Vava & Ors v Anglo American South Africa Ltd [2013] EWHC 2131 (QB)

Case No HQ11XO3245And HQ11XO3176[2013] EWHC 2131 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 24/07/2013
Before
MR JUSTICE ANDREW SMITH
Between
Vava & orsClaimantsAnglo American South Africa LimitedDefendantJessica Margaret YoungClaimant(1)Anglo American South Africa LimitedDefendants(2) Dr Peter John JankowitzDefendant(3) Dr Athol StewartDefendant(4) Dr Brian Royston GloverDefendant(5) Dr Gareth Owen JonesDefendant(6) Dr Ian SmitDefendant
Guy Philipps QC and Stephen Midwinter (instructed by Linklaters LLP) for Defendant in action HQ11XO3245 and (instructed by Reynolds Porter Chamberlain LLP) for the First Defendant in action HQ11XO3176Howard Palmer QC (instructed by George Dodd, Medical Protection Society) for Second Defendant in action HQ11XO3176Alex Layton QC and Sudhanshu Swaroop (instructed by Leigh Day LLP) for Claimants in both actions.Hearing Hearing dates: 1 & 2 May 2013
Judgment
[1]By their applications in these two actions Anglo American South Africa Limited (“AASA”) seeks declarations that the court has no jurisdiction to hear the claims made in them. The only issue is whether, as the claimants maintain, AASA has its “central administration” in England so that under article 60 of the Brussels 1 Regulation (Regulation EC 44/2001 on the Jurisdiction and Enforcement in Civil and Commercial Matters, the “Regulation”), it is domiciled here and may be sued under article 2; or more precisely the issue is whether the claimants have made out a sufficient case for the purposes of establishing jurisdiction that when the proceedings were issued AASA had its central administration in England. AASA contends that the meaning of article 60 and its application to the facts of these cases is sufficiently clear for me to declare that the Court has no jurisdiction to try the claims. The claimants’ primary submission is that the meaning of “central administration” in article 60 is unclear and that, having made findings of fact, I should request a ruling under article 267 of the Treaty on the Functioning of the European Union. Their secondary submission is that otherwise I should refuse the applications and assert the court’s jurisdiction over the claims.[2]This being the issue, the nature of the claims in the proceedings is not relevant to what I have to decide, but I shall introduce them briefly. AASA, incorporated in South Africa with its registered office in Johannesburg, belongs to a group of companies commonly referred to as the Anglo American Group (the “Group”). The claimants in claim no HQ11X03245 (the “Vava” action, Flatela Vava and others v Anglo American South Africa Limited) allege that they contracted silicosis from employment in gold mines in South Africa operated by companies that, it is said, were controlled and advised by AASA at times when safety procedures for employees were inadequate and that therefore AASA is liable for their injuries. AASA faces many such claims in the South African courts, and accepts that the claimants in the Vava action would be entitled to bring claims in South Africa. In claim no HQ11X03176 (the “Young” action, Jessica Margaret Young, by her father and litigation friend Kenneth Niall Young, v Anglo American South Africa Limited and others) it is alleged that the claimant, who apparently suffers from disabilities resulting from late diagnosis of phenylketonuria after her birth in Botswana in 1990, was negligently treated by five doctors, the second to sixth defendants, for four of whom AASA is said to be vicariously liable. The other doctor, Peter John Jankowitz, for whom AASA is not said to be vicariously liable, now lives in New Zealand and he was served with the proceedings pursuant to permission granted on the basis that he is a necessary or proper party to the claim against AASA. He initially challenged the permission on the grounds that the claimant had not made proper disclosure when it was obtained but that argument is not pursued: his challenge to jurisdiction now depends upon that of AASA. Dr Jankowitz was represented by Mr Howard Palmer QC, but he advanced no independent arguments.[3]As I have said, the basis on which the claimants contend that the court has jurisdiction over their claims against AASA is that, for the purposes of the Regulation, AASA is domiciled here because it has its central administration here. Article 2 of the Regulation provides that, “…, persons domiciled in a Member State shall whatever their nationality, be sued in the courts of that Member State …”. Article 60 provides as follows:
“1. For the purposes of this Regulation, a company or other legal person or association of natural or legal persons is domiciled at the place where it has its: (a) statutory seat, or (b) central administration, or (c) principal place of business. 2. For the purposes of the United Kingdom and Ireland, “statutory seat” means the registered office or, where there is no such office anywhere, the place of incorporation or, where there is no such place anywhere, the place under the law of which the formation took place.”
It has never been suggested that AASA’s statutory seat is in England. The claimants initially contended that its principal place of business is in England, but no longer do so.[4]The critical date for determining domicile is the date when proceedings were issued, 25 August 2011 for the Young action and 1 September 2011 for the Vava action: see Dicey, Morris & Collins, The Conflict of Laws (15th Ed, 2012) para 11-083 fn 236, citing Canada Trust Co v Stolzenberg (No 2), [2000] UKHL 51. There was some difference between the parties about the test for deciding whether the claimants have sufficiently demonstrated that AASA then had its central administration here. Mr Guy Philipps QC, who represented AASA, submitted that the standard is whether they have shown a “good arguable case”, citing Canada Trust Co v Stolzenberg (No 2), [1998] 1 WLR 547, in which (at p.555) Waller LJ said that in this context the expression “reflects … that one side has much the better of the argument”. Mr Layton submitted that the expression “much the better of the argument” derives from the test, specific to cases in which jurisdiction is asserted in reliance on article 23 of the Regulation, that a jurisdiction clause must be “clearly and precisely demonstrated”, and that it is not apt where other provisions of the Regulation are invoked. I accept that the phrase has been used to elucidate the test in that context (see, for example, Bols Distilleries BV v Superior Yacht Services Ltd, [2006] UKPC 45, para 28 per Lord Rodger), but I cannot accept that it is peculiar to cases concerning article 23, or that its application is limited to cases in which jurisdiction is so asserted. What Waller LJ said about the relevant standard of proof was endorsed by the House of Lords (loc cit) and his observation about one side having much the better of the argument has been widely cited with approval, for example by Lord Collins in Altimo Holdings and Investment Ltd v Kyrzyg Mobil Tel Ltd, [2012] UKPC 7 at para 77. Waller LJ was, I think, seeking to convey the flavour of the speeches in Vitkovice Horni a Hutni Tezirstvo v Korner, [1951] AC 869 and the authorities drawn together by Lord Goff in Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran, [1994] 1 AC 438, 453-454.[5]The test suggested by Waller LJ is therefore applicable in this case, but it must be recognised that: i) It is essentially a reflection of how the court engages with the problem of testing a case and deciding whether it has been sufficiently satisfied of the case given the limitations inherent in interlocutory process, and in particular given that interlocutory hearings should not develop into something akin to a trial; and ii) The tests of good arguable case and who has much the better of the argument do not apply to questions of law. The court decides them on the application challenging the jurisdiction, unless, perhaps, the question concerns a developing area of the law and findings of fact would assist the decision: see Dicey (cit sup) para 11-147 and fn 423.[6]In article 60 the Regulation adopted a new rule about the domicile of “a company or other legal person or association of natural or legal persons”. Article 60 replaced article 53 of the Brussels Convention, under which the test of domicile was where the “seat” of a corporation or other legal entity was and which provided that “in order to determine that seat, the court shall apply its rules of private international law”. It draws on the continental notion of a company having a “seat” and article 60(2) caters specifically for the legal systems of the United Kingdom and Ireland which do not have this concept. Like the rest of the Regulation, the article is to be interpreted with a view to achieving the overall purpose of the Regulation rather than by focusing upon literal meaning (in other words, its meaning is determined “teleologically”), and so Mr Philipps relied on paragraph 11 of the recitals to the Regulation:
“The rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile and jurisdiction must always be available on this ground save in a few well-defined situations in which the subject-matter of the litigation or the autonomy of the parties warrants a different linking factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.”
His point was, I think, that AASA’s contentions as to the meaning and application of article 60(1)(b) provide a relatively predictable test of domicile and so satisfy the purpose of the Regulation relatively well. I accept this as far as it goes and it bears upon one argument of the claimants (see para 74below), but generally it seems to me a marginal consideration with regard to the meaning of the article as far as the issues before me are concerned.[7]It was (unsurprisingly) common ground that the meaning and application of the article depends not on the legal concepts of any particular system but are determined “autonomously” so as to achieve uniformity across the Member States. Both Mr Philipps and Mr Layton drew upon European, in particular German, jurisprudence in support of their submissions. The Explanatory Memorandum published by the European Commission with the proposed Regulation did not in its English version explain the concepts in article 60 (or the corresponding article 57 in the proposed regulation). However, in the German version of the Regulation the term corresponding to “principal place of business” is Hauptniederlassung, literally “principal establishment”, and in the German version of the Explanatory Memorandum this is equated to tatsächlicher Sitz (real seat, or actual seat). Mr Layton submitted, and I accept, that two of the concepts in article 60 are, as this indicates, directed to the seat of a company or other legal person, the statutory seat and the real seat, the doctrine of a real seat (or siėge reel) being recognised in the jurisprudence of some member states as an alternative to the place of incorporation to govern the affairs of companies where a foreign element is involved: see Anderas and Wooldridge, European Comparative Company Law (2009) at pp.29-30.[8]The test in article 60 for domicile has been adopted for the purposes of the revised Lugano Convention (2007), and Professor Fausto Pocar’s Official Report on the revised Convention provides this explanation:
“The case of companies and legal persons is different, since the determination of their ‘seat’, treated as its domicile for this purpose, was entrusted by Article 53 of the 1968 Convention to the rules of private international law of the State of the court hearing the case. Reference to the domestic rules on conflict of laws, which are based on widely varying criteria, has not given rise to many problems in practice, but it may nevertheless create difficulties in the future. The Commission therefore proposed the adoption of a common definition of domicile for companies which would be the place of their central management or, failing that, their registered office so that a company could be linked to one legal system on the basis of factual elements. The arrangement set out in the new Article 60 of the Convention takes account of the Commission’s proposal; but ensures that the courts of the States bound by the Convention have jurisdiction even if the company’s seat is not located in any State bound by the Convention, provided that the central administration is within one of those States, and vice versa. This solution thus goes further than the Commission’s proposal.”
