedings are
appropriate proceedings (ie compliant with Ord 11, r 9(4)) which permit
the writ to be served out of the jurisdiction without leave, then when it
comes to the service of subsequent orders (such as Ord 48, r 1 orders) it
matters not whether the service of the writ was in fact made within the
jurisdiction, under eg art 17, or without. Nor does it matter that the writ,
legitimately used for service in, was not in the requisite form for service
out. Not only does it not matter, but there is no reason why it should
matter.
Our attention was drawn to The Supreme Court Practice 1995 para
48/1/1-3/6, which reads:
'Although the Court has express powers in specified circumstances to
give leave for service of process out of the jurisdiction (see, e.g. O. 11,
rr. 1 and 9), it has no general power to do so, and accordingly, the Court
will not make an order under r. 1 for the examination of a person who is
outside the jurisdiction (see Re Tucker ([1988] 1 All ER 603, [1990] Ch
148)).
I have no quarrel with that passage down to and including the words 'no
general power to do so'. What follows seems to me to be plainly wrong:
the court can give leave for service out under the first limb of Ord 11,
r 9(4), and no such leave is required under the second limb. And nor is
Re Tucker relevant to the construction of Ord 11, r 9. That case turned
on the construction of and jurisdictional limitations contained in s 25 of
the Bankruptcy Act 1914, and did not touch on the question we had to
consider.
Accordingly, I would dismiss this appeal.