Summary
The case was concerned with a company which was registered in 1872 under the Companies Act 1862. The company was incorporated in England with a view to doing business in India. After the Indian independence had been declared in 1947, the company remained an English company.
The claimants, former company directors, brought proceedings in England, alleging that the defendant, company’s director, along with the other defendants engaged in a series of illegal forgeries which intended to affect the ownership and control of the board. They further claimed that their resignation letters and signatures were forged, and as a result a number of decisions of the board were void and illegal. The proceedings were initiated in England on the basis of Article 22(2) of Brussels I.
The English High Court assumed jurisdiction. An injunction was granted, restraining the managing powers of the first defendant, Mr Bhattar. An appeal was made by Mr Bhattar.
On 11th Nov 2009, the Court of Appeal allowed the appeal. Sir John Chadwick held:
“38 In the absence of authority which compels a different conclusion, I would hold that it is unnecessary—and wrong—to construe the words “regardless of domicile” in art.22 as having any application to a case where the person to be sued is not domiciled in a Member State. I can see no reason why the Council of the European Union should be taken to have intended, by those words in the Judgments Regulation , to confer on the courts of a Member State a jurisdiction in respect of persons not domiciled in any Member State which those courts would not otherwise have under their own national law. […]
[…]
46 There are […] claims for declarations in the present case that the purported forfeiture of shares, the allotment of shares to Namokar, resignations from and appointments to the board of directors and the change in company secretary and registered office are void, a claim (in the alternative) for relief from forfeiture and a claim to rectify the register of members. Those claims are properly brought against the Company in the English court (under article 22(2) – if not under article 2 - of the Judgments Regulation); and, if I were wrong in the conclusion which I have reached that article 22 does not found jurisdiction in respect of a person not domiciled in any Member State, could (on the authority of Speed Investments) be properly brought in the English court under article 22(2) against Namokar and the new directors. But, as I have sought to explain, on a proper understanding those claims are not claims made against Mr Bhatter.” Chouldhary v Bhattar [2009] EWCA Civ 1176 [46].
Lord Justice Stanley Burnton agreed and went on to stated:
“On the issue of permission to serve out of the jurisdiction, as appears from my Lord's judgment, the assets of the Company are in India; its affairs are subject to the jurisdiction of the courts in India; the events that gave rise to this litigation took place in India; and the individual parties, the witnesses and evidence are in India. It is obvious that the issues in these proceedings should be tried in India. When they have been determined, it may conceivably be necessary for consequential orders to be made in this country in respect of the Company. As it is, permission to serve out is inappropriate.” Chouldhary v Bhattar [2009] EWCA Civ 1176 [71]