[9]This explanation is of interest for four main reasons. First, Mr Layton submitted that when Professor Pocar referred to the “seat” of a company he included both its statutory seat and its real seat, and, although it is not immediately apparent, given the German version of the Exploratory Memorandum he is, in my judgment, correct about this. Secondly, Professor Pocar’s explanation demonstrates that the tripartite definition in article 60 was intended to be just that: it suffices to establish domicile that any one of the three limbs is satisfied. Thirdly, the report uses the expressions “central administration” and “central management”, clearly intending them to have the same meaning. Indeed the same words are used in other versions of the commentary: for example, in French the term “administration centrale” is used in both places, in Italian “amministrazione centrale” and in Dutch “hoofdbestuur”. In the German version like the English version two expressions are used: “zentralen Verwaltung” in the context of the Commission’s proposal and “Hauptverwaltung” in the context of what was adopted in the revised Convention. Finally, it is contemplated that the concept of “central administration” might link a company to a legal system on the basis of “factual elements” (rather than the formal legal structure of the legal entity, as I would understand it).[10]Since, as I shall explain, English cases have attached significance to the connotations in ordinary English usage of the word “administration” in interpreting article 60(1)(b), I should also refer to the German Supreme Court’s decision in their judgment of 23 January 2008, [2008] NJW 2797, 5 AZR 60/07. The defendant’s statutory seat was in Austria, but the court considered whether the case was covered by article 60(1)(b). The term corresponding to the company’s place of central administration was the place of its “head office” (according to the agreed translation before me). It was said (at para 18), “Applicable is the place where essential business decisions are made without the need for notification of an appropriate decision by the respective legal entity”.[11]Mr Layton also cited another German case, a decision of the Landgericht for Frankfurt am Main, decision 2-08 S 25/09 of 3 March 2010. The observations that Mr Layton invoked were obiter in that the court had decided that the appeal to it was inadmissible, but commented on the merits. According to the translation originally placed before me the court said that “A corporation’s main centre of administration is in the locality in which the management bodies have their main centre of activity and in which the Company’s policy-shaping and actual business management is centred”. I questioned this translation and in particular the reference to “policy-shaping”: this was a translation of “Willensbildung”, and the parties then agreed that the word, which might be literally rendered “will-forming”, equally covers both decision-making and policy-making. This neutralised the authority as far as issues between the parties in this case are concerned.[12]The concept of a company’s central administration was not new to European law when it was adopted in article 60. It had been used in the context of freedom of establishment, and the jurisprudence developed in cases about freedom of establishment has been held by the German Federal Court of Justice to inform the proper application of article 60. In its judgment of 27 June 2007, NJW-RR 2008 551, XII ZB 114/60, the Court was concerned with claims for damages in tort brought in Germany against a company with a statutory seat in England, and also against two companies domiciled in Germany who had acted for the English company. When considering article 60(1)(b) the Court said (at para 11) that the English company “also had a place of general jurisdiction in Germany at the time the case became pending because its central administration is located in Dusseldorf” (to cite a certified translation that was put before me). When explaining this, the Court drew upon jurisprudence relating to freedom of establishment: “In accordance with article 48(1) of the Treaty establishing the European Community, which governs the right of establishment of companies or firms within the Community, central administration means the place where decisions are made and entrepreneurial management effectively takes place”.[13]Adopting this approach, Mr Philipps submitted that what “central administration” connotes in article 60 is explained by judgments of the Court of Justice of the European Union (“ECJ”) about freedom of establishment, and he also relied upon this explanation of the expression in Everling, “The Right of Establishment in the Common Market” (1964), a textbook written by Dr Ulrich Everling, who became a judge of the ECJ:
“The central administration is located where the company organs take the decisions that are essential for the company’s operations. In this connection only the organs of the company itself count; it is irrelevant whether the company depends on the decisions of a parent company which has its domicile outside the Community. In most instances, the principal establishment and the central administration are located at the same place; the principal establishment is located at the most crucial point of the company’s economic activities, which means primarily the situs of its most essential operational facilities.”
Dr Everling’s views have been adopted in more recent writings (for example van der Groeben and Schwarze, Commentaries on the Treaties on European Union and Establishing the European Community (6th Ed, 2003)), and were cited with approval by Mr Advocate-General Damon in R v HM Treasury ex p. Daily Mail and General Trust Plc, [1989] QB 446, 453.[14]In the Daily Mail and General Trust plc case the ECJ considered the impact of Treaty rights of freedom of establishment on restraints on residence for tax purposes. Daily Mail and General Trust plc, an English company, wanted to transfer “the central management and control” of its business from the UK to the Netherlands for fiscal reasons. Under section 482 of the Income and Corporation Act, 1970 it required the consent of HM Treasury, which was refused. The question referred to the ECJ was whether the requirement of consent contravened freedom of establishment provisions of the Treaty, which applied to “companies or firms … having their registered office, central administration or principal place of business” within the Community: article 58. Both the Advocate-General and the Court, as I read their opinion and judgment, treated the expressions “central management and control” in section 482 and “central administration” in article 48 as equivalent. Thus the Advocate-General said (at para 2) that the claim involved “the claim by a company to exercise the right of establishment and, in particular, the conditions to which the member state of origin in which its registered office is situated may subject the transfer of its central management and control to another member state”. The Court said this (at para 24):
“Under those circumstances, articles 52 and 58 of the EEC Treaty cannot be interpreted as conferring on companies incorporated under the law of a member state a right to transfer their central management and control and their central administration to another member state while retaining their status as companies incorporated under the legislation of the first member state.”
Mr Layton submitted that the use of the expression “their central management and control and their central administration” does not indicate that the ECJ considered the two as equivalent: on the contrary, he argued, there would have been no need for the court to add the words “and their central administration” if they were. I find that a strained interpretation, and reject it.[15]Mr Philipps cited other authorities in the ECJ in support of his submission that in this context a company’s central administration amounts to its centre of management or operational centre, but in my opinion they add little to the Daily Mail and General Trust plc case. In Überseering BV v Nordic Construction Co Baumanagement GmbH (NCC), Case C-208/00, [2005] 1 WLR 315, 317 Mr Advocate-General Ruiz-Jarabo said that he would “use expressions such as ‘actual head office’, ‘actual centre of administration’ or ‘centre of management’ synonymously [in contrast to the place of incorporation]. I am referring, by each of these, to the place where the running of the company takes place and where it concludes a substantial proportion of its dealings with third parties …”. On the face of it, therefore, he focused on the number of dealings rather than their importance, but to my mind that places too much weight on the exact words (as translated). In any case I am not persuaded that this case lends much additional support to Mr Philipps’ submission: the Advocate-General was simply explaining his terminology in relation to the German law under scrutiny.[16]In Cartesio, Case C-210/06, [2009] Ch 354 the ECJ explicitly took “central administration” to mean the civil law concept of “real seat” or “siège real” of a company. The case concerned a provision of Hungarian law that referred to the seat of a company being located at the “operational headquarters”, which the ECJ treated (at para 101) as the same as its “central administration”. But, as with the Überseerung case, the Court was simply considering the proper interpretation of the national law, Hungarian law.[17]Both Mr Philipps and Mr Layton relied on European jurisprudence more heavily than on English judicial authority, but I should refer to three cases in the English Commercial Court in which there was an issue about whether defendant companies had their central administration in England so as to be domiciled here under article 60. The judgments all drew upon English authority and did not rely on European jurisprudence to give the article an autonomous meaning. In King v Crown Energy Trading AG, [2003] EWHC 163 (Comm), HHJ Chambers QC held that there was a sufficient case for the purposes of establishing jurisdiction that a Swiss company had its central administration and its principal place of business in England. The claimant had brought a claim against his former employer, Crown Energy Trading AG (“Crown Energy”), and claims against an associated company, Crown Resources, as guarantor of the employment contract and for inducements of breach of contract. It was held that the Court had jurisdiction over Crown Energy because it was domiciled here. The defendants had relied upon The “Rewia”, [1991] 2 Lloyd’s Rep 325, in which the Court of Appeal had considered the expression “principal place of business” used in a contractual jurisdiction clause. Of what he called the “dichotomy between administration and business found in Article 60”, HHJ Chambers said this (at paras 12 and 13):
“Administration is clearly an aspect of the conduct of business. That aspect has something of the ‘back office’ about it. Boards decide upon policy and important aspects of its implementation. Employees sell, supply and produce. Administration ensures that all runs smoothly: money is got in, debts are paid, leases and transport are arranged, personnel are looked after. But what of central administration? In a small organisation there may be a considerable blurring of function because the same person will often discharge a variety of roles. The larger the organisation, the easier it should be to discern a division of responsibilities. The location of the company secretary’s office in a major organisation might provide a good clue: a clue which seems to be absent in the present case. However, without attempting to be exhaustively precise, I think that in this case a simple listing of those with important responsibilities in Crown Resources will be enough to show where the central administration is to be found. It also seems to me that the same approach shows where one may find the company’s principal place of business.”
