Dennis v Tag Group Ltd & Ors [2017] EWHC 919 (Ch)

Case No CR-2016-007381[2017] EWHC 919 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 10/04/2017
Before
MR. REGISTRAR BRIGGS
Between
RONALD DENNISPetitionerTAG GROUP LIMITEDRespondentsBAHRAIN MUMTALAKAT HOLDING COMPANY B.S.CRespondentMCLAREN TECHNOLOGY GROUP LIMITEDRespondent
David Chivers QC and Ben Shaw (instructed by Herbert Smith Freehills LLP) for PetitionerJohn Brisby QC and Tom Gentleman (instructed by Cleary Gottlieb Steen & Hamilton LLP for First RespondentJohn Brisby QC and Tom Gentleman (instructed by Hogan Lovells International LLP) for Second Respondent.Hearing Hearing dates: 5 April 2017
JudgmentMr Registrar Briggs:Introduction
[1]The question for the Court is whether the First and Second Respondents, who are resident outside the jurisdiction, have submitted to the jurisdiction of England and Wales by participating in and resisting an injunction application.

The background

[2]The petitioner, Mr Dennis, is a 25% shareholder, director, employee, and was until November 2016 the Chief Executive Officer and Chairman, of the Third Respondent, McLaren Technology Group Limited (“McLaren”) which is a company incorporated in England and Wales. The First Respondent, TAG Group Limited (“TAG”) is a company incorporated in Jersey. The Second Respondent, Bahrain Mumtalakat Holding Company B.S.C (“BMH”) is incorporated in the kingdom of Bahrain. BMH manages the commercial assets and investments for the government of the Kingdom of Bahrain. Together TAG and BMH hold 75% of the McLaren issued share capital.[3]On 20 October 2016 Shaikh Mohammed Bin Essa Al-Khalifa, a nominee board member representing BMH, gave notice of a board meeting to be held on 4 November 2016. Two resolutions were tabled for discussion. The first, to place Mr Dennis on garden leave for a period of 12 months; the second to give an interim executive committee delegated authority to manage McLaren. It appears from the correspondence that there was a meeting of the board on 4 November 2016. Mr Dennis did not attend, but in any event it was adjourned to 11 November at 9:30 AM. Mr Dennis claims he has suffered unfair prejudice as a result of the resolutions to be passed (and now passed) and relies on purported breaches of the Companies Act 2006, articles of association, shareholder agreement and service agreement to support his petition.[4]On 8 November 2016 solicitors acting for Mr Dennis, Herbert Smith Freehills, wrote “It is obvious that the reputational and other damage to the company of the proposals being adopted cannot adequately be compensated in damages. Accordingly, we are instructed to seek an undertaking from [the Respondents] that they will not pass resolutions [placing Mr Dennis on garden leave and appointing the interim committee].” The letter ended “We would be grateful if [the Respondents] could provide details of solicitors in London who are authorised to accept service on their behalves.” Solicitors acting for McLaren wrote on 9 November that that they were instructed to accept service.[5]Solicitors acting for TAG responded on the same day, “As we have not had sight of a claim form or any other documents, we are not presently instructed to accept service. We will take instructions on service once we have had an opportunity to consider your client’s claim form, application and papers in support”. The letter ended “all our client’s rights, including as to jurisdiction and costs, are reserved.” Hogan Lovells responded on behalf of BMH in similar terms “Given that you have not provided any such documents we are not instructed to accept service presently. Once you have provided further details of your application and claim, we will take instructions on accepting service.” The letter from Hogan Lovells also ended “all our client’s rights, including as to jurisdiction and seek costs on an indemnity basis, are fully reserved” (sic). The next day, 10 November 2016, Herbert Smith Freehills wrote to the solicitors acting for the First and Second Respondents noting that neither of those firms were instructed to accept service on behalf of their clients, but stating that they would be supplied with the relevant documents in draft as soon as possible on 10 November should they wish to receive them. The letter informed the first and second Respondents that Mr Dennis would proceed to make an application for urgent injunctive relief as the requested undertakings had not been provided. Solicitors acting for TAG wrote, “we confirm that we wish to receive copies of all the documents immediately when they are available." The letter went on to say, “If the documents cannot be provided by 9:30 AM this morning, please provide, by that time, an explanation of the legal basis on which your client intends to seek an injunction against our client. This is necessary so that our client can consider what if any, representations it may wish to make at the hearing.” The letter finished by reserving rights “including as to jurisdiction and costs". Hogan Lovells e-mailed, having seen the letter sent by solicitors acting for the First Respondent, in similar terms, asking for “all documents for the application today" but not reserving the second Respondent’s position as to jurisdiction.