“24. In any case, based on Order 6(1)(e) of the Civil Procedure Rules, on when the service out of the jurisdiction is permitted provided always that a good arguable case is demonstrated, it is for the action to be raised to impose or rescind or dissolve or in any way affect a contract or rectify damage or other relief for or in relation to a breach of contract made in Cyprus. In the present case, the illegal and irregular loan agreements were signed in Cyprus. 25. At this stage, I would also note that, according to the five loan agreements, it is provided that the courts of England and Wales are competent over disputes arising under those agreements but do not have exclusive jurisdiction; As a result such dispute may also be settled in the courts of Cyprus, even if the law to be applied is English. Regarding this, I attach the 5 Loan Agreements as a set of Exhibits 9and in particular I refer the Court to Term 10 of each loan agreement.”
“64. Therefore, and in accordance with all the above, it is clear that this is not a genuine liquidation, as the Applicants call it, debt, but a shareholders’ dispute. It should also be noted that there is no Shareholders’ Agreement between the shareholders of the Company (and the other companies involved in the development of the 3 projects in general), governing their relations. 65. Alexander Nikolaev himself, who for a long time had control over the Company and was and continues to be the ultimate beneficial owner of the Applicants, has created the Company’s alleged debts and the moment he lost complete control of the Company by trying to exploit the same, he decided to pursue its dissolution to regain control of the 3 projects as the Company holds a key position in the group of companies behind these projects. He had followed the same tactic in the British Virgin Islands (BVI) which had failed. This paragraph summarizes the essence of this Application.”
“What Pyxis contends to establish its defence in the present petition, namely that there is a genuine dispute with regards to the debt and therefore the Petitioner’s claim is not liquidated, is raised and asked in the form of declaratory orders in the action which the Respondent characterizes as a derivative action. The Petitioner challenges whether that action is indeed a derivative action. It is not for the present Court, in the context of the winding up petition, to decide on the merits of the action. Neither the Court will decide whether the claimants are to be given the remedies they seek. This is a matter for the Court, before which the aforementioned action is pending. Otherwise, the substance of the claim would be decided in the context of a winding up, which I consider impermissible.”
“I intend to defend all of this claim”
“I intend to contest jurisdiction.”
“If you do not file an application to dispute the jurisdiction of the court within 14 days of the date of filing this acknowledgment of service, it will be assumed that you accept the court’s jurisdiction and judgment may be entered against you.”
“11.….In preparing the witness statement Osborne Clarke consulted Infinitum’s Cypriot lawyers about the steps taken in the derivative action, and specifically Mr Tsirides. In circumstances where there was not known to be any dispute about the fact that Pyxis had been served, nor indeed that such a dispute might be relevant (which is any event denied, since Awendale has submitted to the Cypriot jurisdiction), it did not appear necessary to exhibit any document evidencing the fact that Pyxis had been served. The affidavit of service of Awendale was also not exhibited to that witness statement. When we realised that Awendale disputed service, we sought and obtained the affidavit of service. 12. As to the earlier absence of the affidavit from the court file, we understand from Mr Tsirides that is it not the practice in the District of Limassol for the affidavit of service to be placed on the court file by the bailiff after service. It is usually given by the bailiff to the lawyers, who will file it in Court only if they need to prove service as part of some application. We trust that this resolves the question.”
“1. Without prejudice to Article 31(2), where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. 2. In cases referred to in paragraph 1, upon request by a court seised of the dispute, any other court seised shall without delay inform the former court of the date when it was seised in accordance with Article 32. 3. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.”
“1. Where actions come within the exclusive jurisdiction of several courts, any court other than the court first seised shall decline jurisdiction in favour of that court. 2. Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement. 3. Where the court designated in the agreement has established jurisdiction in accordance with the agreement, any court of another Member State shall decline jurisdiction in favour of that court.”
“Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 24.”
“[16] In particular, in a case such as this, involving the international sale of tangible moveable property, it is apparent that the action to enforce the contract is aimed at giving effect to it, and that the action for its rescission or discharge is aimed precisely at depriving it of any effect. The question whether the contract is binding therefore lies at the heart of the two actions. If it is the action for rescission or discharge of the contract that is brought subsequently, it may even be regarded as simply a defence against the first action, brought in the form of independent proceedings before a court in another Contracting State. [17] In those procedural circumstances it must be held that the two actions have the same subject-matter, for that concept cannot be restricted so as to mean two claims which are entirely identical.”
