England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
IN THE CHANCERY DIVISION

		Royal Courts of Justice
		21st July 2006

THE CHANCELLOR:

1. This is an application by the first Part 20 defendant, Mr. Assad Abu-Aljadail for orders first to extend the time for making an application under CPR Rule 11 to dispute the jurisdiction of the court to try the Part 20 claim against him issued by the defendant in the action ARA Media Services ["AMS"]. He also seeks a declaration pursuant CPR Part 11 that the court has no jurisdiction over him and should not exercise any such jurisdiction as it may have. Thirdly he seeks orders to set aside two orders for service on him and any consequential service under them; and finally, an order to stay such proceedings for which the court may otherwise have jurisdiction. The application is opposed by the Part 20 claimants, AMS. In addition they contend that Mr. Aljadail submitted to the jurisdiction of the court.
2. The facts in summary are as follows: the AGI Group ["AGI"] is a major media and broadcasting group in the Middle East. It is ultimately controlled by Sheikh Waleed who, it is alleged, has a close connection with the Saudi Royal family. The group includes first, AMS, as its advertising, sales, marketing, promotional and advertising procurement representative arm; and secondly, Middle East Broadcasting Centre ["MBC"] as its satellite broadcasting arm.
3. Mr. Aljadail and the second defendant, Mr. Mamdouh Abougabal, and the third defendant, Mr. Hamdi Al Serafi were all employed by AMS and MBC as appropriate. By the end of 2002 Mr. Aljadail and Mr. Abougabal each held 50 per cent. of the issued shares of Global Media Net Limited, which in turn held 67 per cent. of the issued shares in the claimant, Global Media International Limited ["Global"]. Thus indirectly they held 37 per cent. of Global. Both those companies were incorporated in England.
4. On 9^th January 2003 an agreement was concluded between Global on the one hand and AMS on the other, whereby Global was appointed for a term of five years from 1^st January 2003 as the media representative in Western Europe for the various television and radio stations for which AMS was responsible. Global was to be paid a commission at various percentages on sundry sales in the various territories in Western Europe to which the agreement extended. Clause 20 contains an English choice of law and non-exclusive jurisdiction clause. The agreement was executed in England by Mr. Aljadail on behalf of AMS.
5. On 1^st January 2004 a similar agreement was entered into between AMS and Global whereby the latter was appointed media representative of AMS's various stations in Japan. This contract is governed by Saudi law and it too was executed by Mr. Aljadail on behalf of AMS and contains a non-exclusive Saudi Arabian jurisdiction clause.
6. On 17^th July 2004 Sheikh Waleed discovered certain interests of Mr. Aljadail in companies other than AMS but not part of the Global Group. He was concerned to terminate Mr. Aljadail's involvement with AMS. In the result, Mr. Aljadail resigned on agreed terms. It is in issue whether Sheikh Waleed then also knew of the interests of Mr. Aljadail in the companies in the Global Group. On 23^rd July 2004, and as part of the severance between AMS and Mr. Aljadail there was executed a Memorandum of Agreement, and two forms described as "Aquittance and Quitclaim Agreements" [collectively "the settlement agreements"] whereby claims against Mr. Aljadail were allegedly released. The documents are in Arabic. According to the translations before me the Memorandum of Agreement provided (bundle 2, p.338):

"The group shall grant Mr. Assad Abdul Raoof Abu-Aljadail - upon signing this memorandum - the necessary Certificate of Release and Discharge.

Mr. Assad Abdul Raoof Abu-Aljadail shall hand over all the documents and/or contracts and/or deeds and/or Group property he has in his possession & custody, attached to an explanatory report thereof.

The Group shall waive and disclaim any claims and/or lawsuits against Mr. Assad Abdul Raoof Abu-Aljadail for any right which was claimed at any date whatsoever for what he had priorly performed, during the term of his employment with the Group. The Group should also waive and disclaim filing cases against him."

7. As I have indicated, there are two documents described as "Aquittance and Quitclaims", one of them is signed by Sheikh Waleed himself, and the other by a lawyer authorised by him for the purpose. The wider of the two, that signed by the lawyer, provides as follows (bundle 2, p.340):

"ARA Holding Company Group, its Companies & ARA Media Services (AMS) Co., hereby declare to have released & discharged Mr. Assad Abdul Raoof Abu-Aljadail from any past and/or current claims and rights and/or claims & rights arising in future in favour of ARA Holding Company, its Companies and ARA Media Services [AMS] Co."