HHJ Chambers went on to observe (at para 14) that there can be a considerable overlap between what constitutes a company’s central administration and what constitutes carrying on its principal business, and that The “Rewia” was an “essential tool” in deciding what amounts to carrying on the principal business.[18]In Ministry of Defence and Supply of the Armed Forces of the Islamic Republic of Iran v Faz Aviation Ltd, [2007] EWHC 1042 (Comm) Langley J rejected an argument that the defendant, a Cypriot company, had its central administration or its principal place of business (or both) in England and so was domiciled here for the purposes of establishing administration under the Regulation. Langley J considered the argument about the principal place of business by reference to The “Rewia”, and observed that the case supported the proposition (inter alia) that “the central administration and principal place of business may be, and I would add, frequently will be, in the same country” (at para 29). He said that “the principal place of business (if there is one) is likely to be the place where the corporate authority is to be found (shareholders and directors), and to be the place from which the company is controlled and managed”. He then said this (at para 32) about article 60:
“The Jurisdiction Regulation is concerned to provide for jurisdiction in a location with which the potential defendant has a real connection at the relevant time. A company can cease to have any principal place of business or that place could change as the business changes. The questions are simply: was there at 21 July 2006 a principal place of business of Faz or place where the central administration of Faz was to be found and, if so, was that or one of them in England.”
[19]The third of these cases is the decision of Tomlinson J in 889457 Alberta Inc v Katanga Mining Ltd, [2008] EWHC 2679 (Comm). The claimant invoked the jurisdiction of the English court on the basis that the first defendant, a Bermudan company, had its central administration or its principal place of business in England. It was held that the claimant had demonstrated a sufficient case that the central administration was here. Tomlinson J referred (at para 23) to The “Rewia” and the two earlier Commercial Court cases, said that central administration does not necessarily mean the same as central management and control and is not necessarily found in the same place, and cited HHJ Chambers’ observation about administration having “something of the back office about it” whereas “boards of director decide upon policy and important aspects of its implementation”. He concluded that, notwithstanding evidence that board meetings took place in Canada either by way of actual meetings at various locations there or in that telephonic board meetings were conducted through a Canadian telephone number with board members dialling in from wherever they were in the world, nevertheless “No administration is to be found in Canada” and that “the entirety of the administration takes place” in England, where “all known management resides”, London being the “centre from which management instructions are given when necessary”. He said that, “While key decisions may be made in board meetings co-ordinated from Canada and sometimes taking place in Canada, everyone active on [the first defendant’s] behalf operates in London [sc, London, England]”. He endorsed Professor Briggs’ suggestion in Civil Jurisdiction and Judgments (then in the fourth edition at para 2.115 and now in the fifth edition at para 2.138) that one helpful approach to deciding where a company has its central administration is “to examine where those who have the serious responsibilities in a company have their place of work”, which might also indicate its principal place of business, so that in practice the two may well overlap.[20]These judgments were criticised before me as being out of line with European jurisprudence. First, Mr Philipps criticised the suggestion of HHJ Chambers that listing those with “important responsibilities” in a company is enough to show where the central administration is. I agree that this might well not answer the question, but I do not understand HHJ Chambers to say that it will: he simply said that on the facts of his case he thought it helpful. As Professor Briggs observed, it can be a “helpful approach”, but this is very different from saying that it necessarily provides an answer or from using it as a substitute for what article 60 says.[21]Secondly Mr Philipps submitted that, had he had cited to him the relevant European jurisprudence, Langley J would not have said what he did about the principal place of business probably being where the corporate authority is to be found and the place from which the company is controlled and managed. I need not comment on that: it is not important to what I have to decide.[22]Next, Mr Philipps criticised Tomlinson J for stating in the Alberta Inc case that no administration took place in Canada and the entirety of it took place in England, despite the board meetings in Canada. Mr Layton suggested that Tomlinson J might have said this because these decisions might have been “formal processes of rubber stamping” but nothing in Tomlinson J’s judgment indicates this: on the contrary, he recognised that key decisions might have been made at them (loc cit at para 23). His implication was that decisions at board meetings were not part of the administration of the company. Whatever Tomlinson J was saying about the facts of the case before him, I accept Mr Philipps’ submission that decisions at board meetings can and often will be part of the administrative processes of a company. If at paras 12 and 13 of his judgment HHJ Chambers suggested otherwise, then I respectfully disagree.[23]Fourthly, Mr Philipps criticised the observation of HHJ Chambers, adopted by Tomlinson J, that the term “administration” connotes “back-office” functions. If this was intended to suggest that an entity has its central administration where relatively menial and routine administration is done, I agree: the other language versions of article 60 make clear that the central administration is about the important administration, not the bulk of administration. I do not think that HHJ Chambers and Tomlinson J intended to suggest otherwise: certainly, as I read HHJ Chambers’ judgment, his reference to the back office might have been simply an observation about what the word “administration” commonly connotes, mentioned by way of incidental introduction to his consideration of where companies have their “central administration”, and not too much should be read into it. To my mind the term “administration” connotes a company’s or other entity’s internal management, including decisions about entrepreneurial matters in which it might be involved, and possibly dealings with bodies such as regulators, rather than its actual business dealings with third party customers and suppliers. Possibly this is underlined by the distinction between “central administration” and a “principal place of business”. However, the corollary of this is that, while I can well understand that an operating company or a trading company might have its central administration and its principal place of business in different jurisdictions, I find it difficult to envisage circumstances in which an intermediate holding company such as AASA might do so.[24]Mr Philipps suggested that by drawing upon what was said in The “Rewia” to interpret “principal place of business” in article 60, these cases have adopted for that test for domicile considerations such as where the board meets, whereas in fact the European jurisprudence shows that such considerations go to where the entity has its central administration. However that may be, I agree with his fundamental points about these authorities:(i) that the distinction between central administration and central management and control, which is drawn at least by Tomlinson J, is undermined by the other language versions of article 60 and the European jurisprudence that was not apparently drawn to his attention, and(ii) there is no good reason that the decisions of a board of directors should not be part of the administrative process of a company and, depending on the facts, might be the critical determinant of the place where a company has its central administration.[25]I should explain something of the history of these actions. When AASA disputed the court’s jurisdiction, the claimants sought orders for specific disclosure and further information. AASA resisted the applications, but on 16 July 2012 in his judgment [2012] EWHC 1969 (QB) Silber J ordered extensive disclosure. The claimants were then contending that AASA was domiciled in England both because it had its central administration here and because it had its principal place of business here. Silber J concluded (at para 62) that the claimants did not have an arguable case that AASA had its principal place of business in England: the evidence that AASA conducted “its economic activities in England or anywhere other than in South Africa” did not, he concluded, reach that threshold. However, he was satisfied that the claimants had “at the very least an arguable case that London, as the headquarters of Anglo American plc (“AA plc”), is the place where management entrepreneurial decisions relating to AASA’s business are taken”, and therefore that the claimants could show “that their case on jurisdiction (viz. that they have a good arguable case that the place of the Defendant’s central administration, is in England) is at least arguable” (at para 60). He went on to observe that his conclusion, based as it was on the material that was before him, did not mean that the claimants would defeat the substantive jurisdiction applications, and it has not been suggested (and could not have been suggested) that his decision determines any issue between the claimants and AASA that I have to decide.[26]However, I should set out the five considerations upon which Silber J (at para 60) based his conclusion that the claimants’ contention about where AASA had its central administration was at least arguable: i) “AA plc must be concerned to ensure that the correct decisions are taken in relation to the assets of its subsidiary AASA in South Africa, especially as they are worth £6.5 billion or 40% of the value of the assets of the Anglo American Group”. ii) Board meetings of AASA were, it was said, “infrequent”, so as to indicate that “major decisions are very likely to have been and to be taken outside those meetings”. iii) Thirdly, the statement of Mr Godfrey Gomwe, AASA’s Executive Director, that AASA “has regard to the policy and strategy of AA plc in making its own decisions” was said to show that “management decisions relating to AASA are likely to have been taken by AA plc”. iv) “The roles of Mr Gomwe and his close working links with AA plc”. v) The roles of two committees of AA plc, the Group Management Committee (“GMC”) and the Executive Committee (“ExCo”), including the frequency of their meetings.[27]As I understand Silber J’s judgment, his conclusion was really based on, or at least influenced by, his concern about whether decisions were really taken by AASA. Hence, Mr Philipps submitted that the basis of this part of Silber J’s decision was that the management of AASA had been “usurped” by AA plc, and for that reason decisions that constituted its central administration were not its own. That, he observed, was how Mr Layton presented the case to Silber J: he recorded Mr Layton’s submission as follows: “The Board Minutes of AASA were produced by Mr. Gomwe for the period between September 2010 and October 2011 and they indicate that the AASA Board only met on 6 September 2010, 23 September 2010 and 18 April 2011. It is said by Mr. Layton correctly in my opinion that the irregularity and the limited number of these meetings showed that decisions concerning AASA’s business must have been made outside its formal Board meetings, especially in the light of the size of AASA’s assets. It is said by Mr. Layton that many aspects of AASA’s business were not the subject of any decisions at those meetings, such as holding monitoring and reviewing the South African investments of the Group as well as coordinating, delivering, implementing and progressing Group strategy in South Africa although there was some limited reviewing of the South African businesses.” (para 48); and “On that basis, it is submitted by Mr. Layton that AA plc may well be centrally administering AASA by direct control and management decisions of the AASA Board by the GMC or through Mr. Medori or through direct control management by the GMC or Ms Carroll over Mr. Gomwe. Alternatively this is achieved through the direct control and management of ExCo over Godfrey Gomwe or through Rene Medori in his capacity as financial director of AA plc and as a Director of AASA or through the other Board members of AASA who are also members of ExCo.” (para 53).[28]On these applications the same evidence is before the court in both actions. AASA relied mainly upon this evidence: i) Three witness statements made by Mr Godfrey Gomwe, a Zimbabwean living in South Africa, who has been a director of AASA since 2001. ii) A statement of Mr Christopher Griffith, who has been a director of AASA since 27 May 2010, and when these proceedings were brought was the Chief Executive Officer (“CEO”) of Kumba Iron Ore Limited (“Kumba”), in which the Group has a majority interest. iii) A witness statement of Mr Douglas Alison, who was the Company secretary of AASA until he retired with effect from 31 December 2011. There are also statements made by partners in Linklaters LLP and Reynolds Porter Chamberlain LLP, AASA’s solicitors in the two actions, which deal with procedural matters and present background and legal material.[29]The claimants relied upon witness statements of the following: i) Mr Young. ii) Mr Owen Bavinton, who worked in the Group from 1992 to 31 January 2010. iii) Mr Andrew Mitchell, a South African attorney whose professional experience, he stated, has involved “not[ing] the way in which multinational companies manage and structure their organisations and how decisions in such organisations are taken”. He reviewed documents relating to AASA and the Group and some of AASA’s evidence, and gave evidence about what information was required in order to form a proper opinion about whether AASA was “effectively managed and controlled by” AA plc. iv) Mr Gervase MacGregor and Mr Andrew Cottle, partners in the accountancy firm of BDO, who reviewed documents, including witness statements, and stated their views about where AASA’s central administration or central management and control was exercised. The claimants served four witness statements of Mr Richard Meeran, a partner in their solicitors, Leigh Day & Co, who, like AASA’s solicitors, mostly dealt with procedural matters and presented background and legal material, and drew conclusions from and commented upon documentary material.