MUNIB MASRI v CONSOLIDATED CONTRACTORS INTERNATIONAL (UK) LTD [2005] EWHC 944 (Comm)

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
[2005] EWHC 944 (Comm)Case No Case Nos: 2004 FOLIO 124 and 2004 FOLIO 831Venue Royal Courts of Justice, Strand, London, WC2A 2LL
Between
MUNIB MASRIClaimantCONSOLIDATED CONTRACTORS INTERNATIONAL (UK) LTDDefendant
Before
Mr Justice CresswellMr Jonathan Sumption QC and Mr Simon Salzedo (instructed by Simmons and Simmons) for the ClaimantMr Charles Aldous QC and Mr Simon Birt (instructed by Herbert Smith LLP) for the DefendantHearing dates:
[1]Mr. Justice Cresswell : INTRODUCTION The facts set out in this Introduction have not been fully investigated and are taken from the written evidence before the court as being those which can be accepted for the purposes of the present applications only.[2]The claimant ("Mr. Masri") resides in Jordan. In both actions, he seeks damages in respect of the alleged non-performance of a written contract he entered into on 6 November 1992 ("the 1992 Agreement").[3]The corporate defendants are companies in the Consolidated Contractors Group of Companies ("the Group"):(1) The holding company is Consolidated Contractors Group SAL Holding Company ("CC Holding"), a company incorporated in Lebanon.(2) Consolidated Contractors International Company SAL ("CCIC") is a Lebanese company with its principal office in Greece.(3) Consolidated Contractors International (UK) Ltd ("CCUK") and Consolidated Contractors (Oil and Gas) SAL ("CC Oil & Gas") are group subsidiaries incorporated in England and Lebanon respectively.[4]Mr. Said Khoury is a co-founder of the Group. He is President of CCIC and of CC Holding. Mr. Khoury is domiciled in Greece.[5]The 1992 Agreement relates to rights in an oil field in South Yemen, known as the Masila Block or Masila Concession ("the Concession"). The relevant oil interest – a 10% interest in the Concession – was initially held by CCIC. It was agreed to be assigned to CC Oil & Gas by an assignment dated 25 October 1992. The defendants contend that CCIC still held the interest at the time of the 1992 Agreement because the assignment had not then taken effect. Mr. Masri contends that the assignment was effective on 25 October 1992 so that by the time of the November 1992 Agreement, the relevant interest had passed to CC Oil & Gas. The interest is currently held by CC Oil & Gas.[6]The 1992 Agreement was signed by Mr. Masri and Mr. Khoury. Mr. Masri was himself a party to the 1992 Agreement. The identity of the party on whose behalf Mr. Khoury was acting when he signed the 1992 Agreement is in dispute:(1) The defendants say that the contracting party was CCIC.(2) Mr. Masri says that the contracting party was CCUK. In the alternative, Mr. Masri contends that the contracting party was CC Holding, or, in the further alternative, CCIC, CC Oil & Gas or Mr. Khoury.[7]In the First Action (2004 Folio 124), Mr. Masri claimed against CCUK, alternatively CC Holding. Mr. Masri has discontinued the claim in the First Action against CC Holding.[8]In the Second Action (2004 Folio 831), Mr. Masri claims in the alternative against Mr. Khoury, CC Holding, CCIC and CC Oil & Gas.[9]CCUK applies for summary judgment in the First Action and for an order that the claim against CCUK in the First Action be dismissed.[10]The defendants to the Second Action, who are all out of the jurisdiction, submit that there is no justification for proceedings in England, and each of these parties therefore contests the jurisdiction of this court. Mr. Khoury and CCIC are both domiciled in Greece. Mr Masri served the claim form on them in Greece, without the permission of the court, pursuant to Council Regulation (EC) No 44/2001 ("the Brussels Regulation"). CC Holding and CC Oil & Gas are both incorporated in Lebanon. Mr. Masri obtained (without notice) permission to serve these companies out of the jurisdiction pursuant to CPR 6.20.[11]In October 1985, Consolidated Contractors International Company Limited ("CCIC Ltd"), a Liberian company which was a member of the Group until its dissolution in March 1987, entered into a Memorandum of Understanding ("the MoU") with Canadian Occidental Petroleum Limited ("CanOxy") (which is now called Nexen), pursuant to which they agreed to associate in an endeavour to obtain a mutually satisfactory agreement with the People's Democratic Republic of Yemen permitting oil and gas operations in the Masila Block. Under the terms of the MoU, the parties agreed that CanOxy would have a 60% interest and that CCIC Ltd would have a 40% interest in any contract area so obtained.[12]Between 1984 and 1986, CCIC acquired the assets of and liabilities of CCIC Ltd, as part of a general group restructuring. CCIC Ltd was subsequently dissolved on 6 March 1987.[13]On 15 September 1986, CanOxy and CCIC entered into an Agreement for Petroleum Exploration and Production in the Masila Block with the Ministry of Energy and Minerals of the People's Democratic Republic of Yemen ("the PSA"), pursuant to which CanOxy and CCIC were granted the exclusive right to conduct petroleum operations in the Masila Block during the term of the PSA. The PSA became effective on 15 March 1987, when the South Yemeni parliament ratified it.[14]It is Mr. Masri's case (which is disputed by the defendants) that he assisted the Group to obtain this interest in the Concession, and that in late 1985 and in compensation for his services Mr. Sabbagh (one of the other founders of the Group) orally granted him an interest amounting to 25% of the Group's 40% interest in the Concession.[15]On 6 April 1988, CanOxy and CCIC entered into a Joint Operating Agreement in respect of their interest in the Concession ("the JOA"), the term of which was expressed to be coincident with the PSA. Under this agreement, the parties again agreed that ownership of the Concession would be split 60% to CanOxy and 40% to CCIC.[16]Mr. Masri alleges he had a further meeting with Mr. Sabbagh at CCUK's offices in London, prior to which he was given a report on the status of the project prepared by Mr. Brawley and at which he and Mr. Sabbagh initialled a document dated 3 July 1991 recording that Mr. Masri's share of the Concession would be 1.5%.[17]Thereafter, CCIC farmed out 30% of its 40% interest in the Concession to Pecten Yemen Company and Oxy Yemen respectively.[18]Mr Nakhleh sent Mr. Masri a statement of cash calls paid by CCIC in respect of the Concession, requesting Mr. Masri to transfer US$ 2,210,263.75 to CCIC's account with the Arab Bank in London. This sum represented 10% of the total cash calls paid by CCIC from 30 April 1992 to 31 October 1992, plus interest. The letter was dated 24 October 1992, though Mr. Masri contends that he did not receive it prior to signing the 1992 Agreement on 6 November. The letter was on CCIC's headed paper, and was signed by Mr. Nakhleh as "Group Financial Controller Finance and Administration".[19]On 25 October 1992, Mr. Khoury (acting on behalf of CC Oil & Gas) signed an Assignment Agreement and Deed of Assignment between CCIC and CC Oil & Gas pursuant to which CCIC agreed to assign to CC Oil & Gas its remaining 10% interest in the Concession. The defendants contend that this assignment did not take effect until February 1993 at the earliest. Mr. Masri contends that it took effect immediately in accordance with its terms.[20]On 6 November 1992 Mr. Masri met with Mr. Khoury at CCUK's offices in London. At this meeting it was agreed that a memorandum should be written recording the parties' agreement that he should receive a 1% participation in the Concession. The 1992 Agreement was subsequently prepared for Mr. Khoury by Mr. Brawley of CCUK, typed onto CCUK headed notepaper, and later on the same day was signed by both Mr. Khoury and Mr. Masri, at a meeting that took place at Mr. Khoury's house in London.