8. In the five days between 26^th and 31^st July 2004, Mr. Aljadail, Mr. Abougabal and Mr. Al Serafi each left AMS. On 2^nd September 2004 by separate letters and an email AMS terminated both the Europe agreement and the Japan agreement with Global. On 25^th October 2004 the interests of Mr. Abu-Aljadail and Mr. Abougabal in Global Net were discovered by Allen & Overy who, on the instructions of AMS had conducted a straightforward company search in England. Mr. Aljadail claims that Sheikh Waleed knew throughout of his interest in those companies though this is denied by AMS.
9. On 14^th February 2005 the claim form in the main action was issued by Global against AMS and MBC. Global claims that AMS wrongfully repudiated the Europe agreement and seeks damages accordingly. On 4^th May 2005 the court authorised the issue of the claim for service on AMS out of the jurisdiction and in due course it was so served. On 16^th July 2005 Global commenced proceedings in Saudi Arabia against AMS in respect of the termination of the Japan agreement made on 1^st January 2004. As in the case of the Europe agreement Global claims that AMS wrongfully repudiated the Japan contract and seeks damages. On 14^th September 2005 AMS and MBC acknowledged service and served a joint defence to the claim made in this country in relation to the Europe agreement. The defence was to the effect that the Europe agreement had, to the knowledge of Global, been concluded by the relevant individuals at AMS in breach of their duty to AMS and was therefore liable to be set aside. AMS added a counterclaim against Global to that effect and, in addition, made a Part 20 claim against Mr. Aljadail, Mr. Abougabala and Mr. Al Serafi as the relevant individuals at AMS. In addition, they added as further defendants to the Part 20 claim the relevant directors of Global and Global's holding company.
10. The Part 20 claim against the AMS employees is pleaded in terms appropriate to claims in English law against employees and directors alleged to have acted in breach of their fiduciary and contractual duties. Duties of fidelity and good faith are pleaded in conventional terms. The interests of Mr. Aljadail and others in Global are then set out; they are alleged to have been secret, corrupt and concealed from AMS. It is alleged that Mr. Aljadail and the other ex-employees diverted business to Global by means inter alia of both the Europe and the Japan agreements on terms unduly favourable to Global so that they might thereby make secret profits at the expense of AMS for which they had not accounted. AMS seeks an inquiry as to damages and an account of those profits. All the defendants to the Part 20 claim, except Mr. Aljadail and Mr. Al Serafi are domiciled in England and have been duly served.
11. On 5^th October 2005 the solicitors for AMS wrote to Mr. Aljadail asking for an address for service in England and also whether he disputed the jurisdiction of the English Court. The letter was addressed to him at his flat in London: Apartment 503, The Bridge, 334 Queenstown Road, SW8; they got no reply. On 10^th October 2005 AMS applied for permission to issue and serve the Part 20 proceedings on Mr. Aljadail and Mr. Al Serafi in Saudi Arabia or, in the case of Mr. Aljadail in France, but in neither case in England. The application which had been issued on 27^th September 2005 came before Master Bowles on that date. It was made on paper and supported only by the third witness statement of Miss Moya Clifford. She set out the history of the matter and described the nature of the claims. She referred in para.14 to the Memorandum of Agreement, but not to either Aquittance or Quitclaim. She continued in para.15 (bundle 1, p.191):

"The Defendants have taken advice from Saudi counsel who have advised that under Islamic law as enforced in Saudi Arabia, this clause is likely to be void for uncertainty. In addition, to the extent that the clause would be enforceable, it could not operate to bar any claim that AIG might have against Mr. Abu-Aljadail where AIG was unaware, at the time of signing the Memorandum of Understanding, of its right to initiate such a claim. The reasons for the resignations of the First, Second and Third defendants are unrelated to the present proceedings and on 27^th July 2004, when the Memorandum of Understanding was signed, the Defendants were unaware of any of the facts set out in paragraphs 10 to 13 above."

12. Though permission was originally sought under CPR Rule 6.20 (3)(a), (6) and (8) for the purposes of the present application reliance on paras.6 and 8 has been abandoned. With regard to para. 3(a) Miss Clifford said this (bundle 1, p193):

"The issues for the Court to decide are whether the Part 20 defendants are necessary or proper parties to the action and whether it is right to bring the Part 20 defendants to England. It is the Defendants' case that the claims against Mr. Abu-Aljadail and Mr. Al Serafi are identical to the claims against the second Part 20 Defendant Mr. Abougabal. The claims are also inextricably linked to the counterclaim against the Claimant, and the claims against the Fourth, Fifth and Sixth intended Part 20 Defendants, all arise out of the same facts and deal with similar issues. It would therefore be unfair on the other intended Part 20 Defendants including Mr. Abougabal if they had to face allegations against them involving acts carried out by Mr. Abu-Aljadail and Mr. Al Serafi without having Mr. Abu-Aljadail and Mr. Al Serafi as parties to the action. Mr. Abu-Aljadail [and Mr Al Serafi] are therefore necessary parties to the Part 20 proceedings.

"28. As to whether it is right to bring Mr. Abu-Aljadail and Mr. Al Serafi to the Courts in England, given that it is the Defendant's case that the Claimant, an English registered company, was the vehicle for the illegal/fraudulent actions of Mr. Abu-Aljadail and Mr. Al Serafi, the Defendants submit that it is entirely proper for the Defendants' claims against Mr. Abu-Aljadail and Mr. Serafi to proceed in the English Courts. It is therefore the Defendants' submission that Mr Abu-Aljadail and Mr. Al Serafi are necessary and proper parties for the Part 20 claim."

13. The only reference to the proceedings in Saudi Arabia relating to the Japan agreement made by Miss Clifford is in para.5 of her witness statement. That is in the following terms (bundle 1, p.189):

"The Claimant has commenced proceedings against the First and Second Defendants in the Courts of Saudi Arabia in relation to an agreement dated 1 January 2004 under which the Claimants were appointed as the First Defendant's Media Representative in Japan. The issues in those proceedings relate to a different Agreement from the one which is the subject of this action (albeit the issues are similar and arise from the same factual matrix)."

14. On 11^th November 2005 Global served its reply to the defence and counterclaim of AMS and the defence of Mr. Aljadail, Mr. Abougabal and Mr Al Serafi to the Part 20 claim. On 16^th February 2006 AMS applied for and obtained from Master Moncaster an order for service on Mr. Aljadail by an alternative method. The alternative method sought was "by hand" to Mr. Aljadail's London home: "Flat 503, The Bridge, 334 Queenstown Road, Battersea, London SW8.4MP." If the claim form was so delivered before 28^th February 2006 then it should be deemed to have been served on 1^st March. This application too was made on paper and supported only by the witness statement of Mr. Chesher. He set out the background to the application, the order for service out made by Master Bowles, the fact that a case management conference had been fixed for 9^th March 2005 and the need (as he saw it) for the proceedings against Mr. Aljadail and Mr. Al Serafi to catch up with those against the other Part 20 defendants.
15. In paras. 21 to 27 he described in detail the efforts made to obtain an address for service on Mr. Aljadail and why he considered that Mr. Aljadail was a frequent visitor to London and had a flat in Battersea. In paras. 29 to 30 he described the efforts made to serve Mr. Aljadail in Saudi Arabia or in France, and in para.33 he said (bundle 1, p.257):

"In the light of the as yet unsuccessful ongoing attempts to serve the First and Third Part 20 Defendants with the claim form through the permitted means and further, in the case of Mr. Abu-Aljadail the strong possibility that, when the claim form was eventually served on his business address at ART, he may have left that employment, it is likely that service on the first Part 20 Defendant by the permitted means will be unsuccessful. Such failure will obviously delay the determination of the Claim and the Part 20 claims. As set out above, Mr. Abu-Aljadail is central to many of the issues in the First and Second claims. Service of the claim form by hand delivery to Mr. Abu-Aljadail's flat within the jurisdiction, which is his home on regular visits to London, would allow the Part 20 Claim to be dealt with without causing further delay to the First and Second Claims."