“It is true that, in Gubisch, the court held that the concept of "the same subject matter," which, in effect, it interpreted into the English text by reference to the other language versions, could not "be restricted so as to mean two claims which are entirely identical:" para. 17. In practice, it applied that reasoning to the two actions, one of which was brought to enforce, and the other to rescind or discharge, the same contract. In doing so, it attached great importance to the purpose expressed, inter alia, inarticle 27(3) of the Convention of avoiding irreconcilable judgments between the same parties and how such judgments could arise if the competing claims had to be "entirely identical" before a lis alibi pendens plea could be upheld. That reasoning is not, however, equally applicable to the concept of "the same parties," since the judgment proceeds on the assumption that, whatever differences exist in the subject matter, the parties are the same. Nothing in the judgment, in the text of article 21 or in the purpose of the Convention requires that a flexible approach be adopted in that instance. The contrary is rather the case. Judgments are, in my view, truly irreconcilable only if they are contrary and given in actions between the same parties.”
“in considering whether two entities are the “same party” for the purposes of applying the regulation, the court looks to the substance, and not the form.”
“86. How are these principles to be applied to the present case? If there has been an effective legal assignment of the rights of the original claimants under the Assignment, then (section 136(1) of the Law of Property Act 1925 ) the assignment is effective to transfer (from the date of notice to the “debtor”), the legal right in the thing in action transferred, all legal and other remedies for the thing in action and also “… the power to give a good discharge for the same without the concurrence of the assignor.”
“19. A derivative action under Cyprus Law is a procedural device, under the Foss v Harbottle rule, whereby an action may be brought by the aggrieved minority shareholders for a wrong allegedly done to the company where they are shareholders. The alleged wrongdoers are made the defendants in the action and the company is joined as a nominal defendant so that the company can be bound by the judgment and recover any damages awarded by the Cyprus Courts. 20. Although any remedy recovered goes to the company, the company is not named as a plaintiff.”
“The company must be made a defendant to the action. As already pointed out, the company is the true plaintiff, and if a money judgment is recovered against the true defendants – the wrongdoing directors or other controllers – this will be in favour of the company and not in favour of the individual shareholder who is nominal plaintiff. The company cannot, in fact, be the plaintiff, because neither of its organs – the board of directors and the general meeting – will authorise suit by it. As the next best thing the court insists upon its being made the nominal defendant.”
“ix. If both affiants say the truth then I can only conclude that the claimant in the Cyprus Action failed to file the evidence of service on Pyxis and I can say that what matters are the contents of the Court file and nothing else. x. If the fact that Pyxis service documents were not in the court’s file was brought to the attention of the Cyprus judge the order to serve on Awendale abroad would never have been issued. This is because the phrase “against some other person” in Order 6(1)(h) of the Cyprus procedure Rules (see paragraph 41(ii) above) should not be understood to mean that it suffices to serve just any one of the defendants who are Cypriot residents. The requirement should be understood that all Cypriot residents must be first served before the claimant being eligible to apply for leave to serve abroad.”
“the courts of England and Wales are competent over disputes arising under those agreements but do not have exclusive jurisdiction”
“(1) A defendant who wishes to— (a) dispute the court’s jurisdiction to try the claim; or (b) argue that the court should not exercise its jurisdiction, may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have. (2) A defendant who wishes to make such an application must first file an acknowledgment of service in accordance with Part 10. (3) A defendant who files an acknowledgment of service does not, by doing so, lose any right that he may have to dispute the court’s jurisdiction. (4) An application under this rule must— (a) be made within 14 days after filing an acknowledgment of service; and (b) be supported by evidence. (5) If the defendant— (a) files an acknowledgment of service; and (b) does not make such an application within the period specified in paragraph (4), he is to be treated as having accepted that the court has jurisdiction to try the claim.”
“The claims in the Greek proceedings fall outside the jurisdiction clause in the policy and the jurisdiction clause in the settlement agreement. It is respectfully denied therefore that the High Court of Justice of England and Wales has jurisdiction to determine the claims in the Greek proceedings.”
“19. The insurers sought to enforce the settlement agreements referred to in the Tomlin orders and, in a judgment handed down on19 December 2011 , having refused a stay under article 28, the judge held that they were entitled to summary judgment for (inter alia) a declaration that the matters sought to be raised in Greece were part of the settlement of the claim and that Starlight (and OME) are bound to indemnify the insurers against any costs incurred and any sums that may be adjudged against them in the Greek proceedings. 20. As stated above, the Court of Appeal held that it was bound to stay the 2006 proceedings and 2011 Folio 702 and 1043 under article 27, made no final determination of the position under article 28 and declined to consider the issues of summary judgment. The Court of Appeal also held that it was not too late for the owners to rely on article 27 or article 28.”
