High Court Decision Highlights Jurisdictional, Procedural, and Pleading Issues in Commercial Litigation

Citation: [2023] EWHC 3036 (Comm)
Judgment on

Introduction

The High Court of Justice’s decision in Iryna Gordiy v Jekaterina Dorofejeva & Anor concerns issues related to the English jurisdiction in commercial contracts, the adequacy and legality of service of court documents, the viability of a claim when challenged for lack of a “tenable legal foundation,” and stipulations surrounding the application to amend pleadings. Mr Justice Foxton provided a detailed judgment touching on various important aspects of commercial litigation, of particular interest to legal practitioners.

Key Facts

The claimant, Ms. Iryna Gordiy, acting in person, brought forth a claim in the Commercial Court against the first defendant, Ms. Jekaterina Dorofejeva, and the second defendant, an exempt limited partnership registered in the Cayman Islands. The claims involved alleged failures to comply with the terms of a Share Purchase Agreement (SPA), inaccuracies in documents filed with regulatory authorities, and non-fulfillment of promises related to Ms. Gordiy’s employment post-acquisition of the company she directed and owned, Remeeta Ltd.

The dispute evolved from the SPA which dictated the sale of Remeeta Ltd to Finadvant Ltd with certain conditions attached, including regulatory approval by the FCA (Financial Conduct Authority). Following procedural irregularities and what Ms. Gordiy claimed were false representations made to her and the FCA, the SPA did not culminate within an agreed timeframe, causing Ms. Gordiy to claim significant financial losses.

The case illustrates several legal principles vital to UK commercial litigation:

  1. Appropriateness of Chosen Court: The Commercial Court emphasized its finite resources should not be burdened with cases of lesser value, suggesting defendants should ensure proceedings are commenced in appropriate courts or seek transfer at an early stage.

  2. Truth in Filings: The case emphasizes the significance of accuracy and truthfulness in official filings such as Companies House records and regulatory notices such as those under s. 178(1) of FSMA.

  3. Service of Documents: It stressed the principles for valid service of documents set out in CPR 6.20(1)(c) and CPR 6.23, with the court’s willingness to rectify technical oversights to achieve substantive justice.

  4. Tort of Deceit and Unlawful Means: Discussed was the tort of causing loss by unlawful means and the necessity of intention as part of its elem. The judgment cited the potential for such a claim if a party dishonestly provides false information intending to inflict loss on another who subsequently suffers that loss.

  5. Permission to Amend Pleadings: The judgement set forth detailed guidelines for amending claims and pleadings, underscoring the need for clear particularization of any alleged misrepresentations, their falsity, the knowledge thereof, reliance, and consequent loss.

  6. Jurisdiction in Foreign Matters: The issue of service out of jurisdiction without court permission highlighted the importance of establishing a “good arguable case” and English jurisdiction under CPR 6.33(2B)(b) and CPR 6.33(2B)(c), particularly under the “necessary or proper party” ground.

  7. Strike-Out and Summary Judgment Principles: The principles underpinning the striking out of claims lacking in any “tenable legal foundation”, and the requirements for claims to survive a summary judgment application were applied.

Outcomes

The following outcomes were determined:

  • The court found that Ms. Gordiy’s claim should not have been commenced in the Commercial Court based on its value and directed attention to the necessity of proceeding in a suitable court.
  • There were significant deficiencies in Ms. Gordiy’s pleadings; the claims as they were currently presented did not provide a viable case against the first defendant.
  • It was held that any claim for breach of the SPA could not personally implicate Ms. Dorofejeva, as she was not a party to the contract.
  • Claims against Ms. Dorofejeva relying on unparticularized allegations and an implied agreement for compensation were struck out.
  • A declaration was made that the claim form had not been duly served on the second defendant as per the requirements of the CPR due to the necessity of court permission for service out of jurisdiction.
  • The court allowed for the possibility of Ms. Gordiy amending her claim subject to potential legal representation, possibly pro bono, on both contentions against the defendants.

Conclusion

The judgment of Iryna Gordiy v Jekaterina Dorofejeva & Anor elucidates the nuanced application of legal principles in commercial litigation matters, particularly those involving jurisdictional and procedural concerns. The ruling is instructive for legal practitioners on the importance of proper court selection, service obligations, and the threshold for the viability of tort claims within commercial disputes. It sends a clear message about the rigorous requirements