Lord Justice Richards :
- The claimant ("Mrs Sharab") claims commission of US$10 million allegedly payable by the defendant ("the Prince") for her services as agent in relation to the sale of an Airbus 340 aircraft by the Prince to Colonel Gaddafi, President of Libya ("the President"). She issued her claim form in November 2007 and on an ex parte application was granted permission for service on the Prince out of the jurisdiction. The Prince then applied for an order under CPR Part 11 declaring that the court had no jurisdiction to hear the claim, alternatively that it should not exercise any jurisdiction on the ground that this is not the appropriate forum for determination of the claim. Mr John L. Powell QC, sitting as a deputy judge of the High Court, dismissed the application. The Prince now appeals against the deputy judge's order.
The facts
- The deputy judge's account of the facts was based largely on (i) a long witness statement by Mrs Sharab which was filed, together with supporting documents, in support of the application to serve the Prince out of the jurisdiction; and (ii) a much shorter witness statement by Mr Rodney Baker, a partner in the firm of solicitors acting for the Prince, which was filed in support of the Prince's application contesting the court's jurisdiction and which included information given to Mr Baker by the Prince and Mr Alaeddin (whose alleged role in events is described below). The following is drawn from the deputy judge's account.
- According to her statement, Mrs Sharab was born in 1961 in Saudi Arabia, where she lived for 18 years before moving to Jordan. She divides her time between London, Jordan and Libya. Since 1988 she has "lived in London" for at least 3 months annually, except between 1995 and 1998 when she again lived in Saudi Arabia. She has an apartment in London which is held on a long leasehold in the name of an offshore company. She also has a house in Jordan "where I live when I am not away working in Libya, staying in London or travelling". She has a teenage daughter who lives and attends school in Jordan. Owing to extensive business commitments she is only able to spend entire days with her daughter for about three months a year, two of which are spent in London during summer. She travels regularly to Libya where she has extensive business interests. She runs her own consultancy company, the Trans Arab World for Commercial Mediation ("TAWCO"), based in Jordan. She conducts most of her business on behalf of TAWCO from Jordan and some from London. A major part of TAWCO's business is effecting introductions for clients in Libya.
- Mrs Sharab describes the Prince as a member of the Saudi royal family, being a grandson of the first king of Saudi Arabia and one of the world's richest men, with extensive and substantial interests throughout the world. Mr Baker did not comment on this description.
- The events described by Mrs Sharab also involved a Mr Alaeddin, an accountant and managing partner of Arthur Andersen Middle East and latterly of Ernst & Young Middle East (which he joined, according to Mr Baker, in July 2002). Mr Baker describes Mr Alaeddin as having known the Prince for over 20 years as a client. In his capacity as a partner in the accounting firms referred to, he has provided and continues to provide professional services ranging from accountancy to business advisory and corporate finance services, under a retainer to the Prince and his companies. Mrs Sharab alleges that it was a matter of common knowledge that Mr Alaeddin was the Prince's personal representative. Mr Baker records Mr Alaeddin's categorical denial of this allegation and his assertion that he has never been an agent or personal representative of the Prince with authority to enter contracts on his behalf, nor has he held himself out as having such authority. Mr Baker also states that he was told by the Prince that Mr Alaeddin was never his agent or personal representative and that he had never given authority to Mr Alaeddin to enter into contracts on his behalf.
- Mrs Sharab relates that she first met the President in about March 1988 at a conference in Tripoli, after which she was encouraged to introduce clients to the Libyan Arab Foreign Investment Office ("LAFICO"). She describes several large transactions in relation to which she acted as introducing agent on behalf of clients dealing with LAFICO and the President.
- According to Mrs Sharab, when living in Saudi Arabia between 1995 and 1998 she was "introduced to the Prince's affairs" by Mr Alaeddin. She describes a series of tasks which she maintains she was asked by Mr Alaeddin to carry out on behalf of the Prince. She states that, at Mr Alaeddin's request, she arranged for the Prince to meet the President in Libya in 1999 and that thereafter she worked for the Prince in relation to various projects and matters in Libya.
- The specific events with which the claim is concerned commenced, according to Mrs Sharab, with a telephone call from the Prince at the beginning of August 2001, in which he stated that he had two aircraft (an Airbus and a Boeing) and wished to sell one of them. He requested her to meet him in Cannes and to arrange a meeting there with the chairman of LAFICO to discuss tourism investment issues and an agricultural investment project in Egypt ("Project Toushca") run by one of the Prince's companies. Mrs Sharab met the Prince in Cannes on about 7 August 2001, when he reiterated his wish to sell one of his aircraft and suggested that the President was a potential buyer. Her account continued:
"During this conversation, the Prince told me that he would pay me commission for effecting an introduction to the President and arranging the deal, but we did not discuss how much commission I would be paid.
The Prince instructed me not to start to negotiate the sale of the aircraft until the new plane was ready. That was likely to be a considerable period of time as he had a number of personal requirements and extra equipment to be added. He said he would sent Mr Alaeddin to agree a contract with me. I left Cannes on or about 8 August and returned to London."
- Mrs Sharab next describes meetings on about 15 August and 22 August relating to the other matters on which the Prince had requested her assistance, before turning to a meeting in London which is central to the present claim:
"On 25 August 2001, the Prince sent Mr Alaeddin after me to London to meet with me and discuss the proposed sale of one of the Prince's aircraft to Libya for the President, as the Prince had informed me he would do. We met in a London restaurant, Ayoush, James Street, London W1. The sole purpose of Mr Alaeddin's visit, so far as I was aware, was to discuss this deal and agree the terms on which I was to act. Mr Alaeddin told me that the Prince would pay me US$2 million commission if I could sell either one of the aircraft to Libya for the President and US$1 million commission if I could secure an investment in Project Toushca. No prices were discussed at this stage as to how much the Prince wanted for each aircraft as it was not yet known which one, (if at all), would be able to be sold. The Prince wanted to obtain an investment of US$20 million in Project Toushca. As Mr Alaeddin represented the Prince, I considered this to be a firm offer, which I accepted verbally. When I did so I was acting in a personal capacity and not through TAWCO, as indeed was the position in all of my dealings with the Prince. Nevertheless, I told Mr Alaeddin that I would still like to hear confirmation of this commission directly from the Prince."