[30]In the event Mr Layton placed little, if any, reliance on the statements of Mr Young and Mr Bavinton, at least in his oral submissions. Mr Philipps characterised them as “anecdotal” and, without intending any criticism of the witnesses, I think this fair as a general description. Where it is inconsistent, I prefer the (understandably) more detailed and specific and better-informed evidence of AASA’s witnesses: Mr Layton made no telling criticism of it and I see no reason to doubt that it is accurate. The statements of evidence of Mr Mitchell, Mr McGregor and Mr Cottle were, as Mr Layton acknowledged, largely if not wholly expert evidence, and permission to adduce expert evidence had not been sought or granted. I was told by Mr Layton that before Silber J it was “accepted by both sides that [expert evidence] was admissible” and some of it was apparently placed before him. I invited Mr Layton to apply for permission so that I might decide what expert evidence might properly be adduced, but he decided not to do so.[31]Mr Christopher Griffith, the CEO of Anglo American Platinum Limited (“Amplats”), explained something of the history of AASA. It was founded in 1917 to develop gold mining in the East Rand, and developed into South Africa’s leading mining finance house. It held interests in mining companies and provided administrative, financial, technical and engineering services to other operating companies through service contracts. It did not operate mines itself, nor, according to Mr Griffith, did it “exercise management of the operating mining companies in which it had interests: those companies had their own boards and made their own corporate decisions”.[32]In 1999 the businesses of AASA and Minorco SA, a Luxembourg company with interest in mining companies outside South Africa, were brought together. AA plc was incorporated in England, and became the Group’s top holding company. Its shares are listed on the London Stock Exchange, with secondary listings on the Johannesburg and Swiss Stock Exchanges. Its head offices are in London. According to the claimants’ undisputed evidence (which I accept), its offices in London have “hundreds of staff members” not only in administration and finance but working as engineers and geologists and on Group policies. When AA plc was incorporated AASA stopped providing services to other companies, and that role was taken over by AOL, a company incorporated in South Africa as a wholly-owned subsidiary of AASA. AOL also owns Anglo Coal Limited, an operating company.[33]AASA has no employees and conducts no business of its own. It holds through wholly-owned subsidiaries shares in companies incorporated and operating in South Africa, including Kumba, which mines iron ore, and Amplats, which mines platinum. Another subsidiary, Anglo American S A Finance Limited, borrows funds to make loans to the Group’s South African operating companies, and AASA provides guarantees for its borrowings. As Mr Griffith put it, “AASA’s vestigial business … became that of holding various shares in predominantly South African companies and guaranteeing certain financial obligations of those companies”. This is done in South Africa, and presumably this is why the claimants no longer contend that AASA has its principal place of business in England. It does not follow that it does not have its central administration here.[34]Many matters on which the claimants rely can conveniently be presented by reference to the matters identified by Silber J in para 60 of his judgment (see para 26above). The first consideration, that “AA plc must be concerned to ensure that the correct decisions are taken in relation to the assets of its subsidiary AASA in South Africa” is, to some degree, surely true of any relationship between a parent company and a subsidiary in a group: any parent company will be concerned that a subsidiary’s decisions should enhance the value of its assets, and any subsidiary will have regard to the policy and strategy of the group to which it belongs. As Silber J continued and as the claimants maintained, AA plc’s concern is, no doubt, the greater because of the value of AASA’s assets, in absolute terms and relative to the Group’s total assets. All of the Group’s assets in South Africa are held through AASA: it apparently holds more than half of the gross assets of the Group, and between 2008 and 2011, according to the claimants, its assets comprised between some 51% and 62% of the total gross assets of the AA plc. Whatever the precise figures, I accept the thrust of the claimants’ submission: in a press release in April 2010 the Group said that 40% of its operating assets were in South Africa. I also accept, and Mr Philipps did not dispute, that AA plc is concerned that decisions about AASA’s holdings and the Group’s South African assets should be taken in accordance with the Group’s policies and strategies that it has determined and in accordance with its wishes.[35]As for Silber J’s second consideration, the claimants submitted that, on the evidence, entrepreneurial decisions about AASA’s business were made outside Board meetings and “mechanisms of control were consistently exercised by London in relation to the functions of AASA”. AASA’s Board had only three meetings between September 2010 and October 2011, on 6 and 23 September 2010 and on 18 April 2011, the meeting on 6 September being held specifically to approve that interim report for the six months to 30 June 2010 because approval was required by the South Africa Reserve Bank. It is argued that they were too infrequent and irregular for the Board to have taken all business decisions of AASA, and that otherwise there would probably have been meetings at least quarterly, if not more frequently.[36]In support of his argument that the real decisions affecting AASA are taken in London, Mr Layton also relied upon the following: i) Five directors of AASA, Mr Gomwe, Mr Griffith, Mr Norman Mbazima, Mr Rene Medori and Mr Neville Nicolau, belong to ExCo; and Mr Layton submitted that they belong to ExCo “on behalf of AASA”. To my mind there is no proper reason to believe that they are on ExCo in this capacity: Mr Medori is AA plc’s Finance Director, and, I shall explain, Mr Gomwe’s position as a director of AASA is part of a wider role in South Africa. The Group’s operations are divided into seven “Business Units”, organised by commodities or groups of commodities, and their CEOs are members of the GMC and ExCo. Three of the business units are based on mining operations in South Africa: Kumba, Amplats and the Thermal Coal operations (which are principally in South Africa): Mr Griffith joined ExCo as CEO of Kumba, Mr Mbazima is CEO of Thermal Coal, and Mr Nicolau is CEO of Amplats. ii) The AA plc website stated that AASA had a designated “Leadership Team” comprising Mr Gomwe, Mr Griffith and Mr Mbazima, and they all reported to Ms Cynthia Carroll, then the London-based CEO of AA plc. I do not consider this an important indicator of where AASA has its central administration. It is unsurprising given their other roles that they should have reported to Ms Carroll, and unremarkable that the Group should arrange a reporting line between AA plc and important subsidiaries: it does not indicate either that the subsidiary’s central administration is done by the parent or that it is done where reporting takes place. iii) From September 2010 to October 2011 Mr Medori, a director of AASA and of AA plc, a member of the GMC, a member of ExCo and chairman of the Investment Committee of AA plc, never attended a Board meeting of AASA, and the attendance even of the “Leadership Team” was limited. Mr Medori is the only director whose “Location” is recorded in the table of directors as being in the United Kingdom rather than South Africa. Other directors are said to have missed meetings. Again, this does not seem to me significant, and I am not able to regard this as an indication that the Board meetings of AASA were unimportant or were so regarded by its members or AASA.[37]I can understand that infrequent and irregular board meetings might in some circumstances evidence that a company’s board has allowed a parent company to assume control over its management, but they do not necessarily do so. In Holden v Wood, [2005] EWHC 547 (Ch), to which I refer below, Park J observed at para 25 that international groups commonly have companies which do not need frequent or lengthy board meetings because their role and business do not call for them. AASA submits that this is the explanation for the infrequency and irregularity of their Board meetings. I accept that: there is no convincing evidence of decisions about AASA’s administration being taken elsewhere, and the claimants have produced no specific evidence that they were. To my mind, the detailed evidence of their witnesses demonstrates that AASA’s Board meetings, infrequent as they were, were sufficient for the limited business of the company. In particular, Mr Griffith stated that AASA is kept abreast with issues in its major subsidiaries, Kumba and Amplats, particularly issues that affect more than one part of the Group’s business in South Africa, and for this reason receives reports about its subsidiaries at its Board meetings: as is recorded in the minutes, at the meeting on 23 September 2010 the Board received a detailed report from Mr Gomwe as Executive Director and separate reports about Amplats, Kumba, and Thermal Coal, as well as about Anglo American Zimele Limited, which was, as Mr Gomwe explained, set up “to further enterprise development in the small and medium enterprise sector”. The minutes also record decisions reflecting AASA’s other activities: the Board’s approval of a guarantee for a bank loan to AOL; approval of charitable donations; reports of litigation and regulatory matters. The minutes also reflect that the Board considered other matters that were to be expected given AASA’s role in the Group: payment and forfeiture of dividends, appointments of directors, audit arrangements and liquidity.[38]Silber J’s third consideration apparently derives from para 46 of his judgment:
“The Chief Executive Officer of AASA Mr. Godfrey Gomwe has explained that AASA does not carry out any mining or operating business and that it does not have any employees. His evidence is that AASA is run by a Board of Directors, who are largely based in South Africa and who meet in South Africa where it is administered. He did however explain that those decisions are made in the context that AASA is ultimately a wholly owned subsidiary of AA plc “which obviously means that the company has regard to the policy and strategy of AA plc in making its own decisions”
. This is an important and a not surprising statement, because it shows that the ultimate holding company of AASA, which is AA plc, does influence, if not determine, at least some of the decisions of AASA, which is a company whose vast assets constitute such a substantial part of the assets of the Anglo American Group.” I recognise that in para 60 Silber J referred to Mr Gomwe’s statement showing that “management decisions were likely to have been taken by AA plc” (emphasis added), but I do not understand him to state in this synopsis a more firm conclusion than in para 46: and I consider the distinction between AA plc influencing decisions and determining decisions important. I can find no evidence, in what Mr Gomwe said or elsewhere, that AA plc does more than influence, no doubt powerfully influence, what AASA decides.[39]I come to the fourth consideration identified by Silber J, the role of Mr Gomwe as Executive Director of AASA in representing AA plc and implementing Group strategy in the South African region. Mr Gomwe is employed by AOL. (He also has an employment contract with Anglo American Services (UK) Limited, but he explained that that is because, when he joined the Group, he was employed by a Zimbabwean entity and was paid in Zimbabwean dollars, and had an international contract in order to be paid in US dollars: it has no relevance for present purposes.) Mr Gomwe was appointed Executive Director of AASA, his job description stating that the purpose of his appointment was “To be Anglo American plc’s chief representative in South Africa working together with Anglo American’s Business Unit CEOs to deliver the Group’s strategy in the region” and his appointment being recorded in a letter from AOL dated 1 December 2009 and signed by Mr Mervyn Walker, the Group Director of Human Resources & Communications. Mr Layton pointed out that, on its face, the letter “confirmed” the appointment, but I do not attach significance to this: the articles of AASA empower the Board to appoint one of their number to be Executive Director, and I infer that, if the wording of the letter was deliberate, this power had been exercised. In September 2010 Mr Gomwe was appointed as a member of ExCo. As I have said, he reported to Ms Carroll on the delivery in South Africa of the Group’s strategy, and works closely with Mr Walker. In press releases dated 1 December 2009 and 8 September 2010 (issued upon these appointments) he was described as “Anglo American’s key representative in South Africa”, and they said that he would be “working together with Anglo American’s Business Unit CEOs to deliver the Group’s strategy in the region”. In another press release of April 2010 it was stated that he was appointed to “drive the One Anglo strategy”. There is no reason to doubt Mr Bavinton’s evidence that he was a frequent visitor to London.[40]In his evidence Mr Gomwe has explained his position in the Group. He described himself as acting “on behalf of each or all of the individual South African companies ultimately owned by AA plc, as necessary”, and continued:
“My responsibilities revolved around co-ordinating the common issues that overlapped between the businesses of the South African operating companies.