[6]Mr Dennis issued the threatened application for injunctive relief seeking to restrain the Respondents from placing him on garden leave and delegating the authority of the board to the interim committee. The application came before Mr Justice Newey on 10 November 2016. Leading counsel attended for TAG and BMH. At the hearing, Mr Dennis gave an undertaking to issue a petition pursuant to section 994 of the Companies Act 2006 immediately. TAG and BMH gave an undertaking to the Court to use their best endeavours to procure a further adjournment of the board meeting until not before 5:30pm on 11 November. Solicitors acting for TAG and BMH asked for the draft petition that evening. Herbert Smith Freehills thought it unnecessary to send the draft petition in circumstances where they had been ordered to file the petition immediately, but nevertheless complied with the request, attaching the draft to an e-mail timed at 17.59. The petition was filed at Court and sent to the solicitors acting for the Respondents by email sent at 12:55 on 11 November 2016. On the same day Mr Registrar Baister gave standard directions for the petition ordering that it be served on or before 4pm on 25 November 2016. The Respondents then served and filed witness evidence in respect of the injunction early on 11 November and Mr Dennis served a witness statement prior to the hearing before the Chancellor. The CEO of TAG, Mr Mansour Ojjeh provided the following evidence in response to the injunction application:
“I believe that Mr Dennis’ aggressive and autocratic management style has caused conflict with sponsors and other stakeholders. One of my concerns relates to Mr Dennis’ management of MTGL, including, in particular, concerns about inappropriate overtime payments to him of more than £500,000 to which he was not entitled. In addition, Mr Dennis does not have the support of shareholders and has refused to step down from his role….”
[7]It is a reasonable reading of the witness statement that the claims made by Mr Dennis in the petition for breaches of the Companies Act 2006, the service agreement and shareholder agreement were answered by providing(i) reasons for the resolutions including breaches of the 2013 service agreement(ii) the ability of others to manage McLaren during the period of important negotiations with third parties and(iii) evidence as to the operation of the shareholder agreement and Aligned Shareholders’ Agreement.[8]The Chancellor of the High Court heard the contested injunctive proceedings later on 11 November 2016. Mr Brisby QC submitted that damages were an adequate remedy and accordingly no injunction should be granted. That was not his only submission; he submitted, in accordance with the witness statement I have mentioned above, that Mr Dennis had been in breach of his service agreement, the articles of association, had acted autocratically and that he was not fit to be CEO of McLaren. Having submitted that damages were an adequate remedy Mr Brisby QC continued “My Lord, one might understand the application if my clients were men of straw, because then there would be a concern that if he was removed now the damage would occur to the company and there would be no monetary compensation available. My Lord, that is why we major on that point.”[9]The Chancellor gave an extempore judgment:
“The approach to the grant of an injunction to restrain the dismissal or suspension of a director requires the Court to consider, as with other injunctions, whether the claimant has first demonstrated that he has a serious case to be tried for a permanent injunction for the substantive relief that he seeks. The Court then considers whether the damages would be an adequate remedy and then whether the injunction should be granted on the balance of convenience……… I am reluctant to decide today for good and all whether there is a serious case to be tried, because I do accept Mr Chivers’ submission that the context may be all important…….. I am going to assume for the purposes of argument today that Mr Chivers will be able to show that he has a serious case to be tried……. I turn instead to decide whether damages are an adequate remedy. What is said here is that because damage to the company may be so great that damages would not be an adequate remedy. The damages may be unquantifiable, because the company may be put in the hands of what is described as an inexperienced executive committee and it is put so high as to say that the removal of Mr Dennis will inflict serious financial and reputational damage on the company….. In my judgment, however, it is perfectly clear that TAG and BMH are capable of paying any, almost any, award damages that is realistically likely to follow if they establish their case at trial.”
[10]The application for an injunction was dismissed with an order that Mr Dennis pay the Respondents costs on a standard basis. Directions as to how the costs should be assessed were provided by the Court.

