TWO DECISIONS, RELATING TO SERVICE IN UZBEKISTAN AND CHINA, SHOW THE STRUGGLES YOU MAY FACE WHEN SERVING ENGLISH CLAIMS OVERSEAS

SERIOUS FRAUD OFFICE V KARIMOVA [2020] 6 WLUK 383

EXTRA TIME ALLOWED BECAUSE OF PANDEMIC

An extension of time for service of a claim was granted to the Serious Fraud Office (SFO), as the ability to serve out of the jurisdiction upon two defendants in custody in Uzbekistan had been impacted by the COVID-19 pandemic.

Factual Background

The SFO alleges that Gulnara Karimova (K), the daughter of Uzbekistan's former president, and her former partner, Rustam Madumarov (M), received corrupt payments between 2004 and 2012 which were the source of her funds for purchasing a number of UK assets. These assets were subject to a property freezing order (PFO) in 2017, which provided that the SFO had to commence its claim for a civil recovery order within 12 months. 

Although proceedings had been issued within 12 months, there were difficulties in effecting service because of the COVID-19 pandemic. An additional, identical, claim was brought against three other defendants, companies based in the British Virgin Islands (BVI).

The SFO made several applications including for an extension of time for the service of the claim upon K and M.

KEY LEGAL POINTS

The Court held that the SFO had a good reason for not having effected service upon K and M. Both were incarcerated in Uzbekistan and service upon them had been hindered due to the outbreak of the COVID-19 pandemic and the accompanying travel restrictions. In coming to this decision the Court considered the importance of ensuring all efforts had been made to serve upon all those who had a beneficial interest in the property.

COMMENTARY

This judgment may assist those seeking to serve an English claim overseas in the ongoing pandemic. It shows the type of evidence that may be adduced to show good reason for service not having been effected. The Court will consider all factors and base its decision on the interests of justice in the particular case.

NO PERMISSION TO SERVE ON D IN CHINA BY ALTERNATIVE MEANS

The High Court granted permission for the claim to be served out of the jurisdiction in China, but refused permission to serve by alternative means.

CELGARD, LLC V SHENZHEN SENIOR TECHNOLOGY MATERIAL CO LTD [2020] EWHC 2072 (CH)

FACTUAL BACKGROUND

Celgard, LCC (Celgard), an American company, alleged that the Chinese company, Shenzhen Senior Technology Material Co Limited (Shenzhen), was using Celgard's confidential information to produce battery separators. Trade secrets had been obtained by Shenzhen by hiring Celgard's former scientist, Dr Zhang, who had worked for Shenzhen under a different name to avoid attention being drawn to the work. Celgard was concerned that the product being produced by Shenzhen was being sold at a much lower price point and may steal their manufacturing customers. 

One Shenzhen customer was a UK based manufacturer with whom Celgard had a contract. So that Celgard's UK interests were protected, Celgard applied for an injunction in the High Court to prevent the Shenzhen battery separators from entering the UK market. At the same time, they applied to serve the proceedings out of the jurisdiction under CPR 6.36 and to serve the claim form by alternative means under CPR 6.15(1).

KEY LEGAL POINTS

Service out

The Court gave permission for service of the claim out of the jurisdiction. This was on the basis that the claim asked for an order that Shenzhen do or refrain from doing an act within the jurisdiction; the claim was for breach of confidence / misuse of private information where a detriment will be suffered which results from an act committed or likely to be committed within the jurisdiction.

Alternative means

Celgard made an application under CPR 6.15 to serve by alternative means. This application arose out of the successful application for permission to serve out of the jurisdiction. 

Given that China is a Hague Convention country, the test to be considered was whether there were "exceptional circumstances" which would justify an order for alternative service. Additional expense or delay are not considered sufficient to merit such an order. The Court found it difficult on the evidence provided to reach a clear view on how long service would take in China, when taking into account the normal process of service (4-6 months) and the additional delay as a result of COVID-19.

The Court decided that although the COVID-19 pandemic was having an impact on the length of time it takes to serve documents in China, the delay would not be so great so as to be incompatible with the due administration of justice.

COMMENTARY

The judgment shows that there is a fine balance to be considered when the Court is making a decision on orders for service by alternative means under CPR 6.15, especially where there is a Civil Procedure Convention in place, like the Hague Convention. The Court must ensure that the level of delay in service of documents would have such an exceptional effect so as to impact on the due administration of justice.