Pacific Electric Wire & Cable Company Ltd v (1) Texan Management Ltd; (2) All Dragon International Ltd; (3) Blinco Enterprises Ltd; (4) Patagonia Ltd

• Jurisdiction: British Virgin Islands
• Judge: HARIPRASHAD-CHARLES J,Indra Hariprashad-Charles
• Judgment Date: 12 May 2006
• Docket Number: Claim No. BVIHCV2005/0140
• Court: High Court (British Virgin Islands)
• Date: 12 May 2006

THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE (CIVIL)

Her Ladyship the Honourable Justice Indra Hariprashad-Charles

Claim No. BVIHCV2005/0140

BETWEEN

Pacific Electric Wire & Cable Company Limited

Claimant

and

(1) Texan Management Limited

(2) All Dragon International Limited

(3) Blinco Enterprises Limited

(4) Patagonia Limited

Defendants

Appearances:

Mr. Gerard St. C. Farara QC of Farara, Kerins for the Claimant.

Mr. Samuel Jackson Husbands of Walkers for the first and second Defendants.

Mr. Paul Webster QC and Mr. Kerry Anderson of O'Neal Webster for the third and fourth Defendants.

The following cases were referred in the judgment of Justice Charles.

1. Enzo Addari v Edy Gay Addari (Civil Appeal No.21 of 2005) unreported—Judgment of the Court of Appeal of the British Virgin Islands.

2. Smay Investments Limited and Another v Sachdev and Others [2003] 1 WLR 1973.

3. Robert Conrich v Ann Der Elst et al (AXAHCV2001/002) unreported—Judgment of the High Court of Anguilla delivered on 13 February 2003.

4. Spiliada Maritime Corporation v Cansulex Limited [1987] 1 A.C. 460.

5. IPOC International Growth Fund Limited v LV Finance Group Limited (BVI Civil Appeals Nos. 20 of 2003 and 1 of 2004) unreported—Judgment delivered on 19 September 2005.

6. The Abidin Daver [1984] A.C. 398.

7. Banco Atlantico S.A. v The British Bank of the Middle East [1990] 2 Lloyd's Rep. 504.

8. Bitech Downstream Ltd v Rinex Capital Inc. et al (BVIHCV2002/0233) unreported—Judgment of the High Court of the British Virgin Islands.

9. Arabian American Insurance Company (Bahrain) E.C. v Al Amana Insurance and Reinsurance Company Ltd (Civil Case No. 38 of 1993) Supreme Court of Bermuda—unreported—Judgment of Ground J. delivered on 4 January 1994.

CATCHWORDS

Forum non conveniens — Procedure for applying — Inherent jurisdiction of the Court to stay proceedings — Application disputing jurisdiction of the Court under Civil Procedure Rules 9.7 (1) (b) — 1 ^st and 2 ^nd defendants seeking order for the Court not to exercise jurisdiction under CPR 9.7 (1) (b) — Whether failure to file affidavit in support in time bars application from being heard.

3 ^rd and 4 ^th defendants seeking order for Court to stay proceedings based on forum non conveniens relying solely on inherent jurisdiction of the Court — Grounds on which such an application will be granted.

Forum non conveniens — defendants incorporated in the BVI — connecting factors to Hong Kong — similar actions between the parties in Hong Kong concerning substantially the same issues.

HEADNOTE

The claimant, a company incorporated in Taiwan, filed a claim in the BVI seeking inter alia, declarations to the effect that it is beneficially entitled to the ownership of 155,610,000 shares held by the 1 ^st defendant in PacMos Technologies Holdings Limited, a Hong Kong listed company. By an amended Statement of Claim the Claimant alleges that its senior executive officers, Hung Chiu Hu, Yu Jeh Tung and Tao Tsun Sun, carried out a massive fraud over a period of several years in which its funds were used illegally to purchase the PacMos shares in the name of the 1 ^st defendant. Further, that the 2 ^nd defendant holds its shares of the 1 ^st defendant on trust for the claimant, and that it is the owner of the shares in the 3 ^rd and 4 ^th defendants. All four defendants are BVI companies. Prior to commencing this claim the claimant had brought two actions in Hong Kong in which the allegations of wrongdoing and the declarations and orders sought are substantially the same as in this claim. The 2 ^nd, 3 ^rd and 4 ^th Defendants are the defendants in one action and the 1 ^st and 4 ^th defendants are defendants in the other action. The claimant is the sole claimant in both Hong Kong actions. The 1 ^st and 2 ^nd defendants applied pursuant to Part 9.7 (1) (b) of the Civil Procedure Rules for the Court not to exercise its jurisdiction to hear the claim on the ground that Hong Kong was the more appropriate forum for the trial of the issues between the parties. The 3 ^rd and 4 ^th defendants applied under the court's inherent jurisdiction for a stay of the claim on the ground of forum non conveniens. The Claimant objected to both applications. It argued that the application filed on behalf of the 1 ^st and 2 ^nd defendants should not be heard at all because the affidavit in support thereof was filed late in contravention of CPR 9.7 (1) (4). Counsel also argued that application for the 3 ^rd and 4 ^th Defendants should not be heard because the application was filed after the time the CPR permits for applications challenging the jurisdiction of the court, and also because the 3 ^rd and 4 ^thd Defendants had already submitted to the jurisdiction of the Court by first requesting and then applying for an extension of time to file their defence. The claimant argued that the BVI is the appropriate forum for trying the action because the defendants are incorporated in the BVI and the Hong Kong actions involve different issues

