The firm gained a complete victory in the English High Court (Chancery Division) for its clients Mrs. Angela Shamoon and her daughter Ms. Alexandra Shamoon, successfully challenging the jurisdiction of the English Court to hear a major claim against them. The firm succeeded in every aspect of the challenge to jurisdiction, in one of the few reported cases successfully applying article 1(2)(a) of the Brussels Regulation. Additionally, the clients have been awarded their legal costs, some of those on the indemnity basis (awarding costs on the indemnity basis is used by the English Court as a tool to punish bad behavior by a party to litigation).
The claim was brought by Mr. Peretz Winkler, formerly the CFO and manager of an Israeli conglomerate called Yakhin Hakal, and his Panamanian company against the firm’s clients, Mrs. Angela Shamoon and Ms. Alexandra Shamoon, the widow and daughter respectively of the late Israeli billionaire Mr. Sami Shamoon (“Mr. Shamoon”), and the residual legatees under his will. In his claim, Mr. Winkler alleged that, prior to his death, Mr. Shamoon had orally promised to transfer to him certain valuable shares in the holding company of Yakhin Hakal as reward for past and incentive for future services. On the basis of the alleged promise, and certain statements allegedly made by the firm’s clients after Mr. Shamoon’s death, Mr. Winkler claimed declarations from the English Court against Angela and Alexandra Shamoon as to his entitlement to the shares (which Angela and Alexandra were (and are) due to receive as residual legatees under Mr. Shamoon’s will).
Angela, who is a resident of Israel, and Alexandra, who is resident in the UK, challenged the jurisdiction of the English Court to hear the claim on numerous grounds. First, they contested jurisdiction on the basis that the claim was a matter relating to “succession” within article 1(2)(a) of the Brussels Regulation and therefore fell outside its scope. As a result, the issue of jurisdiction fell to be considered under the English common law rules and, pursuant to the common law rules, the English Court had no jurisdiction in respect of the claim and, in any event, England was not the natural or appropriate forum for the dispute. Secondly, Mrs. Angela Shamoon contended that she was not domiciled in England for the purposes of Article 59 of the Brussels Regulation or, therefore, validly served with the claim in the UK. Mr. Winkler contested both points and also alleged that, in any event, by taking certain limited steps in the proceedings before issuing their jurisdiction challenge, Angela and Alexandra Shamoon had submitted to the jurisdiction.
To account for the possibility that the Court would determine Mrs. Angela Shamoon not to be domiciled in the UK, Mr. Winkler also brought a protective application for permission to serve Mrs. Angela Shamoon out of the jurisdiction (in Israel). The application to serve out was brought on the grounds that there was a claim against Ms. Alexandra Shamoon (who, it was not disputed, is resident in the UK) to which Mrs. Shamoon was a “necessary and proper party” within the jurisdictional gateway of Civil Procedure Rules Practice Direction 6B paragraph 3.1(3). Mrs. Angela Shamoon contested this application to serve out on the grounds that there was no “real issue” between the Claimants and the “anchor defendant”—Ms. Alexandra Shamoon—and that it was not reasonable for the English Court to try that issue (CPR 6.37 (1)(a) and PD 6B paragraph 3.1(3)(a)).
In his judgment handing victory to the firm’s clients in all respects, Mr. Justice Carr declared that the English Court has no jurisdiction to hear the claim because: (1) the claim was one relating to “succession” and therefore fell outside the scope of the Brussels Regulation (and, pursuant to English common law rules, England was not the natural or appropriate forum for the claim); (2) Mrs. Angela Shamoon is resident in Israel, and not in England, and was therefore not properly served with the claim within the jurisdiction; and (3) Angela and Alexandra Shamoon had not submitted to the jurisdiction of the English Court. The judge also dismissed the protective application to serve Mrs. Shamoon out of the jurisdiction on the grounds that the claim did not meet the requirements of the jurisdictional gateway. First, the Judge held that there was no claim with realistic prospects of success against the anchor defendant. Secondly, the Judge held that, even if he had concluded that there was a claim with realistic prospects of success against her, he would have concluded that it was not one which it was reasonable for the English court to try.
The case has potentially wider significance as it considered the issue of the “succession” exception to the Brussels Regulation. There was virtually no law on this issue until now and this judgment will add some clarity to the scope of the exception going forward. The Claimants declined to appeal the Judgment of Mr. Justice Carr, which is therefore now final.