[1] Gigi Osco-Bingeman [2] Vadim Fridman Appellant v Barcadi International Ltd Respondent [ECSC]

• Jurisdiction: Anguilla
• Court: Court of Appeal (Anguilla)
• Judge: The Hon. Mr. Denys Barrow
• Judgment Date: 11 October 2007
• Judgment citation (vLex): [2007] ECSC J1011-2
• Docket Number: CIVIL APPEAL NO.4 OF 2007
• Date: 11 October 2007

[2007] ECSC J1011-2

IN THE COURT OF APPEAL

On written submissions before:

The Hon. Mr. Denys Barrow, SC Justice of Appeal

CIVIL APPEAL NO.4 OF 2007

Between:

[1] Gigi Osco-Bingeman

[2] Vadim Fridman

Appellant

and

Barcadi International Limited

Respondent

1 This is a decision of a single Judge. This is a procedural appeal against the decision of George-Creque J dated 12^th July 2007 debarring the appellants from making an application to the High Court asking that it should not exercise its jurisdiction on the ground that the court in Anguilla is not the appropriate court for the trial of the claim (the forum challenge) that the respondent (Bacardi) brought against the appellants.

2 As appears from the background summary made by the judge in her judgment of 24^th May 20071, the appellants are named in the High Court claim as the third and fourth named defendants. Neither the first nor second named defendant is directly affected by the decision that gives rise to this appeal and, hence, neither appeals. The first named defendant (CDC) is the owner of the "Patron" brand of Tequila, and is a very successful company. The second named defendant (Pendragon) owns half the shares in CDC. Both of these companies are incorporated in Anguilla and were served, as of right, by Bacardi. The appellants, both resident in the United States of America, are the executors of the estate of Martin Crowley, deceased, who owned all the shares in Pendragon and, indirectly, half the shares in CDC. The dispute between the parties concerns the sale of those shares.

3 Bacardi and the appellants entered into a conditional agreement for the sale of the shares in CDC to Bacardi. In January 2007 Bacardi obtained a without notice injunction to stop the appellants from selling the shares to Mr. Crowley's former 'partner', Mr. John Paul De Joria, as Bacardi feared the appellants were proposing to do. The judge who granted the injunction also granted an order for service out of the jurisdiction of the claim form upon the appellants. The appellants have an earlier appeal against the judge's refusal to set aside that order. The appellants consider it relevant, for present purposes, to mention that one of the points they take against that order, among others, is that the judge's order, while providing that the appellants must file acknowledgment of service within 28 days after service of the statement of claim, did not state a time for the defendants to file their defence. The appellants argue that rule 7.5.2 (b) requires that a judge must specify a time for a defendant to file his defence. The appellant's contention that the judge set no date for the filing of defences is of considerable significance to their central point, to which I shall shortly come, that the time for making the forum challenge had not expired.

Dispute as to service and reservation of rights

4 Service of the claim form was purportedly effected upon the third appellant in March 2007 and there was an attempt at service upon the fourth appellant in 2February 2007.2 The appellants disputed that there was proper service upon them. In consequence of that state of contention the legal representatives for the parties exchanged correspondence on the matter of service, including discussing the appellants making themselves available to be properly served and treating themselves as having been properly served. The appellants argue that throughout they expressly reserved their right to make the forum challenge. The appellants base that argument on the following correspondence and documents and the expressions set forth in them:

• A. In a letter dated 6^th February 2007, counsel for the appellants wrote to counsel for the respondent;

  " As previously stated, we are in principle prepared to agree to an extension of the return date for the injunction …We look forward to hearing from you and reserve all our clients' rights in the circumstances."

• B. In another letter dated 21^st March 2007, counsel for the appellants wrote to counsel for the respondent stating the following;

  " Please be advised that our clients are disclosing the said letter of Intent pursuant to the order of the court and our clients do not waive their rights to contest the jurisdiction of the Anguillan Court or to contest service on them or to mount any forum challenge."

• C. On the 7^th March 2007 the appellants filed an application to set aside the ex parte order of 30^th January 2007 permitting service on the appellants outside of the jurisdiction. This order, by which the court assumed jurisdiction over the appellants, was therefore subject to a direct challenge from 7^th March 2007. The judge in her judgment given on 24th May 2007 dismissed that challenge. But the appellants appealed against this decision. The challenge to jurisdiction therefore continued.

