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Masri v Consolidated Contractors International Co SAL & Ors
Factual and Procedural Background
The Respondent obtained Commercial Court judgments in 2006 and 2007 for approximately US $64 million against Company A and Company B, both incorporated in Lebanon. Having failed to secure payment, the Respondent applied ex-parte under CPR 71 for the examination of the Appellant, an officer of Company A, regarding the judgment debtors’ assets. Master Miller originally set the order aside for want of jurisdiction. The Court of Appeal reversed that decision and remitted the case to consider service issues. The House of Lords (now the Supreme Court) granted leave, limited the hearing to questions of English law and stayed any examination pending its decision.
Legal Issues Presented
- Whether the wording of CPR 71.2 empowers the court to order the examination of a foreign-resident officer of a foreign judgment-debtor company.
- Whether CPR 71.2 authorises questions concerning assets located outside England and Wales.
- Whether, if CPR 71.2 has that scope, the rule is ultra vires the rule-making power in the Civil Procedure Act 1997.
- Whether CPR 6 provides any gateway for serving such an order on the Appellant in Greece.
- Whether European instruments (particularly Regulation 1206/2001 and Regulation 44/2001) require priority over domestic procedures, and if so whether a reference to the Court of Justice is needed.
Arguments of the Parties
Appellant's Arguments
- CPR 71, properly construed against the presumption of territoriality, does not extend to officers outside the jurisdiction.
- Even if the rule’s language were wide enough, it would exceed the rule-making power because compelling foreign non-parties is a matter of substantive jurisdiction, not procedure.
- No gateway in CPR 6 permits service of the examination order abroad; CPR 6.30(2) applies only to parties, and CPR 6.20(9) concerns enforcement, not information-gathering.
- International comity and practical unenforceability militate against reading CPR 71 extra-territorially.
Respondent's Arguments
- The court already has adjudicative jurisdiction over the judgment debt; examination of an officer is ancillary and should track the debtor’s worldwide obligations.
- The rule-making power historically embraced new extra-territorial grounds under Order 11; Parliament must be taken to have endorsed that evolution.
- CPR 6.30(2), read with CPR 6.20, supplies authority to serve the order abroad.
- Limiting CPR 71 to the territory of England and Wales would frustrate its purpose by allowing officers to defeat enforcement through relocation.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30 | Difficulties in enforcing judgments against recalcitrant debtors | Illustrated why CPR 71 exists but did not sway the territorial interpretation |
| Dickson v Neath and Brecon Railway Co (1869) LR 4 Ex 87 | Historical trigger for extending examination to company officers | Cited to show that the 1883 Rules were aimed at domestic officers |
| R (Al-Skeini) v Secretary of State for Defence [2007] UKHL 26 | Presumption against extra-territorial effect of legislation | Formed the core canon of construction applied to CPR 71 |
| Clark v Oceanic Contractors Inc [1983] 2 AC 130 | Nuanced application of statutes to persons abroad | Used to illustrate exceptions but distinguishable on the facts |
| Holmes v Bangladesh Biman Corp [1989] AC 1112 | Limits of UK legislation over foreign activity | Supported a restrictive reading of CPR 71 |
| British South Africa Co v Companhia de Moçambique [1893] AC 602 | Procedural rules cannot confer substantive jurisdiction | Reinforced the Appellant’s “ultra vires” argument |
| In re Grosvenor Hotel (London) (No 2) [1965] Ch 1210 | Rules of court cannot alter substantive law | Cited to limit the scope of the rule-making power |
| General Mediterranean Holdings SA v Patel [2000] 1 WLR 272 | Same principle as Grosvenor Hotel | Further authority for the Appellant’s position |
| National Justice Compania Naviera SA v Prudential Assurance Co Ltd (The Ikarian Reefer) [2000] 1 WLR 603 | Service out and non-party costs jurisdiction | Discussed but distinguished; not a warrant for broad service powers here |
