Nagel v PDC. Permission for service out withdrawn on forum non and disclosure issues.

W Nagel (a firm) v Pluczenik& Ors [2022] EWHC 1714 (Comm) concerns litigation in the diamond sector. It is an appeal against permission for service out which triggers various jurisdictional considerations, including forum non, as well as disclosure and ‘clean hands’ concerns.

The judgment is a good illustration of claim and counterclaim serving jurisdictional purposes.

Defendants are a Belgium-domiciled diamond manufacturer (PDC) and its equally Belgium-based managing director Mr Pluczenik . Claimant Nagel is a UK based diamond broker. Nagel is defendant in Belgian proceedings brought in May 2015 by defendants in the E&W proceedings, who used a Belgian-based anchor defendant to sue the English claimant in Belgium (A8(1) Brussels Ia); Nagel are also defendant in a September 2015 Belgian claim brought by the same claimants and since consolidated by the Belgian courts. Nagel itself issued a claim against PDC in the English High Court in March 2015, did not serve it, but sent a letter before action which indicated that it intended to bring proceedings in England.

In June 2015, as direct reaction to the Belgian Claim, Nagel amended the English Claim to seek negative declaratory relief to the effect that it was not liable in respect of a number of contractual duties.

In July 2017 Popplewell J found for Nagel, including in respect of the negative declaratory relief: W Nagel (A Firm) v Pluczenik Diamond Company NV [2017] EWHC 1750 (Comm). His judgment was confirmed by the Court of Appeal: [2018] EWCA Civ 2640, payments were made and the E&W proceedings ended.

Come forward third defendant in the current E&W proceedings, Ms Shine, who was the CEO of a subsidiary of De Beers – De Beers Trading Company. She has never worked for either of the Claimant or the First or Second Defendants, but she gave a statement to the Belgian court in 2017, supporting PDC. Her statement was provoked it seems by the outcome of the E&W proceedings which did not match her recollection. Nagel originally objected to jurisdiction solely on the ground of lis pendens (A29-30 BIa).

In July 2020 (one can see that in this case the speed of Belgian proceedings is nothing like in the case I reported yesterday) the Belgian claimants put forward their arguments on jurisdiction based on Antwerp being forum contractus per A7(1) BIA (they argued centre of gravity or characteristic performance was in Antwerp) [20].

In an interim, February 2021 interim judgment the Belgian court held it had jurisdiction on the basis of A7 forum contractus. It considered the lis pendens issue noting that it could no longer apply now that the English Claim was concluded. It then concluded that it had jurisdiction to determine the dispute. The Court noted that “the defendants apparently do not (or no longer) dispute” that the services were performed in Antwerp. 

Nagel then dropped the jurisdictional arguments and at hearings 7 May 2021 onwards went for res judicata, arguing …the English judgment has the status of res judicata with regard to the present proceedings, so that the court on the basis of Article 23 and 25 Judicial Code [the Belgian CPR, GAVC] is currently prohibited from again deciding on the claim…” [30]. End of May 2021 Nagel then commenced the present claim in the Commercial Court. The claim alleges that the Belgian Claim constitutes a tortious abuse of process and forms part of an unlawful means conspiracy between the Defendants. Ms Shine is the Third Defendant. It is said that the provision of the Shine Statement and its (lack of) merits justify an inference that she was involved in the abuse of process and the conspiracy [31].

In September 2021 Moulder J gave permission for service out (required post Brexit) on the basis that the claim met limb (a) of the tort gateway viz “damage was sustained, or will be sustained, within the jurisdiction” (Nagel trades from England, paid sums to Belgian lawyers from a bank account in England and has consequently suffered loss here; she also UKSC Brownlie for the damage gateway). She refused permission on two other gateways – necessary and proper party and tort committed within the jurisdiction. It is alleged by defendants that Moulder J was not given any indication of the Belgian interim judgment.

The Belgian Claim is now scheduled for trial in January 2023.

[64] Cockerill J holds that the Belgian findings on jurisdiction and the existence of a judgment which dealt in terms with jurisdiction should on any view have been put before Moulder J and [65] that this breach of duty of disclosure was deliberate. She also holds [70] that the picture sketched of the Belgian proceedings being ‘in limbo’ was plainly wrong: they were definitely active, and that it had been wrongfully suggested that the Belgian judge was not going to deal with the res judicata issue. On that basis, she would have set aside permission for service out [75] however this point turns out to be obiter for the reason for reversal of the order is that E&W are not the appropriate forum [76] ff. Relevant factors being that (i) the jurisdiction of the Belgian Courts appears to have been established by PDC and accepted by Nagel (at least on a prima facie basis), (ii) the Belgian claim is progressing and (iii) there is scope for determination of a res judicata issue (which replicates the issues sought to be brought here) and (iv) a determination of the res judicata issue is (and was) likely to be determined relatively soon.

Moreover, Belgium clearly is an appropriate forum [79] the Belgian Claim is one brought by a Belgian company (PDC), arising out of services provided in Belgium (as the Belgian Court has held), alleging fraud on the Belgian Court. (The serious issue to be tried discussion leads to an analysis of Article 4 Rome II as retained EU law).

A good illustration as I mentioned of claim, counterclaim, and of course the clean hands principle.

Geert.

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