Newsat Holdings Ltd & Ors v Zani [2006] EWHC 342 (Comm)

[2006] EWHC 342 (Comm)Case No 2005 FOLIO 504
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 01/03/2006
Before
MR JUSTICE DAVID STEEL
Between
(1) NEWSAT HOLDINGS LIMITEDClaimants(2) NEWSAT- 425 LIMITEDClaimant(3) NEWSAT 1 LIMITEDClaimantCHARLES ZANIDefendant
Jeffrey Onions QC and Hannah Brown (instructed by`Messrs Manches LLP) for ClaimantsDavid Lewis (instructed by Messrs Middleton Potts) for Defendant
Judgment

Introduction

[1]On 10 June 2005 Cooke J granted the Claimants (“Newsat”), on a without notice application, permission to serve the Defendant, Mr Charles Zani (“Zani”), out of the jurisdiction at his place of residence in the Philippines pursuant to CPR 6.20 (8)(a) (i.e. a claim in tort “where the damage was sustained within the jurisdiction”) and(b) (i.e. a claim in tort “where the damage sustained resulted from an act committed within the jurisdiction”). Cooke J also granted a worldwide freezing order prohibiting Zani from dealing with or disposing of his assets up to a value of US $8.3 million.[2]The claim form and the freezing order were served on Zani in the Philippines on 27June 2005. By an application notice dated 17 August 2005 under CPR 11 (1) and (6), Zani sought a declaration that the Court had no jurisdiction to hear the claim and an order setting aside the claim form, the granting of permission to serve out of the jurisdiction, the freezing order and the service of the claim form.[3]For the purposes of this application, it is common ground: a) that Newsat has demonstrated a serious issue to be tried on the merits of the claim for the purposes of obtaining permission to serve out and a good arguable case for the purpose of the freezing order. b) that England is the forum where the case may most suitably be tried in the interest of the parties and the ends of justice.[4]The application is pursued solely on the basis that Newsat has not demonstrated a good arguable case that the claim falls within either CPR 6.20 (8) (a) or (b). In summary, on this issue, Newsat contend that the Court has jurisdiction because fraudulent representations by Zani were communicated to them in London and acted on there. The primary theme of Zani’s response is that no act was ever committed by him within the jurisdiction (indeed he had not been within the jurisdiction for many years) and that no damage was sustained by Newsat in the jurisdictions since all the wasted expenditure claimed by Newsat was settled by payment from bank accounts in Bermuda being the place of incorporation of the Newsat companies.[5]The nature of the Claimants’ case is a claim for damages for losses incurred by them as a result of reliance upon fraudulent misrepresentations made to them by the Defendant (or by Seysat Limited a company controlled by him) relating to the quality of orbital slot rights held by the Seychelles Government at longitude 42.5° East. Since there is no challenge to the Claimants’ contention there is a serious issue to be tried on the merits, I propose to summarise matters by reference to the Claimants’ evidence. However, it must of course be emphasized that there is a wealth of evidence filed by the Defendant which contradicts the Claimants’ account.

The parties

[6]The Claimants are a group of companies formed in 2000 in Bermuda. There is no need for present purposes to distinguish between them. They were formed to exploit an apparent investment opportunity in relation to the orbital satellite slot owned by the Seychelles Republic.[7]The Claimants’ case is that the management and control of Newsat was in London, where the business was predominantly run by two of its directors Markus Pedriks and Robert Wardrop. A third director, Jack Albert, carried out many of the operational activities of the company albeit pursuant to the instructions of Wardrop and Pedriks. The three directors had earlier established another Bermuda company, ISC, with a view to exploiting investment opportunities in regard to orbital slots registered by the Russian Federation.[8]Seysat Limited was a Seychelles company also formed for the purposes of exploiting the orbital slot rights held by the Seychelles Republic. It was owned by some 45% (later reduced to 20%) by the Republic and as to 55% (later increased to 80%) by an Anguillan company, Buy & Sell Trading Company Limited. The Defendant was the President of Seysat and was authorised by the Seychelles Government to carry out transactions on behalf of Seysat with a view to extracting the commercial benefits to be derived from the orbital slot rights. Zani was also the beneficial owner and alter ego of Buy & Sell Trading Company Limited.

