Introduction
Facts
Decision
Comment


Introduction

The High Court recently rejected an application brought by two defendants to an alleged bribery claim advanced by a Kuwaiti pension fund that the claim should be heard before the Swiss courts. The defendants had argued that England was the proper jurisdiction, in order to avoid the risk of fragmentation of proceedings and as the claim was most closely connected to Switzerland.

This case is a useful review of the authorities in relation to forum non conveniens, and the bar that must be met to successfully challenge jurisdiction on this basis.(1)

Facts

Mr Ely Michael Ruimy and Aerium Finance Limited (AFL) (together, the applicants) were the defendants (inter alia) to proceedings (which constituted of two consolidated claims) brought against them by the Public Institution for Social Security (PIFSS), an institution in Kuwait that was responsible for the social security system and pension scheme. There were numerous defendants to the underlying proceedings, some of which had already brought successful jurisdiction challenges.(2) PIFSS alleged that Ruimy was the joint founder of the Aerium Group of which AFL (an English company) was a part. Ruimy was also previously a director of AFL.

In summary, PIFSS alleged that secret commissions of $10.1 million were paid from Ruimy to Mr Al Rajaan (PIFSS's former director general), in return for Al Rajaan influencing PIFSS to invest sums in funds managed by the Aerium Group. AFL financed some of those payments and was sued on the grounds that Ruimy's knowledge could be attributed to it. Those payments were allegedly made from a Swiss bank account held by Ruimy to:

  • an account held by Al Rajaan's wife; and
  • two Swiss jewellers in settlement of amounts owed by Al Rajaan.

Similar issues as in the English proceedings had been brought by PIFSS in a debt claim against certain defendants (the Mirabaud parties) before the Swiss court. The Mirabaud parties were part of the group of defendants who had successfully challenged the jurisdiction of the English court. These Swiss proceedings did not relate to the same scheme as the commission payments detailed above. The Mirabaud parties had also commenced proceedings against the applicants in the Swiss courts for declaratory relief (seeking a declaration that the Mirabaud parties were not liable to the applicants in relation to the claims brought against them in the English proceedings).

The applicants applied to challenge the English court's jurisdiction in favour of the Swiss courts on the grounds of forum non conveniens.

Arguments
The applicants advanced four arguments to show that Switzerland was clearly more appropriate than England as a forum in which to try the case.

  • The torts and wrongs alleged took place in Switzerland.
  • Switzerland was the centre of gravity and evidence.
  • Relevant evidence would be heard in already existing Swiss civil proceedings and there was a risk of irreconcilable judgments.
  • Swiss law may be the governing law of the claims.
  • It was where the bribes had been handled and paid, and evidence about those bribes would be primarily located in Switzerland and inevitably relate to Swiss bank accounts (which could give rise to issues of Swiss banking secrecy, best addressed in Switzerland).

PIFSS, however, submitted that the claim had strong connecting factors to England, specifically that:

  • claims regarding the Aerium investments were already being heard in England (and were scheduled to go to trial in 2025);
  • there was a factual connection to England (dealings between the alleged perpetrators took place in London); and
  • both AFL and Ruimy had connections to England (AFL was an English company; Ruimy had been living in England during the relevant period, and he retained assets in the jurisdiction).

PIFSS also argued that the proceedings in Switzerland did not give rise to the risk of contradictory judgments, as the Swiss proceedings:

  • were against different defendants; and
  • would not progress until the English proceedings were resolved.

Decision

Mr Justice Jacobs broadly accepted the PIFSS's submissions and held that the applicants had not established that Switzerland was a more appropriate forum than the English forum.

Jacobs J held that it was clear, after Vedanta Resources,(3) that the risk of inconsistent judgments is often a significant factor in a forum non conveniens analysis. The English proceedings would continue as against the other defendants, including Al Rajaan and his estate, even if the application were successful – it would:

result in a duplication of proceedings . . . with the allegations against the recipient of the alleged bribe (Mr Al Rajaan) being investigated and determined in England, but the allegations against the payor of the alleged bribe being investigated and determined in Switzerland.

In addition, Jacobs J considered it was significant that Al Rajaan was the anchor defendant and at no stage had challenged the jurisdiction of the English court. As such, were AFL and Ruimy to be sued outside England, that would lead to "undesirable fragmentation" and "create a higher risk of inconsistent findings".

The judge held that there were strong connections with England. AFL was an English company and Ruimy had lived in England for the relevant period, such that he had likely been in England when negotiating and arranging the bribes. Similarly, during the relevant period, Al Rajaan had spent time in England on business and had been a director of an English bank. Although the alleged bribes may have been paid in Switzerland, not all elements of the wrong were connected with Switzerland (eg, the instruction to pay them may have been given in England). It would be necessary for the court to determine the reason for the payments and whether they were in fact secret illegal commissions. The justification behind the payments was likely to be more closely connected to England, which was a relevant factor in the High Court's consideration of the connections to the English jurisdiction.

Jacobs J also did not agree that documents and witnesses related to the dispute would primarily be located in Switzerland. The applicants had given no indication as to the form of their defence nor identified any factual witnesses that would need to be called. They were not obliged to do so but, without that indication, the Court could not speculate as to which case they might choose to advance.

Comment

This case illustrates the resurrected relevance of the forum non conveniens test in jurisdictional challenges in the post-Brexit era. Parties wishing to challenge the jurisdiction of the English court must present a compelling argument that another jurisdiction is clearly the most appropriate forum. It will not be sufficient for there to be isolated factors that support the jurisdiction of another court. The High Court will consider all elements of the claim to be advanced, including where the harmful act occurred, the risk of irreconcilable judgments and potential duplication of proceedings, and where the witnesses and documents will sit if the defendant has given any indication of the case it wishes to advance. However, while a defendant is not obliged to offer the court that preview, it would be well advised to consider whether it might be strategically advantageous to do so, as a court will not speculate for the parties' benefit.

For further information on this topic please contact Louise McCarthy or Suzan Kurdi at RPC by telephone (+44 20 3060 6000) or email ([email protected] or [email protected]). The RPC website can be accessed at www.rpc.co.uk.

Endnotes

(1) The Public Institution for Social Security v Mr Ely Michel Ruimy, Aerium Finance Limited [2023] EWHC 177 (Comm).

(2) See [2020] EWHC 2979 (Comm), upheld on appeal [2022] EWCA Civ 29.

(3) Vedanta Resources Plc v Lungowe [2019] UKSC 20.