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Rachel Brown
Rachel Brown,
ASSOCIATE - CHARTERED LEGAL EXECUTIVE
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Service out of the jurisdiction – obtaining an order for permission to serve out
11 August 2020

A recent case has provided some helpful guidance on obtaining permission to serve out of the jurisdiction and disputes over jurisdiction. The case of Punjab National Bank (International) v Vishal Cruises [2020] provides guidance on what is known as ‘jurisdictional gateways’. In this case, the Court dismissed the Application requesting that the orders for service out of the jurisdiction be set aside. The court considered whether service had been validly effected and the effect of certificates of service. 

In this case, the Claimant Bank provided loans to Vishal Cruises Ltd and these loan facilities were expressly governed by English law and gave the English courts jurisdiction to settle any connected disputes. The loan was supported by guarantees from Mr Agrawal and an Indian company, SIL. The first guarantee included a non-exclusive jurisdiction on the English courts and the other guarantee contained no jurisdiction clause. The Bank issued proceedings in the English Courts to call upon the guarantees provided by Mr Agrawal and SIL. The Bank obtained orders giving permission to serve the claim forms outside the jurisdiction in India.

Mr Agrawal and SIL applied to the Courts to set aside the orders for service out of the jurisdiction on the grounds of non-disclosure and jurisdiction. It was also argued that India was the forum conveniens for the claims and that service had not been validly effected.

In obtaining the orders for permission to serve out of the jurisdiction, the Bank had relied upon 3 jurisdictional gateways, being gateway 3 (the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.); gateway 6 (a claim in respect of a contract where the contract (a) was made within the jurisdiction, (b) was made by or through an agent trading or residing within the jurisdiction, (c) is governed by English law, or (d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract) and gateway 7 (a claim is made in respect of a breach of contract committed within the jurisdiction).

The Court held the Claimant met the jurisdictional gateway requirement which was the gateway disputed by the Defendants and that a claimant only needed to satisfy one of the gateways for permission to serve proceedings out of the jurisdiction. The Court did however, consider the other 2 gateways being, gateway 7 which it held was met as the place of performance would be the place of the principal debtor i.e. the Bank which was based in England and gateway 3 which was also met because the other guarantors had not challenged jurisdiction.

It was further held that England was the forum conveniens i.e. the correct place to bring the proceedings as English courts had jurisdiction over the Passat facility and the 2 claims were intertwined and so if jurisdiction was declined in relation to the Vishal guarantee it would risk a multiplicity of proceedings and irreconcilable outcomes. 

On the point of whether a certificate of service from a foreign judicial authority (in this case Indian) can be valid service of English judicial proceedings, the Court found that there is a robust presumption of service and that a claimant need not look beyond the certificate.

If you have any cross border queries or any disputes or debts which have a cross border issue, then please do contact Rachel Brown of our Dispute Resolution team either by email at [email protected] or by telephone on 0118 9527257.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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