England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MR JUSTICE BEATSON
[2012] EWHC 74 (QB)

		Royal Courts of Justice Strand, London, WC2A 2LL
		2nd July 2013

Lord Justice Aikens :

The procedural story in outline

1. The issue on this appeal from an order of Beatson J (as he then was) dated 24 January 2012 is whether the appellant ("Dr Williams") can obtain permission to serve proceedings out of the jurisdiction on the respondent ("the CBN") on a broader basis than that granted by the judge, in order better to pursue his aim of suing the CBN in the English courts to recover US$6.5 million and Naira 5 million. Dr Williams, who is a Nigerian qualified barrister who has lived in England for 30 years, says he was deprived of these sums in 1986 as a result of a fraudulent undercover sting operation directed against one of his clients and himself by elements in the State Security Services of Nigeria ("SSS"). He alleges that the CBN participated in this action.
2. Dr Williams issued proceedings in England in February 2010 and Master Yoxall gave him permission to serve the Claim Form and Particulars of Claim on the CBN in Nigeria. In its original form, Dr Williams put forward three bases for his claim against the CBN, which I will describe further below. Permission to serve the proceedings out of the jurisdiction on the CBN was challenged before Supperstone J and on 9 April 2011 he ruled^[1] that the permission for two of the bases should be set aside. An appeal by the CBN was dismissed,^[2] but the Supreme Court has granted it permission to appeal the matter again, albeit only in relation to one issue on one of the three bases of the original claim. That appeal is due to be heard in November 2013.
3. Meanwhile, on 29 July 2011 Dr Williams applied for permission to re-amend the part of the Particulars of Claim for which permission to serve out remained following the hearing before Supperstone J. Dr Williams also sought permission to serve this re-amended pleading on the CBN in Nigeria. The proposed re-amendments raised three new bases of claim, all of which were founded on a document dated 29 September 1993 which is, on the face of it, a Directive of the Commander-in-Chief and President of Nigeria. This document has become known as "the Fidelity Guarantee" and is said only to have come into Dr Williams' possession in May 2011, a month after Supperstone J's decision. I have reproduced it in full in Appendix One to this judgment.
4. Dr Williams has alleged in the proposed re-amended Particulars of Claim that the terms of the Fidelity Guarantee give rise to new bases of claim, for (1) breach of contract, (2) breach of trust and, (3) under Nigerian law. The argument on the third basis is that Dr Williams can claim directly to enforce the Directive of the President of Nigeria, the Fidelity Guarantee, because it is said to take effect as an order (which Dr Williams can enforce) that the CBN pay to Dr Williams the $6.5 million and Niara 5 million of which he was deprived originally in 1986, together with compound interest at the rate of 17.5% per annum. This basis of claim has become known as "the Nigerian law claim". I will describe it in more detail below.
5. The CBN challenged Dr Williams' application for permission to re-amend the Particulars of Claim and to serve the re-amended version on the CBN out of the jurisdiction. Because of the history of the proceedings it was decided that the matter should be dealt with straightaway at an inter partes hearing (rather than permission being considered on the papers and then, if it were given, the defendant applying to set it aside) and Beatson J heard argument on 12 January 2012. He handed down judgment on 24 January 2012. Originally he had intended to reject permission to amend and to serve out in respect of all three proposed new bases of claim. But as a result of further arguments made to him on the morning of 24 January 2012, Beatson J changed his mind. The effect of Beatson J's revised decision was to grant the application to re-amend the Particulars of Claim and to serve them in that form out of the jurisdiction on the CBN in respect of only one part of the Nigerian law claim. This part concerned the sum of US$6.5 million, which Beatson J held was arguably situated in an English bank account.^[3] Beatson J also held that this limited permission was itself conditional on the CBN's appeal against Supperstone J's decision on the original pleading being unsuccessful in the Court of Appeal. As already noted, in the event that appeal was unsuccessful, so that condition became fulfilled. But the issue of the applicability of the condition arises again now that the Supreme Court has given permission to appeal the Court of Appeal's decision.
6. Beatson J gave the CBN permission to appeal his order but that appeal has not been pursued. The judge refused Dr Williams permission to appeal both in respect of the two bases of claim for which he had refused permission to serve out of the jurisdiction (breach of contract and trust) and also in respect of the part of the Nigerian law claim concerning the sum of Naira 5 million, for which he had refused permission to serve out.
7. However, Sir Richard Buxton gave Dr Williams permission to appeal the judge's conclusion and orders in relation to the contract and breach of trust bases of claim. He also gave permission to Dr Williams to rely on appeal on a document which came into Dr Williams' possession for the first time in March 2012. This is a letter from the CBN to the President of Nigeria dated 17 October 1993, a few weeks after the Fidelity Guarantee was produced. This letter is also reproduced in Appendix One to this judgment. I will refer to it as "the CBN Letter". In it, the CBN acknowledges that, by the Fidelity Guarantee, it had "willingly assumed duties and obligations as by law established as the custodian statutory trustee" of the funds to which Dr Williams lays claim. It also says that all those funds (including the Naira amount) were held by the CBN in an identified account in London. Although Mr Guy Philipps QC, counsel for the CBN on the appeal, has stated that the circumstances in which this document came to light "strain credulity", for the purposes of the present appeal (only) the CBN accepts that it must be assumed that it is genuine. Effectively, this enables Dr Williams to argue on this appeal that he should also have permission to serve the proceedings out of the jurisdiction in respect of the claim for Naira 5 million as well as the claim for US$ 6.5 million.
8. We heard argument on 26 March 2013 and reserved judgment.