- According to Mr Baker's statement, Mr Alaeddin's account is different. He acknowledges that he used to meet Mrs Sharab at the Ayoush restaurant when he was in London on business, generally in the summer months. He estimates that he met her there on approximately five occasions. At these meetings they discussed many issues concerning Libya, some related to the Prince's business and others not. He recalled discussing the possible sale of one of the Prince's aircraft to Libya and the possible investment by Libya in Project Toushca on one or more of these occasions, although he did not think that he would have travelled to London specifically to meet Mrs Sharab at the Prince's request. He did not recall putting any offer to her nor discussing specific commission amounts with her, in relation either to the proposed aircraft sale or the investment in Project Toushca, at those meetings. He certainly had no recollection of the figures referred to in Mrs Sharab's statement. In relation to the aircraft sale, he doubted that they would have discussed figures at such an early stage, when it had not even been decided which of the Prince's two aircraft was to be sold. He did not recall offering or entering into any sort of agreement with Mrs Sharab, for the figures alleged in her statement, at the meeting. He simply did not have the authority to enter into contracts on behalf of the Prince and it was not his job to do so.
- After the meeting on 25 August 2001, according to Mrs Sharab, a year elapsed before the next relevant event. At the end of August 2002, when she was in London, the Prince called her and told her to proceed with negotiations for "the plane".
- Mrs Sharab states that she was unable to arrange a meeting with the President until about 21 January 2003. She then went to Libya and talked to the President, who asked to see both aircraft. She conveyed his request directly to the Prince. On about 10 April 2003 the Prince went to Libya with both aircraft to show the President. According to her account, Mrs Sharab was present at a meeting between the Prince and the President. The latter stated his preference for the Airbus and the Prince left it in Libya while the sale price was negotiated. Mrs Sharab states that while the Prince's luggage and other belongings were being transferred from the Airbus to the Boeing, she sat with the Prince in the Boeing for two hours. She continues:
"The Prince told me that the aircraft actually cost him US$90,000,000 (although in a letter from the Prince to the President, he subsequently stated that it cost him US$135,000,000). I wanted to improve the terms which we had agreed, because I knew how much money I would be making for the Prince if I could broker this sale, especially bearing in mind the use the Prince had already had from the aircraft, and so I requested that the contract between us be varied so that I would receive a margin of the sale price in the proposed transaction. The Prince told me that, if I could sell the aircraft for between US$100 million and US £110 million he would pay me the US$2 million commission (which had previously been agreed) but that if I was able to negotiate a sale at above US$110 million, I could keep anything above that US$110 million. He also confirmed that if I could persuade Libya to invest US$20 million in Project Toushca my commission … in respect of this investment would be the US$1 million (which, as I have already stated, had been agreed previously).
I suspect that the Prince thought that the most that would ever be agreed for the plane was US$110 million and that it would be very difficult for me to achieve more than this; consequently he offered such sum as I could obtain in excess of this as a way of incentivising me to get the full US$110 million for him. I asked for written confirmation of the commission but the Prince insisted that his word should be enough and I did not press the matter as I had not had problems with receiving commission from the Prince previously and Mr Alaeddin had also assured me that the payment would be made when we had met in London."
- Mr Baker does not comment in terms on the alleged circumstances of the variation, but it is the Prince's position that he was not party to any relevant contract with Mrs Sharab.
- According to Mrs Sharab, she was the principal negotiator in negotiations for the sale of the aircraft. She states that the price of US$120 million was agreed for the sale. Two agreements for payment were signed. The first was made between the Prince and LAFICO and provided for the sale of the Airbus for US$70 million. The second is described as an agreement between the Libyan Agricultural Investment Company and one of the Prince's companies, which ran Project Toushca: it provided for the sum of US$20.7 million to be invested directly in Project Toushca and the sum of US$50 million (the balance of the price of US$120 million) to be paid to the Prince. Difficulties arose over the payment of the balance, the resolution of which included a settlement agreement in September 2005. Eventually, in August 2006, the Airbus was transferred to Libya and the balance of US$50 million was paid.
- Mrs Sharab states that in July 2003, after the sale of the aircraft had been agreed, the Prince reiterated his agreement to pay her commission, in the event US$10 million, in a telephone conversation with Mr Alaeddin in the presence of Mrs Sharab at Tripoli and then (after she was handed the phone by Mr Alaeddin) with Mrs Sharab.
- According to Mrs Sharab, when she was in London in August 2003 she was telephoned by the Prince, who told her that he had received US$70 million. She asked him to pay her 50% of her commission. He refused to do so but promised he would pay her commission in full after he had received US$120 million. She continues:
"We then went on to discuss where my full commission would be paid and I informed the Prince that the money should be paid into one of my bank accounts held in London. By this time, I had decided that I wanted this money to be paid into Dury's account in London [that is, the account of the offshore company which owns her London apartment] in order to ensure my daughter's future, for the reasons I have already set out above. The Prince said I should send him details of the account once he had received the remainder of the purchase price."
- Mr Baker does not address this alleged telephone conversation, but asserts that on Mrs Sharab's own evidence the Prince did not agree to her request that she be paid through her London bank account. He goes on to note that she sent faxes to the Prince requesting payment on four occasions in 2007. These requests were sent from Jordan but did not give bank account details in London nor elsewhere for the purposes of payment.
- In any event, the position is that Mrs Sharab has not been paid any of the commission she claims in these proceedings. A letter dated 19 October 2006 from the Prince's solicitors to Mrs Sharab's solicitors records his denial of any agreement to pay commission and also sets out the solicitors' understanding that "your client played no part in the ultimate sale of the aircraft in question, and there is no basis for any sum to be due to her".
The deputy judge's analysis
- The deputy judge's decision was reached within the framework of CPR 6.20 and 6.21 as they stood before the substitution of a new Part 6 with effect from 1 October 2008. Materially the same provisions are now to be found in CPR 6.36 read together with paragraph 3.1 of Practice Direction B supplementing Part 6. The appeal was conducted before us, however, by reference to the version of the rules in force at the time of the deputy judge's decision, and I shall adopt the same approach in this judgment.
- The deputy judge referred to a trilogy of House of Lords authorities as stating the modern law in this area: Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50, Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460, and Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438.