[21]At the time he signed the 1992 Agreement, Mr. Khoury was a director and authorized signatory of both CCIC and CC Oil & Gas. He was not however (and has never been) a director or direct shareholder of CCUK. The defendants contend that Mr. Khoury had no authority to contract on behalf of CCUK. Mr. Masri contends that he did not know that Mr. Khoury had not been appointed a director or signatory of CCUK. Mr. Masri also contends that Mr. Khoury was clothed with such authority by CCUK despite any lack of formal appointment. THE 1992 AGREEMENT[22]The 1992 Agreement was in the following terms: - "[Logo – CCC] CONSOLIDATED CONTRACTORS INTERNATIONAL (UK) LTD SILVER CITY HOUSE, 62 BROMPTON ROAD, LONDON, SW3 1BW MEMORANDUM TO: MR MUNIB MASRI FROM: MR SAID KHOURY DATE: 6 NOVEMBER 1992 This is to define the principles of participation of Munib Masri (MASRI) in CCC's interest in the Masila Block in Yemen. Basic principle is for Masri to receive 10% of CCC's 10% interest or a 1% overall interest in the Block for Masri subject to the following conditions, payments and adjustments: 1. Masri is to pay 10% of Masila Block Development costs which are paid by CCC. 2. Masri is to pay 10% of Masila Operating costs assessed to CCC. 3 … 4. Masri shall pay 10% of CCC's share of Bonus and Training payments required under the Production Sharing Agreement (PSA). … In consideration for the payments and participation of Masri as described above, Masri shall be entitled to the following when and if received by CCC. (Based on actual net receipts by CCC, i.e. after payment of marketing and other costs).a. A. 10% of CCC's share of Contractor oil entitlements under the PSA.b. B. 10% of Development Cost Recovery received by CCC. For purpose of this agreement, the following priority shall be assigned to funds available for cost recovery: - 1. Operating Expenses. 2. Exploration Expenses. 3. Development Expenses. S T KHOURY MUNIB MASRI Agreed and Accepted" THE PROCEDURAL HISTORY[23]On 18 February 2004 Claim No 2004 Folio 124 was issued (and served on 16 June 2004).[24]On 9 June 2004 Mr. Masri applied for permission to serve the Claim Form and Particulars of Claim in Claim No 2004 Folio 124 on CC Holding at CCUK's registered office in England and Wales.[25]On 11 June 2004 Mr Justice Morison granted permission to serve the Claim Form and Particulars of Claim in Claim No 2004 Folio 124 on CC Holding at CCUK's registered office in England and Wales.[26]On 28 July 2004 CCUK applied for summary judgment and CC Holding applied to set aside service of the First Action.[27]On 8 October 2004 Claim No 2004 Folio 831 was issued (and served on 18 October 2004).[28]On 14 October 2004 Mr. Masri applied to serve the Claim Form and Particulars of Claim on CC Holding and CC Oil & Gas in Lebanon.[29]On 19 October 2004 Mr Justice Moore-Bick granted permission to Mr. Masri to serve the Claim Form and Particulars of Claim on CC Holding and CC Oil & Gas in Lebanon.[30]On 17 December 2004 the defendants in Claim No 2004 Folio 834 issued applications contesting the jurisdiction.[31]On 16 March 2005 notice of discontinuance against CC Holding in Claim No 2004 Folio 124 was served. THE APPLICATIONS First Action[32]CCUK applies for summary judgment pursuant to CPR Part 24 on the ground that CCUK was not a contracting party and, accordingly, Mr. Masri has no real prospect of succeeding on the claim against CCUK.[33]The issue that arises is whether there is a real prospect of Mr. Masri succeeding at trial in showing that CCUK was party to the 1992 Agreement. Second Action[34]Mr Khoury and CCIC apply for orders under CPR Part 11 declaring that the court has no jurisdiction over them; and that the service of the Claim Form on them out of the jurisdiction be set aside. The issues that arise are:[35]Whether Mr. Masri is entitled under the Brussels Regulation to sue CCIC or Mr. Khoury in England (it being common ground that Mr Khoury and CCIC are domiciled in Greece). In particular, whether Mr Masri can establish a good arguable case that any of the exceptions (to the general principle under Article 2 that defendants should be sued in the State of their domicile) apply i.e.: under Article 5 of the Regulation, whether the place of performance of the obligation in question under the 1992 Agreement was England and Wales; and under Article 6 of the Regulation, whether any of the other defendants are domiciled in England or Wales[36]Whether, in the case of Mr Khoury, there is a cause of action with a reasonable prospect of success.[37]CC Holding and CC Oil & Gas apply for orders under CPR Part 11 declaring that the court has no jurisdiction over them, that the order of Mr Justice Moore Bick dated 19 October 2004 granting permission to serve the Claim Form out of the jurisdiction on them be discharged and that service of the Claim Form on them be set aside. It is common ground that the 1992 Agreement was made within the jurisdiction (CPR r. 6.20 (5) (a)).[38]The issues that arise are: Whether there is any serious issue to be tried as between Mr. Masri and CC Holding and/or CC Oil & Gas; and Whether Mr. Masri is able to establish that England is clearly the appropriate forum for the trial of any claim against them. EVIDENCE[39]There is a considerable volume of evidence before the court. First Action[40]The evidence before the court is contained in witness statements (and exhibits) from the following persons: -[41]On behalf of the defendants, Antoine Mattar, Edward Greeno (first, second and third), Yasser Burgan, John Brawley, Said Khoury (first), Walid Noureddin (second).[42]On behalf of the claimant, Munib Masri (first) and Simon Morgan (first). Second Action[43]The evidence before the court is contained in witness statements (and exhibits) from the following persons: -[44]On behalf of the defendants, Walid Noureddin (first), Jamal Nakhleh (first), Edward Greeno (fourth), Yasser Burgan (second).[45]On behalf of the claimant, Munib Masri (second and third) and Simon Morgan (second).[46]I refer to the procedural history set out above. It was not until the fourth witness statement of Mr Edward Greeno dated 17 December 2004 that the defendants stated that "CCIC … is the company that all the defendants to the First and Second Actions accept was party to the Agreement dated 6 November 1992." THE APPLICATION BY CCUK IN THE FIRST ACTION – CPR PART 24[47]CCUK applies for summary judgment pursuant to CPR Part 24 on the ground that CCUK was not a contracting party and, accordingly, Mr. Masri has no real prospect of succeeding on the claim against CCUK.[48]The issue that arises is whether there is a real prospect of Mr. Masri succeeding at trial in showing that CCUK was party to the 1992 Agreement. CCUK's submissions[49]Mr Charles Aldous QC for CCUK submitted as follows.[50]'CCC' in the 1992 Agreement meant CCIC. The Agreement included an implied term that "if CCC (i.e. CCIC) assigns its interest under the PSA it will procure that the assignee assumes CCC's obligations under the Agreement".[51]CCUK was not intended to be a party to the 1992 Agreement. In particular: a) Although the 1992 Agreement is set out on the letter headed paper of CCUK, the terms of the agreement do not contain any reference to CCUK. Rather, they repeatedly refer solely to an entity described as "CCC". b) The expressed purpose of the Agreement was to define the principles of "participation of Mr. Masri in CCC's interest in the Masila Block". c) The "basic principle" of the agreement was therefore stated to be for Mr. Masri "to receive 10% of CCC's 10% interest or a 1% overall interest in the Block". d) The clear intent was to confer upon Mr. Masri a share of CCIC's interest in the Concession (on condition that Mr. Masri complied with the remaining terms of the Agreement). e) The only party that was in a position to permit Mr. Masri to participate in its interest in the Concession or to transfer to Mr. Masri 10% of that interest was the party which actually owned the interest at the time of the 1992 Agreement. f) Moreover, the terms "Masila Block Development costs", "Masila Operating costs", "Bonus and Training costs", "Contractor oil entitlements" and "Development Cost Recovery", which define the sums payable by either party under the 1992 Agreement, are all terms that are to be found in or are derived from the PSA, to which express reference is made in the 1992 Agreement. The obvious inference is that the counterparty to the 1992 Agreement was the party to the PSA, namely CCIC defined in the PSA as "CCC".[52]It follows that CCUK is not a party to the contract since: a) The interest in the Concession was not owned by CCUK at the time of the 1992 Agreement and has never been owned by CCUK. CCUK was not therefore able to transfer any share in the Concession to Mr. Masri; b) CCUK was not a party to the PSA at the time of the 1992 Agreement (and never has been). CCUK was not the party making or receiving payments under the PSA and was not therefore in the necessary position to account to Mr. Masri's in respect of such sums; c) From the outset the CC Group share of the Concession had been owned by CCIC, which was the party to the PSA. Further, whilst by the Assignment dated 25 October 1992, CCIC agreed to transfer the interest (and its rights and obligations under the PSA) to CC Oil & Gas that assignment could not, and did not, take effect until after written notice thereof had been given to the Yemeni Ministry of Energy on 8 February 1993. d) The documents relating to the Concession are replete with references to CCC, in many cases in terms that define that abbreviation by reference to CCIC (or its predecessor in title CCIC Ltd). Mr. Masri was contemporaneously in possession of at least some of these documents. e) The abbreviation "CCC" is used in the 1992 Agreement to refer to CCIC. Although the letterhead of CCUK does include the CC Group logo, there is no evidence to suggest that the abbreviation "CCC" has ever been used to refer solely to CCUK.