Chowgule & Company Private Ltd & Anor v Pratap Shirke & Ors
[2023] EWHC 2815 (Comm)
Harrington & Charles Trading Company Limited (in liquidation) & Ors v Jatin Rajnikant Mehta & Ors
14 February 2023
[2023] EWHC 307 (Ch)
High Court
A big fraud case happened, and some people are being sued in England. The people being sued say the case should be in India, but the judge says no. Even though some things happened in India, the people being sued live in England, and the companies involved are registered in England, making England the better place for the case.
Key Facts
- •Alleged US$1 billion fraud involving misappropriation, laundering, and concealment of bullion proceeds.
- •Six English-registered companies (Claimant Companies) allegedly used as vehicles in the fraud.
- •First to Fourth Defendants (Mehta family members) and Fifth Defendant (business associate) allegedly orchestrated the fraud.
- •Consortium Banks (primarily Indian banks) suffered losses due to defaults by Winsome and Forever Precious.
- •Claimants (liquidators of Claimant Companies) brought claims against Defendants in England for equitable compensation, account of profits, knowing receipt, dishonest assistance, unlawful means conspiracy, and insolvency act relief.
- •Defendants challenged jurisdiction, arguing India was the more appropriate forum.
- •Defendants offered undertakings to submit to Indian jurisdiction.
- •A bankruptcy moratorium in India prevents new proceedings against the First Defendant.
- •Uncertainty regarding recognition of English liquidators' authority in India.
Legal Principles
Forum non conveniens: A stay will be granted only if another available forum with competent jurisdiction is more appropriate for the interests of all parties and the ends of justice.
Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460
Burden of proof: Defendant must show another available forum is clearly or distinctly more appropriate; if successful, burden shifts to claimant to show special circumstances requiring trial in England.
Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460
Availability of foreign forum: Foreign court must have jurisdiction (personal and subject matter) over the defendant.
Dicey, Morris & Collins on the Conflict of Laws, 16th Edition
Correct characterisation of dispute: The court must look to the substance of the dispute, not merely the form of claims pleaded.
Unwired Planet International Ltd v Huawei Technologies (UK) Ltd [2020] UKSC 37
Rome II Regulation: In tort claims, the law applicable is generally the law of the country where the damage occurred, unless another country is manifestly more closely connected.
Regulation (EC) No 864/2007
Outcomes
Jurisdiction Applications dismissed.
Defendants failed to demonstrate that India was clearly or distinctly a more appropriate forum than England. While India is an available forum due to undertakings given by the defendants, several factors weighed in favor of England, including the residence of the Applicants in England, the involvement of English companies and liquidators, and the complexity of the international fraud.
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