Factual and Procedural Background
The Defendant resides in England and was served proceedings there by the Claimants, who are members of the same family and settlors and beneficiaries of two trusts established under the International Trusts Law of the Republic of Cyprus. The trusts held investments through two companies incorporated outside Cyprus but with connections to Cyprus. The trustee of the trusts was a Cyprus-incorporated company, Latimer (Management Services) Limited, which operated through directors residing in Cyprus. The Claimants allege losses arising from investments made in telecommunications companies incorporated in Cyprus but operating in Greece, among other investments.
The Claimants have brought multiple claims against the Defendant, including negligence, breach of fiduciary duty, deceit, dishonest assistance in breach of trust, and contractual claims governed by Swiss law related to powers held over Swiss financial accounts.
The Defendant accepts the jurisdiction of the English courts but applied for an order that the English courts decline jurisdiction and stay the claim on the basis that Cyprus is the more appropriate forum ("forum non conveniens" or "appropriate forum"). The court heard evidence from solicitors for both parties and expert evidence on Cypriot law from barristers qualified in both Cypriot and English law.
Legal Issues Presented
- Whether the courts of Cyprus are an available forum to hear the claims against the Defendant.
- Whether the courts of Cyprus are clearly or distinctly a more appropriate forum than the English courts under the Spiliada test.
- Whether, even if Cyprus is more appropriate, justice requires that the English proceedings not be stayed (limb 2 of Spiliada), considering risks of denial of justice or limitation issues.
Arguments of the Parties
Defendant's Arguments
- The Defendant contends that Cyprus is the more suitable forum due to connections with the trusts, the trustee, and the location of key events and witnesses.
- The Defendant relies on expert evidence that the Cypriot courts would have jurisdiction and that Cypriot law applies to most claims.
- He emphasizes personal and factual connections to Cyprus, including the trustee's incorporation and directors' residence.
- The Defendant suggests that the Claimants previously brought related proceedings in Cyprus and that the overall shape of the litigation supports Cyprus as the appropriate forum.
- He argues that the application of Cypriot law favors trial in Cyprus.
Claimants' Arguments
- The Claimants argue that the Defendant has not established that Cyprus is an available forum in the requisite sense, particularly disputing territorial jurisdiction.
- They contend that the English courts are more appropriate given the Defendant's residence and the centrality of his evidence.
- The Claimants emphasize that some claims, such as the deceit claim and Swiss contractual claim, may not fall within Cypriot jurisdiction.
- They argue that the delay in Cypriot courts and limitation issues under Swiss law raise risks of injustice if the case proceeds in Cyprus.
- The Claimants note that the Defendant’s residence in England and the fact that some witnesses and evidence are located outside Cyprus weigh in favor of England.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Spiliada Maritime Corporation v Cansulex Limited [1987] 1 AC 460 |
Established the two-limb test for forum non conveniens: (1) whether another forum is clearly or distinctly more appropriate; (2) whether justice requires that the stay not be granted. |
The court applied the Spiliada test to determine that the Defendant failed to satisfy limb 1; therefore, no stay was granted. |
| VTB Capital plc v Nutritek International [2013] 2 AC 337 |
Guidance on identifying issues likely to arise at trial and the significance of place of commission in tort claims. |
The court used this precedent to frame the issues likely to arise at trial and to assess factual connections and appropriate forum considerations. |
| Altimo Holdings and Investment Ltd and others v Kyrgyz Mobil Tel Ltd [2011] UKPC 7 |
Clarified the formulation of limb 2 of Spiliada regarding risk of denial of justice in the alternative forum. |
The court adopted the formulation emphasizing a "real risk that justice will not be obtained" when considering limb 2. |
| Group Josi Reinsurance v Universal General Insurance Company (Case C-412/98) |
Interpretation of jurisdiction under EU regulations and the significance of parties' domicile in submissions to jurisdiction. |
The court considered the case in submissions on whether voluntary submission to jurisdiction under Article 26 of the Recast Regulation could cure lack of territorial jurisdiction. |
| Manek v IIFL Wealth (UK) Limited [2021] EWCA Civ 625 |
Judicial comity and caution in assessing denial of justice in a friendly foreign jurisdiction. |
The court cited this to emphasize caution before concluding that the Claimants would be denied justice in Cyprus. |
| The Vishva Ajay [1989] 2 Lloyd's Rep 558 |
Significant delays in foreign courts may justify refusal to stay proceedings under forum non conveniens. |
The court referenced this precedent in considering whether delays in Cyprus courts justified refusal of stay under limb 2. |
| The Al Wahab [1982] 1 Lloyd's Rep 638 |
Warning against chauvinistic comparisons between legal systems when assessing denial of justice. |
The court applied this principle to avoid unfairly criticizing the Cypriot legal system when considering limb 2. |
Court's Reasoning and Analysis
The court first identified the legal framework for the forum non conveniens application, applying the two-limb Spiliada test. The Defendant bore the burden to establish that the courts of Cyprus were available and clearly or distinctly more appropriate than the English courts.
On availability, expert evidence indicated that Cyprus would likely have international jurisdiction and grant permission to serve out of jurisdiction. The key issue was territorial jurisdiction within a Cypriot district court, particularly the Nicosia District Court. The Defendant's expert opined that territorial jurisdiction would be established due to the location of the trustee and certain acts related to investments. The Claimants challenged this, especially as to some claims, but the court accepted the Defendant's expert opinion as sufficient to conclude availability.
Regarding whether Cyprus was clearly or distinctly a more appropriate forum, the court considered thematic factors:
- Personal connections: The Defendant's residence in England was significant, and the Claimants overstated its importance. The Defendant was a key witness but not the sole focus of the case.
- Factual connections: While some events and entities were located in Cyprus, many relevant interactions occurred outside Cyprus, including electronic communications. The incorporation of investment companies in Cyprus was of limited weight.
- Evidence, convenience, and expense: Witnesses were located in multiple jurisdictions with varying language considerations. Costs related to interpretation and accommodation favored England. Document location was not significant due to electronic storage.
- Applicable law: Most claims were governed by Cypriot law, which favored Cyprus, but the similarity between Cypriot and English law and the presence of Swiss law claims reduced the weight of this factor.
- Overall shape of litigation: Prior proceedings in Cyprus against the trustee did not strongly indicate Cyprus as the appropriate forum for the Defendant's claims.
Balancing these factors, the court concluded that the Defendant had not demonstrated that Cyprus was clearly or distinctly the more appropriate forum, failing limb 1 of Spiliada.
On limb 2, the court considered the Claimants' arguments that delays in Cyprus courts and limitation under Swiss law would cause injustice. The court recognized delays but found expert opinions divergent and insufficient to conclude denial of justice. The limitation argument was rejected because the Claimants had voluntarily discontinued prior proceedings in Cyprus, and the potentially time-barred claims represented a small proportion of total claims.
Accordingly, the court concluded limb 2 was not satisfied.
Holding and Implications
The Defendant's application to stay the English proceedings in favour of Cyprus as the more appropriate forum is dismissed.
The direct effect is that the English courts will retain jurisdiction to hear the claims against the Defendant. No stay will be ordered, and the litigation will proceed in England. The decision does not set new precedent but applies established principles on forum non conveniens, jurisdiction, and judicial comity. The parties are invited to agree on the form of order, with further directions to follow if necessary.