On the basis of that evidence the Master made the order sought.

16. On 28^th February 2006 the claim form and other associated documents were left by Mr. Chesher with a security guard (Mr. Byrne) at the front entrance to two blocks of flats, in one of which is Flat 503. On 4^th March 2006 the defence of AMS to the Saudi proceedings was served. It is in Arabic and pleads the same defence but by reference to the Sharia and Saudi law, as the defence, counterclaim and Part 20 claims in the English proceedings. Thus it sets out the execution of the Japan agreement on behalf of AMS by Mr. Aljadail, its chief executive officer. It traces the acquisition by Mr. Aljadail and Mr. Abougabal and Mr. Al-Serafi of their interest in the Global companies. It describes the fact that their holdings are in Global Media (UK) Limited, as camouflage to conceal their interests in the company with which AMS had contracted. It attributes the cause of the termination of the agreement on 2^nd September 2004 to the discovery of these interests in Global. It alleges duties of fidelity and fair dealing, citing passages from the Holy Koran in support of those propositions, and it alleges that the terms of the Japan agreement were unduly favourable to Global. It concluded as follows (bundle 3, p.703):

"In sum, and after responding to all claims of the Claimant, we request your Esteemed Circuit to:

First: Dismiss all the Claims of the plaintiff as they are not based on any lawful or contractual ground.

Secondly: oblige the plaintiff to pay USD (459,417.95) representing the outstanding.

Thirdly: We reserve the right to submit further demands or to join third parties."

There was in those proceedings no claim against Mr. Aljadail or any of the other defendants to the Part 20 claim in England, nor was any of them joined as an additional party to the action brought by Global.

17. On 9^th March 2006, there was the case management conference in the proceedings in England, even though by then there had been no service on Mr. Al Serafi. Directions were given for defences, disclosure, exchange of witness statements and expert evidence, but notably not experts on foreign law. The trial was ordered to take place between 31^st March and 1^st June 2007. On Tuesday, 29^th March 2006 the claim form in the Part 20 proceedings in England (which it will be remembered had been left by Mr. Chesher with Mr. Byrne at the entrance to the two blocks of flats on 28^th February 2006) came to the attention of Mr. Aljadail having by then been left outside the door to flat 503 presumably by Mr. Byrne or someone on his direction. This led Mr. Aljadail to consult his present solicitors on Monday and Tuesday, 3^rd and 4^th April. On the following day, 5^th April, those solicitors wrote to the solicitors for AMS indicating their interest. They added (bundle 2, p.405):

"We anticipate that we may shortly be instructed to file an acknowledgement of service at the High Court. We understand that the deemed date of service for the proceedings is 31^st March 2006, which means that we have until 14^th April 2006 to do so. Please confirm this is agreed.

"We also note that at the recent case management conference before Master Bowles our client was ordered to file and serve his Defence to the Part 20 proceedings by 4.00 p.m. on 28^th April 2006. This was despite the fact that our client was not represented in court on 9^th March or given the opportunity to be represented there.

Whilst we are in the process of taking full instructions and will be writing to you again shortly, it would be helpful if you could indicate by return whether or not you are prepared to extend the time for service of our client's defence to 31^st May 2006."

18. On Thursday, 6^th April 2006, the solicitors for AMS replied. They agreed that the date for Mr. Aljadail to file an acknowledgement of service was 14^th April and an extension of time for his defence to 31^st March was also agreed. On 12^th April 2006 the solicitors for Mr. Aljadail filed an acknowledgement of service with the court ticking the box indicating that Mr. Aljadail intended to defend the claim but not ticking the box indicating that he intended to contest the jurisdiction of the court. They sent a copy of the acknowledgement of service as filed to the solicitors for AMS and in a separate letter on the same day they sought the agreement of the solicitors for AMS to discontinue the Part 20 claim on the ground that Mr. Aljadail had been released from all liability to the two aquittance and quitclaims of which they enclosed copy translations. They wrote (bundle 2, p.410):

"Essentially it would appear that both of your clients - we understand that MEBC falls within the definition of an ARA Holding Company Group, its companies and AMS - agreed in 2004 to discharge our client from any potential liabilities to either of them (past, current and future).

In the circumstances, our view at this stage is that your clients are not entitled to pursue our client for anything. It would appear that your clients have no option but to discontinue the action against our client.

We would be grateful if you could take instructions on this matter and confirm by no later than Friday, 21st April whether or not you will be discontinuing the claim against our client. If your clients intend proceeding against our client, please explain how they consider they can proceed in the light of the enclosures to this letter.

If you do not respond positively to this letter we anticipate instructions to apply for the claim against our client to be struck out."

19. On 18^th April the solicitors for Mr. Aljadail wrote again enclosing a copy of the translation of the Memorandum of Agreement. They added (bundle 2, p.418):

"We draw your attention in particular to the second and fourth paragraphs on page 2 of the Memorandum of Understanding.

We await hearing from you by 21^st April with confirmation as to whether or not you will be discontinuing the claim against our client."

On 19^th April AMS's solicitors wrote refusing to discontinue the proceedings. They quoted the passage in Miss Clifford's third witness statement which I have read already, and added (bundle 2, p.431):

"We trust that the basis for bringing the Part 20 Claim against your client is now clear and look forward to receiving your client's Defence by 31 May 2006."