(e) issues relating to the environment and climate change”

. His position as Executive Director of AASA is only one part of his job, but I fail to see that the fact that his other roles mean that, where he undertakes activities for AASA and participates in decisions of AASA, AASA is not acting as a distinct company or that it is acting under the control of another entity in the Group, still less that its activities are undertaken elsewhere than in South Africa.[41]In short, Mr Gomwe’s role is not only as a representative of AASA and his other activities are no indication of where AASA has its central administration. I reject Mr Layton’s submission that Mr Gomwe’s evidence about this is not credible. He made four points in support of this submission: first he said that Mr Gomwe’s evidence about this was served only shortly before the hearing, but its purpose was clearly to answer the case advanced by the claimants before Silber J and its timing is, to my mind, unremarkable. It is said to be inconsistent with Mr Gomwe’s job description but I see no tension between the description and his evidence. It is said that Mr Gomwe was described as AA plc’s chief representative only when he was appointed as AASA’s Executive Director: his appointment as Executive Director was natural given his role as key representative but I see no more significance than that. Finally, it is said that an article in an in-house magazine in December 2011 indicated that Mr Gomwe was involved in environmental issues as Executive Director of AASA and this is said to be inconsistent with his witness statement. I consider that there is nothing in this: apparently the basis of the contention that Mr Gomwe was involved in that capacity is that an accompanying photograph is captioned “Godfrey Gomwe, Executive Director, Anglo American South Africa Ltd”. In any case I see no tension with his statement, in which, as I have said, Mr Gomwe referred to environmental issues being an area of overlap between different businesses in South Africa. This is much too fragile a basis for rejecting his evidence as incredible, dishonest or less than candid.[42]The last of Silber J’s considerations was the roles of the GMC and ExCo plc’s committees, and Mr Layton contended that through them AA plc exercises control over the Group. AA plc’s object to do business through subsidiaries is reflected in its Memorandum of Association, which includes in the objects clause:
“To carry on the business of a holding company … and for that purpose to … co-ordinate the policy management and administration of any companies, corporations or undertakings in which the Company is a member or participant or which are controlled by or associated with the Company in any manner”
. The Articles of Association provide that:
“The Directors may establish any local boards or agencies for managing any of the affairs of the Company, either in the United Kingdom or elsewhere, and may appoint any persons to be members of such local boards, …”; and that: “The Directors shall restrict borrowings of the Company and exercise all voting and other rights, powers of control or rights of influence exercisable by the Company in relation to its subsidiary undertakings (if any) so as to secure (so far, as regards subsidiary undertakings, as by such exercise they can secure) that the aggregate amount for the time being remaining outstanding of all moneys borrowed by the Group and for the time being owing to persons outside the Group less the aggregate amount of Current Asset Investments shall not at any time without the previous sanction of an Ordinary Resolution of the Company exceed an amount equal to two and a half times the Adjusted Capital and Reserves.” “The Directors shall restrict borrowings of the Company and exercise all voting and other rights, powers of control or rights of influence exercisable by the Company in relation to its subsidiary undertakings (if any) so as to secure (so far, as regards subsidiary undertakings, as by such exercise they can secure) that the aggregate amount for the time being remaining outstanding of all moneys borrowed by the Group and for the time being owing to persons outside the Group less the aggregate amount of Current Asset Investments shall not at any time without the previous sanction of an Ordinary Resolution of the Company exceed an amount equal to two and a half times the Adjusted Capital and Reserves.”
[43]The ExCo apparently meets every two months, if not more frequently, for a two days’ session and is said in AA plc’s Annual Report for the year ended 31 December 2010 to be “responsible for developing and implementing Group-wide policies and programmes and for the adoption of best practice standards across the Group”. The GMC, as it is stated on the Group’s website, is “responsible for formulating strategy (for discussion and approval by the Board), monitoring performance and managing the Group’s portfolio”. It apparently meets fortnightly and, as it is put in AA plc’s annual report for 2010, “as mandated by the Board, maintains a Group-wide system of internal control to manage significant Group risks”, and under the system of internal control “The chief financial officers of the Group’s business units provide confirmation, on a six monthly basis, that financial and operating control frameworks have been operated satisfactorily”.[44]According to the “Rules” for the GMC, it is afforded all the powers conferred on the directors other than matters specifically reserved to the Board, which include(i) the overall management of the Group:(ii) approval of its long term objectives and commercial strategy;(iii) maintaining a sound system of internal control and risk management; and(iv) “prosecution, defence or settlement of litigation where material and except in the normal course of business”. The GMC is responsible inter alia for: i) “developing [AA plc’s] strategy and policies, as agreed by the … Board and monitoring the subsequent implementation thereof”. ii) “ensuring that [business units] adhere to [AA plc’s] chosen strategy, policies and standards”. iii) “acting as the authorising committee … for (i) the Group’s capital allocation decisions including the approval of capital projects, acquisitions, disposals, join ventures and other capital commitments up to a maximum of US $250 million per transaction or programme …”.[45]Accordingly, the claimants contended, the GMC has ultimate decision-making power over the implementation of Group strategy by subsidiaries, including AASA, and in particular ultimate decision-making power over significant financial matters. More generally, they argued that AASA’s administration is governed by published policies for the Group covering many areas: the environment, sustainable development, social issues, safety management, fatal risks standards and occupational health. This is apparently the Group’s chosen strategy: for example in its annual report for 2007 AA plc stated this under the heading “Integration; Shared Services”:
“Applying common policies, processes and systems, as well as creating a One Anglo mindset among our employees, will also be delivered through our shared services initiative. ... We will create three shared services centres based in existing offices in Asia Pacific, Latin America (serving the whole of the Americas) and South Africa (serving Africa and Europe). The centres will provide common accounting and employee services.”
