Alternative Service Under CPR 6.15: Insights from Société Générale v. Goldas Kuyumculuk Sanayi Ithalat Ihracat AS & Ors [2018] EWCA Civ 1093

Introduction

The case of Société Générale v. Goldas Kuyumculuk Sanayi Ithalat Ihracat AS & Ors ([2018] EWCA Civ 1093) presents a significant examination of the principles governing alternative service of claim forms under the Civil Procedure Rules (CPR) 6.15 and 6.16. The dispute centers around Société Générale ("Soc Gen"), a prominent French bank, initiating legal proceedings against members of the Goldas group for unpaid obligations related to gold bullion transactions. The key issues in this case involve the validity of service methods under international treaties, the impact of negligent legal advice on alternative service, and the court's discretion in managing procedural defects.

The parties involved are:

• Appellant: Société Générale (Soc Gen)
• Respondents: Goldas Kuyumculuk Sanayi Ithalat Ihracat AS and other associated Turkish and Dubai companies

Summary of the Judgment

The Court of Appeal upheld the initial decision by Popplewell J, which dismissed Soc Gen's claims, discharged the freezing injunctions, and ordered an inquiry into damages. The core of the judgment lies in the court's refusal to validate the service of claim forms through alternative means under CPR 6.15, citing negligence in legal advice and non-compliance with the Hague Convention requirements. Additionally, while the court largely upheld the lower court's decisions, it concurred with the appeal to discharge the inquiry into damages, citing procedural delays by Soc Gen.

Analysis

Precedents Cited

The judgment extensively referenced several precedents, which played a pivotal role in shaping the court's reasoning:

• Hashtroodi v Hancock [2004] 1 WLR 3206 – Established that negligent legal advice is not a valid reason for extending the validity of claim forms under CPR 7.6.
• Aktas v Adepta [2011] QB 894 – Reinforced the principle that negligence in legal counsel is a basis for declining procedural relief.
• Kaki v National Private Air Transport [2015] EWCA Civ 731 – Demonstrated that negligent advice does not preclude alternative service under CPR 6.15 when the limitation period has not expired.
• Barton v Wright Hassall [2018] 1 WLR 1119 – Clarified that CPR 6.15 focuses on the factual evaluation of "good reasons" rather than adhering strictly to previous disciplinary factors.
• Knauf GmbH v British Gypsum Ltd [2002] 1 WLR 907 – Highlighted the importance of comity and the exceptional nature required for alternative service under international treaties.
• Abela v Baadarani [2013] 1 WLR 2043 – Emphasized that service methods contrary to international agreements are to be treated as exceptional unless a compelling reason exists.
• Hoffman-La Roche & Co A.G. v Secretary of State for Trade and Industry [1975] AC 295 – Introduced the principle that courts retain discretion in enforcing cross-undertakings based on the conduct of parties.
• Barratt Manchester Ltd v Bolton MBC [1998] 1 WLR 1003 – Addressed the importance of promptness and reasonable diligence in prosecuting inquiries into damages.

Legal Reasoning

The court's legal reasoning hinged on interpreting the CPR rules in the context of international service obligations. It reaffirmed that alternative methods of service under CPR 6.15 require a "good reason," which is distinct from the rigorous "all reasonable steps" test under CPR 7.6. However, the court found that negligent legal advice provided by Soc Gen’s lawyers undermined their case for alternative service, as it signaled a lack of diligence rather than a compelling reason necessitating deviation from standard service protocols.

Moreover, the court underscored the significance of the Hague Convention, which mandates specific service methods to respect international legal frameworks and comity. The failure of Soc Gen to adhere to these protocols, despite having knowledge of the requirements, was deemed a critical shortcoming. The court also noted Soc Gen's decision to prioritize Turkish proceedings over English ones, leading to procedural delays and demonstrating a disregard for the English legal process.

Impact

This judgment reinforces the stringent standards courts uphold regarding the service of legal documents, especially in cross-border contexts. It clarifies that negligence or incompetence in legal advice significantly weakens applications for alternative service under CPR 6.15. Additionally, the case highlights the court’s reluctance to override international treaties governing service methods, thereby promoting judicial consistency and respect for international legal obligations.

For practitioners, the decision serves as a cautionary tale emphasizing the necessity of meticulous adherence to service protocols and the potential repercussions of relying on flawed legal advice. It also delineates the boundaries of court discretion, making it clear that "good reasons" must be substantial and directly impact procedural timeliness to merit alternative service.

Complex Concepts Simplified

Alternative Service Under CPR 6.15

CPR 6.15 allows parties to request the court's permission to serve legal documents through methods not explicitly outlined in the standard procedures. This is typically granted only when there is a "good reason" for deviating from standard service methods.

Hague Convention on Service Abroad

An international treaty that establishes standardized methods for serving legal documents across borders, ensuring that such service respects the sovereignty and legal processes of the respective countries involved.

CPR 6.16 – Dispensing with Service

This rule permits the court to dispense with the requirement of serving claim forms in exceptional circumstances, essentially allowing a claim to proceed without formal service when strict adherence would be unjust.

Freezing Orders

Also known as Mareva injunctions, these are court orders that prevent a defendant from dissipating their assets to frustrate a potential future judgment.

Conclusion