[53]Further, it is clear from Mr. Khoury's evidence that his intention was to contract on behalf of CCIC, and not on behalf of any other member of the CC Group. In this respect, although the subjective intent of one party uncommunicated to the other is not usually admissible to assist in the identification of the parties to a contract, where the issue is on whose behalf did an agent act in entering into a contract, the intention of the agent is plainly relevant and admissible: Bowstead & Reynolds on Agency, 17 th Edn, at para 8-074 and National Oilwell (UK) Ltd v Davy Offshore Ltd [1993] 2 Lloyd's Rep 582 at p 597, per Colman J.[54]This principle does not, however, extend to evidence adduced by the other contracting party as to its uncommunicated subjective belief or understanding as to the identity of the party on whose behalf an agent was acting: Shogun Finance Ltd v Hudson [2003] 3 WLR 1371 per Lord Phillips at paras 123-125 and Lord Walker at para 183 and Chapman v Smith [1907] 2 Ch 97 , per Parker J at p 102. It is therefore irrelevant that Mr. Masri now suggests(a) that he did not know which member of the CC Group held the interest in the Concession or was a party to the PSA at the time of the 1992 Agreement and(b) that his intention was to contract with CCUK.[55]Accordingly, CCUK submits that Mr. Masri has no real prospect of succeeding on the claim against CCUK. Since there is no other compelling reason why the case should be disposed of at trial, it asks the Court to give summary judgment and dismiss the claim against it. Mr Masri's submissions Mr Jonathan Sumption QC for Mr Masri submitted as follows.[56]Part 24 imposes on CCUK the burden of showing that Mr Masri has no real prospect of success and that there is no other compelling reason why the case should be disposed of at trial.[57]CCUK's application for summary judgment is an invitation to the court to engage in a mini-trial on the documents without discovery and without oral evidence and indeed without even a pleaded Defence.[58]As to the identity of the contracting party this issue turns on The identity of the contracting partytc \l 5 "The identity of the contracting party"the objective construction of the facts, not on what either party subjectively thought: Bowstead & Reynolds on Agency, 17 th ed, Article 101, p.483. The essential points are:(1) The November 1992 Agreement is not a transfer of an interest in the Concession to Mr Masri, but a promise to pay income derived from it.(2) The expression 'CCC', which is used in the Agreement is used to refer to the Group generally. It does not represent the initials of any individual company of the group. The only point of the Agreement which identifies the contracting party is the letterhead, which is CCUK's. This view is strongly supported by the surrounding circumstances. The following facts are undisputed: (1) Mr Masri had meetings about the concession with Mr Sabbagh at the offices of CCUK in London during 1991, including one at which a short written agreement was made. (2) The London office of CCUK was used for the administration of the CCC Group's interest in the Masila Concession.(3) The 1992 Agreement was negotiated orally between Mr Masri and Mr Khoury at the offices of CCUK in London.(4) Mr Brawley, a director of CCUK, apparently prepared the draft. The contract was then typed onto CCUK notepaper, presumably by a CCUK employee on Mr. Brawley's direction.(5) Nothing was said by Mr Khoury when he presented the agreement to Mr Masri for signature on CCUK headed paper to suggest that he was not signing for CCUK.[59]CCUK contends that the acronym 'CCC' which was used in the agreement should be taken as referring to CCIC which, they say, is frequently referred to in that way. On the material at present available that does not appear to be true, and would certainly not have been apparent to Mr. Masri:(1) It is not correct that CCIC is invariably called 'CCC' in documents. The documents in the bundle include references to CCIC as 'CCIC' (the usual acronym where it is desired to identify the company specifically) and 'Consolidated'.(2) It is not correct that other companies, including in particular CCUK itself, are never described as 'CCC'. As Mr Masri explains, the CCUK letterhead used for the 1992 Agreement includes the 'CCC' logo, which contains three 'C's, implying either that "CCC" means CCUK or that 'CCC' is a generic description used for companies in the group. Other companies in the CCC Group use the same logo. Mr Masri also says that the CCC logo was on display alongside CCUK's name on the company directory inside the entrance to CCUK's offices.(3) Employees of CCUK are described as "CCC personnel" by the Group on its website; CCUK's present address is 'CCC House'; and CCUK itself describes it as 'the new CCC London office'.[60]Mr Brawley's evidence is that he deliberately chose to employ in the Agreement the vague term 'CCC' instead of specifying an entity. It is not suggested that 'CCC' objectively indicated any particular company. On the face of it, it designated the Group. If the use of this acronym was intended to convey to Mr. Masri that the contracting party was a group company other than CCUK on whose paper it was written, then it was nothing like clear enough for that purpose.[61]As to authority, CCUK says that Mr Khoury has never been appointed a director or formally authorised to act as a signatory of CCUK. It is correct that he is not recorded as a director on the Companies House register.[62]Four points are made:(1) The evidence of Mr. Mattar, Mr. Brawley and Mr. Khoury himself is limited to denying that Mr. Khoury had express authority. But it is not necessary to be a director nor for some formal act of express authorisation to have occurred, in order that Mr. Khoury should have authority to commit the relevant subsidiary. Authority may be express or implied. The question is whether Mr. Khoury in fact had authority given the way that the CCC Group was managed and his own position as its founder and principal controller.(2) Mr. Khoury was not a stranger to CCUK. The mere fact that he signed a document which was on its face a contract with CCUK and in circumstances which suggested that it was a contract with CCUK, is evidence that he was in position to commit CCUK. That is enough for the purposes of a summary judgment application. The defendants' denial merely underlines the fact that this is an issue for trial.(3) Mr Masri's evidence provides material which is at least consistent with Mr Khoury being a person who in the ordinary course of the Group's affairs was entitled to commit CCUK. He says that directors of CCUK such as Mr. Brawley deferred to Mr Khoury in meetings with Mr Masri; that Mr Khoury habitually used CCUK offices for meetings about the Concession; and that he had an office of his own at CCUK's premises which was much the most impressive office there. Some of these points, particularly the last, are disputed, but Mr. Masri gives considered, circumstantial reasons for his view, and the issue cannot be resolved summarily.(4) If Mr Khoury did not have actual authority, express or implied, then he was held out by CCUK as having authority to make the agreement on its behalf. The facts known to both Mr. Masri and CCUK strongly suggest that he appeared to have authority whether that was actually the case or not, and certainly show that the proposition will be fairly arguable at trial. In particular Mr. Brawley, who was undoubtedly a director of CCUK, arranged for a document to be drawn up for Mr. Khoury to sign, which was on its face a contract with CCUK. [63]As to ownership of the Concession, the defendants say that the only company which could have been the contracting party was the company in which the Group interest in the concession was vested, i.e. CCIC. They do not say that Mr. Masri either knew or should have known which company owned the interest, and in fact he did not. They do say that Mr Masri was aware in general terms of the PSA and other matters arising from the operation of the Concession, but these matters do not show that he knew or should have known which corporate entity was involved on the part of the CCC Group, particularly given the way in which the Group itself chose to operate, using the same corporate "CCC" logo for several different companies and sharing employees and office facilities. The defendants acknowledge that Mr Masri's present understanding of the history of ownership of the interest has been gained only after execution of the 1992 Agreement. Nevertheless, the defendants say that the only company which could have been the contracting party was the company in which the Group interest in the Concession was vested, i.e. on their case CCIC. This argument is without merit:[64]Firstly, it is not correct that only the owner of the relevant interest could have entered into the Agreement:(1) The Agreement did not involve the transfer of part of the interest to Mr. Masri. It could not have done so, because such a transfer (not being within the CCC Group) would have required the consent of the Ministry, which was never sought let alone obtained. Accordingly, the Agreement related only to the income derived from the Concession. The undertaking was to account to Mr Masri for a proportion of the proceeds.