20. The time allowed by CPR Part 11 for challenging the jurisdiction of the court expired on 26^th April 2006. The following day on 27^th and 28^th April the solicitors for Mr. Aljadail sought the advice of counsel. Then on Wednesday, 10^th May 2006 they wrote to the solicitors for AMS stating (bundle 2, p.348):

"We now have instructions to apply to the High Court for Orders (amongst others) that service of the Part 20 Claim Form on our client be set aside and further or alternatively that the proceedings against him in this jurisdiction be dismissed or stayed. This application is currently being prepared and we anticipate being able to serve you with an Application Notice and the supporting evidence during the course of next week.

As will be set out in the evidence in support, the grounds for our client's application are to be as follows:

1 The Courts of England and Wales are not the most suitable forum for the trial of the specific claims against our client (a forum conveniens point): indeed they appear to have no real or substantial connection at all with the alleged dispute; and

2 In the circumstances of this case the Court should not have exercised its discretion to the writ service on our client, whether on the basis of the evidence relied on in support of your client's applications or at all."

21. They then elaborated on those two grounds in some detail and continued (bundle 2, p.350):

"We are aware that any application by our client will be issued outside the time limit provided for by CPR Part 11. However, the Court has jurisdiction to extend time for such (see Sawyer v Atari Interactive Inc. [2005] EWHC 2351).

In the circumstances we should be grateful if you could indicate by return:

1 Whether or not you are prepared to consent to a stay of the proceedings against our client in England, thereby saving Court time and the parties their costs?

2 If not, whether you are prepared to consent to an extension of time for our client's application of the CPR Part 11? The delay in issuing the application has been occasioned by an oversight by this firm as to the time limit, the difficulty in obtaining instructions and translations of documents, and the clear picture that emerges once the facts of the case against our client are analysed in any detail that this dispute has everything to do with Saudi Arabia and nothing to do with England and Wales, and accordingly that his defence and necessarily the Part 20 claim, (although not expressly pleaded in such terms) rely in their entirety on a foreign system of law.

We await hearing from you urgently."

22. On 15^th May 2006 came the response of the solicitors for Mr. Aljadail. They refused their consent to any of the matters put forward by the solicitors for AMS. Accordingly, Mr. Aljadail's application was issued on 23^rd May 2006. The relief he seeks is as follows (bundle 1, p.160):

"Mr. Aljadail intends to apply for orders extending time to make this application and declaring that the Court has no jurisdiction in the Part 20 claim against Mr. Aljadail or that it should not exercise any jurisdiction which it may have and for orders setting aside the Part 20 Claim Form and the service thereof on Mr. Aljadail, discharging the Orders of Master Bowles on 5^th October 2005 and Master Moncaster on 16^th February 2006 against Mr. Aljadail ("the Orders"), and further or alternatively staying the proceedings against Mr. Aljadail because, as set out in the witness statement of Mark Summerfield, the delay is occasioned through oversight, is minimal and occasions no prejudice, the Orders should not have been granted, England is not the proper place in which to bring the Part 20 claim against Mr. Aljadail, Saudi Arabia is the more convenient and appropriate forum. The Part 20 Claim Form contains claims for which permission to serve out was not obtained, and the Orders were obtained without full and frank disclosure and on evidence upon which the Court should not have given permission to serve out, not least because it should have concluded that the claims did not have a reasonable prospect of success or were not sufficiently shown to be within CPR Rule 6.20 and that the requirements of CPR Rule 6.21 were otherwise not satisfied."

23. The application is supported by the witness statement made on 22^nd May 2005 of the solicitor for Mr. Aljadail, Mr. Mark Summerfield. His contentions, so far as still relevant, are first, that Mr. Aljadail is not a necessary or proper party to the claims brought by Global against AMS. Any liability of Mr. Aljadail to AMS which might otherwise have existed had been released by the settlement agreements. Saudi Arabia would be the more appropriate forum for the trial of the claim against Mr. Aljadail. Both the order for service out and the order for the alternative service were made without sufficient justification . With regard to the failure to contest the jurisdiction and service in due time he said this (bundle 2, p.322):

"76. I acknowledged service of the Part 20 Claim Form on behalf of Mr. Abu-Aljadail by letter dated 12^th April 2006. Regrettably I did not appreciate at the time that there might be issues concerning service or that time for contesting service in the jurisdiction of this Court was just 14 days from the acknowledgement of service."

Since then the parties have filed no fewer than 10 witness statements, including five as to the law of Saudi Arabia. For present purposes it is only necessary to refer to the witness statement of Mr. Aljadail himself made on 6^th July 2006. At paras. 22 and 23 he stated that he did not accept that Sheikh Waleed did not know of the interest in Global held by him and Mr. Abougabal and Mr. Al Serafi at the time of the settlement agreement. At paras. 36 and 37 he dealt with what he called "the purported difficulties in serving him". He said this (bundle 3, p.728):

"36. I note that the Defendants have tried to suggest a number of reasons why they could not serve it by handing me the Part 20 Claim Form and Particulars of Claim, and why they should instead have been permitted to avail themselves of an alternative method of service. However, I find it extraordinary that the Defendants failed to mention the extensive and frequent contact and meetings that have occurred and continue to occur. Indeed, I am in no doubt that the Defendants have in their possession minutes of some of these meetings.

37. I set out below some of my key meetings with Sheikh Waleed and other representatives of the Defendant in the period since I left AMS in July 2004. The list is non-exhaustive and I apologise to the Court because I cannot recall many of the precise dates of the meetings in question. I should also point out that throughout this time my contact details (home and mobile telephone numbers, home address and e-mail) were well known to individuals at all levels in AMS and MBCFZ."

He then gave details extending over some three pages of his contacts with AMS and its personnel at frequent intervals from May 2005 to April 2006. He concluded in paras. 38 to 43 by describing the problems he would have if he had to defend proceedings in England rather than in Saudi Arabia.