Argument on submission of jurisdiction

[11]On 2 December 2016 Mr Dennis issued an application seeking an order that he be treated as having effected good service of the unfair prejudice petition on TAG and BMH by e-mailing and couriering it to the London office of Hogan Lovells International LLP (Hogan) and Clearly Gottlieb Steen & Hamilton (Cleary) who are on the record for BMH and TAG respectively. The application is resisted. Mr Chivers QC and Mr Shaw submit that BMH and TAG submitted to the jurisdiction by their conduct in the injunction proceedings. Mr Brisby QC and Mr Gentleman argue(i) Hogan and Cleary reserved their clients’ position as to jurisdiction throughout the correspondence leading to the injunction hearing. The reservation framed in the correspondence acts like a shield so that any subsequent conduct cannot be viewed as submission to the jurisdiction(ii) as a matter of law there can have been no submission to the jurisdiction. Over and above this Mr Brisby QC argues that the Respondents had not had sight of the unfair prejudice petition when the application for an injunction was issued; there was no process to which his clients could have submitted.[12]On the issue of conduct Mr Brisby QC submits that the Respondents had no real option but to defend the injunction application otherwise they could have faced an order being made against them. The hearing on 11 November 2016 takes matters no further forward for Mr Dennis, Mr Brisby QC submits, as the injunction application was unjustified, and the Chancellor would have been aware of the protective words used in the correspondence. This is because the correspondence is mentioned Mr Ojjeh’s witness statement and the Chancellor had read his statement. Mr Brisby QC submits that the main thrust of the written and oral submissions made on behalf of TAG and BMH was that no injunction should be granted because there was a failure to raise a triable issue. As a result, no reasonable observer would have assumed from the submissions made on 10 or 11 November 2016 that TAG or BMH had accepted that the proceedings would continue in this jurisdiction.

Legal analysis

[13]Dicey, Morris & Collins, The Conflict of Laws (15th Ed), Rule 32 states that the Court has jurisdiction to entertain a claim in personam against a person who submits to the jurisdiction of the Court. The learned editors comment:
“A person who would not otherwise be subject to the jurisdiction of the Court may preclude himself by his own conduct from objecting to the jurisdiction, and thus give the Court an authority over him which, but for his submission, it would not possess. The principal is also expressed in Art. 24 of the Brussels I Regulation and of the Lugano Convention. ……. A person who appears voluntarily after service on him submits to the jurisdiction, even though he is out of England at the time of issue and service of the process. He may, for instance, instruct his solicitors to accept service on his behalf; and the Civil Procedure Rules provide that where a solicitor is authorised to accept service on behalf of a party, in principle process must be served on the solicitor. But the solicitor may accept service of proceedings on the basis that the defendant remains free to contest the jurisdiction in the same way as if the claimant had obtained permission to serve abroad and had effected service abroad. If the defendant instructs his solicitor to accept service and the solicitor communicates those instructions to the claimant, the defendant will be regarded as having submitted, even if the instructions are withdrawn.”
