The High Court has rejected an argument that a defendant submitted to the jurisdiction by applying to strike out the claim against him at the same time as challenging jurisdiction: PJSC Bank “Finance and Credit” v Zhevago  EWHC 2522 (Ch).
The court considered two tests set out in the authorities to determine whether a defendant has submitted to the jurisdiction: first, whether there has been wholly unequivocal conduct demonstrating an intention to have the case tried in this jurisdiction; and second, whether there has been conduct that is “only necessary or only useful” if the defendant’s objection to the jurisdiction has been waived. The court held that these are not in fact different tests: the former is just a more modern and succinct statement of the latter.
On the facts of this case, the court held that the test was not met. Applying to strike out at the same time as challenging jurisdiction, without expressly stating that the strike out application was without prejudice to the jurisdiction challenge, was “at best equivocal”. It did not amount to the wholly unequivocal conduct required for a submission to the jurisdiction. Nor was the strike out challenge “only necessary or only useful” if the jurisdiction challenge was abandoned.
In practice however, and despite this decision, it is advisable for a defendant intending to challenge jurisdiction to make sure there is no room for doubt as to whether its conduct is consistent with such a challenge. In particular, it may be wise to leave a strike out application until after the jurisdiction challenge has been determined (if the application is still necessary at that point) or – at the very least – state expressly in the application notice that the strike out application (or any similar application) is without prejudice to the jurisdiction challenge.
The decision also acts as a reminder that an individual who is a company director or other officer and has registered a UK address for service under the Companies Act 2006 can be served at that address, even if they are not in fact living in the jurisdiction at the time the proceedings are served. This is consistent with previous authority (see for example this post).
In February 2021, the claimant Ukrainian bank issued proceedings against various defendants including Mr Zhevago, a Ukrainian citizen, and Mr Pellow, a British citizen resident in England. The claims alleged that the defendants had, through a number of highly sophisticated fraudulent schemes, extracted more than US$500 million from the bank.
All of the defendants applied for an order that the claims be stayed on grounds of forum non conveniens, ie that the proceedings could more appropriately be heard before the courts of Ukraine.
Mr Pellow applied, in the alternative, for an order that certain paragraphs of the particulars of claim be struck out as disclosing no reasonable cause of action against him. The claimant contended that it was not open to Mr Pellow to seek a stay of the proceedings on forum non conveniens grounds because, by applying at the same time to strike out the proceedings, he had submitted to the jurisdiction.
Mr Zhevago also sought a declaration that the proceedings had not been validly served on him. The claimant argued that the proceedings had been validly served under section 1140 of the Companies Act 2006, which provides for the service of documents on company directors and other officers.
The High Court (Sir Julian Flaux, Chancellor) held that the proceedings had been validly served on Mr Zhevago, but that the claims against all the defendants should be stayed on forum non conveniens grounds. It found that Mr Pellow was not precluded from seeking a stay because he had applied, in the alternative, for the claim against him to be struck out.
Had Mr Pellow submitted to the jurisdiction?
The claimant relied on Rubin v Eurofinance SA  UKSC 46 in which the Supreme Court stated, approving earlier first instance decisions, that the “general rule in the ordinary case in England is that the party alleged to have submitted to the jurisdiction of the English court must have ‘taken some step which is only necessary or only useful if’ an objection to jurisdiction ‘has been actually waived, or if the objection has never been entertained at all'”.
The claimant submitted that Mr Pellow could not “box and cox” by making an application to strike out the claim (which was invoking the jurisdiction) at the same time as challenging that jurisdiction on the grounds of forum non conveniens, at least without expressly stating that the strike out application was made without prejudice to the challenge to the jurisdiction (which Mr Pellow had not done). The claimant submitted that Mr Pellow’s application to strike out was only necessary or useful if his objection to the jurisdiction had been waived.
Mr Pellow submitted that the claimant was relying on the wrong test. What was required was a wholly unequivocal conduct demonstrating an intention to have the case tried in this jurisdiction, looking at the totality of the conduct, as applied in SMAY Investments v Sachdev  EWHC 474 (Ch) and WWRT Limited v Tyshchenko  EWHC 939 (Ch).
The court held that the two tests were not different; rather, the formulation in SMAY Investments was a more succinct and modern statement of the test referred to in Ruben. Mr Pellow’s strike out application was not “only necessary or useful” if his jurisdiction challenge was being abandoned. Put another way, where both applications were made at the same time, Mr Pellow’s conduct was “at best equivocal”. His failure to make it absolutely clear that his strike out application was without prejudice to his jurisdiction challenge did not make the conduct wholly unequivocal.
The court also said that it would be “inimical to proper case management” to suggest that the applications should not have been made in the alternative.
Was Mr Zhevago validly served?
Mr Zhevago was served at the registered address of a UK company. As a result of bulk company filings Companies House showed this address, in London, as being Mr Zhevago’s usual residential address. At the time of service Mr Zhevago was in fact living in Dubai.
Section 1140 of the Companies Act provides, so far as material, as follows:
“Service of documents on directors, secretaries and others
(1) A document may be served on a person to whom this section applies by leaving it at, or sending it by post to, the person’s registered address.
(2) This section applies to –
(a) a director of a company;
(4) For the purposes of this section a person’s “registered address” means any address for the time being shown as a current address in relation to that person in the part of the register available for public inspection.
(8) Nothing in this section shall be read as affecting any enactment or rule of law under which permission is required for service out of the jurisdiction.”
Mr Zhevago argued that section 1140(8) expressly preserved the common law requirement that, if the defendant is not present in the jurisdiction, permission to serve him out of the jurisdiction, in this case in Dubai, must be obtained under one of the jurisdictional gateways in paragraph 3.1 of PD6B of the CPR.
However, this argument was contrary to a number of decisions at first instance, all of which, the court held, had been correctly decided. The court considered that the effect of section 1140 is that, where a director has provided a “registered address” in the sense set out in subsection (4) and that address is within the jurisdiction, the director can be served with proceedings at that address even if they are not physically present within the jurisdiction at the time of service.
The situation covered by section 1140(8) is where the “registered address” is an address outside the jurisdiction. In those circumstances, as explained in Key Homes Bradford Ltd v Patel  1 BCLC 402, section 1140 cannot be used to effect service and the normal rules requiring permission to serve out of the jurisdiction to be obtained apply.