24. The allegations of Mr. Aljadail regarding frequent contacts between himself and personnel at AMS were dealt with in a further witness statement of the solicitor for AMS, Mr. Marino in para.4 of his second witness statement made on 13^th July 2006. He said this (bundle 3, p.739B)

"Mr. Abu-Aljadail says that he finds it 'extraordinary that the Defendants failed to mention the extensive and frequent contact and meetings that have occurred and continue to occur' between himself and representatives with the Defendants/Part 20 claimants. The reason for not drawing to the Court's attention the contacts and meetings referred to is that all such contacts and meetings have taken place on a without prejudice basis (and indeed continue to do so as of the date of this Witness Statement). On advice from my firm, the Defendants/Part 20 Claimants concluded that it would not be appropriate to use a without prejudice meeting to effect service of process on Mr. Abu-Aljadail."

No further explanation was given as to why the fact of these frequent contacts was not disclosed properly in the affidavit or witness statement of Mr. Chesher.

25. In these circumstances the following issues arise:

(i) whether Mr. Aljadail has submitted to the jurisdiction of this court, if so

(ii) whether Saudi Arabia is the more appropriate forum for the trial of the claim against Mr. Aljadail, but if not

(iii) whether either or both the orders for service on Mr. Aljadail out of the jurisdiction or by alternative means made by Masters Bowles and Moncaster on 10^th October 2005 and 16^th February 2006 and any service consequent on either of them should be set aside.

I shall deal with those issues in that order.


 


Submission to the jurisdiction.

26. Civil Procedure Rule 11, so far as material, provides as follows:

"Procedure for Dispute in the Court's Jurisdiction"

11(1) A defendant who wishes to (a) dispute the court's jurisdiction to try the claim, or (b) argue that the court should not exercise its jurisdiction may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have.

11(2) A defendant who wishes to make such an application must first file an acknowledgement of service in accordance with Part 10.

11(3) A defendant who files an acknowledgement of service does not, by doing so, lose any right that he may have to dispute the court's jurisdiction.

11(4) An application under this rule must -

(a) be made within 14 days after filing an acknowledgement of service; and

(b) be supported by evidence.

11(5) If the defendant -

(a) files an acknowledgement of service; and

(b) does not make such an application within the period specified in paragraph (4) he is to be treated as having accepted that the court has jurisdiction to try the claim."

Thus, mere failure to make the appropriate application within the period of 14 days gives rise to a deemed submission to the jurisdiction by virtue of 11(5). But subject to the power of the court under CPR Rule 3.1(2)(a) to extend the time for a challenge to the jurisdiction (see Sawyer v Atari Interactive Inc. [2005] EWHC 2351) If time is extended then the defendant is able to challenge the jurisdiction of the court over him on any grounds otherwise available to him. But if by conduct he has affirmatively submitted to the jurisdiction then there is no point in granting an extension of time to make an application for that purpose which is bound to fail.

27. The test to be applied in determining whether any particular conduct amounts to a submission to the jurisdiction was considered by Colman J. in Spargos Mining NL v Atlantic Capital Corporation [1995] reported only in "The Times" for 11^th December, but quoted in full by Patten J. in SMAY Investments Ltd. v Sachdev [2003] 1WLR 1973 at p.1976. I reproduce the whole of the quote as set out in that paragraph 41 from the Judgment of Patten J:

""In approaching the question of submission, I have in mind the following authorities. In Astro Exito Navagacion S.A. v. W.T. Hsu , otherwise know, more pronounceably, as The 'Messiniaki Tolmi' , [1984] 1 Lloyds Reports, 266, Lord Justice Goff (as he then was) at page 270, said this:

'Now a person voluntarily submits to the jurisdiction of the Court if he voluntarily recognizes, or has voluntarily recognized, that the Court has jurisdiction to hear and determine the claim which is the subject matter of the relevant proceedings. In particular, he makes a voluntary submission to the jurisdiction if he takes a step in the proceedings which in all the circumstances amounts to a recognition of the Court's jurisdiction in respect of the claim which is the subject matter of those proceedings. The effect of a party's submission to the jurisdiction is that he is precluded thereafter from objecting to the Court exercising its jurisdiction in respect of such claim. Whether any particular matter, for example an application to the Court, amounts to a voluntary submission to the jurisdiction must depend upon the circumstances of the particular case.'

In Sage v. Double A Hydraulics Ltd , [1992] Times Law Reports, 165, Lord Justice Farquharson said (and this is a report of the judgment which is not reported in oratio recta ):

'A useful test was whether a disinterested bystander with knowledge of the case would have regarded the acts of the Defendant, or his solicitors, as inconsistent with the making and maintaining of his challenge.'

In arriving at the view to be imputed to the disinterested bystander, it seems to me that one has to bear in mind that there will be an effective waiver, or a submission to the jurisdiction, only where the step relied upon as a waiver, or a submission to the jurisdiction, cannot be explained, except on the assumption that the party in question accepts that the court should be given jurisdiction. If the step relied upon, although consistent with the acceptance of jurisdiction, is a step which can be explained also because it was necessary or useful for some purpose other than acceptance of the jurisdiction, there will, on the authorities, be no submission.

If the well-informed bystander had been left in doubt because what the defendants had done was equivocal, in the sense that it was explicable on other grounds in addition to agreement to accept the jurisdiction of the court, then the conclusion must be, on the authorities, that there would have been no submission to the jurisdiction. The representation derived from the conduct of the party said to have submitted must be capable of only one meaning."

28. Thus the test to be applied is an objective one and what must be determined is whether the only possible explanation for the conduct relied on is an intention on the part of the defendant to have the case tried in England. Counsel for AMS submitted that this test was satisfied. He relied on five matters, they are:

(i) the letter from the solicitors for Mr. Aljadail dated 5^th April 2006. By that letter they recognised the order of Master Bowles made on 9^th March 2006 as setting a timetable for the conduct of the case until trial which concerned Mr. Aljadail. In addition they sought and subsequently obtained an extension of time for filing Mr. Aljadail's defence.