The regulatory framework

[9]The regulatory framework as regards satellite transmission can be briefly summarised. Geostationery satellites orbit the earth directly above the Equator at a height above the earth such that the satellite appears to be stationery in the sky when seen from the earth. The position of such satellites is measured in degrees East or West matching the degrees of longitude.[10]The regulation of geostationery satellite orbits is undertaken by the International Telecommunications Union (“ITU”) which is part of the United Nations. Regulation is undertaken by means of a series of filings made pursuant to the Radio Regulations. Such filings can only be made with the ITU by or on behalf of a sovereign state recognised by the ITU.[11]The final step in obtaining a filing is notification to the ITU that a satellite in the relevant location has been “brought into use”. This step must take place within 6 years of the original filing (subject to an automatic extension on application to the ITU of 3 years). Otherwise the filing expires.[12]An intermediate stage in the filing process gives rise to the priority of the network. This priority in turn give rise to a right to operate without harmful interference. Thus a process of co-ordination is embarked upon whereby administrators of neighbouring networks agree the steps needed to avoid interfering with the priority network. The final outcome is registration of the details of the fully co-ordinated network.[13]In accord with this regulative framework, the Republic of Seychelles made two filings with the ITU in relation to the orbital slot at 42.5° East – namely SEYSAT-1 and SEYSAT-1A.[14]SEYSAT-1 was fully co-ordinated by 3 May 2000. Although it had a small footprint, it had an early priority date of 11 September 1992. In contrast, SEYSAT-1A had an in-service due date of 5 March 2005 (including the 3 year extension). It also had a large footprint area. Although its own priority date was as late as 11 November 1996, the SEYSAT-1 priority date could be relied upon in co-ordination negotiations. These negotiations needed to be successfully accomplished with UAE as regards its EMARSAT-1F network at 44° East and with the Russian Federation as regard its EXPRESS -4 network at 40° East.

Initial agreement

[15]In early 2000 Wardrop, in his capacity as director of ISC, became aware of the opportunity of purchasing a satellite from the Indonesian state owned communications department, together with the opportunity for acquiring the rights to the Seychelles slot. Following negotiations between ISC and Seysat, a meeting was held in the Seychelles between Mr Zani and Mr Albert.[16]At that meeting, it is the Claimants’ case that Mr Zani made various representations to the effect that the filings in regard to SEYSAT-1 and SEYSAT-1A had been properly made on the basis of true and accurate information and were not open to challenge.[17]In reliance thereon ISC executed an orbital slot agreement whereby Seysat furnished an exclusive licence to ISC to operate satellites in the slot on all frequencies available in accordance with the ITU filings. The difficulty that arose on the Claimants’ case is that the filing for SEYSAT-1 had not been properly made, a matter which it is contended, that Zani was fully aware of since he had been responsible for filing the false information.[18]The information filed was that a Gorizont satellite, which had been launched in January 1994, had been moved into the slot, its transponders had been turned on and it had carried transmissions on the C-band frequencies before 9 October 1999 (the in-service due date). However, the Claimants assert that the satellite used to bring the filing into use was an old Russian GALS-1 satellite which did not carry C-band traffic, was not in the slot until after 9 October and was probably not turned on.[19]The knock-on affect from the Claimants’ perspective was that the Seychelles Government was unable to reach a co-ordination agreement with the Russian administration in relation to the neighbouring network EXPRESS-4.

