Aspect Properties, Japan Godo Kaisha v Cheng and Five Others
| Jurisdiction | Cayman Islands |
| Judge | (Doyle, J.) |
| Judgment Date | 27 April 2022 |
| Court | Grand Court (Cayman Islands) |
(Doyle, J.)
Civil Procedure — service of process — service out of jurisdiction — Japanese company brought proceedings for alleged conspiracy to steal Japanese property carried out by foreign defendants using Cayman corporate defendants — permission granted for service out of jurisdiction on overseas defendants
Held, dismissing the application:
(1) To obtain permission for service out of the jurisdiction, the court must be satisfied that, in relation to each defendant, there was a serious issue to be tried on the merits, i.e. a substantial question of fact or law or both which had a real, as opposed to fanciful, prospect of success; there was a good arguable case that the claim fell within one or more of the jurisdictional gateways set out in GCR O.11, r.1(1); and that in all the circumstances, the Cayman Islands was clearly or distinctly the appropriate forum for the trial of the dispute and that the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction pursuant to GCR O.11, r.4(2) (para. 39).
(2) The court was satisfied that the plaintiff had established serious issues to be tried in respect of the conspiracy claims against the first, second and third defendants. Simply because there was a factual dispute did not mean that there was no serious issue to be tried. The plaintiff’s case was that the foreign defendants used the Cayman defendants to facilitate the conspiracy and they had important roles to play in the alleged conspiracy (paras. 89–90).
(3) The court was also satisfied that there was a good arguable case that the claims fell within gateways (c), (f) and (ff) in GCR O.11, r.1(1). In respect of gateway (c), the court was satisfied that the claims against the foreign defendants and the Cayman defendants involved one investigation or were so closely bound up together and the factual issues so tightly interwoven that the case against all of the defendants demanded a single investigation. All defendants were alleged to have been involved in the conspiracy. The foreign defendants were necessary and proper parties to the claims made against the Cayman defendants and if all defendants had been within the Cayman Islands they would all have been joined in the same proceedings. The claims were not bound to fail. In respect of gateway (f), the court was satisfied that the plaintiff’s claims were founded on the tort of conspiracy and damage had been sustained within the jurisdiction and/or had resulted from an act committed in the jurisdiction. The registration of the purported transfer of an issued share from one of the Cayman defendants to another, a central plank of the plaintiff’s claim in conspiracy against all defendants, took place within the jurisdiction and damage was sustained within the jurisdiction. There was also the loss of the value of the plaintiff’s security in the issued share of the sixth defendant. These were not remote effects. The “damage” alleged to have been sustained by the plaintiff was sustained within the Cayman Islands. The incorporation of the companies in the Cayman Islands and the share transfer were acts which took place within the jurisdiction to further and complete the conspiracy. In respect of gateway (ff), the court was satisfied that the claim was brought against a director and/or member of companies registered in the jurisdiction and the subject matter of the claim related to such companies. The plaintiff’s claim was that the conspiracy was carried out by the foreign defendants causing each of the Cayman defendants to come into being and using the Cayman defendants as the necessary co-conspirators to cause damage to the plaintiff (paras. 91–94).
(4) GCR O.11, r.4(2) had been satisfied and that the court was right to exercise its discretion to permit the service of the proceedings out of the jurisdiction. The court’s conclusion in respect of gateway (c) weighed heavily in the satisfaction of O.11, r.4(2). The Cayman Islands was clearly the appropriate forum for the trial of the plaintiff’s claims in conspiracy, which involved three Cayman Islands companies which, on the plaintiff’s case, were set up to facilitate the alleged conspiracy. The Cayman Islands was the forum in which this case could be suitably tried for all parties and the ends of justice. It could not be properly suggested that the links between the claim and this jurisdiction were merely casual or adventitious. The plaintiff’s case was that the foreign defendants used the Cayman defendants to perpetrate the conspiracy and cause damage to the plaintiff. There were clearly strong and significant connections with the Cayman Islands. No other forum appeared more suitable. There were no proceedings in any other jurisdiction. Witnesses could travel to the Cayman Islands or give evidence remotely via video-link. The parties should litigate their dispute, which at its heart involved Cayman defendants, in the CaymanIslands. This case was plainly a proper one for service out of the jurisdiction and the Grand Court was the suitable forum for the determination of the claims (paras. 95–103).
(1) Ahmad Hamad Algosaibi & Bros. Co. v. Saad Invs. Co. Ltd., 2010 (2) CILR 289, considered.
(2) Altimo Holdings & Inv. Ltd. v. Kyrgyz Mobil Tel Ltd., [2011] UKPC 7; [2012] 1 W.L.R. 1804; [2011] 4 All E.R. 1027; [2011] 1 CLC 205, considered.
(3) Bancredit Cayman Ltd. v. Pellerano, 2010 (1) CILR 400, considered.
(4) Cairnwood Global Technology Fund Ltd., In re, 2007 CILR 193, considered.
(5) China Agrotech Hldgs. Ltd., In re, 2019 (2) CILR 302, considered.