[46]AASA did not dispute that AA plc exercises its power as shareholders; or that it influences AASA through Group strategy and policies; or that it encourages co-ordination between different parts of the Group. It is unsurprising that in a group of companies the parent will formulate an overall strategy and overall policies, and that the subsidiaries will take decisions in light of them. This does not mean that subsidiaries have allowed their functions to be usurped. It is irrelevant, AASA said, that AA plc does so through committees such as the GMC and ExCo, and that those committees include directors of AASA: this does not mean that AASA does not take its own management decisions, or that they are not taken in South Africa, and arrangements such as the Rules of the GMC do not suggest otherwise. On their face, the Rules only define what responsibilities within AA plc are reserved to the Board of AA plc and what responsibilities the committees have within AA plc.[47]The claimants relied primarily on the position of AA plc with regard to its subsidiaries’ investments, holdings in companies and other assets. AA plc reserves to itself, it is said, significant decision-making powers and control about acquisitions and disposals, including any by AASA. The claimants invoked the Group’s “Investment Evaluation Guidelines” under which the Board of AA plc delegated to the GMC and to Business Units authority for capital investments up to specified thresholds, and which, it is argued, indicates that otherwise they would expect to control all capital investments. Further approval of AA plc’s Investment Committee is still required for any Capital Project for more that $10 million, of its GMC for projects for more than $100 million and of the Board for projects of more than $250 million.[48]Mr Griffith’s evidence was that AA plc did not have ultimate control over these decisions and, while the Group’s policies require that AA plc’s approve for the transactions, any decisions to enter into them are taken by the board of the relevant subsidiary. No decision to enter into an acquisition or disposal appears in AASA’s Board minutes in recent years, but Mr Griffith’s detailed, and to my mind cogent, evidence shows that this is because all such transactions were entered into by AASA’s own subsidiaries and their boards, rather than AASA. Mr Layton complained that Mr Griffith had not provided any documentation to show that the transactions were not entered into by AASA but nothing casts doubt on Mr Griffith’s evidence, and I accept it.[49]However, Mr Layton had other points: he observed that nothing indicates that AASA monitored or reviewed decisions of this kind and so, it is submitted, the implication is that monitoring was done in London, and that, whether or not AASA entered into transactions, it would require AA plc’s approval in advance if it proposed to do so. Moreover, there is no direct evidence, Mr Layton said, whether decisions to dispose of assets were taken before or after AA plc had given their approval, but it is to be inferred that approval had been given in advance. Similarly, the minutes of the AASA’s Board meeting of 23 September 2012 “ratified, confirmed and approved” a guarantee previously given. I cannot attach to this any significance with regard to where AASA had its central administration: it is perfectly usual for companies of all kinds and all sizes to pass such resolutions when their officials have proceeded in anticipation of Board approval. In the end, Mr Layton’s submission was that decisions for major acquisitions and disposals were not taken “without reference to London”. That is uncontroversial, but does not indicate where AASA had its central administration.[50]The claimants had other points as well as Silber J’s five considerations. They argued that other internal administration of AASA are dealt with in England: i) First, the claimants asked me to infer that AA plc through its Audit Committee was ultimately responsible for selecting AASA’s auditor. On 14 June 2006 AASA’s Board received a report from its Company Secretary that “it would serve no useful purpose for [AASA] to retain an Audit Committee of the Board of Directors as its scope of work was covered by the [AA plc] Audit Committee”, and resolved that the Audit Committee should be dissolved with immediate effect. Further, AA plc’s “policy on External Auditor Independence” provided that the Audit Committee had a responsibility to “submit recommendations to the board either to re-appoint or to replace the auditor” and to oversee the selection process in the event that the auditor was to be replaced. ii) The local Group Treasury reported to the Head of Treasury Operations, and shareholder approval was needed to extend inter-company financial assistance. The claimants invited the inference that “a significant amount of control or influence over Treasury was exercised by AA plc”. They relied on the “Division of Responsibilities” set out in AA plc’s “Treasury Policy” of 1 January 2010, which stated that AA plc’s Finance Director was to approve “strategic decisions in respect of risk management, hedging, funding etc within the approved terms of the Treasury Policy” and Business Units were to “obtain approval from Group Treasury in advance of creating an exposure or executing a transaction which contravenes the Treasury Policy”. iii) Tax policies were directed at Group level. AA plc’s “Corporate Tax Policies Manual” dated April 2007 said of the policies for managing the Corporate Structure that “Group Tax is responsible for the management of the Group’s corporate structure and their support should be sought in advance for” specified matters, including changes in the corporate tax structure and (for example) forming new companies, liquidations, and opening or closing branches; transaction structures for acquiring or disposing of assets; use of tax havens; loans to or by holding companies, and material or structural loans to or by any company; and major changes in the nature of the business undertaken by Group companies.[51]I was not impressed by these points: i) With regard to the appointment of auditors, Mr Griffith explained that AASA is audited by the South African firm of Deloitte & Touche (“Deloitte”), and the UK firm of Deloitte audits the consolidated Group accounts. The South African Companies Act, 2008 (“the 2008 Act”) requires that companies appoint auditors annually (“Upon its incorporation, and each year at its annual general meeting, a public company … must appoint an auditor”: section 90(1)), and there is no proper basis to doubt Mr Griffith’s evidence that AASA does so. Indeed, the minutes of the Annual General Meeting of AASA on 5 August 2011 show that it does. The minutes of a meeting of AASA’s Board on 18 April 2011 also confirm the appointment of Deloitte and approve the appointment of a designated Audit Partner. Until recently South African law did not require AASA to have an audit committee: unsurprisingly the Board decided in 2006 that a separate committee would duplicate the work of AA plc’s audit committee. However, as is apparent from the minutes of the meeting on 23 September 2010, AASA’s Board regarded it as a matter for them whether to restore a separate audit committee: anticipating legislative changes, the Board agreed that “an Audit Committee would be established once there was certainty on the requirements for Audit Committees in terms of the 2008 Companies Act and the Regulations” and Mr Alison as Company Secretary advised that in the interim AA plc’s Audit Committee would continue to perform the function. ii) There is no dispute that AASA, through its Head of Finance, Mr Saleh Mayet, who is based in South Africa, reports to the Head of Group Finance and Performance Management at AA plc in England, Mr Ian Botha, about all important matters concerning treasury operations. It would be remarkable in a group of companies if it were otherwise. It does not mean that AASA has relinquished control over treasury operations. As Mr Griffith explained, ordinary shareholders of AASA pass special resolutions when it extends some forms of financial assistance because section 45 of the 2008 Act requires this, but the decision is still taken by an organ of AASA. AASA has not relinquished control over these decisions, still less have they relinquished control to AA plc, who are not AASA’s shareholders. iii) I also reject the claimants’ submission about how tax matters are handled. Mr Griffith’s evidence is that the expression “Group Tax” is not used in the Group to refer to a department in London or anywhere else, but means all the “tax professionals” in the Group, including South Africa; and when AASA or one of its subsidiaries requires tax advice or support, it looks to Group Tax in South Africa, that is to say to Ms Christa Goosen, the Head of Tax (Africa), who is employed by AOL, and others who work for AOL under her. Group Tax in South Africa might in turn look to Group Tax elsewhere or seek external advice if it needs to do so, perhaps about cross-border issues. In any case, while Group Tax provides advice, AASA and other subsidiaries remain responsible for decisions about tax, and in particular while decisions about dividends might be made with advice from Group Tax, they are taken by the board of the company declaring the dividend.[52]Next, I should refer to AASA’s consolidated reports for the years ended 31 December 2009 and 2010: in the 2009 report it was stated that “In light of it being a wholly-owned subsidiary, the Company has delegated to its parent company [AA plc], responsibility for its internal governance processes”, and in the 2010 report that it had so delegated responsibility for “its internal governance processes and policies”. After this litigation was brought, this was revised and the 2011 report said that AASA was “a wholly-owned unlisted subsidiary of [AA plc] and places reliance on the governance processes and policies of its parent company, details of which can be found in their annual report”. I shall return to this later in my judgment.[53]Finally, for completeness, although Mr Layton did not much rely on their evidence, I add these observations about what Mr Young and Mr Bavinton said. From 1984 until 2009 Mr Young, a geologist, was employed by the Group and De Beers companies. In 2009 he established a mining consultancy, in which capacity he had discussions with AA plc about possible assignments. On the basis of his experience and knowledge of the industry, he denied that “AASA is essentially a holding company that is truly managed and run in South Africa”, and the impression that “everything stops in Johannesburg”, which he thought was given by AASA’s witnesses. He also gave evidence that “a former very senior executive who ha[d] recently left AA plc and who was in a position to have detailed knowledge of the management of the business of AA plc and of its subsidiaries … confirmed that the companies like AASA are run from London”, but he was not, he said, at liberty to identify his source. He stated that, while some day-to-day and so called tactical administration is done locally, “all the strategic decisions are actually taken by, or at least strongly influenced by, AA plc through its various London based Executive Management Committees and indeed [ExCo]”. He said that subsidiary companies report to the Group Headquarters in London, and identified “Group functions” that are “run out of London”: Group Technical, Group Strategy and Business Development; Group Mining and Technology; and Group Human Resources and Communication. He added that AA plc exercised a significant degree of control over De Beers, in which it had a 45% shareholding, and referred to meetings between De Beers and AA plc when AA plc “as a major shareholder had to put money into” De Beers.[54]In general terms Mr Young gave an unsurprising picture of an international group of companies, and AASA did not dispute much of his evidence. But, again perhaps unsurprisingly, he did not give specific evidence about AASA’s role in the Group and what decisions it needs to take to fulfil it; and he did not distinguish between AA plc influencing its subsidiaries, which it clearly does, and taking decisions on its behalf. His evidence does not really assist about what I have to decide.[55]Mr Bavinton is also a geologist and was employed by the Group between 1992 and 2010. He stated that, after AA plc was created in 1999, “people and responsibilities migrated from Johannesburg to London”. He said that by 2005 or 2006 “all significant power had moved to London from South Africa” and “all material control worldwide in Anglo American and all its subsidiaries was vested in people and functions based in … London”; and that as “centralisation of power continued … the activities of all overseas subsidiaries, wherever they were based, … essentially shrunk to local shells which had some asset and liability holdings and historical legacy issues”. Thus, AASA “held old mining rights and commensurate obligations such as forestry and water matters”. As Mr Philipps observed, this apparently disregards AASA’s interests in its operating subsidiaries, including Amplats and Kumba, which are among the largest companies listed on the Johannesburg stock exchange (the fifteenth and ninth largest respectively, according to Mr Griffith) and have thousands of employees there: to my mind, this much devalues his evidence.[56]Otherwise much of Mr Bavinton’s evidence is uncontroversial and does not assist the claimants: for example, that AASA’s Board has limited business and had “few if any real employees” (although his statement that the Board “just dealt with the essential formalities of administration and finance” disregarded such matters as financial support for other companies and charitable giving); and that subsidiaries were expected to follow Group policies and procedures. He accepted that subsidiaries had “some day to day operational autonomy”, but maintained “in all material matters the real control through policies and the salary and appraisal system were all determined by performance contracts set and administered from London. The ultimate source of power for Anglo American was the performance appraisal or the performance contract that individual employees enter into with their superiors”. This further demonstrates AA plc’s influence, but AASA acknowledges that.