Stanford International Bank Ltd ((in Liquidation)) (Acting by and Through its Joint Liquidators, Marcus A. Wide and Hugh Dickson v Proskauer Rose LLP

• Jurisdiction: Antigua and Barbuda
• Judge: Blenman JA
• Judgment Date: 29 October 2020
• Judgment citation (vLex): [2020] ECSC J1029-1
• Docket Number: ANUHCVAP2018/0011
• Court: Court of Appeal (Antigua and Barbuda)
• Date: 29 October 2020

[2020] ECSC J1029-1

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Dame Janice M. Pereira, DBE Chief Justice

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Gerard St. C. Farara, QC Justice of Appeal [Ag.]

ANUHCVAP2018/0011

Between:

Stanford International Bank Limited (In Liquidation) (Acting By and Through its Joint Liquidators, Marcus A. Wide and Hugh Dickson

Appellant/Respondent

and

[1] Proskauer Rose LLP

First Respondent/Counter-Appellant

[2] Thomas V. Sjoblom

Second Respondent

Appearances:

Mr. Justin Fenwick, QC with him, Ms. Nicolette M. Doherty and Mr. Malcolm Arthurs for the Claimant/Appellant

Mr. Laurence Rabinowitz, QC with him, Prof. Edwin Peel, Dr. Niranjan Venkatesan and Dr. David Dorsett for the First Defendant/Respondent

Civil appeal — Interlocutory appeal — Service out of jurisdiction — Whether learned judge erred in granting application to set aside the order to serve out of the jurisdiction — Rules 7.3(3)(a) and 7.3(4) of the Civil Procedure Rules 2000 — Whether learned judge erred in concluding that appellant satisfied contract and tort gateways to standard of a good arguable case — Whether appellant had a good cause of action and consequently a serious issue to be tried on merits — Whether learned judge erred in concluding that Antigua was not the appropriate forum for trial of the claims

The joint liquidators of Stanford International Bank (“SIB” or “the Bank”), an offshore bank incorporated in Antigua and Barbuda (or “Antigua”), filed a claim form and statement of claim in the High Court of Antigua against Proskauer Rose LLP (“Proskauer”), a New York based law firm, and Mr. Thomas Sjoblom (“Mr. Sjoblom”), a partner at Proskauer, alleging breach of contract, tort and breach of fiduciary duties pursuant to the retainer contract between SIB and Proskauer (“the Proskauer Retainer”). The Proskauer Retainer was a continuation of the Chadbourne Retainer whereby Mr. Sjoblom, while a partner at Chadbourne and Parker LLP, another New York firm, was retained to represent the Stanford Financial Group (“SFG”), the Stanford Group Company and SIB in investigations and enforcement proceedings against them being carried out by the United States Securities and Exchange Commission (the “SEC”) and the related examinations by various regulatory bodies.

SIB sought leave of the court to serve the claim form and statement of claim out of Antigua on Proskauer on the basis of the jurisdictional gateways provided in rules 7.3(3)(a) (“the contract gateway”) and 7.3(4) (“the tort gateway”) of the Civil Procedure Rules 2000 (the “CPR”) respectively. They contended that there was a breach of the Proskauer Retainer committed both within and outside Antigua and that tortious negligent acts and/or omissions were committed by Proskauer and Mr. Sjoblom both within and outside Antigua, and that those acts and/or omissions caused SIB to sustain damages both within and outside Antigua. The learned judge granted leave to serve both the claim form and statement of claim outside of Antigua. Proskauer, having been served with the claim form and statement of claim, filed an application to set aside the service out order on a number of bases, primarily of which was that Antigua was not the appropriate forum. The learned judge granted Proskauer's application on the basis that though SIB had satisfied the tort and contract gateways and there was a serious issue to be tried, Antigua was not the appropriate forum for the trial of the claim.

SIB, being dissatisfied with the decision of the learned judge appealed to this Court. Their main complaint was that the learned judge erred in concluding that some state in the United States of America (“USA”) as opposed to Antigua, was the appropriate forum to resolve the dispute and therefore the judge had improperly set aside the leave that had been granted to serve out of Antigua. Proskauer agreed with the learned judge's conclusion that Antigua was not the appropriate forum, but challenged, by way of counter-appeal, the judge's finding that the jurisdictional gateways in the CPR were satisfied and that there was a serious issue to be tried. Proskauer asserted that there were alternative bases on which the learned judge should have granted its application to set aside the order to serve out of Antigua. Proskauer's fundamental complaint was that the judge should have, in any event, set aside the service out order on the basis that SIB had failed to meet the jurisdictional gateways.

