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The proper boundaries of Practice Direction 6B paragraph 3.1(20)(a): Orexim Trading Ltd v Mahavir Port and Terminal Private Ltd and others

In Orexim Trading Ltd v Mahavir Port and Terminal Private Ltd and others, the court held that Practice Direction (PD) 6B paragraph 3.1(20)(a) was to be interpreted narrowly. A claim under section 423 of the Insolvency Act 1986 did not fall within it simply because it was made pursuant to an enactment. The court stated it would follow Re Harrods (BA) and Banco Nacional de Cuba and the interpretation adopted there in respect of Order 11, rule 1(2)(b) of the Rules of the Supreme Court (RSC).

Re Harrods

Order 11, rule 1(2)(b) provided:

Service of a writ out of the jurisdiction is permissible without the leave of the court provided that each claim made by the writ is either:

(b) a claim which by virtue of any other enactment the High Court has power to hear and determine notwithstanding that the person against whom the claim is made is not within the jurisdiction of the court or that the wrongful act, neglect or default giving rise to the claim did not take place within its jurisdiction.

The reference to any other enactment was to an enactment other than the Civil Jurisdiction and Judgments Act 1982. The Court of Appeal agreed in Re Harrods that:

… to be within Ord. 11, r. 1(2)(b) an enactment must, if it does not use the precise wording in the rule, at least indicate on its face that it is expressly contemplating proceedings against persons who are not within the jurisdiction of the court or where the wrongful act, neglect or default giving rise to the claim did not take place within the jurisdiction. It is not enough… that the enactment, like the Companies Act 1985, gives a remedy in general cases – against “other members of the company” – without any express contemplation of a foreign element.

This followed the express wording of Order 11, rule 1(2(b).

CPR 6.33(3): Service of the claim form where the permission of the court is not required – out of the United Kingdom

After various revisions, a similar rule to Order 11, rule 1(2)(b) is now found in its successor CPR 6.33(3):

The claimant may serve the claim form on a defendant out of the United Kingdom where each claim made against the defendant to be served and included in the claim form is a claim which the court has power to determine other than under the 1982 Act, the Lugano Convention, the 2005 Hague Convention, or the Judgments Regulation, notwithstanding that –

(a) the person against whom the claim is made is not within the jurisdiction; or

(b) the facts giving rise to the claim did not occur within the jurisdiction.

The direct application of Re Harrods would therefore be to this rule. Although the words “by virtue of any other enactment” have disappeared, express reference is made to the other enactments. The White Book discusses Re Harrods in relation to this rule.

Notably both Order 11, rule 1(2)(b) and CPR 6.33(3) allow for service out of the jurisdiction without the permission of the court. The claimant has to make the requisite declaration of his or her right using notice form N510 (CPR 6.34). In such circumstances, perhaps it is not surprising that the rules and Re Harrods adopted a restrictive approach requiring something express indicating the existence of an exorbitant jurisdiction.

PD 6B paragraph 3.1(20)(a) – Claims under various enactments

This provides that the claimant may serve a claim form out of the jurisdiction with the permission of the court under CPR 6.36 where:

(20) A claim is made –

(a) under an enactment which allows proceedings to be brought and those proceedings are not covered by any of the other grounds referred to in this paragraph; or

(b) under the Directive of the Council of the European Communities dated 15 March 1976 No. 76/308/EEC, where service is to be effected in a Member State of the European Union.

On the face of it, this rule contains none of the provisos that appear in CPR 6.33(3). Under this provision, the permission of the court is required before service out. It is to be noted that when this provision first made its way into the CPR, under SI 2000/221, it was stated as applying to “a claim made under an enactment specified in the relevant practice direction”. No list of statutes is now provided.


In Orexim, the court in effect applied the provisos from CPR 6.33(3) to paragraph 3.1(20)(a). It is not clear why this should be so. There is nothing on the face of the latter that imports these. Although an argument can be posited that this is the meaning of the words “under an enactment which allows proceedings to be brought”, the question arises, if the same criteria were intended to apply, why this was not done expressly.

The judge in Orexim made the point that to leave the question merely to general considerations of “sufficient connection” was too uncertain. He stated that the other gateways generally have some feature which links the claim to this jurisdiction as part of their basic requirements. He saw no reason not to take the same view of paragraph 3.1(20)(a). However, the other gateways generally express the link required. Thus for contractual claims, one link is that the contract is made within the jurisdiction. No such link is specified under paragraph 3.1(20)(a). In those circumstances, there is something to be said for a more flexible approach.

The judge went on to state that, “It is true that the present gateway is not in as explicit terms as the gateway in Harrods” but that he “would respectfully take the same approach as that taken by Lightman J which was to adopt the Harrods rationale in respect of later versions of the gateway”. However, Lightman J in Banco Nacional de Cuba was considering a later version of Order 11, rule 1(2)(b) where the claimants had sought to serve out without obtaining permission. Hence Harrods was directly relevant.

There is good logic to applying Re Harrods to CPR 6.33(3). This is because, under this rule, the court exercises a jurisdiction as of right, rather than a discretionary jurisdiction. If there was no requirement of an express contemplation in the statute, the observation made in Re Harrods would have force that “a party could issue a claim for an injunction against any person anywhere without the need for permission since the power to make an injunction derives from an enactment namely s37 of the Supreme Court Act 1981“. However, it may be argued that the Re Harrods approach is not legitimate for paragraph 3.1(20)(a) where permission of the court is required, and hence sufficient connection and jurisdictional interest would need to be shown.

In Fern Computer Consultancy Ltd v Intergraph Cadworx, the court rejected an argument that CPR 6.33(3) applied in respect of the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) (the regulations) and that therefore permission to serve out was not required. In doing so, the court applied Re Harrods and held that the regulations did not use the wording of CPR 6.33, or anything like it, to confer jurisdiction. Nor did they indicate on their face that they expressly contemplated proceedings against persons who are not within the jurisdiction. However, the judge left open the potential argument that permission may have been possible under paragraph 3.1(20)(a). In General Medical Council v Brauwers, the judge rejected an argument that CPR 6.33(3) applied to a claim form bringing proceedings under section 41A of the Medical Act 1983 to be served on a defendant out of the jurisdiction, applying Re Harrods. However, he was willing to allow service out under paragraph 3.1(20)(a), adopting what appears to have been a wide interpretation.

Therefore, the potential for a broader reading of paragraph 3.1(20)(a) is there and it may be that, considering the often noted international nature of trade and the sophistication of fraud, the courts in future may be persuaded to use a more expansive interpretation. In particular, as the court in Orexim noted, there is no express limitation on the class of transferee defendant against whom a claim under section 423 can be brought, whether by reference to their location or otherwise. A potential reading of In Re Paramount Airways Ltd is that the Court of Appeal held that section 423 had unlimited extra-territorial effect and this was certainly the way in which the judges in Jyske v Spjldnaes and Erste v JSC read the judgment. If so, then the potential of proceeding under the paragraph 3.1(20)(a) gateway may be open to argument, provided other requirements of service out and appropriate forum are met.

However, if Orexim is followed, it will be necessary to consider carefully the wording of the enactment relied upon to see if it contemplates proceedings against persons outside the jurisdiction. If a narrow interpretation is to be followed, general enactment provisions will not be enough to fall within PD 6B para 3.1(20)(a).

St Philips Stone Chambers Ishfaq Ahmed

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