(2) It is routine for an integrated group of companies to vest an asset in one company, while other companies assume obligations in relation to it. Mr Masri needed a promise to pay money from an entity he could rely on. It did not have to be the entity which originally generated the profits. Mr Masri's evidence is that there were good objective reasons why the payer should have been the UK company in the Group.(3) The Agreement did not identify the company which owned the interest and Mr. Masri's evidence is that he had no idea which company owned it. For present purposes, it must be taken that that is right, or at least that it may be found at a trial to be right. On that footing, the objective conclusion must be that it did not matter whether the obligations in the Agreement were owed by the owning company or not.(4) The Agreement conferred no protection on Mr Masri against the entity owning the Concession assigning its interest to some other group company. If it was essential for Mr Masri to have a promise from the owner of the interest, then a prohibition on assignment would surely have been included.[65]Secondly, CCIC, which is put forward as the party which must necessarily have made the Agreement, was not the owner at the relevant time. The position is as follows:(1) Mr Mattar in his evidence for CCUK expressed no view about the ownership of the interest at the date of the 1992 Agreement, but merely said that the Concession was initially owned by CCIC and subsequently transferred to CC Oil & Gas. Mr Greeno in his first statement said nothing about this except that the owner was not CCUK.(2) After the second action had been begun, the defendants disclosed a written Assignment made on 25 October 1992, i.e. two weeks before the Agreement, transferring CCIC's interest to CC Oil & Gas. In the words of the defendants' witness, Mr Burgan:
"At the same time the Deed of Assignment was signed and dated as effective immediately." (3) Mr Khoury says that his intention was that the assignment should not take effect until after the conclusion of a syndicated loan agreement between CC Oil & Gas and the Arab Bank, and that for this reason it did not give notice of the assignment to the Yemeni Government (which had let the Concession) until February 1993, two months before the syndicated loan agreement was signed. There is no reason whatever why the court should be expected to accept this untested assertion on an application for summary judgment. Nor, even if accepted, would it appear to be relevant what Mr. Khoury intended, unless that intention is recorded in the written instrument, on an objective construction. (4) The only ground for suggesting that the assignment to CC Oil & Gas had not taken effect by 6 November 1992 is the failure of CCIC to give notice to the Yemeni government. This was a failure to comply with clause 24.1 of the PSA, which provides as follows: "
Neither MINISTRY nor CONTRACTOR may assign to a person, firm or corporation not a party hereto, in whole or in part, any of its rights, privileges, duties or obligations under this Agreement without the prior written consent of GOVERNMENT. However, either MINISTRY or CONTRACTOR shall be free to assign its rights, privileges, duties and obligations under this Agreement to an Affiliated Company or Appended Unit upon giving prior written notice to GOVERNMENT for such intention." It follows that there was an absolute right in CCIC to transfer its interest to CC Oil & Gas, and that the transfer took affect as between them at the date intended in the instrument, i.e. at once. The fact that the Ministry could not have been required to act on it until they received notice is irrelevant. (5) Mr. Khoury cannot have forgotten when he signed the Agreement with Mr. Masri on 6 November 1992 that he had signed the Assignments only two weeks earlier. If his evidence is taken at face value, he thought it important that the contracting party should be the owner of the interest. Yet he was quite content (on his case) to sign on behalf of a company which had either already parted with its interest or was just about to do so. This hardly reflects credit on him. A more reasonable analysis is that it did not matter to him or anyone else in the CCC Group who owned the concession, provided that it was clear who owed the money. Analysis and conclusions[66]The court may give summary judgment against the claimant on the whole of a claim or on a particular issue if it considers that the claimant has no reasonable prospect of succeeding on the claim or issue and there is no other compelling reason why the case or issue should be disposed of at trial (CPR r. 24.2).[67]The test for a reasonable prospect of success was stated by Lord Hope in Three Rivers District Council v Bank of England (No 3) [2001] UKHL 16 at paragraph 95, [2003] 2 AC 1 at 261: - "I would approach that further question in this way. The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all. "[68]Reference to the extensive witness statements before the court and the submissions presented to the court shows that CCUK has attempted to conduct a mini-trial on the documents without disclosure and without oral evidence. The estimate provided to the court in advance of the hearing was 1½ days for the hearing of all the defendants' applications in the First and Second Actions. In the event Mr Aldous (in his able argument) spent over a day opening CCUK's Part 24 application.[69]I raised with the parties at the outset of the application the possibility of the court giving directions with a view to the early determination of a preliminary issue as to the identity of the contracting party or parties to the 1992 Agreement. Neither side was agreeable to this approach. In any event the challenges to the jurisdiction in the Second Action would have presented obvious difficulties.[70]The task of ascertaining the intention of the parties to a commercial contract must be approached objectively. The question is not what one or other of the parties meant or understood by the words used, but "the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract" Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912, Lord Hoffmann. The courts will, in principle, look at all the circumstances surrounding the making of the contract which would assist in determining how the language of the document would have been understood by a reasonable man. As to construction of contracts generally see Chitty on Contracts, General Principles, Volume 1, 29 th Edition at paragraph 12-041 and following.[71]I consider that Mr Masri has a real prospect of succeeding at trial in showing that CCUK was party to the 1992 Agreement. I also consider that there are other compelling reasons why the issue should be disposed of at trial. My reasons for these conclusions are as follows: - 1. There are a number of material disputes as to what constituted "the background knowledge … reasonably … available to the parties … at the time of the contract". These include (without limitation): - i) Disputes as to whether Mr Masri had or had not prior to 6 November 1992 seen some of the thirty documents contained in Bundle 3A that predate 6 November 1992 (including, by way of example only, CCIC's letter to Mr Masri dated 24 October 1992). ii) Disputes as to the nature and extent of the role of, and the commercial activities of, CCUK and Mr Brawley in relation to the Concession. iii) Disputes as to the extent of Mr Masri's knowledge (if any) as to which CCC Group companies held relevant interests in, or owed relevant obligations in respect of, the Concession and in particular (but without limitation) as to which entities were parties to the PSA and JOA. iv) Disputes as to the extent of Mr Masri's knowledge (if any) of the structure and internal arrangements and functions of companies in the CCC Group. v) Disputes as to the authority (if any) of Mr Khoury to contract on behalf of CCUK. All these disputes are found in or reflected in the conflicting witness statements. 