New agreement

[20]The Claimant companies were formed in October 2000 and it was agreed that a new agreement on substantially the same terms as the ISC orbital slot agreement would be entered into between between Newsat and Seysat. The thrust of the Claimants’ complaint is the failure of the Defendant to correct the earlier representations when entering into the Newsat orbital slot agreement.[21]The new agreement was executed on 14 November 2000. This agreement had a Clause U:- “The parties represent and warrant that their respective companies are…(ii) able to comply with the Agreement and are unaware of any information to the contrary of the intents of this agreement…(v) on the part of Seysat that it has been duly authorised by the Government of the Seychelles the right to grant the Slot Rights to Newsat-425 as provided for in this Agreement and Seysat is not aware of any circumstances which would prevent or limit in any way Newsat-425’s ability to fully utilise the Slot Rights and (vi) on the part of Seysat, it has fully disclosed to Newsat-425 all relevant facts relating to the Slot and Frequency bands, including without limitation, Seysat’s rights to grant the Slot Rights within the Frequency Bands to Newsat-425.”[22]Two further agreements were executed - AROSA1 on 2 October 2001 and AROSA2 on 9 July 2002 - but it is not necessary to consider their terms which did not amend the initial agreement in a manner material to the present proceedings.[23]Newsat contends that Zani falsely misrepresented the validity and status of the SEYSAT-1 filing and that the misrepresentations were effected both by agreeing to the incorporation of clause U in the draft agreement and in thereafter signing the agreement. In regard to the former contention, particular emphasis is placed on email exchanges between Zani and an associate of Winthrop Stimson Putnam & Roberts, a London law firm retained by Newsat, whereby Zani agreed to the draft terms, inclusive of Clause “U”.[24]These exchanges were also relied upon as demonstrating that the representations were “directed” at and “made” in London. Indeed it is Newsat’s case that the terms of the new agreement including Clause “U” were negotiated between Zani and the Claimants’ London lawyers.[25]In fact, if it be of relevance, it appears to be common ground that the agreement terminating the original slot agreement and the new Newsat slot agreement were faxed from the United States by Mr Albert to Zani in the Philippines and were faxed back after signature by the same route for onward transmission to the London solicitors.

The claim

[26]In summary the Claimants’ case against this background is set out in the Claimants’ skeleton argument at paragraphs 54-56:
“54. In those circumstances, it is the Claimants’ case that: 1. The Defendant communicated his agreement to the incorporation of Clause U into the Newsat Slot Agreement to the Claimants’ lawyers in London and thereby falsely represented to them the truth of the representations. 2. The Defendant failed to communicate to the Claimants’ lawyers in London the fact that the representations previously made by him in the Seychelles and upon which he appreciated that the directors of/people behind Newsat (being the same people as the directors of/people behind ISC) would rely, were false. 55. Accordingly the Defendant’s representations and omissions were directed to and made in London. Insofar as it is relevant, the Defendant knew that he was directing his communications to lawyers in London. It is clear on the evidence that, contrary to the Defendant’s skeleton…, these acts were “substantial and efficacious”. 56. Further, in making the representations contained in clause U of the Newsat Slot Agreement … and in omitting to correct the false representations previously made by him and upon which he knew that the directing minds of Newsat were relying, the Defendant was directing such representations/omissions to the directing minds and will of Newsat. By November 2000, the Defendant knew that Mr Albert was not the directing mind and will of Newsat. The evidence (which is not effectively challenged by the Defendant) is that the directing mind and will of Newsat was in London.”
[27]As regards reliance, the submission is summarised in that same skeleton at paragraphs 63 and 65:- “63. The Claimants, acting by Mr Wardrop and Mr Pedriks, acted in reliance upon the above representations (and omissions to correct), as the Defendant intended them to, by deciding to proceed with the Seychelles venture which involved, in particular, deciding to proceed with the purchase of the Palapa-B2R satellite and to move the satellite into position, deciding to cause Newsat-425 to enter into the orbital Slot agreement and the AROSAs, authorising the payment of slot payments under the terms of the OSLA and AROSAs, deciding to instruct various third parties (including Winthrop) and thereby incurring significant expense, including trying to progress the co-ordination of the slot and in pursuing the prospect of a sale of the Group to Newskies…. 65. As described in Shaw 1, the decisions made by Messrs Pedriks nd Wardrop were made by them in London, often at meetings held either at the offices at Portman Square and then at Wellington House or at Mr Pedriks’ home or the offices of John White in London. The fact that such decisions were made in London is consistent with the decision to instruct solicitors in London. Accordingly it was Messrs Pedriks and Wardrop acting in London who made the above decisions on behalf of the Claimants and in reliance on the misrepresentations. ”

