Gheewala v Compendium Trust Company Ltd and Nine Others

CourtCourt of Appeal
JudgeLord Carlisle of Bucklow, Southwell and Goldring, JJ.A.:
Judgment Date14 July 1999
Neutral Citation[1999] J.Unrep 127
Date14 July 1999
Lord Carlisle of Bucklow, Southwell and Goldring, JJ.A.:

W.J. Bailhache for the plaintiff;

M.J. Thompson for the second, eighth, ninth and tenth defendants.

Cases cited:

(1) Abdel Rahman v. Chase Bank (C.I.) Trust Co. Ltd., 1984 J.J. 127, followed.

(2) Connelly v. R.T.Z. Corp. PLC, [1998] A.C. 854; [1997] 4 All E.R. 335; [1997] Com. L.C. 1,357; [1998] Env. L.R. 318; (1997), 147 N.L.J. 1346; 94 (32) Law Soc. Gaz. 28, followed.

(3) Spiliada Maritime Corp. v. Cansulex Ltd., [1987] A.C. 460, [1986] 3 All E.R. 846; [1987] 1 Lloyd's Rep. 1; (1986), 130 Sol. Jo. 925, followed.

(4) Wright v. Rockway, 1994 JLR 321, followed.

Additional cases cited by counsel:

Abidin Daver, The, [1984] 1 All E.R. 470.

Allied Irish Banks (C.I.) Ltd., In re, 1987-88 JLR 157.

Att. Gen. v. Arthur Anderson & Co. (U.K.) (1989), 12 E.C.C. 224.

Finance & Econ. Cttee. v. Bastion Offshore Trust Co. Ltd., 1994 JLR 370.

The Sylt, [1991] 1 Lloyd's Rep. 240.

Legislation construed:

Royal Court Rules 1992 (R. & O. 8509), r.6/10(7):

"Where in any action a defendant in his answer—

(a) claims against a person who is already a party to the action any contribution or indemnity; or

(b) claims against such a person any relief or remedy relating to or connected with the original subject-matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or

(c) requires that any question or issue relating to or connected with the original subject-matter of the action should be determined not only as between the plaintiff and himself but also as between either or both of them and some other person who is already a party to the action;

the Court may after hearing the parties make an order that such person be convened as a third party by the defendant and the provisions of paragraph (2) of Rule 6/10 shall apply."

Texts cited:

Cheshire & North's Private International Law, 12th ed., at 223 (1992).

Dicey & Morris, The Conflict of Laws, 12th ed., vol. 1, at 395 (1993).

Mulla, Principles of Hindu Law, 15th ed. (1968).

Conflict of Laws—jurisdiction—forum conveniens—defendant to establish that another available forum clearly more appropriate than Jersey—court may nevertheless decline stay if plaintiff establishes that justice requires that no stay of Jersey proceedings granted

Conflict of Laws—jurisdiction—forum conveniens—factors to be considered—include residence of the parties, location of assets in dispute, location of documents relating to such assets, location of witnesses, whether plaintiff could successfully serve proceedings in other jurisdiction, law applicable

The defendants applied to the Royal Court for an order staying the plaintiff's action on the ground of forum non conveniens.

The plaintiff brought an action in Jersey seeking to establish his entitlement to a share of his family's assets following the death of his father, S, who had died domiciled in Kenya. The plaintiff claimed that (a) his family was a joint Hindu family as recognized in Hindu law; (b) the family held many assets; and (c) he, as a member of the family, was entitled to a share of those assets. Apart from the first defendant (which was a Jersey company alleged to hold assets for the joint Gheewala family), all the defendants were descendants of S.

After S's death, the joint family assets were managed by his eldest son. Later, another son had sought to obtain his alleged share of the joint family assets. This caused a dispute and an arbitration was conducted in London to settle the matter. The settlement reached at the arbitration was then purportedly repudiated and further proceedings were issued in London. Other proceedings in relation to the joint family assets were issued over the years, including proceedings in both Kenya and Jersey.

While all the parties, except the defendant company, were domiciled in Kenya, only half the parties were actually resident in Kenya. The others lived in England. The assets in dispute were primarily in countries in East Africa, Europe (including substantial assets in the Channel Islands) and North America, and the documents relating to them were generally found in the same country as those assets. The defendant company was served by the plaintiff in Jersey. All the other defendants were served out of the jurisdiction, though none of the defendants challenged the order which gave leave to serve outside the jurisdiction. However, two summonses were issued to stay the action, one by the second and eighth defendants, the other by the fourth and sixth defendants. Only one of the summonses was pursued and it was based on that summons that the Royal Court stayed the action against all 10 defendants although none of the other defendants had objected to the court's jurisdiction and the third defendant had, in fact, opposed the summonses and made a counterclaim.

