In a recent decision by the High Court, a dispute between two Russian businessmen who do not have any business interests or assets in England, resulted in the English Courts accepting jurisdiction over the claim, despite both parties being Russian citizens domiciled in Russia.

The two businessmen were party to a “Cooperation Agreement” agreed and executed in Russia, which related to various mining projects in the Russian Federation. This relationship broke down when the Defendant failed to make payment for the Claimant’s services in accordance with the agreement, leading to the Claimant initiating proceedings in the English courts to recover the outstanding sums owed.

The Defendant was personally served with the claim form while travelling through Heathrow airport to visit his family who live in the UK and did not dispute service, which usually provides automatic jurisdiction to the Courts of England and Wales to hear the claim.

The Defendant argued that due to a number of factors it would be more appropriate to hear the claim in Russia. The Russian Federation was where the contract was executed and effected, the location of the relevant documents (in Russian) and witnesses (who are mostly Russian speakers).

In order to counter these assertions and establish jurisdiction for the English Courts, the Claimant had to provide a “good arguable case” that the Defendant was resident in England at the time the claim was issued. On the Claimant’s evidence, the Court found the Defendant to be resident in England based on a number of factors, all of which pointed towards him having a substantial connection to the jurisdiction despite his assertions to the contrary.

  • Firstly, the Court found that residence does not need to be exclusive and the Defendant could reside in more than one jurisdiction at the same time;
  • Further to the above, the Court found that England is an appropriate jurisdiction for the claim even if not the defendant’s principal place of residence and he spends the majority of the year in another jurisdiction;
  • Residency could be defined by a person’s settled or usual place of abode, in this case the Defendant owning a London apartment satisfied this by providing a degree of permanency to his location;
  • The Defendant usually visiting England twice a month and staying with his family encourages the description of the Defendant residing in England and having a settled pattern to his presence and reasons for visiting;
  • The Defendant’s wife and children living in England for the majority of the year while the children are at school, along with the Defendant’s frequent visits to see them is evidence of the London apartment being a family home and the Defendant residing in England.

While not the sole factors in the decision on jurisdiction, these raise important considerations for individuals residing inside the UK with global business interests. England and Wales is a popular jurisdiction for international commercial disputes and this decision could lead to more claims being initiated in English Courts against individuals whose family life is focussed in the UK.

If you are concerned about how this decision may affect you or have questions regarding the conduct of international disputes, please contact a member of Mackrell Turner Garrett’s highly experienced Civil Litigation Team.