- The first issue was whether there was a "good arguable case" that the claim fell within one or more of the grounds set out in CPR 6.20(5) and (6). So far as material, those grounds (or gateways) apply where:
"(5) a claim is made in respect of a contract where the contract:
(a) was made within the jurisdiction;
(b) was made by or through an agent trading or residing within the jurisdiction;
(c) is governed by English law …
(6) a claim is made in respect of a breach of contract committed within the jurisdiction."
As to the standard of good arguable case, the deputy judge referred to Canada Trust v Stolzenburg (No.2) [1998] 1 WLR 547, 555, where Waller LJ stated that "good arguable case" reflects in this context that one side has a much better argument on the material available; and Cherney v Deripaska [2008] EWHC 1530 (Comm), where the discussion of later authorities casts no doubt on the correctness or usefulness, for present purposes, of the approach in Canada Trust.
- The deputy judge held that Mrs Sharab had established a good arguable case that the claim fell within CPR 6.20(5)(a) and (6), but rejected the case advanced under (5)(b) and (c).
- The second issue was whether the claim had a reasonable prospect of success. The deputy judge held that the existence of a reasonable prospect of success followed from his conclusions that there was a good arguable case.
- The third issue was whether the appropriate forum for the trial of the claim was clearly England and Wales. The burden lay on Mrs Sharab to show that it was. The Prince contended that it was not, and that Libya was the appropriate forum. The deputy judge found in favour of Mrs Sharab. He set out nine considerations to which he had had regard in reaching that conclusion. In summary, they were as follows:
i) First, the Prince's favoured forum, Libya, was not a jurisdiction in which a court might be able to exercise jurisdiction over him as of right, at least in relation to the subject-matter of the present dispute. The exercise of jurisdiction over him by the Libyan court would be just as "exorbitant" (in the sense used by Lord Diplock in Amin Rasheed) as the exercise of jurisdiction over him by an English court.
ii) Second, if Mrs Sharab were to pursue her claim in Libya, she would need to persuade that court to grant her permission to serve process on the Prince out of that jurisdiction. The Prince had resisted the present application on the basis that Libya was the appropriate forum, but it had not been submitted on his behalf that he would voluntarily submit to that jurisdiction. It might be that if he succeeded in resisting the present application on the basis that Libya was the appropriate forum, a Libyan court would not be tolerant of his contending otherwise; but that was not clear.
iii) Third, it was not suggested, and could not credibly be suggested, that it was not reasonable for Mrs Sharab to have started proceedings here and not to have started them in Libya or elsewhere. The initiative having been taken by her to start proceedings here and to incur the expense of so doing, nothing was achieved consistent with the interests of the parties and the ends of justice in depriving her of the advantage of that initiative and resulting in her having wasted time and costs.
iv) Fourth, there was nothing in the intrinsic nature of the dispute that favoured one forum over another. It was a relatively simple and straightforward contractual dispute, turning mainly on issues of fact. The judge rejected any suggestion that the trial of the action would engage any unusually difficult issues or any issues that of itself made this jurisdiction less appropriate than Libya.
v) Fifth, London was a convenient venue for Mrs Sharab, the Prince and Mr Alaeddin. The case would turn mainly on their oral evidence and their credibility. The documentary evidence was relatively limited. It was submitted for the Prince that the contention that Mrs Sharab did not broker the ultimate transaction "depends in large part" on the evidence of those involved in negotiations in Libya, principally government officials, who were not compellable in this jurisdiction but who would be subject to the Libyan courts. On the material before him, the deputy judge found that submission less than convincing. He also observed that no mention of a causation defence or the need to call Libyan government witnesses in support was made in Mr Baker's statements.
vi) Sixth, he rejected the submission for the Prince that the fact that he, Mrs Sharab and Mr Alaeddin were "all Middle Eastern" was relevant to the choice of jurisdiction. In so doing he referred to geographic, ethnic, cultural and religious considerations.
vii) Seventh, as to various connecting factors invoked, he accepted that the fact that Mrs Sharab had an arguable case that the contract was made here and the breach occurred here favoured the choice of this jurisdiction. In so far as Libya was the place of characteristic performance, that factor favoured Libya as a forum; but that was not to be taken as more potent than other factors.
viii) Eighth, he rejected the submission that in evaluating the appropriate jurisdiction much weight was to be attached to the fact that "the underlying transaction", namely the sale of the Airbus, had multiple connections with Libya, whereas connections with England and Wales seemed limited to the choice of law and arbitration venue in the settlement agreement. The alleged commission contract and the aircraft sale agreements were wholly separate transactions. They were interrelated to the extent that entitlement to commission pursuant to the former contract was predicated on conclusion of the latter agreements (and payment pursuant thereto); but apart from that factor, which was itself neutral in relation to the issue of choice of jurisdiction, there was nothing intrinsic to the aircraft sale agreements themselves that was of relevance to that choice.
ix) Ninth, on the issue of enforcement, he was unpersuaded by a submission for Mrs Sharab that her prospects of enforcing a judgment in her favour in Saudi Arabia would be poorer if the judgment were that of a Libyan court rather than a judgment of an English court. He was persuaded, however, that the ease of enforcement in this country was a factor clearly favouring this as the appropriate forum for the determination of Mrs Sharab's claim; and the enforceability of such judgment had obvious relevance if the Prince had assets here. In reaching that view, he accepted that there was no statutory basis for the recognition of a Libyan judgment in this country, and he considered that the prospects of Mrs Sharab being able to invoke successfully the common law jurisdiction to enforce a Libyan judgment in this country were at best theoretical.
- The final issue was whether the court should exercise its general discretion in favour of permitting Mrs Sharab to pursue her claim in this jurisdiction. The deputy judge's overall conclusion was that the interests of the parties and the ends of justice were consistent with her being permitted to do so. He therefore dismissed the Prince's application for the order sought under CPR Part 11.
The issues in the appeal
- The first contention on behalf of the Prince is that the deputy judge was wrong to find a good arguable case that the claim fell within CPR 6.20(5)(a) and (6): if the claim does not get through at least one of those gateways, the Prince's application under CPR Part 11 must succeed. Mrs Sharab defends the deputy judge's decision in respect of both gateways, whilst also accepting his decision in respect of the gateways on which he decided against her.
- The alternative contention for the Prince, if the decision in respect of CPR 6.20(5)(a) and/or (6) is upheld, is that the deputy judge was wrong to find that the appropriate forum is clearly England and Wales. Again, Mrs Sharab seeks to support the deputy judge's decision.