Jurisdiction under CPR 6.28 (b)

[28]The Claimants’ primary case is that the Court has jurisdiction to entertain the claim because they have a good arguable case that the damage sustained in the form of wasted expenditure resulted from acts committed within the jurisdiction. The argument is to the effect that the loss resulted from the making of fraudulent misrepresentations by Zani to the Claimants in London which led to reliance on those misrepresentations in London.[29]All this of course is challenged as a matter of fact by Zani but even assuming the circumstances to be such as contended for by the Claimants, the proposition, in my judgment, fails both as a matter of principle and authority.[30]It is of course well established as a matter of English law that the tort of fraudulent misrepresentation is committed in the place where the misrepresentation was received and acted upon and not the place from where it was sent: Diamond v Bank of England[1979] 1 Lloyd’s Rep 335 (a close analogy being drawn with publication in the context of a libel action: Bata v Bata [1948] WN 366). It is also right that under the previous Rules of the Supreme Court, service out of the jurisdiction was permitted if the action begun by the writ was founded on a tort committed within the jurisdiction: RSC Order 11 rule 1 (1) (h).[31]However, in 1987, the rules as regards claims in tort were amended to adopt an equivalent jurisdiction to that conferred by Article 5 (3) of the Brussels Convention as interpreted by the European Court (albeit the court retained a discretion in respect of such exorbitant jurisdiction): RSC Order 11 rule 1 (1) (f).[32]Article 5.3 of the Convention accords jurisdiction in tort cases to the courts “for the place where the harmful event occurred”. In Handelswekerij G.J. Bier v Mines de Potasse [1978] 1 QB 708, the European Court said this:
“14. The form of words “place were the harmful event occurred,” used in all the language versions of the Convention, leaves open the question whether, in the situation described, it is necessary, in determining jurisdiction, to choose as the connecting factor the place of the event giving rise to the damage, or the place where the damage occurred, or to accept that the plaintiff has an option between the one and the other of those two connecting factors. 15. As regards this, it is well to point out that the place of the event giving rise to the damage no less than the place where the damage occurred can, depending on the case, constitute a significant connecting factor from the point of view of jurisdiction. 16. Liability in tort, delict or quasi-delict can only arise provided that a causual connection can be established between the damage and the event in which the damage originates. 17. Taking into account the close connection between the component parts of every sort of liability, it does not appear appropriate to opt for one of the two connecting factors mentioned to the exclusion of the other, since each of them can, depending on the circumstances, be particularly helpful from the point of view of the evidence and of the conduct of the proceedings. 18. To exclude one option appears all the more undesirable in that by its comprehensive form of words, article 5 (3) of the Convention covers a wide diversity of kinds of liability. 19. Thus the meaning of the expression “place where the harmful event occurred” in article 5 (3) must be established in such a way as to acknowledge that the plaintiff has an option to commence proceedings either at the place where the damage occurred or the place of the event giving rise to it.”
This accordingly forms the basis of the amended form of RSC Rule 11 and its successor CPR Part 6.20. It is to be noted, however, both limbs of the option were viewed as justified because, depending on the facts, they could each “constitute a significant connecting factor” from the perspective of jurisdiction.[33]The issue as to whether England was the designated jurisdiction under the new rule in a case of negligent misrepresentation soon arose for decision. In Minster Investments Ltd v Hyundai Precision & Industry Co. Ltd [1988] 2 Lloyd’s Rep 621, a French classification society with offices in Korea had issued unreliable class certificates in regard to containers built in Korea. The certificates were sent to and relied upon by the plaintiffs in England. This receipt was held to be the event which caused the harm.[34]In so concluding, Steyn J was reluctant to treat the language of the European Court as if it had “statutory force” or as providing comprehensive guidance. In contrast, in concluding that jurisdiction had been properly invoked, he said:
“In my judgment, common sense and policy considerations require one to ask where in substance the cause of action in tort arises, or what place the tort is most closely connected with.”