Held —The stay would be granted because—

• (1) The failure of the 1 ^st and 2 ^nd Defendants to file the affidavit in support of the application in time was not a bar to the application being heard because the claim is complicated requiring careful analysis, and the Court must look at the claim as a whole. To refuse to hear the application on a procedural technicality would be draconian.

• (2) The court has an inherent jurisdiction to grant a stay on the ground of forum non conveniens and the question of submission to the jurisdiction did not arise.

• (3) The defendants had discharged the burden of showing that Hong Kong was the more appropriate jurisdiction for the trial of the issues between the parties and the claimant had failed to prove any special circumstances why the trial should continue in the BVI.

HARIPRASHAD-CHARLES J

1 This Court is concerned with two applications. The first, issued on 12 July 2005 is brought by the first and second defendants (together ‘Texan and All Dragon’) seeking an order that this Court should not exercise its jurisdiction to try the claim herein and that the claim be stayed on the grounds of forum non conveniens. Their application is made pursuant to Part 9.7 (1) (b) of the Civil Procedure Rules (‘the CPR’). This Rule states that a defendant who argues that the court should not exercise its jurisdiction may apply for a declaration to that effect.

2 The second application, filed on 21 September 2006, is brought by the third and fourth defendants (together ‘Blinco and Patagonia’). They crave an order similar to that of Texan and All Dragon that the proceedings be stayed on the ground that the British Virgin Islands (‘BVI’) is not the appropriate forum for the trial of this matter and, alternatively, that the court makes a declaration pursuant to CPR 9.7 (1) (b) that it should not exercise its jurisdiction in the matter and that the time specified in CPR 9.7 (3) for making an application under CPR 9.7 (1) be extended to 10 October 2005. One of the grounds of this application is that the court has power under its inherent jurisdiction to grant a stay of proceedings if there is another forum in which the case can be more conveniently tried and, alternatively, under CPR 9.7 (1) (b) to make a declaration that the court should not exercise its jurisdiction in the matter.

3 On the morning of the hearing of these applications, Learned Queen's Counsel, Mr. Paul Webster appearing on behalf of Blinco and Patagonia expressly declared that he is abandoning the alternative application under CPR 9.7 (1) (b) and he intends to proceed strictly under the inherent jurisdiction of the Court. In doing so, Mr. Webster QC relied on the recent judgment of the Court of Appeal in Enzo Addari v Edy Gay Addari1. At paragraph 13, Rawlins J.A. delivering the judgment of the Court of Appeal said:

‘As far as a stay is concerned, the court has always had an inherent jurisdiction to grant a stay of proceedings on grounds of forum non conveniens or while an appeal is pursued. The court also has an inherent jurisdiction to dismiss a claim on the grounds of forum non conveniens. The jurisdiction is discretionary. It is exercisable where the court thinks that it is just and convenient to make such an Order, in order to prevent undue prejudice to the parties or is an abuse of the process of the court. The court is entitled to exercise the power upon such terms as it determines.’

4 It appears that the stance taken by Mr. Webster may have put an end to one of the procedural objections which the claimant raised in their written as well as oral submissions. For completeness, I will expansively examine this argument at the appropriate time. Needless to say, the claimant opposes both applications.

Procedural objections

1 Texan and All Dragon's application

5 It is common ground that Texan and All Dragon's application was filed on the last day for filing of a Defence and no supporting evidence, as required by CPR 9.7 (4) was filed and served until 23 September 2005.

6 Learned Queen's Counsel, Mr. Gerard Farara appearing on behalf of the claimant submits that the application of Texan and All Dragon should be dismissed on the ground of their non-compliance with the CPR. CPR 9.7 (4) provides that ‘an application under this rule must be supported by evidence on affidavit.’ Mr. Farara QC submits that CPR 11.11 (4) mandates that the notice of application must be accompanied by (a) a copy of any draft order sought and (b) any evidence in support which means that the evidence is to be filed contemporaneous with the application. CPR 11.7 (2) directs that the applicant must file with the application or not less than 3 days before the hearing of the application a draft of the order sought. Mr. Farara submits that Texan and All Dragon have not complied with the provisions of the CPR in that they did not file...