Courts must keep ‘a close eye on proportionality’ after a $339m fraud claim descended into an ‘unrestrained litigation extravaganza’ following repeated challenges by the defendants, the master of the rolls has said.
Sir Geoffrey Vos described Alta Trading UK v Bosworth as ‘an indictment of a system that has, in this case, allowed relatively straightforward jurisdictional arguments to expand into an unrestrained litigation extravaganza’. The dispute – which has yet to reach its substantive phase – has already travelled from the commercial court to the Court of Justice of the European Union (CJEU) over the course of six years.
The case concerns allegations against the former chief executive officer and former chief financial officer of the Arcadia Group, an oil trading giant. It is alleged that the two former bosses are guilty of a large-scale conspiracy to defraud the Arcadia claimants of which they were stewards.
In the latest appeal, the defendants – who are British citizens domiciled in Switzerland – challenged the jurisdiction of the English court over them. The question of jurisdiction turned on whether the claims relate to individual contracts of employment within the meaning of the Lugano Convention, and whether claims against the defendants should be brought in Switzerland rather than in London.
The Court of Appeal dismissed the defendants’ challenge and praised the High Court’s ‘admirable’ judgment. Sir Geoffrey concluded the judgment by stating: ‘It seems that the defendants have spared no expense in seeking to challenge the jurisdiction of the English court over them. There have now been no fewer than six substantive hearings at different levels from the commercial court to the CJEU, and many interlocutory ones.
‘The claim form was issued as long ago as 13 February 2015, now six and a quarter years ago, but the defendants have yet even to file a defence to the claimants' claims for some $339 million. This, I regret to say, is an indictment of a system that has, in this case, allowed relatively straightforward jurisdictional arguments to expand into an unrestrained litigation extravaganza. Courts at all levels need to keep a close eye on proportionality.’