The importance of expert evidence when navigating issues of jurisdiction

We have previously written two articles (available here, and here) on the decision of Mr Justice Jacobs in Magomedov and others v TPG Group Holdings (SBS) LP and others, which as handed down in October last year.

This third and final article on this decision will look at the critical need for expert evidence when navigating issues of jurisdiction in interim applications. This need is felt particularly acutely by parties bringing an application ex parte.

Our first article in this series dealt with the background to this decision in some detail, but briefly, the Applicants (the Claimants in the Magomedov proceedings) issued without notice applications for permission to serve an application for Norwich Pharmacal relief (the “NP Application”) out of the jurisdiction and by alternative means on two Respondents in Liechtenstein (the “Liechtenstein Respondent”) and in Dubai.

Permission was granted on the papers by Order of Mr Justice Foxton (the “Service Order”), and so the Applicants served the NP Application by email on solicitors acting for each Respondent in those jurisdictions. The application was also served on a third Respondent, a UK company, by post.

The Liechtenstein Respondent proceeded to challenge the English Court’s jurisdiction seeking to set aside part of the Service Order. It engaged Lichtenstein counsel to provide an expert opinion on the legality of the Service Order and the draft order for Norwich Pharmacal relief (the “NP Order”) in Liechtenstein. The Applicants obtained their own expert opinion on the same issues, in response.

The expert for the Liechtenstein Respondent submitted that (i) service of the application by email on solicitors is not permitted in Liechtenstein (which meant the Service Order contravened CPR 6.40(4)); and (ii) that disclosure of the material sought by NP Application could constitute a criminal offence under Liechtenstein law.

Furthermore, both the expert for the Liechtenstein Respondent, and the expert for the Applicants, agreed that direct enforcement of any order made by the English court in Liechtenstein was uncertain (at its highest), or not possible (at its lowest). This is due to the absence of an enforcement treaty between the UK and Liechtenstein.

As such, the Liechtenstein Respondent argued that the Norwich Pharmacal application, if granted by the English court, would serve no useful purpose: it was not capable of being enforced in Liechtenstein, and in any event compliance with it risked committing a criminal offence in Liechtenstein.

The Decision

Mr. Justice Jacobs, upon review of the expert evidence, agreed with the expert for the Liechtenstein Respondent. He concluded that:

1. The paragraph of the Service Order granting permission to serve the NP application by email on local solicitors is contrary to Liechtenstein law, and therefore contravened CPR 6.40(4). This paragraph was accordingly set aside; and
2. Compliance with any order granted would likely expose the Liechtenstein Respondent to criminal liability. He further noted that the absence of enforceability in Liechtenstein rendered the application ineffective.

Implications of the decision

This decision emphasises the importance of obtaining expert evidence of local law at an early stage, where proceedings or applications need to be served in foreign jurisdictions and where there is a risk of a challenge to the English Court’s jurisdiction.

This is particularly relevant to parties seeking interim remedies on a without notice basis where expert evidence may be needed to demonstrate that there is no breach of CPR 6.40(4). It is clear that without a thorough understanding of local legal frameworks, Applicants risk seeking orders that are in contravention to local law and ultimately are unenforceable.

This, however, raises the issue of how permission to adduce expert evidence might be obtained before an application has even been made.  In such circumstances, it might be prudent that any application seeking service out of the jurisdiction and by alternative means should also include an application seeking permission to adduce the expert evidence on foreign law produced in support of that application and filed with it.  The ultimate risk is that the court refuses to give permission and the costs of obtaining the expert opinion are unrecoverable. However, that seems unlikely where the expert evidence will ultimately assist the Court, and in circumstances where the alternative is that the whole application might fail, this might be considered an acceptable risk to take.  This might particularly be the case in relation to applications seeking Norwich Pharmacal relief or other third-party disclosure where the costs are typically borne by the applicant.

In all circumstances it would be preferable, at a minimum, to confirm the position in the foreign jurisdiction before making the application, even if it the position is only confirmed in a letter rather than a formal report or, even more informally, in conversation with a foreign lawyer, the note of such conversation could then be exhibited. In such circumstances, if the other side do seek to challenge the application on issues of foreign law the applicant will at least have a good handle on what the legal position is and can have tailored the application to accommodate it.

Further information

If you have any questions regarding this blog, please contact Laurence Clarke or Phoebe Alexander in our Dispute Resolution team. 

About the author

Laurence Clarke is a Senior Associate in the Dispute Resolution Team. He has been recognised as a leading associate in both commercial litigation and civil fraud in The Legal 500.

Phoebe Alexander is an Associate in the Dispute Resolution team. She has experience acting for both corporate and individual clients on a broad range of disputes, including complex multi-jurisdictional litigation involving allegations of fraud and conspiracy, general commercial and contractual matters, and media-related disputes involving reputation and privacy issues.