In reality, this approach, if appropriate, was indistinguishable from the earlier practice under RSC Order 11 r 1 (i)(h): see e.g. Castree v Squibb [1982] 2 All ER 589. It was clearly viewed with some doubt by the Court of Appeal in Source Ltd. V. Rheinland [1998] QB 54.[35]Indeed, in the meantime, in Metall und Rohstoff AG v Donaldson, Rufkin & Jenrette Inc [1990] 1 QB 391, the Court of Appeal considered in some detail the nature of the “act” that needed to be committed within the jurisdiction and the extent of the necessary connection between the defendant and the jurisdiction: “In our view condition (c) [the damage has resulted from an act committed within the jurisdiction] requires the court to look at the tort alleged in a common sense way and ask whether damage has resulted from substantial and efficacious acts committed within the jurisdiction….. But the defendants are, we think, right to insist that the acts to be considered must be those of the putative defendant, because the question at issue is whether the links between him and the English forum are such as to justify his being brought here to answer the plaintiffs’ claim:” per Slade LJ at p.437.[36]Furthermore, in Dumez France SA v Hessische Landesbank [1990] ECR 1-49, the European Court emphasized that Article 5.3 was by way of exception to the general rule according jurisdiction to the courts of the Defendants’ domicile and thus required a particularly close connecting factor between the dispute and the courts of some other jurisdiction:
“17. It is only by way of exception to the general rule whereby jurisdiction is attributed to the courts of the defendant’s domicile that Tile II, Section 2, attributes special jurisdiction in certain cases, including the case envisaged by Article 5 (3) of the Convention. As the Court has already held (Mines de Potasse d’Alsace, paragraphs 10 and 11), those cases of special jurisdiction, the choice of which is a matter for the plaintiff, are based on the existence of a particularly close connecting factor between the dispute and courts other than those of the defendant’s domicile, which justifies the attribution of jurisdiction to those courts for reasons relating to the sound administration of justice and the efficacious conduct of proceedings. 18. In order to meet that objective, which is of fundamental importance in a convention which has essentially to promote the recognition and enforcement of judgments in States other than those in which they were delivered, it is necessary to avoid the multiplication of courts of competent jurisdiction which would heighten the risk of irreconcilable decisions, this being the reason for which recognition or an order for enforcement is withheld by virtue of Article 27 (3) of the Convention. 19. Furthermore, that objective militates against any interpretation of the Convention which, otherwise than in the cases expressly provided for, might lead to recognition of the jurisdiction of the courts of the plaintiff’s domicile and would enable a plaintiff to determine the competent court by his choice of domicile.”
In this connection it also worth referring to Marinari v Lloyds Bank [1996] QB 217 which emphasises the same point in the context of where the damage occurred.[37]Of equal significance is the decision in Shevill v Press Alliance SA [1995] 2 AC 18. The European Court gave consideration to the expression “place where the harmful event occurred” in the context of a libel claim. Having referred to Bier, the judgment goes on as follows: - “24. In the case of libel by a newspaper article distributed in several contracting states, the place of the event giving rise to the damage, within the meaning of those judgments, can only be the place where the publisher of the newspaper in question is established, since that is the place where the harmful event originates and from which the libel was issued and put into circulation.25. The court of the place where the publisher of the defamatory publication is established must therefore have jurisdiction to hear the action for damages for all the harm caused by the unlawful act.26. However, that forum will generally coincide with the head of jurisdiction set out in the first paragraph of article 2 of the Convention.27. As the court held in Mines de Potasse d’Alsace, the plaintiff must consequently have the option to bring proceedings also in the place where the damage occurred, since otherwise article 5 (3) of the Convention would be rendered meaningless.28. The place where the damage occurred is the place where the event giving rise to the damage, entailing tortious, delictual and quasi-delictual liability, produced its harmful effects on the victim.29. In the case of an international libel through the press, the injury caused by a defamatory publication to the honour, reputation and good name of a natural or legal person occurs in the places where the publication is distributed, when the victim is known in those places.”[38]It follows that, in considering the place of the event giving rise to the damage in the context of defamation, the Court felt it right to focus only on the jurisdiction in which the defendant newspaper was established, such being the place where the harmful event “originates”. By definition, this will usually coincide with the primary forum identified by Article 2.[39]Against that background, the particular issue that emerges in the present case fell to be decided in Domicrest Limited v Swiss Bank Corporation [1999] QB 548. Rix J concluded that, in the case of negligent mis-statement, the place where the harmful event giving rise to the damage occurred was, by analogy with the tort of defamation, where the mis-statement was made rather than where it was received.[40]Rix J’s reasoning can be summarised as follows: i) A rule in relation to mis-statement which emphasizes where it is received and acted upon would over favour the Claimant’s jurisdiction contrary to the structure of the Convention and the warning in that regard from the European Court. ii) Such concerns undermined confidence in the approach of Steyn J in Minster. iii) By analogy with the tort of defamation, the harmful event occurs where the mis-statement “originates”: see also Bier para.16.[41]The Claimants say bluntly that Domicrest was wrongly decided. However, the reasoning of Rix J appealed to Kenneth Rokison QC, sitting as a Deputy Judge for the Commercial Court, in Alfred Dunhill v Diffission Internationale Moroquinerie De Prestige SARL [2002] 1 All ER (Comm) 950. Having analyzed the approach of Rix J as identifying the place where the harmful event occurred as coincident with the place where the mis-statement originated, he went on at p. 957:
