“… the transfer of shares for€1 consideration did not have the required consents. Further, there was not the actual or valid signature of the professional trustees. In the circumstances detailed in the Claimant’s evidence, the challenge to the transfer is clearly, to my mind, good on the basis, first, of absence of authority and, second, by applying section 423 and following of the Insolvency Act.”
“25. The courts have considered the territorial reach of section 423 on a number of occasions. It was first considered by this court in In re Paramount Airways Ltd[1993] Ch 223 together with similar provisions in section 238 of the 1986 Act. Having summarised the legislation Sir Donald Nicholls V-C said, at p 235: “It will have been seen from the above summary that, on its face, the legislation is of unlimited territorial scope.” (Emphasis added.)
“Trade takes place increasingly on an international basis. So does fraud. Money is transferred quickly and easily. To meet these changing conditions English courts are more prepared than formerly to grant injunctions in suitable cases against non-residents or foreign nationals in respect of overseas activities. As I see it, the considerations set out above and taken as a whole lead irresistibly to the conclusion that, when considering the expression ‘any person’ in the sections, it is impossible to identify any particular limitation which can be said, with any degree of confidence, to represent the presumed intention of Parliament. What can be seen is that Parliament cannot have intended an implied limitation along the lines of In re Sawers(1879) 12 Ch D 522 . The expression therefore must be left to bear its literal, and natural, meaning: any person.” 27. In Bilta (UK) Ltd v Nazir (No 2)[2016] AC 1 , para 110 these considerations were said to be “unanswerable”. 28. However, as Sir Donald Nicholls V-C went on to point out, the court has a discretion whether or not to make an order under section 425; and it might refuse to exercise that discretion if the defendant has insufficient connection with England and Wales. He added, at p 240: “in considering whether there is a sufficient connection with this country the court will look at all the circumstances, including the residence and place of business of the defendant, his connection with the insolvent, the nature and purpose of the transaction being impugned, the nature and locality of the property involved, the circumstances in which the defendant became involved in the transaction or received a benefit from it or acquired the property in question, whether the defendant acted in good faith, and whether under any relevant foreign law the defendant acquired an unimpeachable title free from any claims even if the insolvent had been adjudged bankrupt or wound up locally. The importance to be attached to these factors will vary from case to case. By taking into account and weighing these and any other relevant circumstances, the court will ensure that it does not seek to exercise oppressively or unreasonably the very wide jurisdiction conferred by the sections.” 29. The extra-territorial effect of section 423 was confirmed in Revenue and Customs Comrs v Begum[2010] EWHC 1799 (Ch) . 30. The effect of the legislation, therefore, is that it confers on the court power to make orders against persons or property outside England and Wales, subject to the court being satisfied that there is a close enough connection with England and Wales.” “Trade takes place increasingly on an international basis. So does fraud. Money is transferred quickly and easily. To meet these changing conditions English courts are more prepared than formerly to grant injunctions in suitable cases against non-residents or foreign nationals in respect of overseas activities. As I see it, the considerations set out above and taken as a whole lead irresistibly to the conclusion that, when considering the expression ‘any person’ in the sections, it is impossible to identify any particular limitation which can be said, with any degree of confidence, to represent the presumed intention of Parliament. What can be seen is that Parliament cannot have intended an implied limitation along the lines of In re Sawers(1879) 12 Ch D 522 . The expression therefore must be left to bear its literal, and natural, meaning: any person.” “in considering whether there is a sufficient connection with this country the court will look at all the circumstances, including the residence and place of business of the defendant, his connection with the insolvent, the nature and purpose of the transaction being impugned, the nature and locality of the property involved, the circumstances in which the defendant became involved in the transaction or received a benefit from it or acquired the property in question, whether the defendant acted in good faith, and whether under any relevant foreign law the defendant acquired an unimpeachable title free from any claims even if the insolvent had been adjudged bankrupt or wound up locally. The importance to be attached to these factors will vary from case to case. By taking into account and weighing these and any other relevant circumstances, the court will ensure that it does not seek to exercise oppressively or unreasonably the very wide jurisdiction conferred by the sections.”
“I do not read this passage in the Vice-Chancellor’s judgment as laying down that a court should never grant an order under s. 423(2) in the exercise of its discretion in the absence of any of the sort of connections with England which the Vice-Chancellor set out but it has to be accepted that there are no such connections in the present case. I have nonetheless come to the conclusion that I should grant the relief sought …”
“132. It is accepted that, as held by Sir Donald Nicholls VC in Re Paramount Airways[1993] Ch 223 , the jurisdiction is subject to no territorial limitation. The fact that both the First and the Fourth Defendants are overseas companies and that the transaction in question concerned moveable property situate in Thailand is relevant only to the question whether the court should exercise its discretion to grant relief. On the other hand I fully recognise the special need for care when exercising an extraterritorial discretionary power - see Banco Nacional de Cuba v Cosmos[2000] BCC 910 . In the context of winding-up, the subject matter of that case, one is concerned not just with the connection with this jurisdiction of the company which it is sought to wind up, but also with the connection of the potential beneficiaries–see per Knox J in Re Real Estate Development Co[1991] BCLC 210 at 217. What one is concerned to find is a sufficient connection to justify the court setting in motion procedures over a body which prima facie is beyond the limits of territoriality–see again per Knox J at page 217. 133. In Re Paramount Sir Donald Nicholls VC said that the court will need to be satisfied that, in respect of the relief sought against him, the defendant is sufficiently connected with England for it to be just and proper to make the order against him despite the foreign element … 134. I particularly note from the foregoing that Sir Donald Nicholls regarded no one factor as decisive. Each case will turn on its own facts with the weight to be given to connecting factors or their absence dependent on their real significance having regard to the overall situation. In Jyske Bank (Gibraltar) Ltd v Spjeldnaes[1999] 2 BCLC 101 Evans-Lombe J, whose experience in this field is very considerable, exercised the jurisdiction even though as he expressly recognised there were present none of the sort of connections with England which the Vice Chancellor had set out.”