2. This application has involved an attempt to conduct a mini-trial on the documents without disclosure and without oral evidence (to the extent that the same are appropriate). It is true that at issue is the construction of an agreement extending to a single page, but there is a danger that if the court proceeds to construe the 1992 Agreement without first establishing "the background knowledge … reasonably … available to the parties … at the time of the contract", any resulting construction will be or may be wrong. 3. The 1992 Agreement relates to rights in an oil field in South Yemen, known as the Masila Block or Masila Concession. The relevant oil interest – a 10% interest in the Concession – was initially held by CCIC. CCIC agreed to assign its interest to CC Oil & Gas by an Assignment Agreement and a Deed of Assignment made on 25 October 1992. There is no suggestion that Mr Masri was told this prior to signing the 1992 Agreement. The defendants contend that CCIC still held the interest at the time of the 1992 Agreement, because the assignment had not then taken effect. Mr. Masri contends that the assignment was effective immediately, so that by the time of the 1992 Agreement the relevant interest had passed to CC Oil & Gas. The interest is currently held by CC Oil & Gas. Mr Khoury had signed the Assignment Agreement and the Deed of Assignment on behalf of CC Oil & Gas as recently as 25 October 1992. The Deed of Assignment is by its terms said to be effective as at 25 October 1992. Issues arise as to the legal effect of the Assignment Agreement and the Deed of Assignment as at 6 November 1992. There appears to have been no assignment of the JOA, but disclosure may serve to clarify the position as to this. Mr Aldous contended that the 1992 Agreement contained an implied term that "if CCC (i.e. CCIC) assigns its interest under the PSA, it will procure that the assignee assumes CCC's obligations under the Agreement". But there are serious difficulties in relation to such an implied term (which was, of course, contended for in the context of the defendants' submission that the party to the 1992 Agreement was CCIC). On one view as at 6 November 1992 CCIC had already assigned its interest under the PSA to CC Oil & Gas. 4. I consider that the claimant has a real prospect of succeeding at trial in showing that(a) the 1992 Agreement was between Mr Masri and CCUK, or alternatively(b) between Mr Masri and the CCC Group (which would include for present purposes all corporate defendants in both actions, including CCUK). The true construction of the Agreement must, in my opinion, await a trial at which the background knowledge available to the parties will be clearly established. A different conclusion as to the contracting party or parties may result from a trial. I emphasise that this is an interlocutory application. But I draw attention to the following matters. The 1992 Agreement is a short business agreement signed by international businessmen (without the assistance of City solicitors). The Agreement is typed on CCUK notepaper which contains (in the top left hand corner) a logo containing three 'C's. It may be necessary to examine at trial the extent of the use of the logo, but it appears from the material before the court that the logo was used on the notepaper of CCC Group companies at the material time. I consider that the claimant has a real prospect of succeeding at trial in showing that the Agreement was between Mr Masri and CCUK because CCUK's name appears at the head of the document containing the Agreement (and no other company is mentioned by name). I also consider that in the alternative the claimant has a real prospect of succeeding at trial in showing that the Agreement was between Mr Masri and the CCC Group (which would include for present purposes all corporate defendants in both actions, including CCUK), because in considering what was intended by "CCC" in the body of the Agreement regard may be had to the logo containing three 'C's, which in context is either CCUK's logo or the Group's logo. Although I again emphasise that I am concerned with an interlocutory application (and not a trial), a possible conclusion at trial would be that Mr Khoury and Mr Masri were not concerned to identify any particular company in the CCC Group as the contracting party, the obligations to Mr Masri under the Agreement being regarded as Group obligations. The two businessmen concerned may not have concerned themselves with the niceties of differences between different companies in the CCC Group. They may have regarded the obligations created as those of the CCC Group (without any need to identify a particular contracting party in the Group). This approach would avoid any difficulties occasioned by the fact that Mr Khoury had only recently signed the Assignment Agreement and Deed of Assignment from CCIC to CC Oil & Gas. The applications in the Second Action for orders under CPR Part 11 declaring that the court has no jurisdiction over the defendants. Mr Khoury and CCIC[72]Mr Khoury and CCIC apply for orders under CPR Part 11 declaring that the court has no jurisdiction over them and that the service of the Claim Form on them out of the jurisdiction be set aside. The Brussels Regulation – the relevant legal principles[73]The 'special jurisdictions' in Articles 5 and 6 of the Brussels Regulation constitute derogations from the principle in Article 2 that jurisdiction is vested in the courts of the state where the defendant is domiciled and as such must be interpreted restrictively.[74]Where the Brussels Regulation applies, the court has jurisdiction in matters relating to a contract, if England is the place of performance of the obligation in question. Article 5 (1) of the Brussels Regulation is the basic rule for contract claims against a defendant domiciled in another Regulation State. The Brussels Regulation makes provision for an autonomous definition of the place of performance of the obligation in the case of sale of goods and the provision of services. In other types of contract the basic rule in Article 5 (1) (a) applies ("the place of performance of the obligation in question"). Subject to the special provision for contracts for sale of goods and supply of services in the Regulation, "the obligation in question" whose place of performance must be in England is the obligation which is the basis of the action. Once the relevant contractual obligation has been determined, the next question is which system of law determines where it is to be performed? It is common ground in the present case that this question is governed by English law.[75]Article 6 (1) of the Brussels Regulation provides that a person domiciled in a Regulation State may also be sued, where he is one of a number of defendants, in the courts for the place where one of them is domiciled. Although this head of jurisdiction fulfils a function similar to the "necessary or proper party" provisions of CPR r. 6.20 (3), it is narrower in scope than the latter. It was adopted in order to prevent the handing down in the Contracting States of judgments which are irreconcilable with one another. There must be a connection between the claims made against each of the defendants, and the nature of that connection is to be given a uniform interpretation. Article 6 (1) applies where the proceedings brought against the various defendants are related when the proceedings are instituted i.e. where it is expedient to hear and determine them together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings. The effect of the decision in Kalfelis v Schroder [1988] ECR 5565 has been codified in the Brussels Regulation in the words "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". Under English law the claimant has to show that there is a real issue that the court may reasonably be asked to try as to the liability of the additional defendant domiciled in England.[76]The claimant has to satisfy the court of two matters:(i) that the case falls within Article 5 (1) or 6 (1) and(ii) that it has a cause of action against the particular defendant with a reasonable prospect of success.