The plaintiff sought to appeal against the order submitting that he would be unable to return to Kenya for the next three years, that there were defects in the administration of justice in Kenya including delays and alleged corruption, and therefore that justice required that a stay should not be granted.

The relevant defendants submitted that Kenya was a forum in which the action could be tried more suitably in the interests of all the parties and the ends of justice.

Held, allowing the appeal:

(1) Whether a court should exercise its discretion to grant a stay was governed by the fundamental principle that a stay should only be granted when it was necessary to prevent injustice. That fundamental principle was applied by adopting a two-stage test. First, the burden was on the defendants to establish that there was another available forum which was clearly or distinctly more appropriate than Jersey, as submitted by the plaintiff. Secondly, even if the court concluded at that stage that the other forum was clearly more appropriate for the trial of an action, the court could nevertheless decline to grant a stay if persuaded by the plaintiff, on whom the burden of proof lay, that justice required that a stay should not be granted (page 167, line 2 - page 168, line 5).

(2) In deciding to stay the action in Jersey, the Royal Court had failed to take into account the following relevant matters—(a) the precise position of each party, since it was a multi-party action; (b) the desire of the third defendant to retain jurisdiction in Jersey and to pursue her counterclaim against the other parties; (c) the fact that only one summons issued by two defendants was pursued and that most of the defendants did not apply for a stay; (d) the fact that the defendant company was resident in Jersey; (e) whether the plaintiff could successfully make all the defendants parties to an action in Kenya even though several of the defendants were not resident there; and (f) whether, as a condition of a stay in Jersey, the defendants should be required to undertake to submit to the jurisdiction of the Kenyan courts (page 169, lines 19-31; page 172, line 25 - page 173, line 14).

(3) The matters which the court considered were relevant in determining the jurisdiction with which the issues in the action had the most real and substantial connection included (a) the matters, stated above, which the Royal Court had failed to take into account; (b) the residence of the parties; (c) the location of the assets in dispute; (d) the location of the documents relating to such assets; (e) the location of witnesses; (f) the fact that the defendant company was served in Jersey and the other defendants had been served out of the jurisdiction and had not applied to set aside the service; (g) the fact that the family went to London to attempt to resolve their dispute with B; (h) the fact that proceedings were brought in Jersey prior to the present proceedings by both the plaintiff and second defendant, though both these parties had also issued proceedings in Kenya; (i) the fact that there was doubt as to whether the plaintiff could successfully serve Kenyan proceedings out of the Kenyan jurisdiction on those defendants not in Kenya; and (j) the fact that no question of Kenyan law arose and while Hindu law would arise it was not tied to any particular forum and a Kenyan court would be in no better position to decide such questions than a Jersey court (page 174, line 37 - page 176, line 20).

(4) The second and eighth defendants had not discharged their burden of showing that Kenya was a forum to whose jurisdiction each of the defendants was amenable and which was clearly or distinctly more appropriate than Jersey. A plaintiff was not to be driven from the Jersey Royal Court except where a clear and distinct case was made out, which had not been done in the present case. Indeed, on balance, the Jersey court was the more appropriate forum and it was therefore unnecessary to consider the second stage of the test, i.e. whether justice required that a stay should not be granted. On this basis, the appeal would be allowed and the action would remain in Jersey (page 176, lines 21-44).

SOUTHWELL, J.A., delivering the judgment of the court: This is the judgment of the court giving reasons for the decision communicated at the close of the hearing, by which this court gave leave to appeal to the appellant plaintiff, allowed the appeal, and discharged the decision and the acte de justice of the Royal Court.

The appeal is from an interlocutory decision of the Royal Court, the Bailiff presiding, staying the action on the ground commonly referred to as forum non conveniens. It will be necessary to set out the facts and the history in no small detail so that the real issues arising on this interlocutory matter can be fully understood. First, it is necessary to state who are the parties to this action in Jersey which the Royal Court had stayed. With one exception, the first defendant, all the parties are descendants of Mr. Shamjibhai...

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