Contract made within the jurisdiction: CPR 6.20(5)(a)
- The way in which the case for Mrs Sharab is put under CPR 6.20(5)(a) is that an agreement to broker the sale of the Prince's aircraft (and also to obtain an investment in the Project Toushca agricultural project) was made orally between Mrs Sharab and Mr Alaeddin, acting with actual or apparent authority to make the agreement on behalf of the Prince, at their meeting at a restaurant in London on 25 August 2001. The agreement was ratified by the Prince in his telephone conversation with Mrs Sharab in August 2002. It was then varied, so as to agree a revised basis for commission, at the meeting between Mrs Sharab and the Prince on his aircraft in Libya in April 2003.
- The deputy judge was satisfied, on the material before him, that Mrs Sharab had a good arguable case that Mr Alaeddin had the Prince's actual authority to make the alleged contract; that the alleged contract was made and varied as maintained by her; and also that the telephone call in August 2002 could be taken as ratification by the Prince of Mr Alaeddin's authority to make the alleged contract. He stressed that he was making no determination on those issues and that the Prince might prevail at trial, but stated that at present her case seemed stronger than the Prince's to the contrary. He referred to her description of prior dealings between her and the Prince, together with related documents, as amounting to circumstantial evidence which provided credence to her case. The Cannes conversation, if accepted, was evidence that Mr Alaeddin had the Prince's actual authority to conclude the alleged contract on his behalf. The acceptance by Mr Alaeddin of many elements of Mrs Sharab's account of the circumstances of the alleged contract, as well as his less than categorical denial of any commission offer (he "did not recall" putting any such offer), stood as evidence which went some way to give the impression that Mrs Sharab had the better argument as to whether the alleged contract was made. Mrs Sharab's description of the subsequent telephone conversations and meeting with the Prince were not the subject of any specific comment by or on behalf of the Prince, and the description was detailed and credible. Her detailed account of negotiations for the sale of the aircraft and her involvement in them was backed by a substantial amount of corroborating documents which were not only consistent but also very supportive of her having a financial interest in the success of the negotiations. As to the alleged variation in Libya, it involved a potential increase in commission but did not alter Mrs Sharab's obligations.
- Mr Pymont submitted that the deputy judge was wrong to reach that conclusion. If there was a contract at all, it did not arise until the meeting in April 2003 when, on Mrs Sharab's case, agreement was reached that she would receive a commission of US$10 million in the event of the Airbus being sold for US$120 million. Prior to that, what Mrs Sharab had to do in order to earn a commission was entirely at large (it had not even been decided which aircraft was to be sold), and the Prince was under no obligation to use her as his representative. Alternatively, if a contract was made at the meeting in London in August 2001, it was no more than a limited agreement that Mrs Sharab would act as the Prince's representative in relation to the sale of one of his aircraft when he wanted her to do so; and what was agreed in April 2003 in relation to the commission of US$10 million was so different in substance as to amount to a renegotiation and replacement of the original agreement rather than a variation of it. Mr Pymont accepted that a contract made in London and merely varied by later discussions in Libya would be treated as a contract made within the jurisdiction, but he submitted by reference to BP Exploration Ltd v Hunt [1976] 1 WLR 788, 797H-798E, that the position would be different if the discussions in Libya had the effect of substituting a fresh agreement or if the contract was substantially made in Libya.
- As part of his submissions in relation to this gateway, Mr Pymont also argued that it is not enough for a claimant to show that he has, technically, brought himself within the relevant rule; he must also show that his case is within the spirit of the rule. He cited a passage in Dicey, Morris and Collins, Conflict of Laws, 14th ed., vol.1, para.11-148, which sets out a number of "cardinal points" that have been emphasised in the decided cases. The first is that the court ought to be cautious in allowing process to be served on a foreigner out of England. The fourth, specifically relied on here, is that "the court will refuse permission if the case is within the letter but outside the spirit of the Rule". From the authorities cited in support of the fourth point, Mr Pymont referred us to the judgment of Goulding J at first instance in Beck v Value Capital Ltd (No.2) [1975] 1 WLR 6, 15G-H.
- In my judgment, the deputy judge was right to find a good arguable case that there was a contract made in London and varied in Libya, as claimed by Mrs Sharab. On the evidence before the court, what happened in Cannes prior to the meeting in London did not give rise to an agreement: it got no further than the Prince indicating what he wanted Mrs Sharab to do and saying that he would send Mr Alaeddin to London to agree a contract with her. At the August 2001 meeting in London between Mrs Sharab and Mr Alaeddin, however, sufficient was agreed to create a binding contract. She agreed to act for the Prince in trying to secure a sale of one of the Prince's aircraft to Libya, and it was agreed in return that she would receive a commission of US$2 million if a sale took place. It did not matter that at that stage it was not known which of the two aircraft could be sold or at what price: what Mrs Sharab had to do in order to earn her commission was to secure a sale of either one of the two, at a price that would necessarily have to be acceptable to both seller and purchaser. Further, the deputy judge was right to find a good arguable case that Mr Alaeddin had authority to act on behalf of the Prince in making the August 2001 agreement. The August 2002 telephone conversation between Mrs Sharab and the Prince can be relied on both as providing further evidence of that authority and, if necessary, as a ratification of the earlier agreement.
- If such an agreement was made in London in August 2001, the April 2003 discussions in Libya gave rise in my view to a variation of that agreement rather than to its replacement by a new agreement. By that time Mrs Sharab had already, on her account, done work under the August 2001 agreement, arranging a meeting between the Prince and the President and getting things to the point where the Prince had gone to Libya with both aircraft and the President had expressed his preference for the Airbus. What the Prince and Mrs Sharab were discussing at that point was the price to be negotiated for the sale of the Airbus. A change to the previously agreed commission was agreed between them, evidently so as to provide an incentive to Mrs Sharab to secure a price at the top end of the range that the Prince was seeking. The variation did not stand on its own or involve the discharge of the earlier agreement and the substitution of a new one. It was a simple, even if potentially very significant, variation of the agreement previously made in London.