[77]As to (i) the claimant must show that he has a good arguable case that the court has jurisdiction under Article 5 (1) or 6 (1). The "good arguable case" test becomes of most significance at the inter partes stage where two arguments are being weighed in the interlocutory context which must not become a "trial." "Good arguable case" reflects in this context that one side has a much better argument on the material available. The court must be satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes, that factors exist which allow the court to take jurisdiction. (Waller LJ in Canada Trust Co v Stolzenburg (No 2) [1998] 1 WLR 547 at 555 approved at [2002] 1 AC 1 at 13, Lord Steyn).[78]As to (ii), the standard of proof in respect of the cause of action is whether, on the evidence, there is a reasonable prospect of success (CPR r. 6.21 (1) (b))/ a serious question to be tried/ a substantial question of fact or law, or both, which the claimant bona fide desires to have tried. See further paragraph 116 below. Mr Khoury's and CCIC's submissions[79]Mr Aldous QC for Mr Khoury and CCIC submitted as follows.[80]Mr Masri has not established the necessary good arguable claim that one of the exceptions to Article 2 of the Brussels Regulation applies. Further there is no good arguable claim that Mr Khoury was a party to the 1992 Agreement.[81]Mr Khoury and CCIC are domiciled in Greece, where they were served with the claim form in the Second Action pursuant to CPR 6.19. Accordingly, the prima facie rule under the Brussels Regulation is that they must be sued in Greece.[82]As to Article 5 (1) of the Brussels Regulation the "obligation in question" is the obligation upon which the claim is founded. Jurisdiction can accordingly be assumed by the courts in the place where the payment claimed should have been made to Mr Masri. The identification of this place is a matter of English law. Mr Masri must show a good arguable case that CCIC (or Mr Khoury if he was a party to the 1992 Agreement) had to pay Mr Masri any sums falling due under the 1992 Agreement in England. The defendants accept that where no place of payment is specified in a contract, as a matter of English law, the general rule is that the debtor must seek out his creditor. This is only a general rule, which must readily give way where a consideration of all the circumstances indicates that an alternative place is more appropriate. Having regard to the surrounding circumstances and in particular the course of dealing between Mr Masri and CCIC, England was not the place of payment of any sums due under the 1992 Agreement to Mr Masri, or at the very least Mr Masri has not established the necessary good arguable case to the contrary. Thus the Article 5 (1) exception does not apply in this case.[83]As to Article 6 (1) none of the defendants in the Second Action are domiciled in England and Wales. Mr Khoury and CCIC are domiciled in Greece and CC Holding and CC Oil & Gas are domiciled in Lebanon. Although CCUK (the first defendant to the First Action) is domiciled in England, the language of Article 6 (1) as well as the general scheme of Articles 6 (1) to 6 (3) demonstrate that the reference to "a number of defendants" is a reference to the defendants to the particular action in which the Article 6 (1) exception is sought to be invoked. The application or otherwise of the jurisdictional rules contained in Article 6 (1) is to be judged at the time of issue of the proceedings in question and not at any other time, and cannot depend on the subsequent application by the court of a discretionary rule of procedure. The existence of a separate action in which one of the defendants is domiciled in England and Wales accordingly does not provide a sufficient basis for Article 6 (1) to apply.[84]Accordingly Mr Khoury and CCIC submit that since neither of the exceptions provided for by Articles 5 and 6 of the Regulation apply, Article 2 requires that they be sued in Greece.[85]In addition, Mr Khoury contends the claimant has not established the necessary good arguable case that Mr Khoury is personally liable under the 1992 Agreement, such that the court can exercise jurisdiction under Article 5 (1). Mr Khoury signed the contract as an agent for the entity described as "CCC". Mr Masri has failed to show the necessary good arguable case that Mr Khoury is an appropriate defendant. Mr Masri's submissions Mr Sumption QC for Mr Masri submitted as follows.[86]As to Article 5 (1) it is common ground that the obligation in question is the payment of money to Mr Masri and that English law applies to the question of the place of performance. The general rule is that the debtor must follow his creditor. In the absence of express provision to some different effect, an obligation to pay money falls to be performed where the debtor ordinarily resides. Mr Masri was ordinarily resident in England at the time of the 1992 Agreement. The fact that Mr Masri no longer lives in London is irrelevant as it can have no effect on the construction of the 1992 Agreement including the obligations of payment: The Eider [1893] P 119 , 131 (Lord Esher).[87]As to Article 6 (1) the reference by the European Court of Justice in Kalfelis v Schroder "to the various actions brought by the same plaintiff against different defendants" is directly inconsistent with the defendants' submission that Article 6 (1) applies only within a single action. The reasoning of the ECJ made it clear that the purpose of Article 6 (1) was to prevent the risk of irreconcilable judgments and that it did so by Article 6 (1) being the "flipside" of Article 22, which permits a second seized court, seized of the same dispute, to stay proceedings where there is such a risk. Article 22 inherently involves a situation with more than one action. There is no basis for restricting Article 6 (1) to a single action.[88]As to Mr Khoury, the pleaded case (in the alternative) is that he made the 1992 Agreement as principal. Mr Khoury is liable on two bases. First, if a contract is signed by an agent in his own name without qualification, he is deemed to have contracted personally unless a contrary intention plainly appears from other portions of the document. (Bowstead & Reynolds on Agency 17 th Edition, Article 101 page 483). Secondly Mr Khoury purported to enter into a contract on behalf of CCUK, but CCUK say he had no express or implied authority to do so. If CCUK are right as to this, he would be liable for breach of warranty of authority. Analysis and conclusions Article 6 (1)[89]It is convenient to consider Article 6 (1) of the Brussels Regulation first. I repeat paragraphs 75 and 76 to 78 above.[90]Article 6 (1) of the Regulation 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". Although this head of jurisdiction fulfils a function similar to the "necessary or proper party" provisions of CPR r. 6.20 (3) it is narrower in scope than the latter. It was adopted in order to prevent the handing down in the Contracting States of judgments which are irreconcilable with one another. There must be a connection between the claims made against each of the defendants, and the nature of that connection is to be given a uniform interpretation. Article 6 (1) applies where the proceedings brought against the various defendants are related when the proceedings are instituted i.e. where it is expedient to hear and determine them together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings. The effect of the decision in Kalfelis v Schroder has been codified in the Brussels Regulation in the words "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". Under English law the claimant has to show that there is a real issue that the court may reasonably be asked to try as to the liability of the additional defendant domiciled in England."[91]In Kalfelis v Schroder the ECJ said: - "… It must be noted that the … report prepared by the committee of experts referred expressly, in its explanation of Article 6 (1), to the concern to avoid the risk in the Contracting States of judgments which are incompatible with each other. Furthermore, account was taken of that preoccupation in the Convention itself, Article 22 of which governs cases of related actions brought before courts in different Contracting States. The rule laid down in Article 6 (1) therefore applies where the actions brought against the various defendants are related when the proceedings are instituted , that is to say where it is expedient to hear and determine them together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings. It is for the national court to verify in each individual case whether that condition is satisfied." (emphasis added)[92]I reject the defendants' submission that the existence of the First Action (in which the remaining defendant CCUK is domiciled in England and Wales) does not provide a sufficient basis for Article 6 (1) to apply.