How Dr Williams' claim arose in the first place

9. In 1986 Pearl Konsults Ltd ("PKL"), which was then a client of Dr Williams, agreed to sell foodstuffs to a Nigerian person called Mr Chukwu. The foodstuffs were to be delivered in Nigeria and the agreed price was Naira 30 million. Dr Williams has alleged that Mr Chukwu was operating on the instructions of the SSS. Payment by the buyer was to be by banker's drafts to be encashed at a Nigerian bank. It was agreed that PKL would provide security of US$6,520,190 against the risk of encashment of the banker's drafts prior to delivery of the goods by the seller. PKL was to borrow that sum from its bank and Dr Williams would guarantee that bank's loan to PKL. The US$6,520,190 was to be deposited with Mr Chukwu's solicitor in England, who was called Mr Rueben Gale. In a letter dated 19 April 1986, Mr Gale undertook that he would "not release to anybody" the US$6,520,190 that he held "until the N 30 million are released by Merchant Securities Ltd to Pearl Konsults Ltd". That is a slightly odd wording, given that the object of the security was to guard against the encashment of the banker's drafts before delivery of the goods.
10. PKL obtained the loan from its bank and that loan was duly guaranteed by Dr Williams. The $6,520,190 was deposited with Mr Gale. The banker's drafts for the Naira 30 million were encashed in Nigeria but the proceeds were then frozen. However, Mr Gale then paid $5,020,190 of the sum deposited with him into an account in the CBN's name with Midland Bank in England. It is suggested that the remaining $500,000 was retained by Mr Gale as "commission" but that is not conceded. Because the bulk of the loan sum had been paid away by Mr Gale and the Naira sum had been frozen, PKL could not go ahead with either the sale of the goods (it is not clear why) or, more relevantly, the repayment of the loan to its bank. The bank then claimed on the guarantee against Dr Williams.
11. In 1987 Dr Williams went to Nigeria in connection with this transaction. He was arrested and charged with exchange control offences. He was tried, convicted and imprisoned, but he escaped and returned to England. Then in 1993 the President of Nigeria ordered that a special judicial panel be set up by the Attorney General to consider Dr Williams' case. The panel found Dr Williams was innocent of all charges and so he received a Presidential pardon, which was published in the Official Gazette on 1 September 1993, just two weeks before the date of the Fidelity Guarantee.

The original claims as considered by Supperstone J

12. In the original Particulars of Claim, Dr Williams pleaded three broad bases for his claim against the CBN. The first is based on the allegation that Mr Gale had received the sum of US$6,520,190 ("the trust sum") on trust for the benefit of PKL and Dr Williams, subject only to the specified purposes set out in his undertaking. It is said that Mr Gale was in breach of trust in paying away the trust sum to the CBN when he knew the Naira amount was not available. The claim against the CBN is that it either knowingly assisted in Mr Gale's breach of trust, or that it received this money knowing of Mr Gale's breach of trust. This first basis of claim was dubbed "the 1986 Trust claim". Secondly, Dr Williams pleaded four documents which were produced in the summer and autumn of 1993, which, it was said, together established an agreement by the CBN to hold the sums received from Mr Gale at the direction of the President of Nigeria and that, pursuant to that direction, the CBN was constituted a trustee of the sums for the benefit of Dr Williams so it had to account to him for them. That second basis was dubbed "the 1993 trust claim". Lastly, Dr Williams pleaded that there was an agreement between him and the CBN in June 2009 that it would repay the sums to Dr Williams. That was dubbed "the 2009 agreement claim".
13. Supperstone J had to consider whether or not these three bases of claim satisfied the three requirements that have to be fulfilled in order for a claimant to obtain permission to serve proceedings out of the jurisdiction on a defendant when service of proceedings is not governed by the European Jurisdiction and Judgments Regulation (Council Regulation (EC) 44/2001)^[4] ("the Judgments Regulation"). In non Judgments Regulation cases permission to serve out will only be given by the Court pursuant to CPR Pt 6.36 and Practice Direction 6B paragraph 3.1 if three requirements are fulfilled. There was no dispute on the present appeal about the formulation of these requirements, so I can summarise them very briefly.^[5] They are, first, that in relation to the foreign defendant to be served with the proceedings, the claimant must establish that there is a "serious issue to be tried" on the merits of the claim against that defendant, i.e. there is a substantial as opposed to fanciful question of fact or law or both. Secondly, the claimant must satisfy the court that there is a "good arguable case" that the claim against the foreign defendant falls within one or more of the classes of case for which leave to serve out of the jurisdiction may be given. These classes of case are the "gateways" that are now set out in paragraph 3.1 of Practice Direction 6B. "Good arguable case" in this context means that the claimant has a "much better argument" that this is so than the foreign defendant.^[6] Thirdly, the claimant must satisfy the court that in all the circumstances England is "clearly or distinctly the appropriate forum" for the trial of the dispute and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction.^[7]
14. Supperstone J held, with regard to the 1986 Trust claim, that Dr Williams had satisfied the court of the three requirements needed to obtain permission to serve out of the jurisdiction. In particular he held Dr Williams had a "good arguable case" that this claim fell within the "gateways" set out in paragraph 3.1(11), 3.1(15) and 3.1(16) of PD6B^[8]. One of the principal issues before Supperstone J in relation to the 1986 Trust claim was whether the court had to decide whether that claim was time-barred by virtue of section 21(1)(a) of the Limitation Act 1980 for the purposes of deciding whether there was a "serious issue to be tried". He held it was not appropriate for him to do so because it was not a short point of law but an important and complicated one which was not appropriate for summary disposal: see [27] of his judgment. The Court of Appeal decided the point in Dr Williams' favour,^[9] but it will now be tested in the Supreme Court.
15. Supperstone J held that there was no serious issue to be tried concerning either the 1993 Trust claim or the 2009 agreement claim. So he refused permission to serve out on those claims.