The issues that arise for this Court's determination are: (i) whether the learned judge erred in concluding that SIB had a good cause of action and consequently, a serious issue to be tried on the merits; (ii) whether the learned judge erred in concluding that SIB had satisfied the tort and contract gateways to the standard of a good arguable case; and (iii) whether the learned judge erred in holding that Antigua was not the appropriate forum to try the issues that arose between the parties.

Held: allowing the counter-appeal, dismissing the appeal and making the orders set out in paragraph 89 of the judgment, that;

• 1. It is settled law that in order to obtain leave to serve outside of the jurisdiction, three prerequisites must be satisfied. The applicant must establish that there is a serious issue to be tried on the merits of the claim, there is a good arguable case against each of the foreign defendants which falls within the relevant jurisdictional gateway in the CPR, and that the local court is clearly or distinctly the appropriate forum in which to resolve the issues between the parties. In so far as it relates to the standard of proof for the application of the relevant jurisdictional gateway, the applicant is required to establish that there is a good arguable case for its application, with a plausible evidential basis showing that it has the better argument.

  Nilon Limited and Another v Royal Westminster Investments SA and Others [2015] UKPC 2 applied; Four Seasons Holdings Incorporated v Brownlie [2017] UKSC 80 applied; Goldman Sachs International v Novo Banco SA [2018] UKSC 34 applied.

• 2. In respect of the contract and tort gateways on which SIB relied to ground their application for leave to serve out of Antigua, it is clear that the pleaded claim form and statement of claim together with the evidence adduced by SIB failed to substantiate its claim that there was a breach of contract of the Proskauer Retainer committed in Antigua. At the very least, SIB was required to establish that some part of the contract should be performed in Antigua and there was a breach of that part. Similarly, the extent of the evidence adduced by SIB failed to demonstrate that there was any tort committed in Antigua or that damage was sustained within the jurisdiction flowing from the commission of that tort. The fiduciary claims, being contingent on the claims in contract or tort, also fail. In this regard, having considered the evidence adduced by both Proskauer and SIB, it is evident that SIB failed to prove that it has the better of the arguments in relation to the jurisdictional gateways. Accordingly, there was no basis on which the learned judge could have reasonably concluded that SIB had a good arguable case in relation to the jurisdictional gateways and consequently, the fiduciary claims.

  Rules 7.3(3)(a) and 7.3(4) of the Civil Procedure Rules 2000 applied; Four Seasons Holdings Incorporated v Brownlie [2017] UKSC 80 applied; Goldman Sachs International v Novo Banco SA [2018] UKSC 34 applied; Seaconsar Far East Ltd v Markazi Jomhouri Islami Iran [1994] 1 AC 438 applied; Altimo Holdings and Investments Limited and Others v Kyrgyz Mobil Tel Ltd and Others [2011] UKPC 7 applied.

• 3. Having failed to show that there is a good arguable case for the application of the relevant jurisdictional gateways, it therefore follows that SIB would have no reasonable prospect of success in establishing that there was a breach of contract committed in Antigua or that any substantial acts causing damage were committed by Mr. Sjoblom in Antigua or that significant damage resulting therefrom was sustained in Antigua. Accordingly, the learned judge erred in concluding that there was a serious issue to be tried on the merits.

  Four Seasons Holdings Incorporated v Brownlie [2017] UKSC 80 applied.

• 4. Consequently, the set aside order should have been granted on the alternative basis that SIB had failed to satisfy the jurisdictional gateways to the standard of a good arguable case and to establish that there was a serious issue to be tried on the merits. This effectively disposes of the appeal and cross appeal.

Introduction

Blenman JA

1 This is an appeal by the joint liquidators of Stanford International Bank (“SIB” or “the Bank”) and a cross appeal by Proskauer Rose LLP (“Proskauer”) against the order dated 28 ^th October 2017 and the reasons for the order as reflected in a written judgment of the learned judge dated 4 ^th April 2018. The learned judge, in his order, set aside the leave to serve the claim form and statement of claim outside of Antigua, in Washington, DC in the United States of America (“the USA”) on Proskauer. The underlying claims were brought by SIB against Proskauer and Mr. Thomas Sjoblom (“Mr. Sjoblom”), based on the Proskauer Retainer (as defined below), wherein SIB alleged breach of contract, tort and breach of fiduciary duties. In this appeal, SIB contends that the learned judge, having correctly found that the jurisdictional gateways of rules 7.3(4) and 7.3(3)(a) of the Civil Procedure Rules 2000 (“the CPR”) had been satisfied, erred in concluding that some state in the USA, as opposed to Antigua and Barbuda (or “Antigua”), was the forum coveniens in which to resolve the dispute and therefore improperly set aside the leave that had been granted to serve out of the jurisdiction.

2 By way of...