The recent High Court case of BNP Paribas SA v Open Joint Stock Company Russian Machines(1) provides a useful illustration of the circumstances in which the court will permit:

  • service out of the jurisdiction under Civil Procedure Rule (CPR) 62.5 of anti-suit proceedings against a third party that was not subject to an arbitration agreement; and
  • alternative means of service under CPR 6.15.


The facts of the dispute were complex. In summary, the first defendant had provided a guarantee to the claimant which related to the liabilities of its subsidiary, the second defendant, under a loan agreement. Both defendants were Russian companies. The guarantee was governed by English law and contained an arbitration clause. The guarantee also contained an option for the claimant to refer disputes to the English court, in which case the first defendant's English firm of solicitors, Firm A, would be appointed as its agent for service.

There was a dispute under the loan agreement and the claimant sought to enforce the guarantee by commencing arbitration in London against the first defendant. The first defendant appointed Firm B to represent it in the arbitration.

The arbitration agreement was subsequently varied by agreement. One of the amendments was to remove the option to litigate, which thereby also removed the provision that Firm A act as the claimant's agent for service of process. The second defendant issued proceedings in Russia for an order invalidating the guarantee because it had not been properly approved by shareholders. The claimant applied for an anti-suit injunction against both defendants to restrain the Russian proceedings. The claimant served the claim form for the anti-suit proceedings on Firm A, despite the fact that there was no longer provision for Firm A to be the agent for service of process. Firm A eventually passed the claim form to Firm B.

The court granted permission to serve the claim form out of the jurisdiction on the second defendant. It did so on the grounds that the first defendant had been validly served within the jurisdiction (although this was not strictly correct), and that the second defendant was a "necessary and proper party" for the purposes of Practice Direction (PD) 6B.3.1(3).

Both defendants challenged both the court's jurisdiction and the service of proceedings. The claimant made a cross-application for service-related relief.

The claimant alleged that the second defendant's commencement and pursuit of the Russian proceedings was part of a scheme involving the first defendant which was designed to assist the first defendant's evasion of responsibility under the guarantee.


There were a number of issues to be decided by the court, in what the judge referred to as a "complicated menu of issues for decision on an interlocutory application".(2) Two key issues were whether the court had jurisdiction over the second defendant and whether the claim form had been validly served on both defendants.

The second defendant contended that there was no valid jurisdictional gateway on which the claimant could rely for service out of the jurisdiction. The judge considered the various jurisdictional gateways as follows.

CPR 62.5(1)(b)
CPR 62.5(1)(b) provides that the court may give permission to serve a claim form in relation to an arbitration out of the jurisdiction if the claim is for an order under Section 44 of the Arbitration Act 1996 (ie, an interim injunction to restrain foreign proceedings being brought in breach of an arbitration agreement).

One of the points that the judge had to determine was whether permission should have been granted to serve out against the second defendant, given that the second defendant was not a party to the arbitration agreement.

The judge held that the claim against both the first defendant and the second defendant fell within the jurisdictional gateway in CPR 62.5(1)(b) because the case concerned "an allegation that the non-party has been engaged in the unconscionable pursuit of litigation intended to prejudice the arbitration agreement",(3) and that where this is the position, "it may be that in most circumstances, the non-party will be amenable to service out of the jurisdiction as a 'necessary or proper party'".(4)

CPR 62.5(1)(c)
CPR62.5(1)(c) provides that the court may give permission to serve a claim form in relation to an arbitration out of the jurisdiction if:

  • the claimant seeks some other remedy or requires a question to be decided by the court that affects an arbitration (whether commenced or not), an arbitration agreement or an arbitral award; and
  • the seat of the arbitration is or will be within the jurisdiction.

The defendants submitted that the claimant was concerned only with the extent to which an adverse conclusion in the Russian proceedings would impinge on enforcement of an award, and that as this was an enforcement issue, it was outside the scope of CPR 62.5.