(ii) there is the acknowledgement of service filed on 12^th April 2006 in the form it was whereby box 1 (rather than box 3) was ticked. Counsel for AMS accepts that this alone would be insufficient. (see IBS Technologies PBT Limited v APM Technologies [2003] All E.R. D105 at para.26.) He relies on it though in the context of all the other matters which he submits all point in the same direction.

(iii) there is the letter from the solicitors for Mr. Aljadail dated 12^th April and the later letter of 18^th April under cover of which the settlement agreements were sent to the solicitors for AMS. Mr. Aljadail thereby entered into the merits of the claim. He threatened to seek to strike it out on the basis that the settlement agreements gave rise to a complete defence. It is contended that such conduct is wholly inconsistent with any objection to the jurisdiction of the court to try it.

(iv) is the conduct of the solicitors for Mr. Aljadail in allowing the period of 14 days to elapse without making the requisite application.

It is accepted that by itself that is neutral but again AMS relies on it in the context of all the affirmative conduct to which I have referred.

(v) there is the absence of any counter indication until the advice of counsel had been obtained and the objection to the jurisdiction was first adumbrated by the letter dated 10^th May 2006.

In that context, counsel for AMS relies on the passage at para.76 of the witness statement of Mr. Summerfield, made on 22^nd May 2006 which I have quoted. That, he submits does not suggest any initial mistake but rather a change of heart subsequently.

29. This is disputed by counsel for Mr. Aljadail. He submits that Mr. Summerfield made one or more mistakes from the consequences of which Mr. Aljadail should be relieved. He invited the court's sympathy for the plight of the solicitor in taking instructions in a case such as this, including obtaining reliable translations of relevant documents. He contended that no prejudice had been sustained by AMS, and relied by way of analogy on the various matters set out in CPR Rule 3.9 as material to the court's consideration in determining whether to grant relief from sanctions imposed for failure to comply with any rule, practice direction or order. He took me through all the correspondence on which counsel for AMS relied and himself relied on what he contended was the true context, namely neither order for service had been properly made.
30. I can express my conclusion quite shortly. I will assume for the purposes of the argument that both orders for service had been improperly made so that Mr. Aljadail did have grounds for challenging the jurisdiction of the court. I also recognise that solicitors instructed to advise and represent the client in relation to a claim such as this have little time to determine whether to contest the jurisdiction. Consequently, in cases of doubt the solicitor would be well advised to tick box 3 on the acknowledgement of service and obtain an extension of time under Rule 11(4) without delay. If he genuinely wishes to preserve his client's ability to contest the jurisdiction of the court he will refrain from entering on the merits of the claim or at least only do so on a clear and express without prejudice basis.
31. The solicitor for Mr. Aljadail adopted none of these courses. To any objective outside observer his conduct, and accordingly that of Mr. Aljadail from the giving and receipt of instructions on 3^rd April to the letter of 10^th May - a period of over five weeks - was only consistent with an acceptance of the jurisdiction of the court to determine the claims of AMS on their merits. A defendant who intends to challenge the jurisdiction of the court does not seek an extension of time for his defence, he does not advance a defence on the merits in the form of the settlement agreements, nor does he threaten to strike-out the claim if the claimant refuses to discontinue it. I do not accept that there is no prejudice sustained by AMS in consequence of this conduct if Mr. Aljadail is now permitted to challenge the jurisdiction of the court. At the very least some five weeks in preparing the Part 20 case for trial against all defendants in April 2007 will have been lost together with the associated costs. In my judgment Mr. Aljadail had submitted to the jurisdiction before his solicitor's letter of 10^th May was sent, and before his application for an extension of time was issued on 23^rd May 2006. This is, in effect, recognised by Mr. Summerfield in para.76 of his first witness statement.

