Supreme Court Win for PCB on Serving Foreign Defendants

Posted on: June 26th, 2013

The Supreme Court has today unanimously reversed the judgment of the Court of Appeal in Abela v Baadarani [2011] EWCA Civ 1571. In finding in favour of PCB clients Mr Abela and others, the Court recognised that litigation between residents in different states is a routine incident of modern life and the traditional characterisation of service of proceedings abroad being an interference with the sovereignty of the state in which process is served is no longer a realistic view of the situation.

In his speech, Lord Sumption stated that the “characterisation of the service of process abroad as an assertion of sovereignty may have been superficially plausible under the old form of writ (“We command you …”). But it is, and probably always was, in reality no more than notice of the commencement of proceedings which was necessary to enable the Defendant to decide whether and if so how to respond in his own interest. It should no longer be necessary to resort to the kind of muscular presumptions against service out which are implicit in adjectives like “exorbitant”.”

Lord Clarke identified 5 matters on which he considered the Court of Appeal had erred. Importantly for Claimants seeking to serve proceedings out of the jurisdiction, particularly in cases where there may be difficulties in service by methods permitted by local law:

  • At least as regards cases not involving the Hague Service Convention or a bilateral service treaty, the Court only needs to be satisfied that there is a good reason for alternative service, and not exceptional reasons.
  • It was wrong for the Court of Appeal to hold that a claimant who wishes the court retrospectively to validate alternative service abroad needs to show that the method used was good service under local law.

More generally for service cases, Lord Clarke accepted the submissions of PCB’s counsel, Clive Freedman QC and Tim Penny, that, save perhaps in exceptional circumstances, events before the issue of the Claim Form are not relevant and the focus of the inquiry is upon the reason why the claim form cannot or could not be served within the period of its validity.

The case is important in multi-jurisdictional cases, marking a shift away from the view that serving English proceedings on a foreign national is interfering with the sovereignty of a foreign state, a view that often adds to the burden on the Claimant seeking to serve foreign defendants. It is also important for the many commercial cases where the process of service on foreign defendants can be fraught with practical difficulties.