The Fidelity Guarantee

16. This document is headed "Office of the Presidency". On the last page it is signed by someone described as the "Principal Staff Officer Col (GS) For. Chief of General Staff For. Commander in Chief Nigerian Armed Forces". Over the signature there is a stamp which has within it the words "Office of the CGS". Underneath that signature and stamp, but as part of the typing of the Fidelity Guarantee document itself are the words "Noted and Accepted by CBN". Underneath that phrase is an official stamp of "CBN, Tinubu Sq, Lagos" which has been counter-signed and dated 29 September 1993. The word "Governor" appears at the edge of the stamp in type, apparently as part of the Fidelity Guarantee document itself. Each page of the document has been stamped "Attorney-General of the Federation" and all but one page is stamped "Secret & Confidential Restricted".
17. Paragraph (2) of the Fidelity Guarantee states that;

"…this Fidelity Guarantee and Abiding Warranty are made as an Order for Execution by the Central Bank of Nigeria, this Order having been acceded and accepted by CBN as below signified in favour of Dr Louis Emovbira Williams a citizen of Nigeria".

Paragraph (3) recites that the SSS and the CBN entered into a scheme of "unlawful racketeering, deception and criminal conspiracy" with Mr Gale and others and "duped" Dr Williams "under false pretences" and "deprived him" of his sums of money in Naira and US dollars. Paragraphs (4) to (12) set out more of the history. Paragraph (13) then states that the "C-in-C has therefore ordered the pardon of Dr Williams as of right and innocence not ex gratia and therefore ordered all assets purportedly forfeited to FMG to be returned to Dr Williams".

18. The key paragraphs of the Fidelity Guarantee are (14), (15), (18) and (21). As I have set out the whole document in Appendix One I will only summarise them here. The first sentence of paragraph (14) states that "The CBN therefore is ordered and herein has consented to act with the utmost good faith and assurance and to return to Dr Williams" two sums of money. These are then identified as being the US$ and Naira sums. Compound interest of 17 ½ % "on a roll over basis from 1986" is to be paid on the dollar sum and compound interest of 25% is to be paid on the Naira sum unless that sum is not to be paid in Naira, in which case the rate will be 17 ½ %. Paragraph (15) states that the C-in-C "orders" the CBN to hold the "proceeds and sums" identified in (14) as "custodian" for Dr Williams and it notes that the CBN "accepts" this. It continues that the CBN would "with utmost good faith" release those sums to him not only on demand but also "as a matter of duty". Paragraph (18) is a waiver of any sovereign immunity defence that might otherwise be available to either the CBN or the Nigerian State in any proceedings in any jurisdiction.
19. Paragraph (21) stipulates, first, that if Dr Williams has to bring proceedings then "the FMG orders and CBN herein agrees" that Dr Williams can choose which jurisdiction in which to bring his claim, whether it be "the UK or Nigeria or any other country"; secondly, that English law is to apply to such proceedings; and thirdly, that neither the Nigerian State nor the CBN will "raise or invoke any defence to deprive Dr Williams of his monies" as identified in paragraph (14). It enumerates several possible defences, such as "effluxion of time, state privileges [and] state immunity". They are all said to be "waived without any equivocation".