[14]The authors of the Conflict of Laws explain that the general principle is that a person who appears merely to contest “the jurisdiction of the Court does not thereby submit”. Further, in order to establish that the party “by his conduct in the proceedings”, has “submitted or waived his objection to the jurisdiction, it must be shown that he has taken some step which is only necessary or only useful if the objection has been waived or never been entertained at all”.[15]Mr Brisby QC submits that although steps had been taken in the November application, legal principle does not permit an inference of submission to the jurisdiction to be drawn where a party is defending an injunction. I asked for the rationale for this proposition. He responded(i) there can be no submission if the proceeding does not include an ability to acknowledge service. The unwary may otherwise submit without being alerted (by the acknowledgement of service form) that it could contest the jurisdiction; and(ii) a party is entitled to defend an interim and urgent injunction application without being taken to have submitted to the jurisdiction.[16]Reliance is placed on Obikoya and Others v Silvernorth Limited, The Times, 6 July, 1983 where Mr Justice Parker found that a party is not to be taken to have submitted to the jurisdiction with regard to the main action, merely because he had later applied to discharge an injunction. The test, says Mr Brisby QC, can be gleaned from Rein v Stein (1892) 66 LT 469 at 471 which was approved by the House of Lords in Williams & Glyn’s Bank plc v Astro Dinamico Comp Nav SA [1984] 1 WLR 438 at 444 which is cited in the Conflict of Laws for the proposition that a defendant will be taken to have submitted to the jurisdiction if he has “taken some step which is only necessary or only useful if the objection has been waived or, never been entertained at all”. Drawing on these authorities in Advent Capital Plc v GN Ellinas Imports-Exports Limited [2005] 1 CLC 1058 Colman J explained: “[The] relevant test is whether the party has by his conduct in the proceedings acted in such a way which is only necessary or only useful if objection to the jurisdiction of the Court in question has been waived or has never been entertained at all ………The essence of the test is that- reflected in the word ‘only’ - there has to be an unequivocal representation by word or conduct that objection is not taken to the relevant jurisdiction. In the present case the Insurers’ conduct in not relying on the jurisdiction clause to exclude Cypriot jurisdiction at the time of their original challenge to the jurisdiction in September 2002, following entry of appearance in the Nicosia Proceedings or thereafter until they issued proceedings in England in the Injunction Action on 12 September 2003, was clearly not such as to satisfy the test of conduct unequivocally referable to submission to the jurisdiction”.[17]Mr Brisby QC and Mr Chivers QC both rely on SMAY Investments Limited v Sachdev [2003] 1 WLR 1973, a decision of Patten J (as he was). Having set out the facts of the case and nature of the disputes between the parties, he found that “when a defendant has complied with CPR Pt 11 with a view to challenging the jurisdiction of the Court, and the time for making his application under CPR r11(4) has not yet expired, then any conduct on his part said to amount to a submission to jurisdiction, and therefore a waiver of that right of challenge, must be wholly unequivocal”. Patten J went on to find:
“In the present case, however, the first defendant’s conduct was anything but unequivocal. He indicated in the affidavit sworn on 5 December and served prior to the hearing on 6 December that he intended to contest jurisdiction. Mr Deacon indicated to Peter Smith J that the full inter parties hearing would involve a contest on jurisdiction, and the undertakings offered were only until that effective hearing. Therefore the only order sought and obtained by the first defendant from the judge on 6 December which was in any way inconsistent with the challenge to jurisdiction being maintained was the extension of time for service of the defence. That was strictly unnecessary, see CPR rule 11 (9), but it can only operate as an unequivocal submission to the jurisdiction if the only possible explanation for it is an intention on the part of the first defendant to have the case tried in England.”
[18]In Esal (Commodoties) Limited v Mahendra Pujara [1989] 2 Lloyds Law Reports 479, the Court of Appeal considered a dispute between the parties as to the ownership of shares. The claimant had obtained an injunction restraining the defendant from disposing of the shares. The question for the appeal Court was whether the defendant had submitted to the jurisdiction.