[93]By Article 6 (1) a person domiciled in a Member State may also be sued elsewhere if two conditions are satisfied: - i) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided ii) 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.[94]Article 6 (1) is not concerned with the domestic procedural rules of the courts of particular Member States. There must be a connection between the claims made against each of the defendants, and the nature of that connection is to be given a uniform interpretation. The correct approach is not to look to English procedural rules, but to ask the question whether the two conditions in Article 6 (1) are satisfied? The reference in condition i) is to the same court, not the same action. The defendants' submission is contrary to the express terms of the decision of the ECJ in Kalfelis v Schroder. Further it seeks to add an additional condition which is not present in the Article. Article 6 (1) is to be applied consistently throughout all Member States with their very different domestic procedural rules.[95]Where there is a good arguable case as to whether A and/or B and/or C and/or D and/or E and/or F are party to a contract, there is obviously a risk of irreconcilable judgments resulting from separate proceedings in different Member States. Article 6 (1) was adopted in order to prevent this happening. It is plainly expedient to hear and determine such a case in one jurisdiction. The demands of justice are met by one answer in one jurisdiction. If this approach is adopted there is no scope for the parties to advance inconsistent contentions in different jurisdictions or for different tribunals to reach inconsistent conclusions on the same or differing materials and evidence. The defendants (realistically) did not contend that the claims are not so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.[96]Good arguable case is a concept with some degree of flexibility depending upon the issue. Such flexibility extends to cases where alternative claims are advanced.[97]As to CCIC I repeat my analysis set out above including in particular paragraph 71 (4) above. Further CCIC is the company which the defendants say was party to the 1992 Agreement. In my opinion there is a good arguable (alternative) claim against Mr Khoury on both of the bases advanced by the claimant. Further I understood Mr Aldous to concede at the end of his submissions that(a) if the court dismissed the application in the First Action (so that the proceedings against CCUK continued) and(b) if his main argument (set out in the final sentence of paragraph 83 above) did not succeed, the claimant was entitled to join Mr Khoury.[98]For these reasons(1) I consider that the claimant has made out a good arguable case that the court has jurisdiction under Article 6 (1) in relation to Mr Khoury and CCIC. Further(2) as to a cause of action against Mr Khoury and CCIC, to the extent that this is not covered by (1) above, I consider that the claimant has established on the evidence that there is in each case a reasonable prospect of success/a serious question to be tried/a substantial question of fact or law, or both, which the claimant bona fide desires to have tried. Article 5 (1) I turn to consider Article 5 (1). It is of course sufficient for the claimant to establish jurisdiction under Article 6 (1). However I consider Article 5 (1) for completeness (and in case I am wrong as to Article 6 (1)). I repeat paragraphs 74 and 76 to 78 above.[99]Article 5 (1) provides that " a person domiciled in a Member State may, in another Member State be sued: (a) in matters relating to a contract, in the courts for the performance of the obligation in question. …" Subject to the special provision for contracts for sale of goods and supply of services (which have no application in the present case), "the obligation in question" whose place of performance must be in England is the obligation which is the basis of the action. The relevant contractual obligation is to make payments to Mr Masri under the 1992 Agreement. It is necessary to consider as a matter of English law where that obligation was to be performed.[100]I consider that the claimant has made out a good arguable case that the court has jurisdiction under Article 5 (1) against Mr Khoury and CCIC for the following reasons. In The Eider supra Lord Esher MR said at page 131: - "What, then, is the ordinary rule? That the debtor must follow his creditor, and must pay where his creditor is. If there were a contract made in England, by two people who were at the time in England, and payment was to be made in England, nevertheless, if the creditor went abroad and was abroad at the time payment was to be made, the debtor need not go after his creditor to pay him abroad; he may wait until his creditor comes back to England."[101]In my opinion the relevant principles of law are accurately set out in Benjamin's Sale of Goods 6 th Edition paragraph 9 – 046 as follows: - "… Where no place of payment is specified, the place of payment depends upon the intention of the parties to be gathered from the terms of the contract and the position of the parties and circumstances prevailing at the time it was entered into. In many cases the mode of payment prescribed will therefore determine where payment is to be made. If no place of payment can thus be implied, it is being said to be a general rule that "the debtor must follow his creditor and must pay wherever his creditor is." In commercial transactions, however, the general rule would seem to be that payment is to be made at the place where the creditor resided or carried on business at the time of the contract, … "[102]The relevant time for determining the place of payment is the time when the contract was made. It is elementary that there is a need for certainty as to place of payment in commercial contracts. I do not consider that the evidence before the court establishes any relevant course of dealing between the CCC Group and Mr Masri. No mode of payment is prescribed in the 1992 Agreement. In my opinion there is a good arguable case that the default rule - that payment is to be made at the place where Mr Masri resided at the time of the contract (i.e. in England), applies.[103]I have not overlooked the fact that the passage in Benjamin continues: – "If, after the conclusion of the contract, the seller changes his place of business or his residence, the question whether or not the place of payment is thereby changed should, it is submitted, depend upon a reasonable inference to be drawn from all the circumstances surrounding the formation and performance of the contract of sale."[104]The default rule provides for certainty as to place of payment. I am not persuaded on the material before the court that there is any basis for displacing the default rule in the present case. In any event there is a good arguable case that the default rule applies in this case.[105]See further the Legal Aspect of Money by Dr. F A Mann QC 5 th Edition at page 81: - "The place of payment is very often fixed by the parties, either expressly or impliedly. But in the absence of such determination the general rule in this country as well as the United States, Switzerland, Holland, Italy, Greece and Hungary is that the place of payment is the place where the creditor resides or carries on business at the time of the contract. "[106]As to CCIC I repeat my analysis set out above including in particular paragraph 71 (4) above. Further CCIC is the company which the defendants say was party to the 1992 Agreement. In my opinion there is a good arguable (alternative) claim against Mr Khoury on both of the bases advanced by the claimant.[107]For these reasons(1) I consider that the claimant has also made out a good arguable case that the court has jurisdiction under Article 5 (1) in relation to Mr Khoury and CCIC. Further(2) as to a cause of action against Mr Khoury and CCIC, to the extent that this is not covered by (1) above, I consider that the claimant has established on the evidence that there is in each case a reasonable prospect of success/a serious question to be tried/a substantial question of fact or law, or both, which the claimant bona fide desires to have tried.