The judgment of Beatson J

20. Beatson J noted, first of all, that he proceeded on the basis that the Fidelity Guarantee was not a forgery.^[10] Secondly, he noted that it was not argued for the CBN that the "new" trust and contract claims were an abuse of process because they were similar to the existing claims.^[11] Thirdly, in relation to the new "trust" and "contract" claims, based on the Fidelity Guarantee, the judge noted that it was argued for Dr Williams that these were "private law" obligations that were said to arise out of the same document which was said to create a Nigerian law right because the document constituted a legislative instrument.^[12]
21. The judge concluded that Dr Williams, as claimant, did not have "much the better of the argument" that the Fidelity Guarantee created a "trust" claim. First, he was not satisfied that if the document created a "legislative obligation" on the CBN,^[13] there was any "need" to read it as also manifesting an intention to create a private law trust.^[14] Secondly, the document did not contain a direction that the CBN should hold the sums described in paragraph (14) separately.^[15] Thirdly, the Fidelity Guarantee was not sent to Dr Williams or his lawyers.
22. The second argument of Dr Williams before the judge was that the Fidelity Guarantee created a contract between the CBN and the Federal Republic of Nigeria, whereby the former promised to the latter to repay the sums identified in paragraph (14) of the document. It was argued that the Federal Republic held the benefit of that promise on trust for Dr Williams, who was thus entitled to bring proceedings against the CBN to enforce the promise. Beatson J held that Dr Williams did not have "much the better of the argument" for what the judge described as "similar reasons to those in relation to the trust claim".^[16]
23. Lastly, with regard to the Nigerian law claim, the judge noted that the CBN accepted, for the purposes of the hearing before him, that the Fidelity Guarantee "is a law which can be enforced by the claimant as a matter of Nigerian law".^[17] The implicit conclusion (although not stated) is that there is, therefore, a "serious issue to be tried" in relation to this basis of claim. So Beatson J then considered whether Dr Williams had demonstrated that he had "much the better of the argument" that this claim came within one of the "gateways" set out in paragraph 3.1 of PD6B. The judge focused on paragraph (11), viz. where "the whole subject matter of the claim relates to property located within the jurisdiction". At the time of the hearing before Beatson J, the evidence was that only the US$ sum was held in a CBN account within the jurisdiction. The judge was prepared to hold that paragraph (11) could apply to the claim as there was a good arguable case that the claim for the US$ sum related to property within the jurisdiction. Provisionally, therefore, the judge was prepared to accept that the "gateway" requirement was satisfied.
24. However, this would have the effect that one part of the total claim (for the US$ sum) would be dealt with in the English court, whereas the other (for the Naira sum) would have to be dealt with in the Nigerian courts. This was relevant to the decision on the third requirement, ie. whether Dr Williams had demonstrated that England was clearly or distinctly the appropriate forum for the trial of the Nigerian law claim. In his principal judgment the judge noted that although the CBN had not challenged Supperstone J's finding (in relation to the 1986 Trust claim) that England was clearly the appropriate forum and that this fact was a relevant consideration for him (Beatson J), he nonetheless concluded that England was not "clearly or distinctly the most appropriate forum for the trial of a claim to enforce a Nigerian law, particularly when parts of the claim cannot be determined in England".^[18] He did not elaborate on this conclusion. The judge then changed his mind on this last requirement in his supplementary judgment because he was told that Dr Williams would abandon his Naira claim. Therefore, on the evidence, Dr Williams did have "much the better of the argument" that the whole of the subject matter of the Nigerian law claim was situated within the jurisdiction. Given the fact that the 1986 Trust claim was also to be pursued in the English court, that meant that Dr Williams had demonstrated that England was clearly or distinctly the appropriate forum in which to pursue the Nigerian law claim.

The New Document – The CBN Letter

25. This is, on the face of things, a letter dated 17 October 1993 from the Governor of the CBN to the Commander-in-Chief of the Armed Forces of Nigeria. As it is reproduced in full in Appendix One I need only summarise its contents here. The title is "Progress Report on Compliance of CBN with its Obligations and Duties under the Fidelity Guarantee and Abiding Memorandum of Understanding and Assurance Order…". Paragraph 1 states that the CBN "willingly assumed duties and obligations as by law established as the custodian statutory trustee" of various identified sums "payable to Dr L.E. Williams in London". It identifies the US$ sum and a dollar equivalent of the Naira sum. The document describes the Naira sum as "US$5,898,019.12 now in the account of CBN Bankers Midland Bank, London at 17 ½ % compound interest on a rollover basis".
26. Paragraph (6) states that "the next stage" is for the CBN to appoint a solicitor in England "to reach out to Dr Williams on behalf of CBN" and for that solicitor to appoint "a Counsel to file a motion in the High Court to receive the funds directly or indirectly through management trustees appointed by the High Court". Paragraph (8) says that the exercise set out in paragraph (6) will be carried out by the Attorney-General of the Federation, "who has promised to engage London solicitors directly" or via the Nigerian High Commission. The document is signed by Mr Paul Ognuma, "Governor". The CBN is prepared to assume the authenticity of this document for the purposes of the appeal only. On that basis, it was conceded that Dr Williams was entitled to pursue his claim for both the US$ sum and the Naira sum, but subject to the condition that the 1986 Trust claim remained alive following the appeal to the Supreme Court on the limitation point.