“This requirement does not exist in the present case, because these proceedings have been commenced as of right. That does not mean that where a section 423 claim is commenced against a defendant as of right, the court should never exercise its undoubted discretion to make no order against that defendant. But it seems to me that a court having jurisdiction as of right should be slow to decline to make an order at all unless it is clear that the making of such an order will cut across the position under some relevant foreign law. Where that is the case, an English court seised as of right must pay careful regard to the exorbitance or potential extraterritorial adverse effect of making an order under the section 423 jurisdiction …”
“(1) Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur … (3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a preexisting relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.”
“490. Before me the parties addressed the bulk of their submissions in closing to the case of Dolphin Maritime & Aviation Services Ltd v Sveriges Angfartygs Assurans Forening[2009] EWHC 716 (Comm) ; [2010] 1 All ER (Comm) 473. In that case, an English company (“Dolphin”) was engaged by Turkish cargo underwriters to recover compensation from shipowners whose vessel had grounded off Gibraltar. The owners’ interests were represented by the defendant Swedish P&I Club. Dolphin entered into an agreement with the underwriters whereby only Dolphin was entitled to conduct negotiations with the Club and the full amount of any recoveries would be paid into Dolphin’s English bank account, from which Dolphin would deduct its commission. The Club provided a Letter of Undertaking addressed to the underwriters securing the shipowners’ liability, which provided for payment of any settlement monies to Dolphin or solicitors appointed by Dolphin. However, in breach of contract the underwriters concluded a settlement directly with the Club, and the Club paid the settlement monies directly to the underwriters’ bank accounts in Turkey. Dolphin sued the Club for, among other things, inducing a breach of the contract between Dolphin and the underwriters, and conspiracy to injure by unlawful means. 491. The issue was whether Dolphin had suffered the damage in England, as the place where it should have been paid the settlement monies, for the purposes of Article 5(3) of the Brussels I Regulation. Christopher Clarke J, as he then was, accepted Dolphin’s submission that it had, rejecting the argument that the harm occurred either where the settlement monies were paid or received. In particular, he held as follows: “… 56. …there is, as it seems to me, a well arguable case that, under the terms and conditions, the underwriters were bound to procure that the sums recovered directly from the Club were paid in the first instance to Dolphin. …. 57. In those circumstances, the arguments on behalf of Dolphin are, in my judgment, to be preferred. Dolphin’s essential complaint is that it suffered harm because it did not receive the$8.5 million into its bank account which it should have done because, despite knowledge that this would involve a breach of the underwriters’ contract with Dolphin, the Club paid it to their accounts in Turkey. …. the contract (which is governed and must be interpreted by English law) calls in terms for ‘Recoveries and quasi-Recoveries (i.e. sums which would otherwise comprise ‘Recoveries’) to be received direct by Dolphin and that the complaint in tort is that the Club wrongfully brought about a breach of that obligation. 58. When, in those circumstances, I ask myself ‘where the damage to the direct victim occurred’ (Dumez: Advocate General para. 52) or ‘where the event giving rise to the damage, and entailing tortious liability, directly produced its harmful effects upon the person who is the immediate victim of that event’ (Dumez (ECJ) para. 20) or ‘where the event giving rise to the damage caused injury’ (Reunion), the answer appears to me that it is in this country, where Dolphin did not receive the money which, if the contract had been performed, it should have received. 59. Further, if I ask myself what would have been the position if the tort complained of had not taken place, the answer is that payment would have been made to Dolphin in England: and the essence of Dolphin's complaint is that that did not occur. … In some cases, e.g. in cases of damage to goods or persons, the question may have no great utility. But in others where the claimant has failed to obtain some property or money which he would otherwise have received the answer to the question may be a guide to identifying where the harm in the particular case occurred. 60. I do not ignore the danger of conflating the place where the damage occurred with the place where the loss was suffered. There is, however, a difference between a case in which the claimant complains that he has lost his money or goods … and a case in which the claimant complains that he has not received a sum which he should have received. In the former case the harm may be regarded as occurring in the place where the goods were lost …or the place from or to which the moneys were paid …, although the loss may be said to have been suffered in the claimant's domicile. In the latter case the harm lies in the non-receipt of the money at the place where it ought to have been received, and the damage to him is likely to have occurred in the place where he should have received it. That place may well be the place of his domicile and, therefore, also the place where he has suffered loss.” 492. The argument before me was as to the applicability of this analysis: in particular whether it encapsulated a statement of general principle or whether (as submitted for Mr Ohmura) the case had to be read more narrowly in light of its facts, in particular that there was a specific contractual obligation on the underwriters to pay any recoveries into Dolphin’s bank account, that that contract was governed by English law, and that Dolphin had given a notification identifying a particular bank account in England for the receipt of the money. 493. I do not think such a narrow reading is justified. There does not seem to me to be anything in Christopher Clarke J’s judgment to suggest that it was intended to be confined in the way suggested by Mr Emmett or why the fact of the existence of a contractual obligation should make a significant difference. When one looks at the judgment the category of cases identified by Christopher Clarke J at [60] to which the principle stated is said to apply was one where “the claimant complains that he has not received a sum which he should have received”
“They were under an obligation not to sue in Germany or elsewhere than England. The former clients could have performed their contractual obligations to AMTF either by not raising proceedings in Germany or, having raised those proceedings, by discontinuing them”