Two recent cases, Bestolov v Povarenkin and Eng King v Petrillo, considered whether wealthy Russian residents, who also had links to the UK, were domiciled in England. In both instances, the court found that the individual was domiciled in England.
The cases provide a useful reminder to international elites that their family and personal ties in the UK may provide a basis for the English court to assert jurisdiction over them, regardless of whether they have a more substantial connection elsewhere and even where the dispute has limited or no link to England.
The position under EU and English law
The overarching principle, under the EU Brussels Regulation is that a defendant should usually be sued in the place of his or her domicile. Once domicile in an EU member state is established, the European jurisdiction regime applies and the relevant court cannot decline jurisdiction, even if it is clear that it would be more appropriate for the matter to be dealt with in another jurisdiction. Under the Recast Brussels Regulation, the domicile of an individual is determined by reference to the applicable national rules. In England the rules are set out in the Civil Jurisdiction and Judgments Order 2001 (SI 2001/3929).
The English rules provide that an individual is domiciled in England if: (i) he / she is resident in the England and (ii) the nature and circumstances of his / her residence indicate that he / she has a substantial connection with England. The second limb of this test will be presumed satisfied if the individual has been resident for three months or more.
The facts in these cases
In Bestolov, the parties were both Russian businessman and the matter related to Russian mining projects. Mr Bestolov was personally served with proceedings at the Heathrow, whilst on a visit to the UK. The court held that Mr Bestolov was domiciled in England (as well as Russia), on the basis that:
- Mr Povarenkin’s wife and children lived in a flat in Belgravia, London (purchased out of joint matrimonial assets) for the majority of the year to facilitate the children’s education, and had done so for the past 4 years.
- The home was used not only by the wife and children but also by the defendant himself on his frequent and regular visits to England to spend time with them as part of family life in England.
- There was also the frequency (twice monthly) and regularity of the defendant’s stays in the home in England and the overall number (79 days) of such stays. The critical point, though, was the quality and nature of the visits, not simply the number.
- Mr Povarenkin spent time in England using the UK Tier 1 Investor Visa of his wife, not a business or visitor visa.
- Given Mr Povarenkin has been resident for over three months, it was presumed that the nature and circumstances of his residence indicated that he had a ‘substantial connection with England’ so as to establish domicile.
In Eng King, the court reached a similar decision, holding that Mr Petrillo was domiciled in England on the basis that:
- Mr Petrillo was a UK national whose permanent residence until the 1990s, was in England. He divorced and moved to Russia. However, he returned to England to regularly visit his family and spent a considerable amount of time in the country. He remained on the electoral roll as a resident at the English address and continued to give that address on formal documents.
- Mr Petrillo had an English mobile telephone and an English landline,
- Mr Petrillo had a Russian girlfriend who lived in a flat in London at the time the claim form was issued. He visited her and sometimes stayed at her flat.
- It was clear that the Mr Petrillo carried on significant business and personal activities in the UK.
- Mr Petrillo had given little evidence of any particular personal connection outside England.
These cases illustrate the sort of factors that an English court will take into account when assessing whether will be deemed to be domiciled in England under English law.
The cases also highlight that where the Brussels regime applies, the English courts do not have the discretion to decline jurisdiction in favour of a more appropriate forum. Whilst in Eng King, the court did not accept that Russia or Belarus was a more appropriate forum in any event (as had been argued), in Bestolov, the court held (obiter) that if it did have discretion, Russia would have been the more appropriate forum.