High Court Finds Submission To Jurisdiction No Bar To Staying English Proceedings In Favour Of Thai Proceedings Following Change In Circumstances

• Published date: 18 February 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Herbert Smith Freehills
• Author: Ms Anna Pertoldi and Maura McIntosh

The High Court has granted a stay of English proceedings on the basis that the Thai courts were clearly and distinctly the more appropriate forum to determine the dispute. The stay was granted even though the English proceedings had begun five years earlier, and the defendant had unsuccessfully challenged jurisdiction at that time and had subsequently submitted to the jurisdiction by serving a defence: Apollo Ventures Co Ltd v Manchanda [2021] EWHC 3210 (Comm).

The stay was granted in light of a change in circumstances - the defendant, M, was the only remaining defendant in the English action, the claims against other defendants having been struck out when the claimant failed to provide security for costs. This meant that there was no longer a risk of inconsistent judgments against different defendants in different jurisdictions if the claim against M was stayed, a key consideration when jurisdiction was challenged originally. The court also took into account the existence of similar proceedings pending in Thailand, which were commenced by the claimant and its shareholders after the English proceedings began and were much further advanced than the English proceedings.

This case demonstrates that it is possible to apply for a stay of English proceedings a considerable time after the proceedings have begun, even where the defendant has submitted to the jurisdiction. An extension of time is however required and the application should be made promptly, as the court will apply the Denton criteria (outlined here), meaning any delay will be taken into account. The stay will likely only be granted in unusual circumstances, as on the facts of this case.

Background

The claimant is a Thai company in which M is a substantial shareholder. The claimant alleges that M caused the claimant to enter into two substantial loans with a Thai businessman, without the knowledge of other officers of the claimant and by the use of forged documents. The greater part of the loan money was, it says, paid for the benefit of M and his family.

Proceedings began in England in May 2016 against M and a number of other defendants and a world-wide freezing order was granted. M applied at that time to set aside permission to serve proceedings outside of the jurisdiction but that application was unsuccessful, in large part because the claims against a number of the other defendants were proceeding as of right in England as they were domiciled here, and allowing the proceedings against M to...