The arguments on appeal and the issues to be decided

27. Mr Jonathan Adkin QC, who appeared for Dr Williams on the appeal, submitted that now that the CBN had conceded (for the purposes of the appeal) that the whole of the subject matter of Dr Williams' claim related to property located within the jurisdiction, within PD6B paragraph 3.1(11), (because of the statement in paragraph (3) of the CBN Letter that it was in a CBN bank account in Midland bank in the UK), there were only two hurdles for Dr Williams to overcome in relation to both bases of claim that had been rejected by Beatson J. Dr Williams had to show, in respect of each basis of claim, first, that there was a "serious issue to be tried" and, secondly, that England was clearly or distinctly the appropriate forum in which to try that basis of claim.
28. With regard to the trust claim, Mr Adkin submitted that the focus should be on whether there was a serious issue to be tried that the Fidelity Guarantee evidenced an intention to create a trust. He argued that the wording supported this conclusion. He emphasised in particular that the document was not a unilateral order but evidenced the CBN's consent. He submitted that the "private law" trust claim was not inconsistent with the Nigerian law claim because the two were pleaded in the alternative and there was no guarantee that Dr Williams would succeed on the latter basis of claim, which had not been conceded by the CBN. Mr Adkin submitted that the new document evidenced the actual creation of the trust when the sums were deposited in the bank account in London as noted in the CBN letter.
29. As to the contract claim, Mr Adkin relied on the same arguments on the construction of the Fidelity Guarantee. He submitted that paragraph 21 indicated clearly that the document was intended to create legal relations and rights. Looked at overall, the Fidelity Guarantee was "bilateral" in the sense that the CBN has "noted and accepted" its terms. The Federal Government of Nigeria held in trust the contractual rights given by the Fidelity Guarantee to Dr Williams, who was clearly intended to be the beneficiary. "Consideration" moving from the government could be found, eg, in refraining to take any more "direct" action against the CBN.
30. On the question of whether England was clearly or distinctly the appropriate forum, Mr Adkin submitted that the right to pursue any of the three new bases of the claim must not be dependent on whether the 1986 Trust claim survives the attack to be made on it by the CBN in the Supreme Court. Mr Adkin relied on the factors set out at [42] of Supperstone J's judgment, which led that judge to conclude that England was the "natural" forum for the determination of the 1986 Trust claim. That paragraph was not challenged by the CBN on appeal from Supperstone J's order and those findings must now bind it. In addition, in relation to all three new bases of claim, there were two further factors in favour of England being clearly or distinctly the appropriate forum. First, the fact that it is (at least) highly arguable that all the sums are situated in England. Secondly, the fact that paragraph 21 of the Fidelity Guarantee states that English law is to apply to any "any legal proceedings to secure and enforce the release of [Dr Williams'] monies" and that Dr Williams is given a choice to bring proceedings in the UK, as well as Nigeria and other countries.
31. On behalf of the CBN, Mr Philipps QC confirmed that the CBN accepted, for the purposes of the hearing before this Court, as it had done before Beatson J (see paragraph 23 above) that the Fidelity Guarantee constituted Nigerian legislation and was thus a valid law in Nigeria. The question for trial would be whether it is directly or indirectly enforceable by Dr Williams, but the CBN accepted that this gave rise to a "serious issue to be tried". The question raised on the appeal was whether there was a "serious issue to be tried" on whether this Nigerian legislation also gave rise to private law rights, as Dr Williams asserted.
32. Mr Philipps submitted that the language of the Fidelity Guarantee was inconsistent with a conclusion that the Fidelity Guarantee gave rise to a trust over the sums referred to in it. He relied particularly on the use of the word "order" in paragraphs 14 , 15 and 16. Secondly, he noted that there was no pre-existing separate fund and the Fidelity Guarantee did not create one. Thirdly, it was wrong to characterize the document as being "bilateral" simply because the CBN acknowledged and accepted its terms. It remained an "Order for Execution by the Central Bank of Nigeria". Acknowledgement of an order and a willingness to obey it (even with "utmost good faith") did not turn the document into a private law trust or contract. The CBN did not thereby volunteer to act as a trustee of assets for the benefit of Dr Williams. Fourthly, Beatson J was correct to draw an analogy with the case of Swain v The Law Society. Because this was an executive order which created certain rights under Nigerian law as a consequence, there was no need to create, in addition, an English private law trust or contract.
33. As for the question of whether England was the appropriate forum for the new bases of claim to be tried, Mr Philipps noted that the judge stated, at [43] of his judgment, that he did not consider that England is "clearly or distinctly the most appropriate forum for the trial to enforce a Nigerian law". However, he accepted that it follows from the judge's change of mind when handing down judgment, that he must have been satisfied that England was clearly or distinctly appropriate to try the Nigerian law claim, although minus the Naira element. But Mr Philipps emphasized that the judge imposed the condition that the Nigerian law claim could only go ahead if the CBN's appeal against Supperstone J's judgment was unsuccessful in relation to the 1986 Trust claim. He submitted that this condition remained and that there had been no appeal from that part of Beatson J's judgment or order.
34. In response to this last point, Mr Adkin accepted that no specific point was taken in the Grounds of Appeal in relation to the condition imposed by Beatson J, but he submitted that the point was sufficiently covered by the general Grounds of Appeal. If the court decided in favour of the appellants on any one or more of the three new bases of claim, the condition imposed by Beatson J should be lifted.
35. In my view, the following issues arise for decision on this appeal: first, is there a "serious issue to be tried" that the Fidelity Guarantee creates a private law trust in Dr Williams' favour? Secondly, is there a "serious issue to be tried" that the Fidelity Guarantee creates a contract between the CBN and the Nigerian state, for the benefit of Dr Williams, which benefits the Nigerian State holds in trust for Dr Williams? Thirdly, in relation to each of the three proposed new bases of claim, has Dr Williams satisfied the court that England is "clearly or distinctly" the appropriate forum for the determination of that claims. Fourthly, should this court remove the condition imposed by Beatson J that permission to amend and serve out is dependent upon the 1986 Trust claim being able to continue.
36. Given the CBN's concession that, for the purposes of this appeal, the CBN Letter must be treated as valid and given that the letter refers to both the US$ sum and the Naira sum being in a bank account in England, there is a "good arguable case" that all the subject matter of Dr Williams' claim relates to property situated in the jurisdiction so falls within the "gateway" in (11) of paragraph 3.1 of PD6B. Therefore, it seems to me, it is unnecessary to determine any further "gateway" issues on this appeal, so I have not addressed them.