| Aiden Shipping Co Ltd v Interbulk Ltd [1986] AC 965 | Basis for CPR 6.20(17) | Referenced in historical survey of rule expansion |
| Interpool Ltd v Galani [1988] 1 QB 738 | Examination may cover foreign assets | Accepted but not determinative of territorial reach over officers |
| Union Bank of Finland Ltd v Lelakis [1997] 1 WLR 590 | Service of examination orders on judgment debtors abroad | Highlighted the difference between debtors and third-party officers |
| In re Tucker [1990] Ch 148 | Bankruptcy court could not summon foreign resident for private examination | Provided an analogy supporting the Appellant |
| In re Seagull Manufacturing Co Ltd [1993] Ch 345 | Public examination of foreign company officers in winding-up | Distinguished as involving a stronger public interest |
| Theophile v Solicitor-General [1950] AC 186 | Effect of orders on persons abroad despite enforcement difficulties | Cited but treated as materially different from compelling attendance |
| Mansour v Mansour [1989] 1 FLR 418 | Service out under previous rules | Found unreliable once wording error identified |
| Aktiebolaget Robertsfors v Papeteries de l'Aa [1910] 2 KB 727 | Heads of jurisdiction for service out are exclusive | Supported the view that no inherent power exists outside CPR 6 |
| Sostad v Woldson [1925] 3 DLR 779 | Canadian dicta on service out of summonses | Considered but found non-persuasive |
| In re Liddell’s Settlement Trusts [1936] 1 Ch 365 | Service on non-party domiciled within jurisdiction | Distinguished; emphasised need for a jurisdictional gateway |
| Vitol AS v Capri Marine Ltd [2009] Bus LR 271 | Scope of CPR 6.30(2) limited to parties | Adopted by the House in rejecting the wider Court of Appeal view |
| Tasarruf Mevduati Sigorta Fonu v Demirel [2007] EWCA Civ 799 | History and ambit of CPR 6.20(9) | Confirmed that the gateway concerns enforcement, not information-gathering |
Court's Reasoning and Analysis
1. Rule-making power. Section 1 of the Civil Procedure Act 1997 permits wide procedural rules, and historically the heads of extra-territorial jurisdiction have grown through rules alone. However, that does not displace the presumption against extra-territoriality when construing a specific rule.
2. Presumption against extra-territoriality. Applying R (Al-Skeini) and related authorities, the House asked whether CPR 71 was intended to reach foreign officers. The informal, ex-parte nature of the procedure, its Victorian origins, and practical unenforceability abroad suggested not.
3. Comparison with other statutory regimes. The House contrasted winding-up examinations under the Insolvency Act 1986 (public interest and explicit service rules) with the purely private enforcement context of CPR 71. The latter was held closer to compelling an ordinary witness, something Parliament has expressly limited.
4. Service considerations. Even if CPR 71 authorised such an order, no gateway in CPR 6 allowed service on the Appellant in Greece. The Court of Appeal’s broad reading of CPR 6.30(2) would create an uncontrolled power to serve any non-party worldwide and was therefore rejected. CPR 6.20(9) was inapplicable because seeking information is not “enforcement” within its meaning.
5. European law. Because the appeal succeeded on domestic grounds, questions about the Evidence Regulation and Brussels Regulation were moot, and no reference to the Court of Justice was necessary.
Holding and Implications
APPEAL ALLOWED. The order of the Court of Appeal directing the Appellant’s examination and permitting service out of the jurisdiction is set aside; Master Miller’s order refusing such relief is restored.
Implications: The decision confirms that CPR 71 does not empower English courts to compel foreign-resident officers of judgment-debtor companies to attend for examination, nor does CPR 6 presently provide a route for serving such orders abroad. Judgment creditors must therefore rely on other mechanisms—such as foreign evidence procedures or insolvency processes—when information from overseas officers is required. No new precedent was created on European law because those issues were not reached.
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