I Ltd v A

JurisdictionCayman Islands
Judge(Harre, C.J.)
Judgment Date01 January 1994
Date01 January 1994
CourtGrand Court (Cayman Islands)
Grand Court

(Harre, C.J.)

I LIMITED (in liquidation)
and
A and SIX OTHERS

C. Purle, Q.C. and E. McQuater for the plaintiff;

R. McCombe, Q.C., R.D. Alberga, Q.C. and A. Trace for the defendants.

Cases cited:

(1) Guaranty Trust Co. of New York v. Hannay & Co., [1915] 2 K.B. 536; [1914–15] All E.R. Rep. 24, dictum of Pickford, L.J. distinguished.

(2) Harrods (Buenos Aires) Ltd., In re, [1992] Ch. 72; [1991] 4 All E.R. 334, distinguished.

(3) Insurco Intl. Ltd. v. Gowan Co., 1992–93 CILR 445.

(4) Lonrho PLC v. Fayed, [1992] 1 A.C. 448; [1991] 3 All E.R. 303.

(5) Rawson Trust Co. Ltd. v. G.C.T.C. Ltd., 1980–83 CILR 214.

(6) Russian Comm. & Indus. Bank v. British Bank for Foreign Trade, [1921] 2 A.C. 438; [1921] All E.R. Rep. 329, dictum of Lord Dunedin applied.

(7) Saipem S.p.A. v. Dredging VO2 B.V., The Volvox Hollandia, [1988] 2 Lloyd”s Rep. 361.

(8) Vine v National Dock Labour Bd., [1957] A.C. 488; [1956] 3 All E.R. 939; [1956] 2 Lloyd”s Rep. 567.

(9) Waterhouse v. Reid, [1938] 1 K.B. 743; [1938] 1 All E.R. 235, applied.

(10) Williams & Humbert Ltd. v. W. & H. Trade Marks (Jersey) Ltd., [1986] A.C. 368; [1985] 2 All E.R. 208, dictum of Lord Mackay applied.

Legislation construed:

Grand Court (Civil Procedure) Rules, r.13(3):

‘No such process shall be served outside the jurisdiction without leave of the Court. . . .’

Rules of the Supreme Court (England), O.11, r.1(1)(c): The relevant terms of this rule are set out at page 185, lines 28–30.

Companies-legal proceedings-forum conveniens-in dispute over share ownership, exceptional to decide forum on basis of company”s main operations if international shareholders

Civil Procedure-pleading-amendment-amendment of statement of claim allowed if defendant outside jurisdiction and leave granted under Grand Court (Civil Procedure) Rules, r.13(3) to serve him with amended claim-discretion to grant leave guided by Rules of Supreme Court, O.11, r.1

Civil Procedure-declarations-locus standi of parties-petitioner needs real interest in seeking declaration and respondent needs real reason to oppose it-respondent need only oppose making of declaration and not seek declaration in own favour

Civil Procedure-judgments and orders-declaratory judgment-declaration of non-liability-seldom granted if relates to another existing or prospective action-normally no reason to refuse positive declaration

Civil Procedure-pleading-striking out-court will not hear application to strike out statement of claim where not prompt and involves prolonged, serious argument without likelihood of striking out

The plaintiff sought leave to amend its writ and statement of claim and two of the defendants, C and L, applied to strike out all or part of the statement of claim.

The plaintiff alleged that 88% of F Ltd.”s shareholding in A Ltd. had been wrongfully transferred to L who had wrongfully transferred it to a subsidiary of C. It was acknowledged that the plaintiff owned not less that 75% of F Ltd. Some of the parties in these proceedings were also involved in an action started in Pakistan to determine who was entitled to control the business conducted through certain valuable A Ltd. subsidiaries established there and an English court had already made orders in relation to A Ltd. share ownership.

The Cayman proceedings had reached the discovery stage when the plaintiff applied for leave to amend his writ and statement of claim, to have F Ltd. removed as a defendant and added as a plaintiff and to introduce a claim for a declaration that F Ltd. was the sole beneficial owner of A Ltd. or as to the extent of its ownership. C and L also applied to strike out the whole or part of the statement of claim.

The plaintiff submitted that (a) Pakistan was not a more appropriate forum since (i) the proceedings concerning the A Ltd. subsidiaries were the only connection with Pakistan and did not involve all the parties; and (ii) in any event, the forum for an action concerning the ownership of shares should not be decided on the basis of where the company”s main operations took place; (b) leave should be granted to remove F Ltd. as a defendant and to introduce it as a plaintiff under the Grand Court (Civil Procedure) Rules, r.24 since the plaintiff”s allegations of conspiracy were based on the claim that F Ltd. was the owner of the A Ltd. shares; (c) furthermore, leave should be granted to introduce the claim for a declaration because (i) both L and C had real reasons for opposing the declaration since it was fundamental to the conspiracy allegations made against them and, therefore, although L made no claim to ownership, it could be duly served with the new claim, allowing leave to be granted to serve C in Panama on the basis that it was a necessary party to the action under the Grand Court (Civil Procedure) Rules, r.13(3), applied with guidance from the Rules of the Supreme Court, O.11, r.1; and (ii) the court had the jurisdiction to grant the declaration and since it was not a negative declaration denying liability in an existing action based on a positive claim arising out of the same dispute, it had no reason to refuse to exercise it; and (d) the court should not grant the defendants” application to strike out since it had not been brought promptly and it would demand prolonged and serious argument without the likelihood of any part of the statement of claim being struck out.

The defendants submitted in reply that (a) leave to amend should not be granted since the dispute was motivated by a desire to control A Ltd. subsidiaries which were already the subject of an action in Pakistan and, consequently, this action should also be determined there; and (b) in any event, leave should not be given to add the claim for a declaration because (i) leave would not be granted under the Grand Court (Civil Procedure) Rules, r.13(3) to serve C outside the jurisdiction with the new claim, since L made no claim to the ownership of the shares and could not, therefore, be a person duly served, as required by the English Rules of the Supreme

Court, O.11, r.1 as a prerequisite to granting leave to serve a person outside the jurisdiction; and (ii) the declaration sought would not be granted since an English court had already made orders in relation to the A Ltd. shares and the plaintiff should not be allowed to forum shop.

Held, granting the plaintiff leave to amend and dismissing the defendants” application:

(1) Pakistan was not a more appropriate forum for the present proceedings since, although they may have been motivated by a desire to control the A Ltd. subsidiaries which were the subject of proceedings in Pakistan, that was their only connection with Pakistan and not all of the parties were involved. In any event, it would be exceptional to decide the forum for an action concerning the ownership of shares on the basis of where the company”s main operations took place (page 184, lines 27–30;page 184, line 42 – page 185, line 9).

(2) The plaintiff would be granted leave to remove F Ltd. as a defendant and to introduce it as a plaintiff under the...

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1 cases
  • Lhasa Invs Ltd v ICIC
    • Cayman Islands
    • Court of Appeal (Cayman Islands)
    • 12 December 1994
    ...and serious argument without the likelihood of any part of the pleadings being struck out. The Grand Court proceedings are reported at 1994–95 CILR 180. On appeal, the appellants submitted that (a) leave should not have been granted to introduce a claim for a declaration as to the extent of......

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