Lord Justice Slade said (483):

“It has throughout to be borne in mind that on 22nd May 1986 the plaintiff was asking the Court to renew injunctions which would otherwise have expired on that date. Against that background the defendant did not take any of the alternative courses which, in my view, he might reasonably have been expected to take if he had intended to apply for an order setting aside the service of the writ. His counsel did not ask for the motion to be adjourned until a specified date or to be heard as a motion by order or pending the hearing of an application by him…… He did not ask that the consent order should contain a provision expressly giving him the right to make such an application. He did not expressly reserve the right to make a challenge of this nature. He did not even tell the judge that such a challenge was under contemplation. Instead, he consented to an order which not merely granted an injunction “until after judgement in this action or until further order in the meantime”, but also contained (a) an express reference…to the opening of a deposit account in certain contingencies in which the monies were “to abide the outcome of these proceedings”, and (b) expressly reserved the costs of the motion “to the trial”.”
[19]In my judgment the following can be gleaned as guidance from the authorities: i) A person submits to the jurisdiction if he voluntarily recognises that the Court has jurisdiction; ii) He does not submit if he plays no part in the proceedings; iii) He may submit if he takes a step in the proceedings without making it clear that he wishes to argue jurisdiction as a preliminary issue; iv) The Court may infer voluntary submission from the circumstances using an objective test (referred to in Sage v Double A Hydraulics Limited [1992] The Times Law Reports 165 as a ‘well-informed’ but ‘disinterested bystander’ test); v) When making an inference the Court will have regard to whether the step or act said to create an effective waiver of the right to contest or voluntary submission was unequivocal and cannot be explained except on the assumption that the party in question accepts that the Court has jurisdiction; vi) If a party states in correspondence that he is not going to submit to the jurisdiction but the statement conflicts with his conduct such as to leave an objective observer in no doubt of waiver or submission, the prior statement is unlikely to prevail; vii) Once submission has been made it cannot be revoked.[20]In my judgment, there is no special carve-out for injunction applications as submitted by Mr Brisby QC. The same objective test applies as to any situation where jurisdiction is challenged. I accept that, on the facts of Obikoga and SMAY Investments the Court found that the actions of the party resisting jurisdiction were inconsistent with voluntary submission to jurisdiction. In the latter case the defendant filed an acknowledgment of service indicating an intention to defend, but before the time for challenging jurisdiction expired applied to set aside the freezing injunction. The principles applied to reach those conclusions were, in my judgment, conventional. The decisions were not made because of a potential unfairness for the unwary, or the need for a party to defend injunction applications. It would be perfectly possible to defend such an application by contesting jurisdiction at the hearing of the injunction. Support for this view can be found in The Conflict of Laws at 11-130:
“Submission has been inferred when the defendant applied to strike out part of the claim. It has also been inferred when the defendant filed affidavits and appeared through counsel to argue the merits on the claimant’s application for an injunction; or when the defendant consented inter partes to the continuance of a freezing injunction without reserving his right to contest the jurisdiction; or when he sought to set aside a committal order and gave an undertaking and submitted evidence; when he moved to set aside a default judgement that the same time applied for an order that the plaintiff deliver a statement of claim; and when he applied for an order for security for costs. The clear trend of the modern authorities is that the defendant will not be regarded as having submitted by making an application in the proceedings, provided that he has specifically reserved his objection to the jurisdiction.”
[21]One of the cases referred to in The Conflict of Laws is Boyle v Sacker [1888] 39 Ch 249. The concise judgment of Cotton LJ merits repeating:
“In this case three preliminary objections have been taken, first, that the Appellant appeared and took his chance of success or failure on the merits, and after that cannot object that he is not properly made a party; secondly, that he has never applied to discharge the order for service; and thirdly, that the appeal is out of time. I shall say nothing about the third objection, but the first and second are of some importance. When the defendant was served with the order of Mr Justice Charles, if he objected to it, he ought to have moved to discharge it……..Whether his counsel addressed the Court or not is immaterial. On the 23rd June, both parties having filed affidavits, the motion came on, and counsel appeared for the defendant and argued the case. During the argument an objection was taken to the order of the 28th of May which objection Mr Justice Chitty very properly refused to entertain, as there was no motion to discharge the order. The Defendant’s counsel did not, even then, say “we are not properly here”, they argued the case on the merits, which they had no right to do except upon the footing of the Defendant being a party. After this, I am of the opinion that he cannot be heard to say that he was not properly served.”
[22]I have been taken to no authority supporting the submission that there is a carve-out in respect of injunctions for the reasons provided by Mr Brisby QC. It seems to be unanswerable that a foreign party may defend injunction applications on the basis that they unequivocally do not submit to the jurisdiction. There are no hard and fast rules with fact sensitive inquiries. So, if one foreign company sues another foreign company in England & Wales (presuming no jurisdiction clause binds the parties) and the defendant seeks a declaration that the Court has no jurisdiction, making at the same time a separate application for security for costs, the separate application will not amount to a voluntary submission. There would be a submission if it had not been for the first application- the declaration. The Court is at all times, evaluating the factual matrix and asking itself whether a disinterested bystander would view the Respondent party as having unequivocally submitted to the jurisdiction.