The Trust claim: serious issue to be tried? Discussion and conclusion

37. Put very generally, in English law an express trust is created when a person, (the settlor), directs that certain identified property (the trust property) will be held either by him or others (as trustees) under a legal obligation which binds the trustees to deal with that property, which is owned by them as a separate fund, for the benefit of another (the beneficiary) who has an equitable proprietary interest in the trust property and its fruits from the moment that the trust is created.^[19] Thus, if it is intended that a document is to create an express trust, it is sufficient that it is demonstrated with reasonable certainty: (a) there is an intent to create a trust; (b) that the trust property is intended to be kept separately from other property of the trustee; (c) the identity of the trust property; (d) the person(s) intended to be beneficiary(ies); and (e) the purpose of the trust and that it is administratively workable.^[20]
38. The most important issue is (a). So, in terms of the present case, the question is whether there a "serious issue to be tried" that the Fidelity Guarantee (together with the CBN Letter perhaps) demonstrates that either the President of Nigeria or the Nigerian state, as settlor, intended to place upon the CBN a private law obligation which recognised that Dr Williams had from the moment the Fidelity Guarantee was promulgated, a beneficial proprietorial interest in the sums identified in paragraph (14) of the document and that those sums were to be kept separate from the other property of the CBN. Mr Adkin emphasised especially the following provisions of the Fidelity Guarantee: (i) the heading, particularly the words "to protect the assets of Dr Williams"; (ii) paragraph 2, particularly the stated acknowledgement by the CBN of the terms of the "Order"; (iii) paragraph 13, in particular the statement that "all assets purportedly forfeited to FMG to be returned to Dr Williams"; (iv) the whole of paragraph 14; (v) paragraph 15, in particular the "order" that the CBN is to hold the assets as "a custodian for Dr Williams and would with the utmost good faith release [the assets] to Dr Williams…"; (vi) the whole of paragraph 21 but, in particular the reference to Dr Williams being able to take legal proceedings to "secure and enforce the release of his monies…".
39. If the Fidelity Guarantee were intended to be simply a private law document, then, on the assumption (which was made before us) that we must approach the issue from the English law standpoint, I would have no hesitation in saying that the formulations used in it, particularly those emphasised by Mr Adkin, would satisfy me that there is a "serious issue to be tried" on whether it created a trust in favour of Dr Williams as beneficiary, with the CBN in the position of trustee of the identified trust property. None of the factors, such as the use of the word "custodian" or "utmost good faith" or "his monies" and the terms of paragraph 21, are conclusive. There are contrary factors, which Mr Philipps emphasised. But, taken together, the factors Mr Adkin relied on, plus the fact that the CBN letter refers to the assets being "deposited for the benefit of Dr Williams in CBN account at Midland Bank in London as custodian statutory trustee of the said proceeds" would be enough to satisfy me that the modest test applicable is fulfilled.
40. The problem is that the Fidelity Guarantee is plainly not "just" intended to be a private law document. It is an executive order made by the President and Commander in Chief of Nigeria which gives mandatory directions to the CBN to do various things. If, as is conceded for present purposes, the Fidelity Guarantee arguably imposes a "legislative obligation"^[21] on the CBN and thereby creates Nigerian law rights that Dr Williams can enforce in the English court (in accordance with paragraph 21 of the document), then is it seriously arguable that it was intended that the same document would also create a private law express trust? I have concluded that it is not.
41. First, the President and Commander in Chief was acting in his public capacity as Head of State and Commander in Chief in promulgating the Fidelity Guarantee. Secondly, the document is declaratory of public law matters; its aim is to set right a wrong done to Dr Williams by the state of Nigeria or its state organs, including the CBN, as is made clear by paragraphs 12 and 13. Thirdly, to paraphrase the words of Lord Diplock in Swain v The Law Society,^[22] although the legal consequences of the promulgation of this order may result in creating private rights enforceable by Dr Williams in private law, those rights are not necessarily the same as those that would flow in private law from doing a similar act otherwise than in the exercise of executive or legislative powers that, for present purposes, it is assumed that the President can and has used. In short, given the origin and legislative/executive nature of the Fidelity Guarantee, I think it is not reasonably arguable that, in addition, it was intended at the same time to create a document embodying purely private law obligations on the CBN as trustee and private law rights for Dr Williams as beneficiary that would flow from those private law obligations on the CBN.
42. Fourthly, in saying this I have not forgotten Mr Adkin's argument that the Nigerian law claim and the trust claims are put in the alternative. In my view that is no answer. If the Fidelity Guarantee creates a "legislative obligation" on the CBN under Nigerian law but it does not give rise to enforceable private law rights at the suit of Dr Williams, it would still remain a document created by the executive power of the President of the Nigerian state and a public law document declaratory of a state of affairs according to Nigerian law. There is nothing (express or implied) in the Fidelity Guarantee to suggest that it was being created as a dual purpose document: part declaratory of Nigerian law, but also creating an English law express trust. So I think it is not even reasonably arguable that the Fidelity Guarantee can be, at one and the same time, a public law document declaring matters according to Nigerian law (albeit giving Dr Williams no enforceable private law rights) and at the same time creating a private law express trust.
43. Fifthly, the fact that paragraph 21(ii) states that if Dr Williams sues to enforce such rights as he has in either England or Nigeria, then English law is to apply, does not advance the argument. It simply means (on the best argument for Dr Williams) that English law will determine the nature of the Fidelity Guarantee and decide what rights (if any) it grants Dr Williams. Thus it leads back to the same question of intention.
44. Mr Adkin naturally also now relies on the CBN Letter, in particular: (a) the wording of paragraph (2) that "the CBN willingly assumed duties and obligations as by law established as the custodian statutory trustee of the following funds payable to Dr Williams in London…" and (b) the wording of paragraph (5) that all the proceeds are deposited "for the benefit of Dr Williams in CBN Account at Midland Bank in London as custodian statutory trustee of the said proceeds". But, in my view, the CBN Letter does not help Mr Adkin's case. It post-dates the Fidelity Guarantee and is signed by the Governor of the CBN. At best the parts quoted can only amount to the writer's subjective understanding as to what the effect of the Fidelity Guarantee might be. That is in contrast to the statement of fact that the sums are in a CBN bank account in London.
45. For these reasons I conclude that the Trust Basis does not pass even the modest test of a "serious issue to be tried", so I would refuse permission to amend and to serve out in respect of this proposed new head of claim.