“He concluded that, applying the formula stated in the Bier case, the place where the harmful event giving rise to the damage occurred was where the misstatement originated. As the learned judge observed, it was there that the negligence, if not every element of the tort, was likely to have taken place and for that and other reasons the place from which the misstatement was put into circulation was as good a place to found jurisdiction as the place where the misstatement was acted on, even if receipt and reliance were essential parts of the tort. I would respectfully go further and conclude that it is a better place, if one is seeking to identify the place of the event which is the origin of the damage as it was described in the Bier case, and if one puts to one side, as one is required to do, the rules of national law which define the necessary elements of the commission of the tort in question. It is true that in the course of his judgment, Steyn J had identified as the event causing harm in the case before him the receipt of the negligently produced certificates in England rather than their production and dispatch. But, in so far as there is a conflict between the judgment of Rix J and Steyn J on this point, as well as on the question of which is the right approach, I prefer the judgment of Rix J.”
[42]This view receives considerable additional support from a decision of the Court of Appeal in ABCI v BFT[2003] 2 Lloyd’s Rep 146. Having refused to review the trial judge’s exercise of discretion, the Court nonetheless went on to consider the position as regards service out in the event that the accounts which were said to have contained fraudulent misrepresentations had been received in England:
“41. However, we will consider the position on an opposite basis. If one assumes that there is a good arguable case for saying that the accounts were received here, the question arises whether that is sufficient. We have already observed that, when presenting its case in its skeleton before the Judge, ABCI does not appear to have considered that it was (since it relied only on damage suffered here). But it now relies on the receipt of the accounts here as a sufficient “substantial and efficacious” act. O.11, 1.1(1)(f) was formulated as it stood in 1995, in order to be consistent with and give effect to art. 5 (3) of the then Brussels Convention. The fact that the present case is not within the scope of the Brussels Convention is by the way. The significance of O. 11, r. 1(1) (f) was considered in the light of authorities in the European Court of Justice by Mr Justice Rix in Domicrest Ltd v. Swiss Bank Corporation, [1999] Q.B. 548. He concluded that the mere receipt here of negligent assurances conveyed by telephone from abroad, on which the recipient acted by releasing goods abroad, did not constitute the commission by the person giving the assurances of an act here which could ground jurisdiction in respect of the damage suffered abroad. Article 5(3) is one of a number of special jurisdictions, which, as exceptions to the general European rule that suit must be brought in the country of the defendant’s domicile, are not to be given too extensive a scope. The alternative possibility of founding jurisdiction in the place where damage is sustained anyway alleviates the position from a claimant’s viewpoint. Mr Justice Rix thus disagreed with the approach of asking where “in substance the cause of action arises, or what place the tort is most closely connected with”, which had been adopted by Mr Justice Steyn in the earlier authority on art. 5(3) of Minster Investment Ltd. v Hyundai Precision & Industry Co. Ltd., [1988] & Lloyd’s Rep. 621, prior to three of the European Court authorities on which Mr Justice Rix relied. We favour Mr Justice Rix’s reasoning and conclusion. …”
[43]As already recorded, the Claimants say that Domicrest was wrongly decided, the error deriving, it is submitted, from an unhappy adoption of the concept of “an originating event” in the context of defamation: see Shevill. An echo of shared concern is said to be found in the judgment of Lawrence Collins J in Bank of Tokyo – Mitsubishi Ltd v Baskan Gida Sanaya [2002] Lloyd’s Rep 395 in a passage at p.419:
“185. ….If it were necessary to reconsider the decision, the starting point would be consideration of the scope of the decision in Shevill … and what application it might have to claims for fraudulent and negligent misrepresentation. ”
[44]I am not persuaded, even if it was open to me, to hold that any “wrong turning” has been taken. In particular I do not accept that the autonomous meaning of “the place where the harmful event occurred” should turn on whether, as a matter of English law, the event which gives rise to the damage incorporates all the necessary ingredients of relevant cause of action.[45]The position in short is that Newsat have no good arguable case, in my judgment, that substantial and efficacious acts were committed within the jurisdiction by the Defendant which gave rise to the damage sustained by Newsat so as to afford any sufficient connecting factors with this jurisdiction.