However, the judge rejected this argument and held that the jurisdictional gateway under CPR 62.5(1)(c) was established against both defendants. In his view, enforcement was an integral part of the process; therefore, the fact that an adverse decision in Russia might make an award in the claimant's favour much more difficult to enforce did not imply that the question did not affect an arbitration, an arbitration agreement or an arbitral award.

CPR 6.36 and PD 6B
CPR6.36 provides that permission to serve a claim form in relation to an arbitration out of the jurisdiction may be granted if:

  • the claim falls within one of the gateways under PD 6B.3.1;
  • the claim has a reasonable prospect of success; and
  • England is the proper place to bring the claim.

The gateways under PD6B3.1 on which the claimant relied were found in:

  • paragraph 3 - where the claimant wishes to serve the claim form on another person that is a necessary and proper party to the claim (the so-called 'necessary or proper party gateway'); and
  • paragraph 6 - where a claim is made in respect of a contract that is governed by English law (the so-called 'contract gateway').

The second defendant submitted that it was not a necessary or proper party, as the issues could be decided properly without it being joined as a party to the relevant proceedings.

However, the judge rejected this argument and held that:

"[w]here the allegation is that parties are acting in consort, one party will usually be a necessary or a proper party to the claim against the other party, being a defendant which has been or will be served, and in my view, the second defendant is so here."(5)

The fact that the second defendant was related to the first defendant and the fact that it had issued the proceedings in Russia against the claimant were factors which the judge found to be relevant in upholding this jurisdictional gateway.

The second defendant submitted that the contract gateway could not apply to it, as it was not a party to the guarantee or the arbitration agreement. The judge did not accept this, stating that:

"the fact that the second defendant is not a party to either the guarantee or the arbitration agreement in itself is not fatal to an application under this ground, if the claim is otherwise a contractual one."(6)

However, he did not uphold the claimant's claim to jurisdiction on this ground because he preferred to approach the case on the basis of unconscionable conduct.

Once jurisdictional gateways had been established against both defendants, the judge had to decide whether there was a serious issue to be tried. He held that there was a good arguable case that the defendants had acted vexatiously and oppressively in their pursuit of the Russian litigation, and accordingly that there was a serious issue to be tried. In terms of what could amount to unconscionable conduct, the judge stated that this issue:

"cannot and should not be defined exhaustively, but where companies are in the same ownership and control, it is arguably unconscionable for them to work together to the extent of bringing court proceedings with a view to impeding the outcome of an arbitration to which the other is a party."(7)

Having decided that the court had jurisdiction over both defendants, there were a number of issues relating to service that it was necessary to consider. Perhaps the most significant was whether service by the claimant on the first defendant by delivery to Firm A under the (revoked) process clause could be retrospectively validated under CPR 6.15(2) - this rule gives the court the power to order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place constitute good service.

The judge held that the service by alternative means (ie, retrospective validation) could be justified by the following special circumstances:

  • The claimant had overlooked the fact that the service of process clause had been repealed. Had that been noticed, it was difficult to see why service in England on the first defendant's solicitors, which were acting for it in the arbitration, would not have been permitted.
  • The solicitors acting for the first defendant in the arbitration, Firm B, knew that the claim was coming and prior correspondence had taken place about it with the arbitrator.
  • The proceedings were sent to Firm A (which was acting for the second defendant) and passed to Firm B.
  • The first defendant and the second defendant were in common ownership and control.


On the issue of jurisdiction, this case suggests that challenges to the court's jurisdiction will not be taken lightly, particularly where it can be shown that proceedings have been issued outside the jurisdiction with the aim of impeding an arbitration. Although the court will take account of factors such as the terms of the relevant contractual documents, this case makes clear that in certain circumstances the court will not limit injunctive remedies to the parties to the arbitration agreement.

On the issue of service, the case illustrates the special circumstances in which the court will permit service by alternative means out of the jurisdiction.

For further information on this topic please contact Helen Fairhead at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email ([email protected]).


(1) [2011] EWHC 308 (Comm).

(2) Paragraph 30.

(3) Paragraph 45.

(4) Id.

(5) Paragraph 52.

(6) Paragraph 58.

(7) Paragraph 92.