(6) Club Resorts Ltd. v. Van Breda, 2012 SCC 17, considered.
(7) Contadora Enterprises S.A. v. Chile Holdings (Cayman) Ltd., 1999 CILR 194, considered.
(8) Credit Agricole Indosuez v. Unicof Ltd., [2003] EWHC 2676 (Comm); [2004] 1 Lloyd’s Rep. 196, referred to.
(9) Daiwa Capital Markets Europe Ltd. v. A1-Sanea, Cause No. 22 of 2019; 2019 (2) CILR N [9], considered.
(10) FS Cairo (Nile Plaza) LLC v. Brownlie, [2021] UKSC 45; [2022] A.C. 995; [2021] 3 W.L.R. 1011, considered.
(11) Fidelity & Guar. Intl. Ltd. v. Hakemian, 1992–93 CILR N–6, referred to.
(12) Health Secy. v. Servier Laboratories Ltd., [2021] UKSC 24; [2022] A.C. 959; [2021] 3 W.L.R. 370; [2022] 1 All E.R. 1, referred to.
(13) Hutchinson Ltd. v. Cititrust (Cayman) Ltd., 1998 CILR 43, considered.
(14) KTH Capital Management Ltd. v. China One Fin. Ltd., 2004–05 CILR 213, considered.
(15) Merkanti Holding plc v. Raiffeisen Bank Intl. A.G., 2022 (1) CILR 497, considered.
(16) Metall & Rohstoff A.G. v. Donaldson Lufkin & Jenrette Inc., [1990] 1 Q.B. 391; [1989] 3 W.L.R. 563; [1989] 3 All E.R. 14, considered.
(17) Raiffeisen Intl. Bank AG v. Scully Royalty Ltd., Cause No. FSD 162 of 2019, Grand Ct., March 12th, 2021, unreported, referred to.
(18) Ritchie Capital Mgmt. LLC v. Lancelot Investors Fund Ltd., 2021 (1) CILR 128, considered.
(19) Satfinance Inv. Ltd. v. Athena, [2020] EWHC 3527 (Ch), referred to.
(20) Société Commerciale de Reassurance v. Eras Intl. Ltd. (The Eras Eil Actions), [1992] 2 All E.R. 82 (Note); [1992] 1 Lloyd’s Rep. 570, considered.
(21) Spiliada Maritime Corp. v. Cansulex Ltd., The Spiliada, [1987] A.C. 460; [1986] 3 W.L.R. 972; [1986] 3 All E.R. 843; [1987] 1 Lloyd’s Rep. 1, referred to.
(22) TCB Creditor Recoveries Ltd. v. Arthur Anderson LLP, 2007 CILR N [14], considered.
(23) Telesystems Intl. Wireless Inc. v. CVC/Opportunity Equity Partners L.P., 2002 CILR N [21], referred to.
(24) Torchlight G.P. Ltd. v. Millenium Asset Servs. Pty. Ltd., 2018 (1) CILR 244, considered.
(25) Vedanta Resources plc v. Lungowe, [2019] UKSC 20; [2020] 1 A.C. 1045; [2019] 2 W.L.R. 1051; [2019] 3 All E.R. 1013; [2019] BCC 520, considered.
(26) Velox Intl. Invs. v. Peirano Facio, 2003 CILR 30, considered.
(27) Voth v. Manildra Flour Mills Pty. Ltd., [1990] HCA 55; (1990), 171 CLR 538; 97 ALR 124, considered.
Grand Court Rules 1995, O.11, r.1(1):
“Provided that the writ does not contain any claim mentioned in Order 75, rule 1(3) service of a writ out of the jurisdiction is permissible with the leave of the Court if in the action begun by the writ—
…
(c) the claim is brought against a person who has been or will be duly served within or out of the jurisdiction and a person out of the jurisdiction is a necessary or proper party thereto;
…
(f) the claim is founded on a tort, fraud or breach of duty whether statutory at law or in equity and the damage was sustained, or resulted from an act committed, within the jurisdiction;
(ff) the claim is brought against a person who is or was a director, officer or member of a company registered within the jurisdiction or who is or was a partner of a partnership, whether general or limited, which is governed by the laws of the Islands and the subject matter of the claim relates in any way to such company or partnership or to the status, rights or duties of such director, officer, member or partner in relation thereto …”
O.11, r.4(2): The relevant terms of this subrule are set out at para. 81.
Rules of the High Court of Justice 2009 (Isle of Man), r.2.42(3): The relevant terms of this provision are set out at para. 84.
The plaintiff sought to serve the first, second and third defendants out of the jurisdiction.
The plaintiff, a Japanese company, sought relief against the defendants including damages for conspiracy. The plaintiff alleged that until September 2018, it had the beneficial and legal ownership of two apartments in Japan. As a result of a conspiracy undertaken by and through the defendants, the legal ownership of the apartments had been transferred to the sixth defendant, a Cayman Islands company.
Pursuant to a subscription agreement entered into between the plaintiff and the fourth defendant, a Cayman Islands company, the plaintiff subscribed for bonds issued by...
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