Arguments in cases in the Scottish courts based on alleged unlawful means conspiracy seem to be on the rise. One such case, Mex Group Worldwide Limited v Ford & Ors [2024] CSOH 86, has raised several interesting issues, including in relation to jurisdiction.
The English courts have also been involved in the dispute, with a worldwide freezing order sought ([2024] EWCA Civ 959).
Background
Mex maintains that all twelve defenders engaged in a complex unlawful means conspiracy against it by causing the eleventh defender, a SARL, to seek to renege on an agreement recorded in a British Virgin Islands (BVI) High Court Consent Order in 2020. Mex claims to have suffered a loss of £85 million, mainly due to the failure of a planned bond issue due to the defenders' actions.
Specifically in relation to the third and eighth defenders, Mex maintains that a commercial inducement of $7 million was paid to the third defender by the transfer of funds by the ninth and tenth defenders to the eighth defender (indirectly benefiting the third defender) in order to induce him to cause the SARL to seek to renege on the agreement and Consent Order.
Jurisdiction
The third, eighth and ninth defenders are not domiciled in Scotland and challenged the jurisdiction of the Scottish court. A preliminary trial took place, and the court considered the relevant provisions in paragraph 2 of Schedule 8 to the Civil Jurisdiction and Judgments Act 1982.
Paragraph 2 provides that a person may be sued "where he is one of a number of defenders, in the courts for the place where any of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings;".
Forum non Conveniens
The third defender, domiciled in Luxembourg, argued that Scotland was forum non conveniens (not the appropriate forum) in respect of the dispute. An action was live in the BVI relating to the Consent Order which was capable of resolving the dispute. The question in the BVI proceedings was whether the Consent Order had been obtained by fraud. This was a prior question which ought to be determined before the current action. The BVI was the most appropriate forum. The third defender further argued that Luxembourg was the next most suitable forum due to his domicile.
Mex highlighted that there was no evidence to demonstrate that all the defenders could be convened in the BVI, and further there was no strongly identifiable connection other than the current live action. Mex further highlighted that any proceedings in Luxembourg would be conducted in French, a language to which neither the defenders nor Mex were native speakers. Bringing an action in Luxembourg would ultimately result in an increased risk of irreconcilable judgments being issued.
Closely Connected
The eighth defender sought to distinguish itself from the remaining defenders to prove that they were not closely connected. It maintained that it had not participated in the conspiracy and that no evidence could be led to the contrary. Since there was no possibility of any judgment being given against the eighth defender, the risk of irreconcilable judgments did not arise.
Prorogation Clause
The ninth defender (domiciled in Germany) challenged jurisdiction on the basis the court had no jurisdiction to hear claims based on a breach of, or non-contractual claims in relation to, a Deed of Affirmation (the basis of the claim against it). The introductory words in paragraph 2 of the 1982 Act stipulated that it was "subject to… rule 6 (prorogation").
The Deed contained a prorogation clause determining that the choice of law and jurisdiction would be the laws of Luxembourg and/or Germany and their courts.
The pursuer maintained that this action was not based on or connected with the Deed, instead it was only noted to provide the necessary background for this claim.
Decision
The court ultimately held that the Scottish courts had the necessary jurisdiction to hear the claims relating to both the third and eighth defenders. Lord Sandison noted that the precise role played by each conspirator, whether active or passive, in itself wrongful or lawful, was not the "true touchstone of liability". The issue of close connection was to be assessed on "a broad common sense approach… bearing in mind the objective of the article, applying the simple wide test set out…and refraining from an over-sophisticated analysis of the matter." (Compagnie Commercial Andre SA v Artibell Shipping Co Ltd [1999] SLT 1051).
The suggested alternative jurisdictions of the BVI and Luxembourg were refused by the court. The nature and incidents of the alleged conspiracy extended far beyond the BVI, and the allegations had very little substantial connection with Luxembourg. The court also highlighted that pursuing a claim in an alternative jurisdiction would ultimately present a risk of irreconcilable judgements being issued, as the remaining "anchor" defenders would still be pursued in Scotland.
However, the court had no jurisdiction as regards any claim or dispute arising out of or in connection with the Deed of Affirmation. It didn't matter that the action was not founded upon that Deed. The pursuer's pleadings that the ninth defender's actions breached that Deed could not proceed to trial (albeit other elements of the case against the ninth defender would continue). The Scottish courts did not have a common law discretion to refuse to give effect to a prorogation clause.
Comment
This case highlights the importance of carefully pleading the basis of jurisdiction against a defender, and the necessity of a close connection with claims against other "anchor" defenders. Successfully arguing forum non conveniens is generally difficult - a court would have to be persuaded that a foreign court having jurisdiction was clearly more appropriate.
While this decision is simply on the question of jurisdiction, it remains to be seen whether the pursuer can establish its case on liability. Watch this space.
This article is part of our Litigation in Scotland Report 2025. To explore more cases, you can access the full report here.
