This is possibly the longest title of any of my posts and rightly so for the issues in current judment are extensive. Bourlakova & Ors v Bourlakov & Ors (Rev1) [2023] EWHC 2233 (Ch) is a follow-up to Bourlakova v Bourlakov [2022] EWHC 1269 (Ch) which I discuss here; in the meantime Mr Bourlakov has passed away, leaving the other defendants.
Claimants ask for permission to amend their PoC (Particulars of Claim) including the proposed joinder of an additional claimant. Some of the Defendants have themselves made three related applications, namely (a) to adjourn the hearing of the Claimants’ amendment applications (b) for permission to rely on further evidence and (c) for a stay under A33 or 34 Brussels Ia of such amended claims for which the Claimants may be given permission.
The case first of all raises an interesting discussion on applicable limitation periods (attached to Panama law as the lex causae under Rome II) as compared to carved-out procedural issues under Rome II (and English residual conflicts law), subject to English law as lex fori. It then discusses a number of jurisdictional issues.
First, on the limitation periods, discussed by Smith J [56] ff against the background of the Panamian Penal Code (‘PC’). Of note is that defendants only have to raise a reasonably arguable limitation defence in relation to these new damages claims (hence the discussion need not contain the Alfa and Omega of the issues) and it is worthwhile to see the competing arguments in full [64] ff (footnotes omitted):
Panamanian law admits of a civil claim in damages for those guilty of a criminal offence. The specific offences relied upon by the Claimants are those identified in Articles 220, 243 and/ or 253 PC. Although the route by which this is achieved is contentious, it is common ground that Panamanian law governs the question of any available limitation defence to claims brought under these articles. It is also common ground that the damages claims could be brought in Panama in different ways, namely
(i) within criminal proceedings;
(ii) before the civil courts without awaiting the outcome of any criminal trial; or
(iii) before the civil courts after the criminal court has issued its final liability ruling.
[Defendants] say that if, as here, a claim for civil damages arising from alleged criminal acts under Articles 128 and 129 PC is filed without a criminal conviction having first been obtained or in the absence of criminal proceedings, this would have to be submitted as an extra-contractual or tortious claim under Article 1644 of the Civil Code (CC) which provides that:-
“Whoever by act or omission causes damage to another, through fault or negligence, is bound to repair the damage caused. If the act or omission is attributable to two or more persons, each of them shall be jointly and severally liable for the damage caused.“
[Defendants] also say that the relevant limitation period for such a claim is one year by operation of Article 1706 CC which provides:-
“The civil action to claim indemnification for slander or insult or to demand civil responsibility for the obligations resulting from guilt or negligence to which Article 1644 refers, shall prescribe in the term of one (1) year, counted from the moment in which the victim knew.
If criminal or administrative action is timely initiated for the facts foreseen in the previous paragraph, the prescription of the civil action shall be counted from the moment when the criminal judgment or the administrative resolution became firm, as the case may be.
For the recognition of the civil claim, in no case is the intervention of the criminal jurisdiction essential.”
The Claimants disagree with this analysis. They say that a claim for civil damages for an alleged criminal act may be brought directly under Articles 128 and 129 PC (without regard to Article 1644 CC) by operation of Article 977 CC which provides that :-
“Civil obligations arising from crimes or offences shall be governed by the provisions of the Penal Code.”
The Claimants say that the applicable limitation period for a claim under Articles 128 and 129 PC is seven years by operation of Article 1701 CC which provides that:-
“Actions in personam for which there is no special limitation period shall prescribe in seven years.”
This is where the Rome II procedural carve-out becomes relevant, and I will limit the discussion here to the Rome element: [71]
Before which court in Panama any claim could be asserted is a matter of procedure (whether considered under Rome II or the common law). According to Dicey, Morris & Collins on the Conflict of Laws (16th ed., at [4-074]), this includes the question whether a civil action can be brought in respect of alleged criminal acts before criminal proceedings have been taken. Since the English court is only concerned with the relevant foreign law as it applies to matters of substance, the Claimants are entitled to rely on the limitation period which remains available under Article 116 PC even if criminal proceedings have not begun and may not yet eventuate.
