High Court considers relevance of Mitchell to late application to challenge jurisdiction

A deputy judge has held that deemed submission to the jurisdiction by failing to challenge jurisdiction on time is not a sanction, so no question of relief from sanction arises on a late application. The Mitchell case is relevant, however, as compliance with time limits is considered more important than before: Zumax Nigeria Limited v First City Monument Bank Plc [2014] EWHC 2075 (Ch). Although judgment was given before the Court of Appeal reinterpreted Mitchell in its decision in Denton (see post), the decision remains of interest as, even post-Denton, compliance with rules and court orders is of particular importance.

The case is also of interest in expressing the view, obiter, that:

  • The defendant’s application for access to a third party’s documents under the Bankers Books Evidence Act was a submission to the English jurisdiction, even though made after a challenge to the jurisdiction had been issued.
  • Submission did not prevent the defendant from seeking a stay on forum conveniens grounds, ie arguing the courts of another country were more appropriate to hear the case.

The key message is that parties wishing to challenge the jurisdiction of the English courts should apply promptly and, whenever possible, within the time limits in CPR 11. Until the challenge is determined, they should not take any steps in the proceedings which could be interpreted as a submission to the jurisdiction. Continue reading

US federal appeals court gives extraterritorial application to Racketeer Influence and Corrupt Organization Act (RICO)

In a milestone ruling last week, a Second Circuit panel has revived a massive civil RICO action brought a dozen years ago by the EU and twenty-six of its member states against R.J. Reynolds Tobacco and related entities for their role in an alleged global money-laundering enterprise involving claims of drug and cigarette smuggling: European Community v. RJR Nabisco, Inc., No. 11-2475-cv (2d Cir. Apr. 23, 2014). 

The ruling breaks new ground with its rejection of a categorical bar on the extraterritorial application of RICO, as a number of courts have held following the US Supreme Court’s landmark extraterritoriality ruling in Morrison in 2010 (see post). You can read more about the Second Circuit’s decision in our cross-border litigation e-bulletin.

Transitory Movement of Funds through New York Banks No Guarantee of Jurisdiction

In a case of interest to foreign parties that routinely use New York’s banking system to facilitate dollar transactions, the New York Court of Appeals has reversed a decision by the Appellate Division that would have foreclosed forum non conveniens dismissals as a matter of law whenever a foreign national, “effecting what is alleged to be a fraudulent transaction, moves dollars through a bank in New York.”  Left undisturbed, this ruling would have burdened overseas litigants in cases lacking any other nexus to the state by preventing them from using the doctrine of forum non conveniens in response to the often broad jurisdictional reach of New York’s “long-arm” statute. Continue reading