High Court favours English jurisdiction in bribery claim brought by Kuwaiti pension fund

The High Court recently rejected an application, brought by two defendants to an alleged bribery claim advanced by a Kuwaiti pension fund, that the claim should be heard before the Swiss courts, holding that England was the proper jurisdiction both in order to avoid the risk of fragmentation of proceedings, and in view of the close connection of the claim to England.  This case is a useful review of the authorities in relation to forum non conveniens, and the bar that must be met to successfully challenge jurisdiction on this basis (The Public Institution for Social Security v Mr Ely Michel Ruimy, Aerium Finance Limited)¹.

Facts

Mr Ely Michael Ruimy and Aerium Finance Limited (AFL) (together, the Applicants) were the defendants (inter alia) to proceedings (constituted of two consolidated claims) brought against them by the Public Institution for Social Security (PIFSS), an institution in Kuwait which is responsible for the social security system and pension scheme.  There were numerous defendants to the underlying proceedings, some of whom had already brought successful jurisdiction challenges².  PIFSS alleged that Mr Ruimy was the joint founder of the Aerium Group, of which AFL (an English company) was a part.  Mr Ruimy was also, at certain points in time, a director of AFL.

In summary, PIFSS alleged that secret commissions of USD 10.1m were paid from Mr Ruimy to Mr Al Rajaan (PIFSS's former Director General), in return for Mr Al Rajaan influencing PIFSS to invest sums in funds managed by the Aerium Group.  AFL financed certain of those payments and was sued on the grounds that Mr Ruimy's knowledge could be attributed to it.  Those payments were allegedly made from a Swiss bank account held by Mr Ruimy to: (i) an account held by Mr Al Rajaan's wife; and (ii) two Swiss jewellers in settlement of amounts owed by Mr Al Rajaan.

Similar issues as in the English proceedings had been brought by PIFSS in a debt claim against certain defendants (the Mirabaud Parties) before the Swiss court.  The Mirabaud Parties were part of the group of defendants who had successfully challenged the jurisdiction of the English court.  These Swiss proceedings did not relate to the same scheme as the commission payments detailed above.  The Mirabaud Parties had also commenced proceedings against the Applicants in the Swiss courts for declaratory relief (seeking a declaration that the Mirabaud Parties were not liable to the Applicants in relation to the claims brought against them in the English proceedings).

The Applicants applied to challenge the English court's jurisdiction in favour of the Swiss courts on the grounds of forum non conveniens. 

Arguments

The Applicants advanced four arguments to show that Switzerland was clearly more appropriate than England as a forum in which to try the case.  This was so because: (a) the torts/wrongs alleged took place in Switzerland; (b) Switzerland was the centre of gravity and evidence; (c) relevant evidence would be heard in already existing Swiss civil proceedings, and there was a risk of irreconcilable judgments; and (d) Swiss law may be the governing law of the claims, and this was a minor indication as to the appropriateness of Switzerland.  For example, it was where the bribes were handled and paid, and evidence about those bribes would be primarily located in Switzerland and inevitably relate to Swiss bank accounts (which could give rise to issues of Swiss banking secrecy, best addressed in Switzerland).

PIFSS, however, submitted that the claim had strong connecting factors to England, specifically that: (a) claims regarding the Aerium investments were already being heard in England (and were scheduled to go to trial in 2025); (b) there was a factual connection to England (dealings between the alleged perpetrators took place in London); and (c) both AFL and Mr Ruimy had connections to England (AFL was an English company, Mr Ruimy was living in England during the relevant period, and he retained assets in the jurisdiction).  PIFSS also argued that the proceedings in Switzerland did not give rise to the risk of contradictory judgments, as: (i) the Swiss proceedings were against different defendants; and (ii) the Swiss proceedings would not progress until the English proceedings were resolved.

Decision

Mr Justice Jacobs broadly accepted the submissions of PIFSS and held that the Applicants had not established that Switzerland was a more appropriate forum than the English forum.

Jacobs J held that it was clear, after Vedanta Resources³, that the risk of inconsistent judgments is often a significant factor in a forum non conveniens analysis.  The English proceedings would continue as against the other defendants, including Mr Al Rajaan and his estate, even if the application were successful – it would "result in a duplication of proceedings [..], with the allegations against the recipient of the alleged bribe (Mr Al Rajaan) being investigated and determined in England, but the allegations against the payor of the alleged bribe being investigated and determined in Switzerland".  In addition, Jacobs J considered it was significant that Mr Al Rajaan was the anchor defendant and at no stage had challenged the jurisdiction of the English court.  As such, were AFL and Mr Ruimy to be sued outside England, that would lead to "undesirable fragmentation" and "create a higher risk of inconsistent findings".

The judge held that there were strong connections with England.  AFL was an English company and Mr Ruimy lived in England for the relevant period, such that he likely was in England when negotiating and arranging the bribes. Similarly, during the relevant period, Mr Al Rajaan spent time in England on business, and was a director of an English bank. Although the alleged bribes may have been paid in Switzerland, not all elements of the wrong were connected with Switzerland – for example, the instruction to pay them may have been given in England.  It would be necessary for the court to determine the reason for the payments, and whether there were in fact secret illegal commissions.  The justification behind the payments was likely to be more closely connected to England, which was a relevant factor in the Court's consideration of the connections to the English jurisdiction.   

Jacobs J also did not agree that documents and witnesses related to the dispute would primarily be located in Switzerland.  The Applicants had given no indication as to the form of their defence or identified any factual witnesses that would need to be called.  They were not obliged to do so, but without that indication, the court could not speculate as to which case they might choose to advance.

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