- I conclude that Mrs Sharab's claim is in respect of a contract made within the jurisdiction and falling within CPR 6.20(5)(a) even though it was subsequently amended outside the jurisdiction. That analysis accords with the reasoning of Kerr J in BP Exploration Ltd v Hunt (above), at 798A-C, in relation to the predecessor rule, RSC Order 11, rule 1(f)(i):
"I think that the correct analysis is that the contract was made in London and amended in Dallas; not that it was made partly in London and partly in Dallas, or elsewhere. The 1967 amendment could not stand alone; it merely amended certain provisions of the 1960 agreement. The position would, of course, have been different if the 1967 amendment had operated as a discharge of the 1960 agreement and substituted a fresh agreement. The foregoing analysis is also in accord with what Denning LJ appears to have thought in Entores Ltd v Miles Far East Corporation [1955] 2 QB 327, 334, where he preferred the view that an agreement made in one country and amended in another should be regarded as not having been made in the latter country."
Kerr J went on to say that, even if that analysis was wrong, the contract in question had been "substantially" made within the jurisdiction; but it is unnecessary to look any further at that aspect of his reasoning.
- I do not accept Mr Pymont's submission that in order to get through the gateway a claimant has to bring himself within the "spirit" as well as the letter of the rule. The passage cited from Dicey, Morris and Collins is not directed specifically at the application of the gateways but is a general passage concerning the assumption of jurisdiction. Similarly, the observations of Goulding J in Beck v Value Capital Ltd (No.2) about the spirit of the rules are in my view directed not to whether the claim gets through the gateway but to the exercise of the court's discretion if it does get through. The judgment of the Court of Appeal in Beck, at [1976] 1 WLR 572 and reported more fully at [1976] 2 All ER 102, does not refer expressly to Goulding J's observations but is wholly consistent with the view I have expressed. In any event, on the basis that there is here a good arguable case that the alleged agreement was made in London, as I have held, I do not accept that the claim is otherwise so lacking in connection with London that it is contrary to the "spirit" of the relevant gateway to treat it as an agreement made within the jurisdiction.
- It follows that the deputy judge was correct to find that the claim fell within CPR 6.20(5)(a).
Breach of contract committed within the jurisdiction: CPR 6.20(6)
- Mrs Sharab's argument under CPR 6.20(6) rests on her evidence concerning the August 2003 telephone conversation in which she requested the Prince to pay the commission into one of her bank accounts in London (see [16] above). The effect of that conversation is said to have been that payment was due in London and that failure to pay the commission therefore amounted to a breach committed within this jurisdiction.
- The deputy judge accepted that argument. He stated that establishing a breach committed within the jurisdiction entails establishing that the contract required performance of the relevant duty within the jurisdiction and not elsewhere, as illustrated in several cases where the breach consisted of the failure to pay money: Bell & Co v Antwerp London and Brazil Line [1891] 1 QB 103, The Eider [1893] P 119, Comber v Leyland and Bullins [1898] AC 525, and Cuban Atlantic Sugar Sales Corporation v Compania de Vapores San Elefterio Limitada [1960] 1 QB 187. It was common ground that there was no express term of the alleged agreement, at least initially, as to where payment of the commission was to be made. The submissions turned on the effect of the August 2003 conversation. Mrs Sharab's account of that conversation was detailed and credible. The deputy judge expressed his conclusion as follows:
"85. I conclude that Mrs Sharab has a good arguable case that, arising from the August 2003 telephone conversation with the Prince, the place of payment of her commission was agreed as London and not elsewhere and that the alleged contract was further varied so as to impose that obligation. An alternative argument open to her and of like strength is that it was an implied term of the alleged contract and/or the alleged contract as varied that her commission would be paid at a place to be nominated by her and that in the August 2003 telephone conversation London was nominated by her. On either argument, breach consisting of non-payment occurred within this jurisdiction."
- Mr Pymont rightly stressed that, for the gateway to apply, this jurisdiction must be the only place where performance is required by the contract. In the Cuban Atlantic Sugar Sales Corporation case, for example, the contractual obligation was to deliver to one safe port in the United Kingdom at the plaintiffs' option, but the ship sank before the option could be declared. It was held that, as the contract could be performed in Scotland or Northern Ireland, as well as in England, until a port in England had been nominated it could not be said that it was to be performed within the jurisdiction. Mr Pymont submitted that the prima facie position in the present case is that the Prince was entitled to pay the alleged commission anywhere (or anywhere he might find Mrs Sharab), and the judge's finding that the Prince became subject to a contractual obligation to pay the commission only in London is unsustainable on the evidence. Mrs Sharab's account of the August 2003 conversation is that she informed the Prince that the money should be paid into one of her bank accounts held in London, i.e. she requested payment in that way. She does not say that the Prince agreed to her request. She does state that the Prince said she should send him details of the account once he had received the remainder of the purchase price; but she does not say that she sent him any bank account details, and Mr Baker notes that, although she subsequently sent the Prince a number of faxes requesting payment, at no time did she give any such details. That evidence, submitted Mr Pymont, does not establish any contractual obligation to pay Mrs Sharab in London, on either of the two bases relied on by the deputy judge.
- On this issue I consider Mr Pymont to have the better of the argument. First, I do not accept that the evidence before the court is sufficient to establish a good arguable case that London was agreed as the place of payment of the commission or that the August 2001 agreement was varied so as to impose an obligation to pay the commission in London. On Mrs Sharab's account of the August 2003 conversation, there was a discussion of how payment could conveniently be effected but the Prince did not accept an obligation to pay the commission in London and not elsewhere. He went no further than impliedly to indicate, by telling her to send him details of the account, a willingness to pay to a bank account nominated by her. In any event, since no consideration was given by Mrs Sharab, I do not see how, even if an agreement as to place of payment had been made, it could have taken effect as a contractually binding variation of the August 2001 agreement.
- As to the deputy judge's alternative basis, I do not accept that a term can be implied into the August 2001 agreement to the effect that payment would be at a place nominated by Mrs Sharab. No such implied term was pleaded and I can see no basis for its implication, either to give business efficacy to the agreement or otherwise. In any event, what was said by Mrs Sharab in the August 2003 conversation did not amount to the nomination by her of London as the place of payment; nor was any particular bank account ever nominated by her as the account into which payment should be made.
- Accordingly, I respectfully disagree with the deputy judge's conclusion on CPR 6.20(6) and take the view that Mrs Sharab has failed to establish a good arguable case that the claim gets through this gateway.