[57]As I have said, the issue is whether the claimants have shown a sufficient case that AASA has its central administration in England. Initially it appeared to be common ground that article 60 contemplates that a legal entity cannot have its central administration in more than one place for the purpose of establishing domicile. Although on reflection Mr Layton reserved his position about that general proposition, he accepted that in this case AASA had its central administration in only one jurisdiction at the relevant times, and therefore the essential issue is about whether it was England or South Africa.[58]The starting point of Mr Philipps’ argument can be stated by citing Roskill LJ in The “Albazero”, [1977] AC 777, 807: “each company in a group of companies (a relatively modern concept) is a separate legal entity possessed of separate legal rights and liabilities so that the rights of one company in a group cannot be exercised by another company in that group even though the ultimate benefit of the exercise of those rights would enure beneficially to the same person or corporate body irrespective of the person or body in whom those rights were vested in law.” (The successful appeal to the House of Lords does not detract from this statement of principle: see Adams v Cape Industries plc, [1990] Ch 443, 476H.) Although this is English authority, there is no suggestion but that other European legal systems share the principle that each legal personality is separate from its parent and shareholders: the citation from Dr Everling at para 13 aboveindicates that they do share it.[59]Mr Philipps submitted that the European jurisprudence demonstrates that an entity has its central administration where it is actually run or where it takes its important managerial decisions. This is essentially a question of fact, but where a company is managed by a board of directors, an important consideration will be, or is likely to be, where the board meets (and if the entity is not a company, where its corresponding body meets). He contended that in this case AASA takes few management decisions apart from declaring dividends, appointing auditors and supporting inter-company lending, and the decisions that it does take are made in South Africa. The Board meets only in Johannesburg. Most of its directors reside in South Africa: according to a list of directors that is in evidence, in August and September 2011 AASA had eleven directors, the “locations” for ten of whom are recorded as South Africa and seven of whom had South African nationality, the others being Zimbabwean, Zambian, French and British.[60]Mr Philipps submitted that, while Silber J accepted that arguably AASA must have done more by way of managing the Group’s South African business than appears from Board minutes and therefore important administrative decisions must have been taken by AASA outside Board meetings, the disclosure that he ordered having been made, it is now apparent that this is not so: that the only significant business decisions taken by AASA were those taken at Board meetings in South Africa and recorded in Board minutes. He acknowledged that AASA’s Board makes decisions “in the context that AASA is ultimately a wholly-owned subsidiary of AA plc, which obviously means that the company has regard to the policy and strategy of AA plc in making its own decisions”, but that does not affect the place where AASA has its central administration.[61]Such administrative services as AASA requires are provided under a Master Services Agreement dated 4 April 2011 by AOL, whose employees are based in South Africa. It covers company secretarial services, finance and performance management services, tax services, treasury services, corporate communications services and corporate finance services. It also covers Executive Director Services, which comprise (see schedule 1 to annex 4) “leadership, advice and support which may include but not be limited to: Regulatory affairs; transformation; corporate communications; government relations; strategic implementation; and protection of shareholder interests ie attending Board meetings, Strategy sessions”. However, AASA does not rely in support of its case about where it had its central administration on the fact that these secondary services were provided by AOL in South Africa.[62]Mr Layton submitted that, on a proper autonomous interpretation of article 60 in light of the European jurisprudence, the place where a company has its “central administration” is “the place where in reality a company’s major decisions are taken” or where “the main entrepreneurial decisions are taken which determine the activity of the company”; that therefore the place of central administration is not simply where a company’s board and general meetings are held; that it is where “the people who devise the company’s strategy, who take the big picture decisions are located and do their strategising and decision-making”; and that it is “most probably not … where formal rubber-stamping of decisions is undertaken of entrepreneurial decisions which are handed down from above, or where second-order decisions are taken which merely implement the big picture decisions handed down from above”. The decisions that determine where a company has its central administration are not, Mr Layton submitted, necessarily taken by the company itself, and might be taken by others for various reasons: because decision-making might be “usurped” by a parent company or other entity; because it might be delegated by the company; or simply because of “the circumstances of a company within a group”. The claimants’ essential argument, I think, is really this: that AASA’s principal function is to hold shares in the Group’s South African companies and be the vehicle through which the Group, or AA plc, implements its strategy in South Africa; that in reality the “functions” associated with holding shares are carried out in London in that the entrepreneurial decisions regarding the shareholdings are taken there, it being inconceivable that a wholly owned subsidiary (such as AASA) of an active parent company (such as AA plc) would itself take decisions of such importance; and that Mr Gomwe, AASA’s Executive Director tasked with delivering the Group’s strategy in the region, implements strategies determined in London.[63]In order to illustrate the point, Mr Layton invited consideration of hypothetical situations: if, for example, it were decided to dispose of the shares in a subsidiary such as AOL. It is unrealistic to suppose, he argued, that such a decision would in reality be taken by AASA: the effective decision would be taken by AA plc in London and any part played by AASA in South Africa would be “formal rubber stamping” and executing documents to implement the decision. Mr Philipps did not dispute that AASA would not make a decision of this kind otherwise than in accordance with AA plc’s wishes, but submitted that this does not mean that AASA does not control its own decisions. But he had a second submission that to my mind also answers the point: Mr Layton’s example is speculative, and does not assist in ascertaining the place where AASA in fact had its central administration at the times when these proceedings were brought. He recognised that, if at some time in the future AASA were to acquiesce in AA plc or another manifestation of the Group in England making decisions on its behalf, the place of AASA’s central administration might then move to be in England. But I need not consider in what circumstances it would move: it is not part of the factual enquiry that article 60(1)(b) requires.[64]It is not entirely clear whether the claimants take issue with AASA about whether secondary management services such as those provided by AOL do or might bear upon where AASA has its central administration. At one point it appeared that they did not: Mr Layton cited in this context the judgment of Silber J, who referred (at para 30) to the case of the German Supreme Court of 23 January 2008, [2008] NJW 2797, in which it said that “mere secondary management tasks such as accounting and settlement of tax matters are irrelevant for determining the seat of the head office”, and who said (at para 58) that the services provided by AOL “although important for AASA, do not appear to relate to managerial or entrepreneurial issues”, adding that “This interpretation is derived not from domestic law but independently from European law” and that it was “so obvious as to leave no room for reasonable doubt”. (There was a difference about whether the question had been argued before Silber J between Mr Philipps, who told me that there was no dispute about it, and Mr Layton, who recalled that the question was argued, but nothing turns on that.) However, Mr Layton later explained that he was “not saying that the German court laid down a clear ultimate decision on this”, and argued that in this case tax policies directed “at Group level” support the argument that AASA’s central administration is in England. However that might be, the claimants rely on the range of services provided by AOL to AASA to support their argument that AASA was not simply a holding company and that the evidence shows that their role includes(i) monitoring and reviewing the activities of subsidiaries;(ii) guaranteeing loans and providing other financial support to subsidiaries;(iii) charitable works; and(iv) ancillary business functions, such as appointing directors and auditors, setting budgets and dividends, defending litigation and managing business risks. AASA did not suggest otherwise.[65]I should refer to the evidence about litigation against AASA. Mr Alison said that AOL provides to AASA the services of Mr Kevin Lester, Senior Legal Counsel in South Africa, and others working under him, and that their services are used to manage, for example, silicosis litigation brought against AASA in South Africa as well as this litigation. The claimants disputed this, and contended that such litigation, in so far as it is “material” is managed by the Board of AA plc under the GMC rules. I cannot accept that. i) On the face of it, the rules distribute responsibilities within AA plc, and the fact that they reserve to the Board the prosecution, defence and settlement of litigation does not mean that AA plc controls litigation by or against AASA. That would require an arrangement between AA plc and AASA. ii) The claimants relied on an offering circular of AA plc referring to the litigation risk associated with the silicosis litigation. This is unsurprising, given its potential impact on the value of AA plc’s holdings in Group companies. iii) Next, Mr Meeran gave evidence that, although he has dealt with AASA’s silicosis litigation for eight years, he had not come across Mr Lester. He did not say whether he has come across any in-house counsel for AASA or has dealt only with external advisers. I do not consider that this is a proper basis to reject Mr Alison’s evidence. iv) Finally, Mr Layton stated that in a letter dated 25 April 2013 Linklaters “averred and accepted that decisions in relation to the “President Steyn” litigation were not taken by the AASA Board”. I reject this: Linklaters wrote in response to evidence of Mr Meeran that there were “no references to the President Steyn litigation in the Board minutes of [AASA]”, and pointed out that the litigation was discussed at the meeting on 23 September 2010 but the discussion was redacted from the disclosed minutes to protect privilege. They continued, “Whilst no formal decision was taken in respect of the President Steyn litigation during the period for which disclosure of AASA Board minutes has been provided [sc. September 2010 to October 2011], it is not the case that the litigation was not considered by the AASA Board”.[66]Mr Layton did not argue, and it could not cogently be argued, that the central administration of a wholly owned subsidiary is always located with its shareholder, but he contended that it is in this case, or rather that the claimants have a sufficient argument that it is. There are circumstances in which the English court has recognised that a subsidiary has renounced all control over its affairs to a parent company and the parent has “usurped” the functions of control over the subsidiary. The leading such case that shows that a company can be resident in a country without holding directors’ meetings there is Unit Construction v Bullock, [1960] AC 351, and I adopt this description of it from the judgment of Park J in Holden v Wood, (loc cit) at para 22:
“A United Kingdom parent company owned several subsidiaries which were incorporated in jurisdictions in East Africa and carried on trading activities there. The managing director of the parent company formed the view that ‘the situation of the African subsidiaries was becoming so serious that it was unwise to allow them to be managed in Africa any longer, and that their management must be taken over by the directors of [the parent company] in London.’ The board of directors of the parent company ‘decided that … they were forced to take over management and control’. (See paragraph 5 of the Case Stated at 38 TC 716.) Thereafter the representative of the parent company in East Africa effectively usurped the functions of the local boards, which still existed but stood aside, and controlled the subsidiaries in accordance with the requirements of the parent. Much of that may have been irregular, or even unconstitutional, but it was what happened. It was held that the African subsidiaries had become resident in the United Kingdom.”
