Service of writ outside jurisdiction - sale of shares in UK-registered company at undervalue - leave not to be granted unless creditor establishing both triable issue on claim and forum conveniensIn re Banco Nacional de Cuba: ChD (Mr Justice Lightman): 11 April 2001Prior to a reorganisation of the Cuban banking system in 1997 the first defendant was the sole bank in the Republic of Cuba, carrying out the functions of both a central bank and a commercial bank.

As a result of the reorganisation the first defendant passed its central banking functions to the second defendant, becoming a commercial bank only.

In June 1997 the first defendant sold its shares in HIB Ltd, a subsidiary bank incorporated in the UK, to the second defendant.

The claimant bank, a creditor of the first defendant in the sum of some 13 million, sought to commence proceedings against the defendants for compensation on behalf of all of the creditors of the first defendant pursuant to section 423 of the Insolvency Act 1986 on the basis that the shares in HIB had been sold to the second defendant at an undervalue for the purpose of putting assets beyond the reach of the creditors.

The claimant successfully applied to the master for a declaration that by operation of Civil Procedure Rules 1998 (CPR), rule 6.19(2) it did not need the permission of the court to serve proceedings on the defendants, neither of which had any presence in the UK.

The defendants applied to the court for an order discharging and/or setting aside the order of the master and a further declaration that the court would not grant permission under CPR rule 6.20 for proceedings to be served outside the jurisdiction on the defendants.Robin Potts QC and Philip Gillyon (instructed by Holman Fenwick & Willan) for the claimant; Richard Sheldon QC and William Trower (instructed by Slaughter and May) for the first defendant; William Blair QC (instructed by Herbert Smith) for the second defendant.Held, granting the defendants' application, that to come within CPR rule 6.19(2) an enactment had to indicate on its face that it expressly contemplated proceedings against persons who were not within the jurisdiction of the court, or where the acts or omissions giving rise to the claim did not take place within the jurisdiction; that section 423 of the Insolvency Act 1986 did not therefore come within CPR rule 6.19(2); that the practical course was to consider whether the claimant would be entitled to permission to serve proceedings outside the jurisdiction under CPR rule 6.20; that the second defendant, as the central bank of a sovereign foreign state, was not entitled to immunity from suit since the sale of shares in question was a commercial rather than a governmental act; that the claimant's application for permission came within the ambit of CPR rule 6.20(10) since the register of shares for HIB was situated in the UK; but that the claimant was unable to show that its section 423 claim raised a triable issue since there was no evidence that the transaction was for the purpose of prejudicing the position of existing or future claimants in relation to their claims; that in any event the only appropriate forum for the appointment of a receiver and the distribution of assets to the creditors of the first defendant would be Cuba itself; and that since no judgment against the second defendant could be enforced in the UK by operation of section 14(4) of the State Immunity Act 1978, any such proceedings would have been fruitless.