EUPillar Alliance Bank JSC v Aquanta Corporation & Others [2011] EWHC 3281 (Comm)

Summary

The claimant, Alliance Bank, was a large Kazakhstan bank. There were multiple defendants. The defendant had allegedly conspired causing, through a dishonest scheme, a significant damage of over US$1.1 billion to the claimant. There were a series of loan agreements, including English law and English jurisdiction clauses. Criminal proceedings were started in Kazakhstan. Civil proceedings were initiated by the claimant in England. An application for service the proceedings out of jurisdiction was approved by Mr Justice Teare. The defendants challenged the jurisdiction of the English court. The challenge was upheld by the High Court, and affirmed by the Court of Appeal. In this context, the issue of applicable law was briefly considered, but could not be resolved at this stage. Mr Justice Burton held: “37 In order to decide what the proper law of the tort is, the first question is, as always in recent times, whether the issue is governed by the Private International Law (Miscellaneous Provisions) Act 1995 (“the 1995 Act”) or by Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (“Rome II”). The recent decision of the European Court in Deo Antoine Homawoo v GMF Assurances SA [Case C-412/10] is very concise. It concludes that a national court is required to “apply the Regulation only to events giving rise to damage occurring after 11 January 2009” . But this of course does not help as to whether the date is the date when the damage is caused or whether it is the date of the event which subsequently, possibly years later, caused the damage, and if so how the court is to assess which event is the relevant one. […]. […] 40 Thus the rival contentions would be: i) By reference to s11(1) of the 1995 Act – the country in which the events constituting the tort or delict in question occur – the Defendants would say Kazakhstan, while the Claimant would submit that s11(2) applied by reference to “elements of those events occurring in different countries” . ii) By reference to s11(2) the Claimant asserts, but subject to its reliance on s12 , Cyprus, as being the place where the property (the STRIPS) was when it was damaged (removed from the custody account). iii) By reference to s11(2)(c) – the law of the country “in which the most significant element or elements of those events occurred” – the Claimant would assert Cyprus or Liechtenstein (the home of the Fifth Defendant) where the Offshore Companies were managed, and the Defendants would say Kazakhstan. iv) The Claimant would howevver submit that s12 of the Act – “displacement of general rule” – that English law was substantially more appropriate , by virtue of English law being the mechanism of the fraud effected by the Loan Agreements and the Guarantees; […]. v) If Rome II applies, then, under Article 4(1) , it would appear that Cyprus law would apply as being the law of the country in which the damage occurs , although the Defendants would assert Kazakhstan. vi) If Article 4(2) , referred to in paragraph 38, applies, then that would be Kazakhstan, as between the Claimant and some of the Defendants, but it is, it seems, an unanswered question as to whether Article 4(2) applies at all where more than one person is claimed to be liable and does not share the habitual residence of the person sustaining damage. vii) Then, in relation to Article 4(3) referred to in paragraph 38(i) above, the Claimant would assert that it is clear from all the circumstances of the case that the tort is manifestly more closely connected with English law, whereas the Defendants would assert Kazakh law. 41 It seems clear to me that I cannot decide this question without a full understanding of the facts. At the moment, I would regard it as likely that Cyprus law is the same as English law […].” [37, 40 & 41] The difficulties were acknowledged by the Court of Appeal as well. (See [2012] EWCA Civ 1588 [90]).