• D. In skeleton arguments filed on behalf of Pendragon on 11^th April 2007 in support of that defendant's forum challenge the appellants' solicitors stated "the [Appellants] have still not been served with the Bacardi Claim. Part 9 of the CPR is not operativeuntil the Court is seised of jurisdiction over the [Appellants] … It is for that reason that the [Appellants] have not yet applied for a stay of these proceedings on the basis of forum non conveniens."

• E. The appellants also submit that both the court and the respondent were fully aware that the appellants filed in a court in California a Petition for Instructions, which sought instructions from the court permitting the appellants to cease defending the Privy Council appeal that Mr. De Joria, the surviving partner of Mr. Crowley, has pending against the decision of this court that the executors were not bound to sell the shares in CDC to Mr. De Joria. If the executors were to cease defending the appeal it would defeat the enforceability of the appellants' agreement with Bacardi. This petition, therefore, sought to place performance of the agreement into the jurisdiction of a California court as opposed to the Anguilla court and was, accordingly, a clear attempt to oust the jurisdiction of the Anguilla court.

• F. In her judgment on the 24^th May 2007 in dealing with Pendragon's forum challenge the judge stated that the appellants, who were not resident in the jurisdiction, had not joined in the application then before her because at the time that application was made the appellants maintained they had not been served. The judge, therefore, was clearly aware of the prospect of the appellants' challenge, once served, to the jurisdiction of the Anguilla court.

• G. In a letter on the 5^th of June 2007 counsel for the appellants once again wrote to counsel for the respondent stating;

• H. "We have slightly amended the said order as we wish to make it pellucid that our position is that to date the 3^rd and 4^th Defendants have not been served and accordingly reserve all their rights in relation to the jurisdiction of the Anguilla court over them."

The judge's decision

5 It is against the third of the judgments, which the judge gave, that this appeal was filed. The first and second are relevant, however, because, as we shall see below, Bacardi claims that they caused the appellants to alter their stance on the forum challenge. The essence of those judgments, both pronounced on 24^th May 2007, was that, in the one case, Pendragon had failed to show that California was clearly or distinctly a more appropriate forum than the court in Anguilla for the determination of the issues and the judge dismissed Pendragon's forum challenge. In the other case the judge exercised the discretion given to the court by rule 26.9 to put matters right and decided that she would not set aside the order that she had made for service out of the jurisdiction on the third and fourth defendants on account of Bacardi's failure to put certain information before the court when it made its application for service out of the jurisdiction.

6 The third decision, pronounced on 12^th July 2007 and the one that is currently being considered on this appeal, noted that proper service upon the appellants had occurred respectively on 26^th March and 7^th June 2007 and, therefore, stated the dates (in April and July, respectively) when the time for acknowledgement of service expired. The judge noted that the fourth appellant (D4) acknowledged that he was properly served and the judge found as a fact that the third defendant (D3) was properly served. The judge held D3 had not filed an acknowledgement of service and that Bacardi could therefore request judgment in default. Additionally, however, the judge stated, D4 relied on rule 9.3(4) which says that a defendant may file an acknowledgment of service at any time before a request for default judgment is received at the court office. In response, the judge stated, Bacardi submitted that because of the defendants' conduct the court should dispense with the need to file a request for default judgment, exercising its power under rule 26.1(6).

7 The judge's order continued:

"(5) The court was pointed to correspondence between the parties, relating to the issue of service in respect of the Third Defendant and Fourth Defendant where they appeared to be prepared to concede service upon them provided they were given until 31^st July 2007 for filing and serving their Defences (see letter 22^nd June 2007 — p.398 — Hearing Bundle).

"(6) The time so sought for filing their Defences was not accepted by the Claimant — who preferred a shorter period (i.e. 9^th July 2007) (see letters of 27^th June 2007 — pgs 408 and 410 Hearing Bundle)

"(7) In this correspondence it becomes clear that the only issues was as to time of service of their Defences. No reservation was then being made or even hinted at regarding the Third Defendant's and the Fourth Defendant's right to challenge the Court's jurisdiction. This has now been raised for the first time today as a...