- That view is, however, far from fatal to Mrs Sharab's overall case. The deputy judge's finding, which I have upheld, that the contract was made within the jurisdiction and that the claim therefore gets through the CPR 6.20(5)(a) gateway is sufficient to take one through to consideration of appropriate forum. The fact that I have taken a different view on the application of CPR 6.20(6) is relevant only in so far as it affects the factors taken into consideration by the deputy judge in reaching his conclusion that the appropriate forum is clearly England and Wales.
Appropriate forum: the Prince's stance as to submission to the jurisdiction in Libya
- Before I undertake a more general examination of the deputy judge's conclusion on forum, I need to deal with the stance that the Prince has adopted on the specific question of his submission to the jurisdiction of the Libyan courts.
- The position before the deputy judge was that no undertaking was given or offered on behalf of the Prince that he would submit to the jurisdiction of the Libyan courts in the event that Mrs Sharab brought a claim in Libya in relation to the issues she has sought to raise by her claim here. The absence of any such undertaking played a significant part in the argument before the deputy judge and in the reasons given by him for his decision to allow Mrs Sharab's claim to proceed in this jurisdiction. It also played a significant part in the arguments on behalf of Mrs Sharab in seeking to uphold the deputy judge's decision on the appeal to this court. In the course of his submissions during the hearing of the appeal, Mr Pymont raised the question of taking instructions from the Prince as to whether he would be prepared to give an undertaking. Whilst there is some doubt about what precisely was said by him and by the court (the parties have different recollections of the matter and there is no transcript of the exchanges), the court made clear that it was minded to decide the case on the evidence before it; but there was no application to adduce further evidence and no ruling on the issue. By the conclusion of the hearing of the appeal it remained the position that no undertaking had been given or offered on behalf of the Prince. Shortly after the hearing, however, Mr Pymont sent an email to the court stating that he now had instructions on behalf of the Prince to give an undertaking to the court that "should the Claimant bring proceedings in Libya in relation to the issues she has sought to raise by her claim in this jurisdiction, he will submit to the jurisdiction of the Libyan courts in respect of those proceedings". In the light of that email the court directed and received written submissions on (i) whether it should accept such an undertaking at this stage of the proceedings and (ii) if such an undertaking was accepted, its effect on the issues in the appeal.
- It is necessary for the court to decide, in the light of the submissions received, whether to accept an undertaking on behalf of the Prince at this late stage in the proceedings.
- Mr Craig, on behalf of Mrs Sharab, submits strongly that the court should decline to accept such an undertaking. He draws attention to relevant features of CPR 52.11, namely that an appeal will normally be limited to a review; that, unless it orders otherwise, an appeal court will not receive evidence which was not before the lower court; and that a party may not rely on a matter which was not contained in his appeal notice unless the appeal court gives permission. He submits that permission was in effect refused at the hearing of the appeal but should in any event be refused now. The undertaking should be treated as a matter of evidence, since it is the fact that the undertaking is being offered which is relied upon on behalf of the Prince. But the Prince had several opportunities to put in this evidence in the proceedings before the deputy judge as well as in the notice of appeal and at the hearing of the appeal (though its admission in the appeal would have been opposed). Although Ladd v Marshall principles do not apply with the same stringency under CPR 52.11, they retain considerable force; and the Prince's "application" (there is no formal application as required by the rules) would fail to meet the first test in Ladd v Marshall since the undertaking could and should with reasonable diligence have been offered at the time of the hearing before the deputy judge.
- Mr Craig submits further that, if the appeal is limited to a simple review, an undertaking given at this stage could have no effect on whether the deputy judge's decision, made in the absence of such an undertaking, should be upheld. If, on the other hand, the court went further and sought to determine whether the deputy judge's decision would have been the same if there had been an undertaking from the Prince at that time, there are numerous issues that would have to be given further consideration, and the parties would in fairness have to be given a proper opportunity to marshal their arguments and to be heard afresh (and, in Mrs Sharab's case, to consider whether to serve a respondent's notice) in the light of the changed circumstances. This would result in a new and very different hearing from which occurred at first instance. The interests of justice do not require such a departure from well-established principles governing the conduct of appeals. Complaint is also made about the Prince's tactics in this case, the lapse of time that has already occurred and the further delay that would be caused if an undertaking were accepted and the appeal had to be re-opened for further hearing.
- For the Prince, Mr Pymont submits that the court should view the offer of an undertaking in a very different light. The issue arises in the context of the Prince's submission that Libya is clearly the more appropriate forum. That is the context in which Mrs Sharab has taken the point that the Prince has not agreed to submit to the jurisdiction of the Libyan courts. The Prince's submissions in answer to this point have been (a) that he would in practice be obliged to submit to Libyan jurisdiction because, on Mrs Sharab's own evidence, he has assets in Libya which he would need to protect; (b) he could hardly hope to argue in Libya that another country was a more appropriate jurisdiction, having consistently submitted to the courts in England on his current application that Libya is the appropriate jurisdiction; and (c) Mrs Sharab has never suggested that she would in fact commence or consider proceedings in Libya if the Prince were to submit to that jurisdiction and if her claim in England were dismissed pursuant to the Prince's application. Mrs Sharab's point is therefore a hypothetical one. It is submitted that no defendant should be required to give an undertaking to meet an entirely hypothetical case, and that no inference can properly be drawn against a defendant who has not given an undertaking in such circumstances. The reality is that the Prince will have to submit to the jurisdiction of the Libyan courts even without a formal undertaking to that effect; and if Mrs Sharab contends that a more formal submission from the Prince is required, she needs to give evidence that she would or might want to rely on it in proceedings in Libya.
- Moreover, submits Mr Pymont, the Prince's submission before the deputy judge was that if he were to reject the approach summarised above and decide that it was important for the Prince to make a formal commitment to submit to the Libyan courts, the Prince should be given an opportunity to do so: the court has power to impose a term on a defendant challenging the jurisdiction and the suggestion made on the Prince's behalf could have achieved a similar objective. The deputy judge did not rule on that submission, save implicitly to reject it. On appeal it was submitted to this court, too, that it should allow the Prince time to give an undertaking if that were considered material to the exercise of discretion. The understanding derived from the exchanges during the hearing, however, was that that course would not be followed and that the Prince must adduce his full case on the appeal, that is to say that if he were minded to give an undertaking he should do so immediately because he would not be given another opportunity. Instructions were therefore taken, and that led to the undertaking offered to the court in the email from counsel.