[108]Accordingly the applications by Mr Khoury and CCIC fail. CC Holding and CC Oil & Gas[109]CC Holding and CC (Oil & Gas) apply for orders under CPR Part 11 declaring that the court has no jurisdiction over them, that the Order of Mr Justice Moore Bick dated 19 October 2004 granting permission to serve the Claim Form out of the jurisdiction on them be discharged and that service of the Claim Form on them be set aside. It is common ground that the 1992 Agreement was made within the jurisdiction (CPR r. 6.20 (5) (a)). Service out of the jurisdiction pursuant to CPR 6.20 – the relevant legal principles[110]The High Court has jurisdiction to entertain a claim in personam against a defendant (other than a person domiciled in another state to which the Brussels Regulation applies) who is not in England when it assumes jurisdiction in any of the cases mentioned in CPR r.6.20.[111]Four important points have been emphasised in the decided cases:(1) The court ought to be cautious in allowing process to be served on a foreigner out of England.(2) If there is any doubt in the construction of any of the heads of CPR r. 6.20, that doubt ought to be resolved in favour of the defendant.(3) Since the application for permission is made without notice to the defendant, a full and fair disclosure of all relevant factors ought to be made.(4) The court will refuse permission if the case is within the letter, but outside the spirit, of CPR r. 6.20.[112]The claimant must show that the case falls within one of the heads of jurisdiction in CPR r. 6.20 and that he has a cause of action against the defendant.[113]In exercising its jurisdiction the court will consider, inter alia, whether England is the forum conveniens. The claimant must show good reasons why service on a foreign defendant should be permitted, and in considering this question the court must take into account the nature of the dispute, the legal and practical issues involved, such questions as local knowledge, availability of witnesses and their evidence, and expense. The fundamental question is to identify the forum in which the case can suitably be tried for the interests of all the parties and for the ends of justice. To justify the exercise of the discretion, the claimant has to show that England is clearly the appropriate forum for the trial of the action.[114]Thus the claimant has to satisfy the court of three matters:(i) that the case falls within one of the heads of CPR Rule 6.20;(ii) that it has a cause of action against the defendant "with a reasonable prospect of success" (CPR Rule 6.21 (1) (b)); and(iii) that England is the appropriate forum.[115]As to (i), the standard to be applied when deciding whether the jurisdiction of the court has been sufficiently established under one or more of the heads of CPR Rule 6.20 is that of good arguable case, which is a concept with some degree of flexibility depending upon the issue: Canada Trust Co v Stolzenberg (No 2) [1998] 1 WLR 547 , at 558, per Waller LJ, approved [2002] 1 AC 1 , at 13, per Lord Steyn. See further paragraph 77 above.[116]As to (ii), it was held in Seaconsar Far East Ltd v Bank Markazi Iran [1994] 1 AC 438 that the standard of proof which the claimant must satisfy in showing that he has a cause of action is whether, on the evidence, there is a serious question to be tried, i.e. a substantial question of fact or law, or both, which the claimant bona fide desires to have tried. It has been held that the effect of the test under CPR Rule 6.21 (1)(b) of a "reasonable prospect of success" is the same as that in Seaconsar (Opthalmic Innovations International (UK) Ltd v Opthalmic Innovations International Inc [2004] EWHC 2948 (Ch) , para 39) or in substance the same as the test used to determine whether a claimant has a "real prospect of succeeding" for the purposes of summary judgment under CPR Part 24 (De Molestina v Ponton [2002] 1 Lloyd's Rep 271 ; Swiss Reinsurance v United India [2002] EWHC 741 (Comm)).[117]Thus the standard of proof in respect of the cause of action is whether, on the evidence, there is a reasonable prospect of success (CPR r. 6.21 (1) (b))/a serious question to be tried/a substantial question of fact or law, or both, which the claimant bona fide desires to have tried.[118]As to (iii), which goes to the discretion of the court, the claimant must show good reason why service on a foreign defendant should be permitted: Amin Rasheed Shipping Corp v Kuwait Insurance Co [1984] AC 50, 65-66, 72; Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 : "The effect is, not merely that the burden of proof rests on the [claimant] to persuade the court that England is the appropriate forum for the trial of the action, but that he has to show that this is clearly so": at 481, per Lord Goff of Chieveley. CPR r. 6.21 (2A) provides that the court will not give permission unless satisfied that England is the proper place in which to bring the claim. This provision imposes on the claimant the burden of showing good reason why service should in the circumstances be permitted on a foreign defendant. The submissions of CC Holding and CC Oil & Gas Mr Aldous QC for CC Holding and CC Oil & Gas submitted as follows.[119]The claim that Mr Khoury was acting as the agent of CC Holding when entering into the 1992 Agreement is inconsistent with the terms of the 1992 Agreement, with Mr Khoury's evidence and with Mr Masri's own case as to the identity of the other contracting parties. Mr Masri has discontinued against CC Holding in the First Action because of the difficulty of establishing that CCUK was acting as agent of CC Holding for the purposes of service under CPR 6.16.[120]CC Oil & Gas was included as a defendant in the Second Action, at a time when Mr Masri was aware that the defendants would say that the 1992 Agreement was made with the party which actually held the interest in the Concession and moreover that that interest had been held by CCIC and transferred to CC Oil & Gas, but when Mr Masri was unaware that transfer had taken place. The defendants' position is that at the time of the 1992 Agreement, the interest was held by CCIC and not by CC Oil & Gas. It follows that at the time of the 1992 Agreement, CC Oil & Gas did not fall within the description "CCC". As a matter of construction of the 1992 Agreement CC Oil & Gas was not intended to be a party to it.[121]There is no serious issue to be tried as between Mr Masri and CC Holding and CC Oil & Gas.[122]In any event England is not clearly the appropriate forum. Mr Masri's submissions Mr Sumption QC for Mr Masri submitted as follows.[123]CC Holding is the top company in the group. It is a company on behalf of whom Mr Khoury undoubtedly had authority to sign. If any company is truly described as 'CCC' it is CC Holding. If Mr Masri's primary case (that the contracting company was CCUK) is wrong, but some other company was involved, then CC Holding is the most likely alternative party.[124]On the defendants' case the Agreement was made with the company which held the Concession at the date of the Agreement. The defendants say that this was CCIC, but having regard to the terms of the Assignment Agreement/Deed of Assignment this might well have been CC Oil & Gas.[125]England is the most appropriate forum for the trial of the claims against CC Holding and CC Oil & Gas. Analysis and conclusions I repeat paragraphs 110 to 118 above.[126]In making the application for permission to serve the claim form out of the jurisdiction the claimant relied on CPR Rules 6.20 (3) (necessary or proper party), 6.20 (5) (a) (contract made within the jurisdiction), 6.20 (5) (c) (contract governed by English law) and 6.20 (6) (breach of contract committed within the jurisdiction). It is of course common ground that the 1992 Agreement was made within the jurisdiction.[127]The standard to be applied when deciding whether the jurisdiction of the court has been sufficiently established under one or more of the heads of CPR Rule 6.20 is that of good arguable case, which is a concept with some degree of flexibility depending upon the issue. I am so satisfied in the case of CC Holding and CC Oil & Gas. I repeat my analysis set out above including in particular paragraph 71 (4) above.[128]As to a cause of action against CC Holding and CC Oil & Gas, to the extent that this is not covered by paragraph 127 above, I am satisfied on the evidence that there is a reasonable prospect of success/ a serious question to be tried/a substantial question of fact or law, or both which the claimant bona fide desires to have tried.[129]In the light of my conclusions as to the claim against CCUK in the First Action and the challenges to the jurisdiction by CCIC and Mr Khoury in the Second Action, it is clear that England is the appropriate place to bring the claims against CC Holding and CC Oil & Gas. If the former claims are to proceed in England, England is the appropriate forum to try the latter claims.[130]For these reasons the applications of CC Holding and CC Oil & Gas fail.

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