Intention to defend in England

[23]In my judgment the following factors weigh in favour of a finding that there has been a voluntary submission to the jurisdiction by TAG and BMH: i) The indication on 9 November that Cleary would accept service if they had sight of the papers: “as we have not had sight of a claim form or any other documents, we are not presently instructed to accept service”; ii) The correspondence from Cleary on 10 November stating: “we confirm that we wish to receive copies of all the documents immediately when they are available.” and the subsequent receipt of the documents; iii) The correspondence from Hogan asking for “all documents for the application today” and the subsequent receipt by e-mail; iv) The hearing before Mr Justice Newey where the Respondents provided an undertaking to the Court without informing the Court that it was doing so on a “clear and express without prejudice basis” (adopting the words of Sir Andrew Morritt C in Global Multimedia v ARA Media [2007] 1 All ER (Comm) 1160 at 1173); v) The order of Mr Justice Newey which was drafted by counsel after Court and later agreed between the parties. No express reservation as to jurisdiction was included in the Court order. The failure to include an express reservation to make a challenge to jurisdiction was a factor in Esal (Commodities); vi) The undertaking provided by the Respondents was given without a clear and express statement that jurisdiction was or would be contested. This is consistent with a voluntary submission to the jurisdiction. The Court would not have known that the undertakings may not be enforceable within the jurisdiction as it was not informed of a reserved right to challenge during the hearing; vii) The provision by e-mail of “all” the documentation in draft on the evening of 10 November 2016 in order to permit the Respondents to draft full witness statements in response. An objective observer would in my judgment, view the requirement to provide a full witness statement in response to the merits, as a voluntary submission; viii) The time spent in preparing and later relying on witness statements drafted by the first and second Respondents focusing on the merits of the unfair prejudice petition. There was no requirement to prepare witness statements or provide a skeleton argument on the merits of the case if jurisdiction was contested, but the absence of argument on jurisdiction in the skeleton argument (but a mere reservation buried in the witness statements) makes more powerful the argument that a contest as to jurisdiction had been waived; ix) During the hearing before the Chancellor on 11 November the Court was not informed that the injunction application was resisted on the ground of jurisdiction; x) Counsel for the First and Second Respondents dealt at that hearing with the merits without a clear and express statement that jurisdiction was in issue. The disinterested bystander would view the hearing as evidence of an unequivocal submission to jurisdiction; and xi) A major plank of the argument before the Chancellor, which succeeded, was that damages were an adequate remedy. The Chancellor was not informed that damages would have to be enforced in a different jurisdiction.[24]Against these factors, the correspondence from 9 November to 11 November from Cleary and Hogan Lovells included phrases such as “All of our client’s rights, including as to jurisdiction and costs, are reserved” and “All our client’s rights are reserved, including as to jurisdiction and costs.” Sunil Gadhia of Cleary provides a witness statement:
“TAG’s skeleton argument for the hearing on 11 November invited the Chancellor to read Mr Ojjeh’s statement prior to the hearing. At the start of the hearing the Chancellor confirmed that he had read the witness statements; so he would have read the reservation of TAG’s position as to jurisdiction contained in Mr Ojjeh’s statement……..The principal thrust of the oral submissions made by leading counsel for TAG was that no injunction should be granted because the Petitioner had failed to raise a triable issue- i.e. the same ground that would be material in resisting or applying to set aside an order for service outside the jurisdiction.”
[25]In respect of the first argument about the use of the term “reservation” in correspondence, Mr Chivers QC and Mr Shaw argue that it is meaningless. In context, the term used merely informs the reader that TAG and/or BMH may contest jurisdiction at some point in the future. It is an equivocal statement but in any event was superseded by conduct waiving the right to contest jurisdiction. It is not possible to reserve a right to contest something that has been waived.[26]Looking at subsequent events, the Respondents did not deal with the issue even after the hearing on 10 or 11 November. They merely purported to reserve their position. At its highest, it is submitted, the wording used in the correspondence, means that nothing contained in the correspondence should be taken as agreeing jurisdiction.[27]Having heard the argument made by Mr Chivers QC, Mr Brisby QC and Mr Gentleman conceded the language used “does not protect” the Respondents’ position. In my judgment the concession was rightly made. To reserve is not the same as informing the Court or other party that “we are not properly here” (Boyle v Sacker); or jurisdiction is in dispute (Williams & Glyn’s Bank Ltd v Astro Dinamico Compania Naviera S.A); nor does the language used inform the Court that the Respondents intend to challenge jurisdiction (Esal (Commodities) v Pujara); or leave little doubt that jurisdiction is in issue (Global Multimedia v ARA Media [2007] 1 All ER (Comm) 1160, 1168). The language used by the Respondents is insufficient.[28]In the context of the arguments made before Mr Justice Newey and the Chancellor there is nothing in the argument raised by Mr Brisby QC, that the legal test to resist an injunction is the same as to set aside an order for service outside the jurisdiction. It does not follow that there cannot have been a waiver of the right to contest jurisdiction due to a legal test alignment. The Respondents did not argue that the injunction should not be granted for want of jurisdiction. There was no submission that the injunction was to be argued on the merits because the tests were aligned. In my view the fact that the tests are aligned is an afterthought.[29]In my judgment, the factors set out in paragraph 23 above lead to the conclusion that TAG and BMH voluntarily submitted to the jurisdiction of England & Wales. Nothing in the correspondence, served witness statements, skeleton argument or submissions to the Court on 10 or 11 November, or in the orders subsequently granted, express an intention to contest jurisdiction: cfSMAY Investments v Sachdev, where the Court was informed at the hearing that a full inter-parties hearing would involve a contest on jurisdiction and undertakings were offered only until the outcome of the challenge hearing. In my judgment, such a finding on the facts of this case demonstrates unequivocal submission such that the only possible explanation for the actions (and inactions) of TAG and BMH is an intention to have the cases tried in England; this is consistent with authority: Esal (Commodities) v Pujara; SMAY Investments Limited v Sachdev; The Messiniaki Tolmi [1984] 1 Lloyd’s Rep 266.