Damage “sustained within the jurisdiction”: see CPR 6.20 (8) (a)

[46]The Claimants’ alternative case was not promoted with much vigour and I can take the matter shortly. As already explained, the Claimants’ claim is made up of many items of wasted expenditure. In the event, I did not understand it to be even suggested that the bulk of the claim was made up of damage sustained within the jurisdiction.[47]For instance, one head of damage was in the sum of US$1,275,000 in respect of payments under the slot agreements as amended from time to time. Of this US$1,025,000 was derived from subscriptions to a private placement arranged by the Claimants, the proceeds of which had been paid into a trust account with Bank of Bermuda set up by the Claimants’ Bermudan lawyers. The payment was made under instructions from Mr Albert in New Jersey to an account of Seysat in Hong Kong. The balance was paid partly by Mr Wardrop, then in the Netherlands, from a bank account in Paris and partly by Mr Pedriks from a bank account in Guernsey.[48]The only exception (and that was said to be a significant one) was said to be found in the liability incurred to the London solicitors retained to prepare the draft agreement in the sum of about US$584,000. The basis of this contention was, as I understood it, that, although the liability was satisfied by payment from the Claimants’ Bermuda trust account to, at Winthrops’ request, a bank account in the United States, it arose from acts of reliance in London and the consequent incurring of liability in London. In my judgment, the fact that a decision in regard to the engagement of English solicitors was made within the jurisdiction, even if it be the claimants’ principal place of business, is not adequate to provide the necessary connecting factors: see Dunhillsupra, at p. 962 d..[49]In like case to the other heads of claim which were all satisfied from the bank accounts outside England, the concrete transactions as regards payment of the wasted expenditure were all effected outside the jurisdiction. Put another way, I am not persuaded that the direct damage, sounding in monetary terms, was suffered in this jurisdiction: see ABCIsupra at para.44. In short there are no sufficient connecting factors with this jurisdiction in regard to the damage sustained.

Conclusion

[50]It follows that the defendant is entitled to the relief sought.

Cited in 12 later judgments

and 3 more of the most senior