[72 [Defendants] say that there is a world of difference between the English court ignoring as a bar to recovery a procedural requirement for criminal proceedings prior to the commencement of a civil action (a proposition from which they do not demur) and the broader proposition (from which they do) that, where multiple potential routes for bringing civil damages claims are available locally, it matters not which particular procedural route the claimant has, in fact, adopted. The Claimants have brought a claim where there has been no criminal conviction as they were entitled to do so under Panamanian law. Having done so, the limitation period is one year. No question of having or failing to comply with local procedural requirements arises.
[73]
I understand the logic of the Claimants’ position that, being a matter of procedure, it is irrelevant which particular course the Claimants may, in fact, have pursued in this case. However, it seems to me that the distinction between the position indicated in Dicey, where the need for a criminal conviction is a bar to the commencement of a civil action, and the position here, where multiple routes are potentially available, may, in fact, be more meaningful than the Claimants suggest. I am therefore unable to say, without more direct authority on the point at least, that the [defendants’] limitation defence falls short of the reasonably arguable threshold on this account.
yet on the point of the actual damages sought, and other elements of the claim, the defence does fall short and the eventual conclusion is that the limitation defence fails. The judgment is a bit dense to read on the factual elements of the various claims however its overall emphasis on procedure v lex causae is really quite relevant.
The judgement subsequently discusses the jurisdictional issues with given the amendment of the claims, a shift from the alternative Monegask forum before Trower J, to [107]Panama or Florida now the suggested alternative fora to England.
[108] The jurisdictional issues arising on these amendment applications are whether:-
(i) despite the UK’s withdrawal from the EU, the Brussels Recast (including Article 8(1)) applies to the proposed new claims against the Kazakovs and Mr Anufriev;
(ii) in relation to the Claimants’ proposed new claims subject to the common law regime, England, Panama or Florida is clearly and distinctly the appropriate forum;
(iii) the Claimants’ proposed new claims against the ‘anchor defendant’, Leo Holding, are artificial and abusive such that the amendment applications fail for lack of jurisdiction, whether through their inability to invoke Article 8(1) of the Brussels Recast or the relevant jurisdictional gateway at common law;
(iv) Gatiabe is a ‘necessary or proper’ party with respect to the proposed new claims concerning the ownership of that company; and
(v) if the EU jurisdictional regime does apply to the Kazakovs, whether a stay should be granted under Articles 33 and 34 of the Brussels Recast of any new claims the Claimants might be permitted to advance.
(i) Application of Brussels Ia at all following the UK-EU Withdrawal Agreement: “legal proceedings instituted before the end of the transition period”
Article 67.1(a) WA provides that “in respect of legal proceedings instituted before the end of the transition period and in respect of proceedings or actions related to such legal proceedings pursuant to Articles 29, 30 and 31 of [the Brussels Recast]”, the provisions of the Brussels Recast shall continue to apply. Are permitted amendments caught by ‘proceedings instituted’? [116-117] the judge, referring to Simon v Taché, that Article 67 WA preserves the applicability of Brussels Recast to “proceedings” and not to particular claims or, here, unamended claims in proceedings.
(ii) and (iii) Abuse of the anchor defendant mechanism
The judge [128] sees no reason under BIa to conclude that claimants’ claims against Leo Holding are artificial, abusive or do not reflect a genuine intention to sue the ‘anchor defendant’, and repeats that [134] conclusion under the obiter English gateway.
(iv) a lengthy and largely obiter forum non conveniens discussion ends [212] with both Florida and Panama being rejected as a more appropriate forum, and (v) [213] the A33-34 stay was not discussed at hearing but, it seems, may be revived at a later stage (which would be highly relevant) and therefore [223] has been deferred.
Quite the judgment.
Geert.
gavc law - geert van calster 