This week we draw to your attention the Justice Committee Call for Evidence on the work of the County Court: Call for Evidence – Committees – UK Parliament. Responses are due by 13th February and questions cover:
Anyone working in the County Court is encouraged to have their say – as with elections, if you don’t vote, you lose the right to complain afterwards.
Permission to Serve Out of the Jurisdiction, and forum non conveniens, in a Kazakhstan case of cloak and dagger bitcoin-mining
Introduction
Following a 2-day hearing in an exotic jurisdiction dispute relating to a bitcoin mining business operated in Kazakhstan, Simon Birt KC has given a judgment in Alimov v Mirakhmedov & Others [2024] EWHC 3322 (Comm) which is rich in its analysis of the common major issues in jurisdiction disputes. The judgment ran to some 93 pages, and so it is not possible to cover all of the points which were decided, but there were some particularly useful points which merit highlighting, in a claim involving allegations of criminality, corruption, and violence.
The Facts and Procedural Background
The Claimant sought to establish jurisdiction within the courts of England and Wales. The Defendants challenged the English courts’ jurisdiction, and argued that the dispute ought to be determined in Kazakhstan.
All of the individual parties to the dispute had commercial backgrounds in Kazakhstan. The Fourth Defendant was a company incorporated in Cyprus, and was described as “one of the world’s largest bitcoin-mining companies and operates […] from facilities in Kazakhstan and elsewhere.” The Claimant alleged he connected to “one of the most influential businessmen in Kazakhstan at the time, who had substantial influence over the Kazakh government and who could provide “krysha” (protection)”, and that a number of the Defendants had sought to use the Claimant to find a cheap source of energy for their bitcoin mining operation. The alleged agreement the claim was based on was said to be oral, and made in London, over a shared Iftar meal (a meal eaten after sunset, during the festival of Ramadan), and involved a remarkable level of detailed express and implied terms for an oral agreement (such as an energy price of not more than US$0.04 per kWh).
On the basis of this primary agreement, together with alleged agreements with the other Defendants, the Claimant brought a claim in England which he asserted should be governed by the law of Kazakhstan for breach of contract, breach of Article 228 of the Civil Code of Kazakhstan, and various other causes of action said to exist under the law of Kazakhstan.
Because the Defendants did not accept the English courts’ jurisdiction, they did not file or serve substantive defences, but the Claimant’s factual narrative was firmly disputed. In essence, the Defendants’ case was that the claim amounted to a fabrication and a “shake-down” and “attempted extortion”, timed to exert maximum pressure on the Fourth Defendant company which the Claimant believed to have been considering an IPO.
The Defendants made various applications in response to purported service of the claim. In short, they argued that
Service within the Jurisdiction
The key issue was whether, to fulfil the requirements of CPR 6.9, the First Defendant’s “usual or last known residence” had been an address in London. The judge performed the requisite “multi-factorial” evaluation and found that although the First Defendant had lived in Dubai, he had had no long-term visa to stay there. His wife and children remained in London, and he clearly spent time visiting them in the UK. Declarations made to Companies House stated that he was resident in the UK. There was a distinct lack of evidence to support his case that he had moved his residence to Dubai (for example, there were no utility bills). The court therefore found that the address in question had been his usual residence within the meaning of CPR 6.9(2).
The Application for Permission to Serve out of the Jurisdiction
On the first requirement for permission to serve out, that there be a good arguable case, the judge found that given the extensive and contested details of the alleged agreements, the case was simply not suitable for a summary judgment type determination. The court would be required to resolve disputes by assessing directly conflicting evidence. Despite the “oddities” of the Claimant’s case, the court could therefore not be satisfied that there was no serious issue to be tried.
The court could further not be satisfied that there was no good arguable case that the claim fell within the contract gateway under the CPR. Again, the reason was that it would involve preferring either the Claimant or Defendant’s evidence, in circumstances where the court was not in a position to assess the credibility of either. As such, reaching a judicial decision on relative merit would be incompatible with the nature of the hearing, and the injunction not to conduct a mini-trial.
Appropriate Forum
The main battleground was in respect of the issue of appropriate forum. The judge found that the matters connecting the dispute with Kazakhstan were “numerous and significant.” There was much disagreement between the parties’ respective experts on the law of Kazakhstan. All individual parties had substantial connections to Kazakhstan. Almost all of the events relevant to the dispute took place in Kazakhstan. The only significant event to have taken place outside Kazakhstan was the alleged London meeting at which the oral agreement was said to have been made. The properties involved were situated in Kazakhstan. The first language(s) of all the potential witnesses for trial was Russian and/or Kazakh. Almost all of the relevant documents were in Kazakh or Russian. The issues at trial would likely involve “nuanced questions of Kazakhstani regulation and commercial practices.”
Whilst the judge recognised that the enforceability of an English judgment (particularly against the Fourth Defendant’s shares in Cyprus) may in principle be a relevant factor, there was no evidence about the ease with which a Kazakhstan court judgment could be enforced, the Claimant having failed to deploy any such evidence.
Other Issues
As mentioned at the outset, there were numerous other issues, including the dramatic issue of alleged threats to the Claimant and his witnesses (including references to connections to the criminal world in Kazakhstan, and an alleged “bandit committee”) which yielded interesting and useful analysis from the court, but space does not permit consideration of these issues within a Dekagram article.
Conclusion
The law on forum non conveniens is familiar and well-trodden, but the judgment of Simon Birt KC on the facts of this case is of considerable assistance in understanding how the law should be applied to increasingly common complex cross-border relationship such as those alleged in the present claim. The case also proved a useful reminder of how rarely the courts will see fit to engage in summary judgment of the merits of a case, even where a claim may be premised on remarkably unusual oral agreements or other less than convincing pleaded facts.
About the Author
Called in 2011, prior to pupillage Conor Kennedy spent two years working with a leading insurance law firm, gaining experience across regulatory, employment, leisure, travel and public sector teams. He has a varied civil practice and is accredited for Direct Access instruction, but has a particular interest and expertise in claims involving fundamental dishonesty.
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