- In the circumstances Mr Pymont submits that the undertaking should be taken into consideration in any exercise of the court's discretion. If the undertaking is taken into consideration, certain of the judge's reasons cannot be sustained as they are materially based on his doubts as to whether the Prince would submit to the jurisdiction of the Libyan courts.
- In my judgment, the court should decline to accept any undertaking on behalf of the Prince at this late stage of the proceedings. I do not regard the issue as having been determined by the exchanges that took place during the hearing of the appeal; and, despite the informality of the procedure adopted, I am prepared in the circumstances to treat counsel's email as an application for the court to accept the undertaking now offered. There are, however, strong reasons of substance for refusing the application:
i) The appeal should proceed in the normal way as a review of the deputy judge' decision. It is plain that the interests of justice do not require a rehearing.
ii) The normal approach on a review is to consider whether the decision of the lower court was or was not wrong on the basis of the material that was before that court. I refer to "material" so as to include not only the evidence placed before the court but also any undertaking given or offered to the court: contrary to Mr Craig's submission, I doubt whether the giving or offer of an undertaking through counsel can strictly be regarded as a matter of evidence.
iii) The court has a discretion whether to receive fresh evidence or to permit a party to rely on a matter not contained in the notice of appeal. It seems to me that the discretion should apply to the acceptance of an undertaking in much the same way as to the admission of fresh evidence properly so called. The court must of course seek to give effect to the overriding objective of doing justice, but in that respect the pre-CPR cases, including Ladd v Marshall, remain of relevance and indeed of powerful persuasive authority: see, for example, Hamilton v Al-Fayed (No.4) [2001] EMLR 15, at [10]-[13], and Al-Koronky v Time-Life Entertainment Group Limited [2006] EWCA Civ 1123, at [13]-[15].
iv) The Prince had the clearest of opportunities to give or offer an undertaking at the time of the proceedings before the deputy judge. The explanation given by Mr Pymont shows that a considered decision was taken not to do so. It was decided instead to submit that no such undertaking should be required and that no adverse inference should be drawn from the omission to offer one. It was open to the Prince to take that position, but he must have appreciated the risk that it might be rejected by the court and that no subsequent opportunity might be afforded for an undertaking to be given. That is the position in which he found himself when the deputy judge ruled against him. Even then he adhered to the same position for the purposes of the appeal, allowing the appeal to proceed on that basis until the conclusion of the hearing and seeking to change his position only after the hearing as a result of the exchanges that had taken place during the hearing. I do not think that the Prince should be permitted to reverse, so late in the day, a tactical position deliberately adopted for the purposes of the proceedings below and the appeal.
v) Moreover, the position adopted by the Prince on the question of an undertaking had an important effect in shaping the arguments before the deputy judge and on the appeal. To allow an undertaking to be given now might not have as broad an effect on the arguments as suggested by Mr Craig, but it would produce a situation materially different from that considered by the deputy judge and would alter the character of the case sufficiently to make it necessary, in the interests of fairness, to give the parties an opportunity to address fresh argument to the court, with a strong likelihood that a further hearing would be needed. The exercise in which this court would then be engaged would strictly remain one of review of the deputy judge's decision, but the difficulty of determining the impact of the changed circumstances on the deputy judge's decision would make it in practice very similar to carrying out a fresh exercise of discretion. I do not think that such a departure from the normal approach is at all appropriate in this case. The further delay that would be caused to the ultimate determination of the appeal is an additional factor telling against it.
- Accordingly, I take the view that the court should not accept the undertaking now offered and that the deputy judge's conclusion on appropriate forum should be reviewed on the basis of the material that was before him.
Appropriate forum: the deputy judge's decision
- The deputy judge's reasoning in support of his conclusion that England and Wales is clearly the appropriate forum has been summarised at [24] above. Among the many detailed criticisms that Mr Pymont made of that reasoning, the following matters are the most important.
- Mr Pymont submitted that the proper starting-point for consideration of appropriate forum in this case is that any connection with this jurisdiction is of the most tenuous and accidental kind. The only events that took place in England – the alleged agreement in August 2001 and two telephone calls from the Prince in August 2002 and August 2003 – occurred by reason of Mrs Sharab's fortuitous presence here and not because England had any significance to the material course of events. The "real" agreement relied on for her claim is the April 2003 variation made in Libya. Further, the alleged agreement is not governed by English law and does not require performance in England. Most of the documentation disclosed is in Arabic and any additional documentation is likely to be in Arabic and located in Libya. The potential witnesses are all Arabic speakers and none of them has English as their first language. The Prince would want to call the Libyan officials involved in the negotiations for the sale of the Airbus, and they could only be compellable in Libya. Libya is also a convenient place for the witnesses who do not reside there to attend trial. On the expert evidence (which I have not thought it necessary to summarise, because the conflict of expert opinions was unresolved and the evidence was not relied on by the deputy judge as a factor telling either way) there could be no material objection to the ability of the Libyan courts to provide a suitable remedy or a fair trial. On Mrs Sharab's own evidence the Prince has personal assets in Libya which would be available for enforcement of any judgment in her favour.
- In Mr Pymont's submission, the deputy judge failed to register this fundamental point about lack of substantial connection with England as opposed to Libya and was, in particular, led centrally into error in his seventh and eighth reasons, in which he assumed a greater connection with England than was warranted and he wrongly ruled out of consideration everything that happened in Libya. Thus he was wrong to dismiss the significance of the underlying transaction, namely the sale of the Airbus: the Prince has denied Mrs Sharab's instrumentality in obtaining the sale, upon which, it is submitted, her commission depended; and Libya is obviously the appropriate forum for the trial of that issue.
- Mr Pymont further submitted, in relation to the second and ninth of the deputy judge's reasons, that the deputy judge was wrong to attach weight to the fact that the Prince had not agreed to submit to the jurisdiction of the Libyan courts. As explained above in the context of the undertaking offered to this court, the Prince's position was that there was no occasion to offer to submit to the Libyan jurisdiction in the absence of any suggestion by Mrs Sharab that she would wish to commence proceedings there if her claim here was dismissed on jurisdictional grounds. He would also need to submit to the Libyan jurisdiction in order to protect the personal assets that, on Mrs Sharab's own evidence, he had in Libya. Mr Pymont accepted that an English judgment would be more readily enforceable, but this was often the case and did not mean that the jurisdiction of the English courts was necessarily to be preferred. In the absence of evidence as to where the Prince's assets were located (other than those in Libya), the point was of no practical significance for this case. Moreover a Libyan judgment would itself be enforceable in England by means of an action on the judgement at common law, and the English judgment would then be enforceable in other jurisdictions like any other English judgment.