Appropriate Forum

32. I turn then to the second issue, namely whether England or Saudi Arabia is the more convenient forum for the trial of the Part 20 proceedings. Counsel for Mr. Aljadail submits that the balance clearly points to Saudi Arabia. He relies on a number of considerations, the principal one of which is the legal effect of the settlement agreements. As he correctly points out their legal effect is to be determined by reference to the law of Saudi Arabia. Five experts on Saudi law are not of the same mind on this. Some suggest that the settlement agreements can only release claims known at the time of the settlement agreements. Others consider that they may release all claims then unknown if that is what was intended. In addition, there are questions of fact as to what was known to Sheikh Waleed at the material time. AMS contends that he did not know of the indirect interests of Mr. Aljadail and the other ex-employees in Global. Mr. Aljadail contends that he did for all the reasons set out in his witness statement. Counsel for Mr. Aljadail contends that all these issues are more conveniently determined by the relevant court in Saudi Arabia. They are of course more familiar with Sharia law than the courts of this country, and the witnesses necessary to resolve the issues of fact are primarily to be found in Saudi Arabia rather in England.
33. Counsel for Mr. Aljadail submits that AMS should be required (or expected) to join the defendants to the Part 20 claim in England to the pending proceedings in Saudi Arabia. He envisages that the court there would then determine, as a preliminary issue if appropriate, the legal and factual effect of the settlement agreements. It could and would, if asked to do so, also determine whether those agreements constituted a complete release of all claims against Mr. Aljadail in relation to the Japan agreement. He envisages that the decision of the court in Saudi Arabia on these issues would in practice determine whether the settlement agreements also constituted releases of the claim advanced by AMS against Mr. Aljadail in the Part 20 proceedings in relation to the Europe agreement pending in England. In that connection, counsel for Mr. Aljadail relied on the fact that the proceedings in Saudi Arabia and in England raised the same issues as to the enforceability of the Europe or Japan agreements as between Global and AMS. The defence of AMS to both was the same, indeed, para.26 of the Part 20 claim in England specifically raises issues arising from the Japan agreement. Mr. Aljadail also relies on the inconvenience and expense to him in defending these proceedings in England when compared with the defence of parallel proceedings in Saudi Arabia. He contrasts the resources available to him with those, seemingly much greater, at the command of AMS.
34. I am unable to accept these submissions for, in effect, the reasons advanced by counsel for AMS. First, AMS is the defendant to proceedings brought against it by Global in England. It is entitled, indeed, bound to defend that claim in England. Part of that defence consists of allegations of breach of duty made against Mr. Aljadail and others. Though similar allegations are made in the Saudi proceedings brought by Global against AMS, there is no claim in Saudi Arabia against any Part 20 defendant corresponding to the Part 20 claims made against them by AMS in England. Mr. Aljadail is not a party to the Saudi Arabian proceedings and seemingly would not be entitled to intervene in them if he wished to do so. All the defendants to the Part 20 proceedings brought by AMS in England, except Mr. Aljadail and Mr. Al Serafi, are domiciled in England. Even if it were otherwise desirable, this court could not stay the proceedings against them (See Article 2 of the Judgments Regulation and Owusu v Jackson [2005] QB 801).
35. Accordingly, the stay envisaged by counsel for Mr. Aljadail would give rise to a split trial and the risk of conflicting Judgments the court is always anxious to avoid. The trial would be split in the sense that the claim against all the other defendants, except Mr. Al Serafi, would proceed in England and that against Mr. Aljadail, or at least a substantial part of it, would take place in Saudi Arabia. The risk of conflicting decisions would arise from the fact that each trial would involve the same issues, both legal and factual. In particular, the courts in both jurisdictions would be concerned to ascertain the duties owed by employees, agents and directors under Sharia and Saudi law, and whether and the extent to which they might have been broken. The potentiality for such a conflict does not presently exist in proceedings between AMS and Mr. Aljadail because Mr. Aljadail is not a party to the proceedings in Saudi Arabia. Thus the order sought by Mr. Aljadail would create the very risk which the court is anxious to avoid. I accept that the resources available to Mr. Aljadail are less than those at the command of AMS, but that would be so whether or not I grant the stay sought. The more relevant point is whether to litigate in England would cause such problems to Mr. Aljadail as in effect to debar any defence on his behalf. There is no evidence to that effect. He has owned the flat at 503, The Bridge, Queenstown Road, Battersea since April 2003. He is a frequent visitor to this jurisdiction and has, so it seems, had two bank accounts here.
36. Counsel for Mr. Aljadail also suggested that the order he seeks is to be treated as a case management decision and justified as such. He relied on the decision of the Court of Appeal in Reichhold Norway ASA v Goldman Sachs International [2000] 1W.L.R. 174. In that case the stay of the proceedings in England was likely to last a year so as to enable an arbitration in Norway to be completed. But in that case those concerned were parties to both the arbitration and the action. By contrast in this case Mr. Aljadail is not a party to the proceedings in Saudi Arabia. In addition there are four other defendants to the Part 20 proceedings against whom the Part 20 claim cannot be stayed.
37. For all these reasons it seems to me that the forum conveniens , as it is conventionally called, is in England. In these circumstances the third issue to which I have referred does not arise. Accordingly it is unnecessary to deal with the submissions made to me and with one exception I shall not do so. The exception relates to the pleading of the Part 20 claim, specifically a complete absence of any reference to Sharia or Saudi law. Counsel for AMS sought to justify this by reference to Dicey & Morris on "The Conflict of Laws" 13^th Edition, Volume 1, para. 9.003. In that paragraph it is stated:

"The general rule is that if a party wishes to rely on foreign law he must plead it in the same way as any other fact. Unless this is done the court will decide a case containing foreign elements as though it were a purely domestic English case."

Later in the same paragraph appears this passage:

"The burden of proving foreign law lies on the party who bases his claim or defence on it. If that party adduces no evidence, or insufficient evidence of the foreign law the court applies English law. This principle is sometimes expressed in the form of foreign law is presumed to be the same as English law until the contrary is proved, but this mode of expression has given rise to uneasiness in certain cases. Thus in one case the court refused to apply the presumption of similarity where the foreign law was not based on the common law and in others it has been doubted whether the court was entitled to presume that the foreign law was the same as the statute law of the forum. In view of these difficulties it is better to abandon the terminology of presumption and simply to say that where foreign law is not proved the Court applies English law."