Application of Article 24 of the Brussels Regulations

[30]I need not deal in detail with the interesting argument as to whether or not the High Court is bound by Choudhary v Bhatter [2010] 2 All ER 1031 which concerned service out and the application of the Brussels Regulations. The case concerned a company incorporated in England in 1872. It had no connection with England and carried on business in India. The claimants sought to restrain the company and the director from acting in what purported to be letters of resignation from the board for the first and second claimants. At first instance the English High Court found that it was obliged to accept jurisdiction as a result of the Brussels Regulations. The decision was reversed on appeal but the appellant court noted that there was an “absence of authority which compels a different conclusion”.[31]In Dar Al Arkan Real Estate Development Co & Anor v Al Refai& Ors [2014] 1 CLC 813, Andrew Smith J accepted a submission that section 3 of the European Communities Act 1972 applies to the Brussels Regulation, compelling the English Courts to determine issues of construction in “accordance with the principles laid down by and any relevant decision of the European Court”.[32]The judge found that the Court system, operating in accordance with the hierarchical system, “should make determinations in accordance with the requirements of the section.” He concluded that although a contempt application was a proceeding concerned with the enforcement of judgments, “in deference to the Choudhary decision, article 22 does not cover the committal application against Sheikh Abdullatif because he is not domiciled in a Community jurisdiction.” The Court of Appeal ([2015] 1 WLR 135) found that Article 22(5) of the Regulation enabled a Court of the European Union to assume jurisdiction against a person who is not domiciled in a member state of the European Union. The Court of Appeal found that the committal proceedings could have been served on the receiving party without permission of the Court. Beatson LJ said:
“since I have concluded that the appeal on CPR r81.4(3) does not succeed, it is not necessary to rule on the second defendant’s cross-appeal. In these circumstances, any view expressed as to whether the decision in Choudhary’s case was per incurium and the effect of the decisions of the Court of Justice of the European Union would be obiter, and therefore would not resolve the issue. The Court has, however, heard full submissions on this point. Moreover, since, if article 22(5) enables this Court to assume jurisdiction against a person who is not domiciled in a member state, the claimant will be able to serve out without obtaining the permission of the Court, the question is one of practical importance. For those reasons, albeit with some hesitation, I have concluded that it is appropriate to express a view on the Choudhary point, while recognising that it will not resolve the question……. The judge’s reasoning on the question of whether the jurisprudence of the Court of Justice of the European Union means that, notwithstanding the citation of different parts of the judgments by Sir John Chadwick in Choudhary’s case that decision is per incurium, appears to me to be compelling.”
[33]The Regulation has been ‘recast’ since Choudhary. The decision of Choudhary is persuasive but full regard must be had to the equally persuasive Dar Al Arkan Real Estate Developments Co. Recently Mr Justice Teare found that Choudhary need not be followed as a result of the implementation of the Recast Brussels Regulations,in Deutsche Bank AG v Sebastian Holdings Inc & Alexander Vik [2017] EWHC 459 found: “the amended wording of Article 24(5) together with the reasoning….of the Court of Appeal in Dar Al Arkan makes it clear that the exclusive jurisdiction provisions in the article apply ‘regardless of the domicile of the parties’ ”.[34]Faced with two persuasive Court of Appeal cases, the most recent of which heard full argument and the most distant in time not having heard full argument, a finding that the first in time Court of Appeal decision was per incuriam (the “decision [in the first Court of Appeal case] is per incuriam appears to me to be compelling”) and the judgment of Mr Justice Teare considering the Recast Brussels Regulation, I would follow the reasoning of Mr Justice Teare, and find that permission to serve out was not required.

Conclusion

[35]In conclusion I find, adopting an objective disinterested bystander test, TAG and BMH unequivocally voluntarily submitted to the jurisdiction of the English Court or waived their right to contest jurisdiction. In the alternative, the exclusive jurisdiction provisions of Article 24 of the Recast Brussels Regulation applies regardless of the domicile of the parties.[36]Order accordingly.