The trust of a contractual promise claim: serious issue to be tried? Analysis and conclusions

46. The same reasoning leads me to the same conclusion in respect of this proposed head of claim. I also agree that the point made by Beatson J at [37] of his judgment militates strongly against the Fidelity Guarantee being a document that creates private law rights in the form of a contractual promise by the CBN to the President of Nigeria to do various things in favour of Dr Williams, which the President holds on trust for him.
47. Accordingly, I would refuse to grant permission to amend or serve out of the jurisdiction in respect of the trust of a contractual promise claim.

Is England clearly or distinctly the appropriate forum for the resolution of the Nigerian law claim?

48. I phrase the question this way in the light of my conclusions on the first two issues. I think that there are two particular reasons why England is shown to be clearly the appropriate forum for the resolution of this claim. The first is that the CBN has, by the fact that it has "Noted and Accepted" the Fidelity Guarantee, also noted and agreed to the provision in paragraph 21. This means that, by paragraph 21(i), the CBN has agreed that Dr Williams has a choice of the forum in which to take legal proceedings to enforce whatever claims he may have arising out of the Fidelity Guarantee. That is reinforced by the fact that the CBN has agreed that English law is "to apply" to "secure and enforce the release of his monies". So, effectively, the CBN has agreed that England is potentially an appropriate forum. As Dr Williams has elected to choose the English forum, I think that the position of the CBN is now the same as if there was an exclusive jurisdiction clause in a contract in favour of the English courts. The English courts will keep the parties to their agreement and will only not enforce it if it is shown that there is "strong reason" why it should not be: see the classic statement in the speech of Lord Bingham of Cornhill in Donohue v Armco.^[23]
49. The second reason is that Supperstone J has already held that England is clearly or distinctly the appropriate forum for the 1986 Trust claim and that has not subsequently been challenged. So a claim in respect of the same sums is going to be resolved in the English courts. In my view it is clearly appropriate that the two claims should be dealt with in the same court.
50. Therefore, I would grant Dr Williams permission to serve out the proposed Nigerian law claim out of the jurisdiction on the CBN. The remaining question is whether this should be subject to the condition imposed by Beatson J, viz. that this permission is contingent on Dr Williams being successful in upholding the decision of this Court on the 1986 Trust in the Supreme Court.

Should the condition imposed by Beatson J be set aside?

51. The order of Beatson J dated 24 January 2012 provides, in paragraph 2, that the grant of permission to re-amend and to serve out of the jurisdiction (in respect of part of the Nigerian law claim) is:

"…conditional upon [the CBN's] appeal against the Judgment and Order of Mr Justice Supperstone dated 8 April 2011 ("the Pending Appeal") being dismissed, such that if the Pending Appeal is successful the grant of permission set out in paragraph 1 (1) and (2) above shall be deemed revoked".

52. After the Court of Appeal dismissed the CBN's appeal against Supperstone J's judgment there was a dispute between the parties as to when the CBN needed to file an acknowledgement of service and any defence in that action. This dispute arose out of the terms of paragraphs 4 to 8 of Beatson J's order of 24 January 2012 where he had laid out a timetable for when Dr Willams was to fine and serve the statements of case in respect of which permission to amend had been granted by the 24 January order, when the CBN was to acknowledge service and file a defence and when the CBN was required to file any notice of appeal against the part of Beatson J's order which permitted the Nigerian law claim (in part) to proceeding. In short, paragraphs 4 – 8 did not envisage any further steps being taken until the "Pending Appeal" had been "unsuccessful" or "finally disposed of". In paragraph 2 of the order of 24 January 2012, the term "Pending Appeal" had been defined as "the Defendant's appeal against the judgment and order of Supperstone J dated 8 April 2011…" that is the appeal concerning the 1986 Trust claim.
53. The CBN applied on paper to Beatson J for directions as to the precise meaning of his order of 24 January 2012, in particular when "The Pending Appeal" was "finally disposed of". Beatson J made an order of 10 May 2012 in the following terms:

"For the avoidance of doubt, for the purposes of paragraphs 4, 5(i), 5(ii), 6, 7 and 8 of the order of Beatson J dated 24 January 2012, any appeal will be "unsuccessful" and "finally disposed of" only upon the occurrence of one of the following events:

(a) the appeal being dismissed by the Court of Appeal and there being no application for permission to appeal within the 28 day time limit.