“121. In my judgment, there is no sensible basis on which it can be said that the time limit underCPR r 11 (4), which can in an appropriate case be extended underCPR r 3.1 (2)(a), is contrary to EU law. The time limit satisfies the principle of equivalence because it is the same rule that applies in all cases. It fulfils a legitimate aim, namely making sure that points going to whether the proceedings are to be tried on their substantive merits in England are taken promptly and without unnecessary costs. It satisfies the principle of legal certainty because parties need to know where they stand. The absence of a time limit would allow a litigant to take the point years afterwards. Moreover, the time limit does not render the right to apply for a stay under article 27 (or article 28) impossible or excessively difficult to exercise. It allows sufficient time for the point to be raised, especially given the express rule permitting an extension of time in appropriate cases. 122. As to the expression “of its own motion” in article 27, there are a number of different parts of the Regulation that have a similar provision. On the facts here the potential for a stay under article 27 was before the courts on at least two occasions. The position was explained to Judge Mackie QC on the without notice application referred to above. There is no reason to think that he did not give consideration to the position. More importantly perhaps the position was explained to the judge in the skeleton arguments to which I have referred. He was given both reasons and authority on the question whether a stay should be granted under article 27. It seems to me that the judge was entitled to accept those submissions, which were made on the owners' behalf by experienced counsel and solicitors. 123. For these reasons I would hold that the Court of Appeal should have refused to allow the owners to rely on article 27 in the Court of Appeal. That said, I would accept that the meaning and effect of the duty to consider article 27 of its own motion are matters of some potential importance and I have (somewhat reluctantly) reached the conclusion that they are not acte clair. I would therefore refer an appropriate question to the Court of Justice of the European Union if it were necessary in order to resolve the appeal. If the insurers abandon the claims to the declarations referred to in paras 58 and 59 above, such a reference will not be necessary because, for the reasons given above, I would allow the appeals under article 27 in their entirety.”
“As there may be several concurrent international jurisdictions, and the courts of different States may properly be seised of a matter (see in particular Articles 2 and 5), it appeared to be necessary to regulate the question of lis pendens. By virtue of Article 21, the courts of a Contracting State must decline jurisdiction, if necessary of their own motion, where proceedings involving the same cause of action between the same parties are already pending in a court of another State. In cases of lis pendens the court is therefore obliged to decline jurisdiction, either on the application of one of the parties, or of its own motion, since this will facilitate the proper administration of justice within the Community. A court will not always have to examine of its own motion, whether the same proceedings are pending in the courts of another country, but only when the circumstances are such as to lead the court to believe that this may be the case.”
“It is true, as F&M points out, that the Supreme Court did not regard this conclusion as acte clair (see [123]) and that it would (if necessary) have referred an appropriate question to the Court of Justice of the European Union. However, the fact that the issue can ultimately be resolved authoritatively only by the CJEU does not mean that the decision in The Alexandros T is not binding in the meantime. It is plainly binding on this court, and I take the rule to be, therefore, that notwithstanding the mandatory language of Article 27, CPR Pt 11(4) and (5) may apply so as to bar a challenge which is late under the rules, and deem the applicant to have submitted to the jurisdiction.”
“As a matter of law, however, I reject S.E.T.'s submission that the sole route available to a defendant in the position of F&M is an application for relief against sanctions under CPR Pt 3.9 . This question is covered by authority.
“Furthermore, it is relevant that the CPR in this context is concerned with civil procedure not in the purely domestic context, but with the relationship between proceedings carried on at the same time in different member states of the EU. The mutual recognition of judgments under the Judgments Regulation includes rules as to lis pendens and related actions intended (among other things) to preclude inconsistent judgments. Though the CPR Pt 11(4) time limit is not objectionable under EU law (see The Alexandros T, ibid, at [121]), the context may (in my view) operate as a factor when considering whether to extend time. This is because a case might be heard in England which might otherwise not have been had the jurisdiction application been on time. This was the approach adopted by Beatson J in Polymer Vision R & D Limited v Van Dooren[2011] EWHC 2951 (Comm) at [79] based on Texan Management Ltd v Pacific Electric Wire & Cable Company Ltd[2009] UKPC 46 , and I would follow the same approach.”