[67]However, the courts do not readily conclude that a subsidiary has had its independent authority over its own affairs usurped. The Unit Construction case itself turned on and is explained by the particular findings of fact of the Special Commissioners. As is clear from Lord Cohen’s speech at p.374, the board of the local company “did not meet at all during the period relevant for the assessments”.[68]In Holden v Wood, Park J said (loc cit at para 23) that the Unit Construction case was “a highly exceptional case in terms of the result” and that:
“It was not a case where the local boards still exercised central management and control, but did so under guidance and influence from the parent company in the United Kingdom. It was a case in which the local boards stood aside altogether, and the parent company effectively usurped what in theory were the functions of the local boards.”
He continued (at paras 24 and 25):
“… In the context of a group of companies where matters proceed in a normal way and not in an exceptional way it is to be expected that the parent company will have plans for what it wants its subsidiaries to do, and that the directors of the subsidiaries will ordinarily be willing to go along with the parent company’s wishes. If in those circumstances the subsidiaries were resident for tax purposes wherever the parent company is resident the consequences would, in my view, be unsatisfactory, productive of double taxation clashes between different jurisdictions, and disruptive of national tax systems. There is a difference between, on the one hand, exercising management and control and, on the other hand, being able to influence those who exercise management and control. There is another difference, highlighted by Unit Construction v Bullock, between, on the one hand, usurping the power of a local board to take decisions concerning the company and, on the other hand, ensuring that the local board knows what the parent company desires the decisions to be. It is also necessary to keep in mind that … it is possible (and common in modern international finance and commerce) for a company to be established which may have limited functions to perform, sometimes being functions which do not require the company to remain in existence for long. Such companies … can and do fulfil important functions within international groups, and they are principals, not mere nominees or agents, in whatever roles they are established to undertake. They usually have board meetings in the jurisdiction in which they are believed to be resident, but the meetings may not be frequent or lengthy. The reason why not is that in many cases the things which such companies do, though important, tend not to involve much positive outward activity. So the companies do not need frequent and lengthy board meetings.”
[69]The judgment of Park J was upheld in the Court of Appeal: [2006] EWCA Civ 26. Chadwick LJ, with whom Moore-Bick LJ and Sir Christopher Staughton agreed, said this (at para 27):
“In my view the judge was correct in his analysis of the law. In seeking to determine where “central management and control” of a company incorporated outside the United Kingdom lies, it is essential to recognise the distinction between cases where management and control of the company is exercised through its own constitutional organs (the board of directors or the general meeting) and cases where the function of those constitutional organs are “usurped” – in the sense that management and control is exercised independently of, or without regard to, those constitutional organs. And, in cases which fall within the former class, it is essential to recognise the distinction (in concept, at least) between the role of an “outsider” in proposing, advising and influencing the decisions which the constitutional organs take in fulfilling their functions and the role of an outsider who dictates the decisions which are to be taken. In that context an “outsider” is a person who is not, himself, a participant in the formal process (a board meeting or a general meeting) through which the relevant constitutional organ fulfils its function.”
[70]In the end Mr Layton did not submit that in this case AASA’s functions were usurped by AA plc or that the position here is comparable to that in the Unit Construction case. He was right not to do so: to my mind, the only evidence that AASA had allowed control over its affairs to be taken over is the statements in AASA’s consolidated reports for 2009 and 2010, to which I referred at para 52above. However, it is important to read them in their context: they are introduced by references to Codes of Corporate Governance for South African companies, commonly called the “King” codes after the retired judge of the Supreme Court of South Africa who chaired the committee that produced the Code in 1994. Thus in AASA’s 2009 report, the sentence upon which the claimants rely is introduced by reference to the first revision of the Code (King II, published in 2002) as follows:
“The Directors endorse the Code of Corporate Practices and Conduct as detailed in the second King Report on Corporate Governance and believe that, in all material respects, [AASA] complies with the provisions thereof insofar as the recommendations relate to a wholly-owned unlisted subsidiary company”
. The corresponding sentence in the 2010 report reflects the third version of the Code, King III:
“The Directors endorse that the King Code of Governance Principles as detailed in the King III Report and believe that, in all material respects, [AASA] complies with the provisions thereof insofar as the recommendations relate to a wholly-owned unlisted subsidiary company”
. Mr Griffith explained that the Code is directed to such matters as good corporate citizen principles with regard to company management, and recognises that it is difficult for international groups with entities in different jurisdictions to comply with different regimes and so accepts that, where a holding company of an international group is listed on another exchange, a South African subsidiary may comply with the corporate governance principles of that exchange. As an unlisted company, AASA was not strictly required to comply with the Codes (although its listed subsidiaries, Kumba and Amplats, were required to do so), but in order to demonstrate good corporate governance AASA wished to state that it adopted the good governance policies issued by AA plc. In fact no issues about this ever arose for AASA. AASA accept that the wording in the 2011 report was revised because of this litigation: Mr Griffith explained that it led AASA’s company secretary to consider the statement in earlier reports and to recognise that it was not accurate in referring to powers being “delegated”. Mr Griffith’s explanation is, to my mind, clear and cogent and there is not reason to doubt it. The statements on which the claimants relied were clearly directed to matters covered by the King Codes, such as sustainability and corporate citizenship. They were not about management decisions or entrepreneurial decisions.[71]However, as I have said, the claimants put their main argument on a broader basis: that while a parent might make the decisions comprising the central administration of a company because it has usurped them or because the subsidiary has delegated its decision making to a parent, this can come about simply because in reality the parent company takes the decisions which determine the activities of the subsidiary. Mr Layton submitted that the place where a company has its central administration does not necessarily depend on anything done by the company or any organ or agent of the company: the question is where the “main entrepreneurial decisions … which determine the activity of the company” are taken, whether they be taken by the company, its parent or anyone else. I am unable to accept this proposition: to my mind the question where a company has its central administration clearly depends upon where the company itself carries out its functions, and unless the company can properly be said to act through another person or entity because of agency or delegation or on some other legally recognised basis, the actions of others do not determine the question. First, the claimants’ submission is not what article 60(1)(b) says in any of the language versions that were placed before me. The article is not simply about where an entity’s central administration is; it is about the entity having its central administration in a jurisdiction. Just as the other limbs of article 60(1) are about where the entity has its statutory seat or the entity principally conducts business, article 60(1)(b) is about where it carries out functions, not about where others carry out functions that affect it. Secondly, the submission has no support in the European jurisprudence or, for that matter, in the English cases. Thirdly, it is inconsistent with what Professor Pocar explained (at para 28 of his Report) to be the justification for the article providing that an entity may be sued in the jurisdiction where it has its central administration: that, if it decides to keep its central administration in a different place from its principal place of business, it chooses so to expose itself. (The reasoning, I think, supposes that both places are within the Community or at least have similar jurisdictional rules.) Finally, Mr Layton’s argument proves too much: it is not difficult to envisage circumstances in which an entity’s entrepreneurial decisions are determined predominantly by the wishes of a bank or other institution on which it relies for its financial survival, but it could not, I think, really be suggested that it has its central administration where the bank or institution takes decisions.[72]This seems to me fatal to the claimants’ case. None of the evidence indicates that AASA carries out any functions in England: it does all its business in South Africa. In the end it does not matter on the facts of this case whether the place that it has its central administration is determined only by reference to decisions taken by the Board or whether the services provided by AOL are of some relevance. The fact that decisions taken and policies and strategies adopted by AA plc in England influence, indeed strongly influence, the decisions taken by AASA in South Africa does not alter the position.[73]However, Mr Layton had a further argument: he submitted that a parent is to be regarded as taking decisions that determine where a subsidiary has its administration not only if it actually exerts (or usurps) control over the subsidiary sufficiently for it to be regarded as taking decisions for the subsidiary (or for the subsidiary to be taken, in accepting this, to have delegated its decision making to the parent), but also if the parent could do so. He suggested three ways in which a parent might be in a position to exert control over a subsidiary: by a contractual relationship that would allow it to do so; through shareholder remedies; and possibly on the basis of trust if assets held by the subsidiary were beneficially owned by the parent. His argument was not such remedies were available on the facts of this case, but that these possibilities showed that a parent’s authority over its subsidiary was important in determining where the subsidiary has its central administration.[74]I do not accept that these considerations are relevant. The question what control a parent could exercise over its subsidiary would depend upon the law governing that relationship or particular issues to which it gives rise, and I cannot accept that the application of article 60 turns on questions of this kind. It would defeat the purpose of having a predictable test of jurisdiction and introduce differences between the jurisdictional positions of different member states. It would introduce legal questions into what Professor Pocar considered to be a factual inquiry. I see nothing in the Regulation that warrants it or in the jurisprudence that supports it. In any case on the facts of this case there is no proper basis to think that any of these remedies might be available to AA plc against AASA, and, while, no doubt because these arguments were not foreshadowed, no evidence was directed to them, in my judgment it is highly unlikely that they are. In these circumstances, in my judgment these considerations are not relevant to what I have to decide.[75]I decline to make a reference to the European Court about the meaning of “the place where [an entity] has its central administration”. Mr Layton submitted that it seems “inevitable that this issue is likely to be referred at some stage in these proceedings” and the only question is when it should be referred. I disagree. I accept that other English decisions at first instance might not have been reached after consideration of the European jurisprudence and legislative background, but I do not accept that therefore there is real uncertainty about the meaning of the article that is important on the facts of these cases. The only question that might affect the outcome of these applications is that which I consider at para 71above, and the answer to that seems to me clear. On any view, in my judgment, AASA has its central administration in South Africa and not in England, and the claimants do not have an arguable case to the contrary.[76]Subject to any points about the exact terms of the order, I grant the defendants’ applications. Although it has no legal significance, I observe that this result means that these claims can be pursued in South Africa, the jurisdiction with which at least the claims in the Vava action are really connected, and the English court is not obliged to assume jurisdiction over claims that have little if anything to do with this country.

Cited in 1 later judgment