38. Counsel for AMS stressed the word "if" in the first passage to which I have referred. He suggested that it was sufficient in the first instance to rely on the so-called presumption referred to in the second passage and leave it to the defendant to ascertain and rely on any aspect of the foreign law he considered to be different and material. If the defendant did so then the claimant would have to deal with the issue in his reply or amend his particulars of claim. He sought to give this submission added force by relying on his own pleading in The Arab Monetary Fund v Hashim which came before the court on many occasions in the 1980s and 1990s. This submission does not reflect my experience either at the Bar or on the Bench. Under the old system of pleading it was necessary to plead foreign law (see Ascherberg, Hopwood and Crew Limited v Casa Musicale Sonzogno ) 1971 1 W.L.R 1128). That requirement arose from the terms of RSC Order 18, Rule 8(1)(b) because in the absence of such pleading foreign law was a matter which might take the opposite party by surprise. The Civil Procedure Rules do not contain any similar express requirement but it would be inconsistent with the provisions of CPR Rule 16.4(1)(a) and the overriding objective deliberately to omit an allegation of some material facts, namely, relevant principles of foreign law. As the passage I have quoted from Dicey & Morris points out it is inaccurate to refer to a presumption that foreign law is the same as English law. The true proposition, I believe, is that as foreign law is in most cases a question of fact to be proved by evidence, in the absence of such evidence the court has no option but to apply English law. But if the facts alleged demonstrate that, for example, the proper law of a contract is not the law of England then as the law of England includes the principles of private international law those principles may demonstrate that some other system of law is applicable to the claim and if the relevant principles of that system of law are not sufficiently proved the claim may fail for that reason.
39. The Part 20 claim in this case is a good example. In paragraphs 10 to 15 AMS avers the existence of certain duties to be implied in the various contracts of employment entered into by AMS and each of Mr. Aljadail, Mr. Abougabal and Mr. Al Serafi. Paragraph 14 avers that obligations of fidelity "were implied by law." Given the allegations in relation to the parties to and formation of the employment contracts the law there referred to must be the law of Saudi Arabia, yet there is no attempt to say what it is or, in the sense of legal source, where it is to be found. In my view such a pleading is deficient. It is not a mere pleading point but one of justice. If, as in this case, the true claim is based on propositions of foreign law then the party who advances it should make it good by reference to the system of law on which he relies. This is an a fortiori case because the defence of AMS in the proceedings brought by Global in Saudi Arabia does precisely that. It is true that that defence was advanced on 4^th March 2006 as opposed to the Part 20 claim which was brought forward by AMS on 14^th September 2005. But if AMS can provide the requisite details in the one it should be required to do so in the other. Quite apart from giving fair notice to the opposing party of the claim he has to meet, it merely increases costs if both parties have to carry out the same initial research into the relevant system of law.
40. In the light of the conclusions I have reached on the first and second issue, it is immaterial to consider whether either or both of the service orders should be set aside. The applications before me do not include one to strike out the claim under CPR Rule 3.4(2)(A), and the point was not argued before me on that basis. I have sought to express my prima facie views on the submission of counsel for AMS lest my silence, if I say nothing, is treated in the future as approval of it. For all these reasons I dismiss the application of Mr. Abu Aljadail.

MR. FLINT: My Lord, I invite your Lordship to dismiss the application with costs. The parties have exchanged schedules of costs if your Lordship wishes to undertake a summary assessment, which I would invite you to do, and I can hand those up.

THE CHANCELLOR: Does Mr. Aldous accept the consequence ----

MR. ALDOUS: I cannot resist an order for costs.

MR. FLINT: I think your Lordship has two schedules.

THE CHANCELLOR: I have two pages of one.

MR. ALDOUS: I am sorry, I was not accepting the summary assessment ... I think your Lordship understood that.

THE CHANCELLOR: Yes.

MR. FLINT: My Lord, the total schedule that I have handed up to your Lordship is £154,000. Coincidentally - or it may not be a coincidence - the schedule that is served by the other party in preparation for this hearing came to £153,000. So the parties' costs overall are broadly the same, and I would submit therefore ----

THE CHANCELLOR: I must say I am not particularly impressed by those submissions. They are frequently made, or the opposite, it is equally consistent with both sides being overcharged.

MR. FLINT: I have to accept the logic of that. My Lord, the schedule is set out there in detail. I am happy to respond to any point put to me by the court, or which emerges in argument from my learned friend, but that is the schedule.

THE CHANCELLOR: Mr. Aldous, what do you wish to say?

MR. ALDOUS: I would submit that your Lordship should lower these costs to go to taxation and should order a figure of £80,000 on account.

THE CHANCELLOR: How much?

MR. ALDOUS: £80,000, my Lord. I find it very difficult to go through a bill of costs of this size, and I have some understanding of the various grades and of course some of the rates seem to be a little high.

THE CHANCELLOR: When did you receive the schedule?

MR. ALDOUS: In plenty of time I received this schedule. I think it has been amended but I have had an earlier schedule some days before so I am not in any way taken by surprise. All I am saying is that if one looks at just one or two of the charging rates, I am talking about grade D rates seem to be higher than as I understand it ordinarily allowed. But personally, and I obviously have not taken instruction from my solicitors, I find it very difficult to deal with a bill such as this ... taxation, but it is right, in my submission, if your Lordship makes a payment on account.

MR. FLINT: I do not think I can add anything in reply my Lord.

THE CHANCELLOR: What do you say about the suggested payment on account?

MR. FLINT: Well I would submit a logical amount would be two-thirds of what is sought.

THE CHANCELLOR: It is only logical if you start from the proposition that they are all proper.

MR. FLINT: My Lord, I am not sure that was even a submission rather than a bid, and I do not think I really can help.

THE CHANCELLOR: I am not prepared to make a summary assessment. I think the level of cost is such that it requires the expertise of a costs Judge to examine all the constituent elements of it, and it seems to me in the circumstances that £80,000 as a payment on account is quite sufficient. 14 days?

MR. ALDOUS: We might ask for longer than that. He is not in this country at the moment, could I ask for 28.

MR. FLINT: No opposition.

THE CHANCELLOR: Very well. £80,000 to be paid on account within 28 days.

MR. ALDOUS: Two other matters. First, I just hand up a letter, I do not think it is anything which your Lordship can or I am asking you to deal with. It is actually of some interest I think in the light of the last part of your Lordship's Judgment, the requirement for pleading foreign law, looking particularly at the middle paragraph. We received that about mid-day today, I think a little later but I think it requires nothing from the court today.

THE CHANCELLOR: No.

MR. ALDOUS: And I think nothing, if I may say so, that your Lordship has said which would in any way prejudice if an application is made by Global to do so.

THE CHANCELLOR: It cannot because they were not parties. What I said was directed primarily at Mr. Flint.

MR. ALDOUS: Lastly, I think I must formally ask for permission to appeal and I do so really on one ground at the moment, there seems in our submission to be a tension between the decision in Sawyer and that of SMA , and it has been our submission, and it would be our submission on appeal that unless a party has actually invoked the court's jurisdiction or acted so as to cause real prejudice in the late application, a court will, we submit, always entertain an application to contest the jurisdiction out of time.

THE CHANCELLOR: Do you want to say anything, Mr. Flint?

MR. FLINT: No, my Lord.

THE CHANCELLOR: No, you will have to get your permission, if at all, from the Court of Appeal. I do not think there is a real prospect of success.

MR. ALDOUS: My Lord, I am grateful.