(b) Any application to the Supreme Court for permission to appeal being refused; or

(c) If permission to appeal is granted the appeal being determined (or otherwise abandoned)".

54. This order was made without Beatson J having had submissions from Dr Williams, who attempted to set it aside. However, Edwards-Stuart J upheld the order after in inter partes hearing on 13 June 2012.
55. Beatson J's order of 10 May 2012 as confirmed by Edwards-Stuart J's order does not deal directly with the duration of the condition referred to in paragraph 2 of the order of 24 January 2012. It is, at the least, arguable that in the light of Beatson J's later order, it was intended that the condition for the grant of permission to serve out of the jurisdiction would remain effective until after final disposal of the case by the Supreme Court. I think it is better to take that view for present purposes, even though it is the CBN who ought to have taken action to clarify the position regarding the condition, particularly after the Court of Appeal dismissed the CBN's appeal from Supperstone J's judgment and order on 3 April 2012 and Sir Richard Buxton granted Dr Williams permission to appeal Beatson J's judgment on 28 May 2012.
56. On the assumption that the condition still notionally stands, I would hold that it should no longer do so. In relation to the issue of whether England is "clearly or distinctly" the appropriate forum, matters have moved on since Beatson J's judgment. Now it is accepted that there is a good arguable case that all the relevant sums are situated in London. The whole of the Nigerian law claim satisfies all three jurisdictional tests independently of the outcome of the 1986 Trust claim. In particular, given the terms of paragraph 21 of the Fidelity Guarantee as applied to the Nigerian law claim, it seems to me that it would be wrong in principle to continue the condition imposed by Beatson J, for what were then good reasons.

Disposal

57. I would allow Dr Williams' appeal in respect of the Nigerian law claim but reject it in respect of the trust claim and the contract claim.

Lord Justice Elias:

58. I agree.

The Master of the Rolls:

59. I also agree.

Note 1   [2013] QB 499)    [Back]

Note 2   [2012] 3 WLR 1501; [2012] EWCA Civ 415.    [Back]

Note 3   He refused permission to serve out in respect of the claim for the return of the sum of Naira 5 million on the ground that this claim did not come within any of the procedural “gateways” set out in PD6B para 3.1 to CPR Pt 6.33. In particular he held that it was not arguable that this sum was situated within the jurisdiction.     [Back]

Note 4   Or the Lugano Convention 1988.     [Back]

Note 5   This formulation was set out in the advice of the Privy Council given by Lord Collins of Mapesbury in AK Investment CJSC v Kyrgyz Mobile Tel Ltd [2012] 1 WLR 1804 at [71]. See also VTB Capital Plc v Nutriek International Corp and others [2012] 2 Lloyd’s Rep 313 in the judgment of Lloyd LJ at [99] – [100]. This court’s summary was approved by Lord Clarke of Stone-cum-Ebony when the case went to the Supreme Court. Although he dissented (with Lord Reed) in the result on the “jurisdiction” issue in that case, none of the Justices suggested that this Court’s summary of these principles was defective.    [Back]

Note 6   In the important work Briggs & Rees: Civil Jurisdiction and Judgments (5th Ed 2009), the authors suggest, at 2.111 (page 169) that the epithet “much” should now be allowed to “slip from view”, at least in relation to Judgment Regulation cases. We did not hear argument on this and so I adopt the now traditional formula for this non-Regulation case.    [Back]

Note 7   This requirement is reflected in rule 6.37(3) of the CPR, which provides that “The court will not give permission [to serve a claim form out of the jurisdiction on any of the grounds set out in paragraph 3.1 of Practice Direction 6B] unless satisfied that England and Wales is the proper place in which to bring the claim”.    [Back]

Note 8   These provide, respectively: (11) “The whole subject matter of the claim relates to property situated within the jurisdiction”; (15) “A claim is made for a remedy against the defendant as constructive trustee where the defendant’s alleged liability arises from acts committed within the jurisdiction”; (16) “A claim is made for restitution where the defendant’s alleged liability arises out of acts committed within the jurisdiction”.     [Back]

Note 9   [2013] QB 499.    [Back]

Note 10   [25]    [Back]

Note 11   [26]    [Back]

Note 12   [28]    [Back]

Note 13   [30] of the transcript says “legislative obligation on the claimant” (my emphasis) but this must be a reference to the CBN.    [Back]

Note 14   [30] and [36], referring to Swain v The Law Society [1983] AC 598 as an analogous situation: statutory scheme for indemnity ; no need to imply in the same instrument a private law trust as well.    [Back]

Note 15   [31]    [Back]

Note 16   [35]    [Back]

Note 17   [38].     [Back]

Note 18   [43].    [Back]

Note 19   See Underhill & Hayton: Law of Trusts and Trustees (18th Ed 2010) at para 1.1 and 3.1. There are, of course, other ways of creating express trusts with which we are not concerned.     [Back]

Note 20   Ibid. para 7.1.    [Back]

Note 21   Beatson J’s phrase: [30].     [Back]

Note 22   [1983] AC 598 at 608G.    [Back]

Note 23   [2002] 1 Lloyd’s Rep 425 at [24].    [Back]