- Mr Craig, on the other hand, supported the reasons given by the deputy judge and submitted that there was no basis for this court to interfere with the deputy judge's conclusion. He said that the deputy judge did not put a foot wrong.
- Subject to one point, I agree that the deputy judge's assessment was sound. The one point arises out of my finding that Mrs Sharab does not have a good arguable case that there was a breach of contract committed within the jurisdiction. It follows that the deputy judge was wrong to place reliance on that factor, as he did as part of his seventh reason, and that by so doing he overstated the claim's connections with England. This was not, however, a major element in his process of reasoning, and the error in relation to it does not undermine his overall assessment. In my judgment, the remainder of his reasons are not open to serious criticism.
- I do not accept that the links with this jurisdiction are as tenuous and accidental as Mr Pymont contended or that the deputy judge was therefore wrong not to take that as his starting point. The evidence is that Mrs Sharab spends some three months a year in her London residence, conducts some of her business from London and has had several meetings with Mr Alaeddin there: it can properly be regarded as more than pure chance that the Prince sent Mr Alaeddin across to meet her there in August 2001 and that the alleged agreement was made there. Even if the Prince does not have direct ownership of assets in London, he has substantial business or investment interests there. It was also open to the deputy judge to find, as he did in his fifth reason, that London was a convenient venue for Mrs Sharab, the Prince and Mr Alaeddin and that the case would turn mainly on their oral evidence and their credibility. At the same time he gave valid reasons for rejecting, as less than convincing, the submission that a trial in Libya was strongly favoured by considerations of language and by the location and compellability of witnesses involved in the negotiations for the sale of the Airbus: the issue of causation, that is whether Mrs Sharab had done enough to earn her commission, was not raised with sufficient particularity as a potential defence to sustain the points made on behalf of the Prince in relation to this aspect of the case.
- The deputy judge was also entitled to take into account, as he did in his second reason, the absence of any agreement by the Prince to submit to the jurisdiction of the Libyan courts. In so doing he impliedly and rightly rejected the contention that, unless and until Mrs Sharab made clear that she would if necessary commence proceedings in Libya, the question of an undertaking to submit to Libyan jurisdiction was hypothetical and no adverse inference should be drawn from the failure to give one. It was the Prince's case that Libya was the appropriate forum, and it was therefore for him to show that the Libyan courts would be able to exercise jurisdiction against him. In the absence of an agreement to submit to the jurisdiction, he had to fall back on the argument that it would be necessary for him to submit to the jurisdiction in order to protect his personal assets in Libya and/or that the Libyan court would not be likely in the circumstances to accept a submission on his behalf that Libya was not an appropriate jurisdiction. As to those points, however, the evidence before the court does not establish that he has personal assets in Libya (and Mrs Sharab's witness statement should not be read as a concession that he does); and, as the deputy judge said, it is not clear what reaction the Libyan courts would have to submissions on appropriate forum. Accordingly, the absence of an agreement to submit to the jurisdiction of the Libyan courts is a factor of significance.
- The same points affect the criticisms made of the deputy judge's ninth reason. It was common ground before us that a judgment obtained in Libya could be enforced in England by means of an action on the judgment at common law provided that the Prince submitted to the jurisdiction of the Libyan court: see Dicey, Morris and Collins, Conflict of Laws, 14th ed., vol.1, rule 35(1) and rule 36, at paras 14R-018 et seq. The proviso concerning submission to the jurisdiction (rule 36, third case) is important, since there is no basis on which any of the other cases in rule 36 could plausibly be said to apply. It follows that, unless it can be said with confidence that the Prince would submit to the jurisdiction of the Libyan court, there can be no assurance that a Libyan judgment would in practice be enforceable in England. In those circumstances the deputy judge was correct to state that the prospects of Mrs Sharab being able to invoke successfully the common law jurisdiction to enforce a Libyan judgment in this country were "at best theoretical" and to contrast this with the ease of enforcement in this country of an English judgment.
- The enforceability of a judgment is an advantage on which a claimant is entitled to rely and which can, in an appropriate case, be decisive: see the decision of the Court of Appeal in International Credit & Investment Company (Overseas) Ltd v Sheikh Kamal Adham [1999] I.L.Pr. 302, as considered and applied by Tugendhat J in Inter-Tel Inc v Ocis Plc [2004] EWHC 2269 (QB) at [22]-[25]. In the present case the deputy judge was entitled to treat the enforceability of an English judgment as a factor clearly favouring England as the appropriate forum. It is true that he went on to say that the enforceability of such a judgment had obvious relevance "if the Prince has assets in this country", whereas the existing evidence does not go so far as to establish that the Prince does have personal assets (as opposed to business or investment interests) here. But I do not accept that this deprives the point of all practical significance, since there must be a real possibility that relevant assets can be identified for the purposes of enforcement. Account should also be taken of the status and enforceability of an English judgment elsewhere in the world. Looking at the position overall, I consider that the judge was right to regard an English judgment as offering Mrs Sharab a clear advantage as compared with a judgment of the Libyan court.
- I do not think it necessary to deal expressly with any of Mr Pymont's other criticisms of the deputy judge's reasoning. In my view, none of them has any force to it.
- In Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460, at 465F-G, Lord Templeman observed that the solution of disputes about the relative merits of trial in England and trial abroad is pre-eminently a matter for the trial judge, and that "[a]n appeal should be rare and the appellate court should be slow to interfere". I am far from persuaded that the present case is an appropriate one for interference by the appellate court. On the contrary, the deputy judge undertook a careful and detailed analysis of the relative merits of a trial in England and a trial in Libya, and I am satisfied that the conclusion he reached was properly open to him. I see no basis for an independent exercise of discretion or evaluation by this court.
Conclusion
- I would therefore dismiss the appeal.
Lord Justice Rimer :
- I agree.
Lady Justice Arden :
- I also agree.
