Orders for service of English legal proceedings on a defendant out of the jurisdiction (Collatory Case)

In Trayport Ltd v E-Star Trading GmbH [2026] EWHC 164 (Ch) ('Trayport'), HHJ Davis-White KC (sitting as a Judge of the Chancery Division)(the 'Judge') gave a long and detailed exposition of the law relating to orders for service of proceedings out of the Jurisdiction. This exposition:

(1) came after being '...referred to over 85 cases in the main and supplementary authorities bundles and a number of extracts from textbooks, statutes and other materials.' (paragraph 17) (though some related to the duty to make full and frank disclosure on a without notice application);

(2) spans 8 pages / 30 paragraphs;

(3) arose in proceedings, wherein the Court had before it, 2 applications by ((1) E-Star/Exxeta; and (2) Mr Schmid, respectively), to set aside an order giving permission to serve a Claim Form and Particulars of Claim on all the defendants (paragraphs 1 to 3). 

Exposition - Overview

Under the heading 'The Law regarding orders for service of proceedings out of the Jurisdiction', the Judge in Trayport:

(1) identified the key case - namely, AK Investment v Kyrgyz Mobil Tel Limited [2011] UKPC 7; [2012] 1 WLR 1804 (PC) ('Kyrgyz Mobile Tel'), wherein Lord Collins, at paragraph 71, identifies 3 requirements for permission;

(2) note that these 3 requirements are now encompassed within CPR r6.36 and PD6B paragraph 3 and CPR r6.37(1) and (3);

(3) considered, in detail, the 3 requirements, under the headings:

(a) 'Serious issue to be tried'.

(b) 'the appropriate forum';

(There is some discussion of the facts, within these paragraphs, particularly at paragraphs 52 to 55)

Separately, the Judge in Trayport also considered the law in respect to an applicant's obligation of full and frank disclosure, when making a without notice application (paragraphs 65 to 70)(here, to obtain permission to serve out of the jurisdiction).

It is noteworthy that, the Claimant's main allegation in its claim was for:

(a) infringement of the intellectual property rights of Trayport; and/or

(b) misuse of Trayport's confidential information (see paragraph 53).

In short, Trayport has a software platform called 'Joule'. Trayport inferred it had been wronged by the defendants, as: (a) it took a '...very short time to create an Exxeta/E-Star product akin to Joule compared with the time that it took to develop Joule' (paragraph 54) and (b) 4 employees left Trayport, and were believed to have taken up substantially similar roles at Exxeta/E-Star (paragraph 55) (around the time a Mr Schmid (Chief Technology Officer at Trayport) had also left Trayport). Further details of the Claimant's asserted causes of action, are provided in a footnote[1].

Summary

Along with the exposition of the law, helpfully, the Judge in Trayport also provided a summary. At paragraph 7, the Judge in Trayport said:

'To obtain an order for service of proceedings outside the jurisdiction on a defendant, a claimant will have to:

(1) establish that each claim raises a serious issue to be tried, that is, that it is a claim with a real (as opposed to fanciful) prospect of success;

(2) establish to the relevant standard, which is that there is "a good arguable case", that each claim falls within one of the jurisdictional gateways set out in paragraph 3.1 of CPR PD 6B;

(3) establish to the relevant standard that England is the appropriate forum;

(4) make full and frank disclosure,(see CPR r6.37(3)). The requirement set out in (4) above arises from the nature of the application for service out as being one that is made without notice to the Defendant.'

Exposition - Service of Proceedings out of the Jurisdiction

The Judge in Trayport said, at paragraphs 35 to 64:

'35. The relevant law was largely agreed, subject to the question of emphases.

36. The general position regarding the obtaining of an order for service of English legal proceedings on a defendant out of the jurisdiction is summarised by Lord Collins, giving the judgment of the board, in AK Investment v Kyrgyz Mobil Tel Limited [2011] UKPC 7; [2012] 1 WLR 1804 (PC) at paragraph 71. The case was actually an Isle of Man case, heard in the Privy Council, but Lord Collins referred to the position under English law and the jurisdictional requirements, as set out in his paragraph 71, are essentially the same under both legal systems:

"[71] On an application for permission to serve a foreign defendant …. out of the jurisdiction, the claimant… has to satisfy three requirements: Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran Ltd [1994] 1 AC 438, 453—457. First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: eg Carvill America Inc v Camperdown UK Ltd [2005] 2 Lloyds Rep 457, para 24. Second, the claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context "good arguable case" connotes that one side has a much better argument than the other: see Canada Trust Co v Stolzenberg (No 2) [1998] 1 WLR 547, 555—557, per Waller LJ affirmed [2002] 1 AC 1; Bols Distilleries BV v Superior Yacht Services (trading as Bols Royal Distilleries) [2007] 1 WLR 12, paras 26—28. Third, the claimant must satisfy the court that in all the circumstances [in this case England] is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction."

37. These requirements are now encompassed within CPR r6.36 and PD6B paragraph 3 and CPR r6.37(1) and (3).

38. CPR r 6.36 provides:

"6.36 In any proceedings to which rule 6.32 or 6.33 does not apply, the claimant may serve a claim form out of the jurisdiction with the permission of the court, if any of the grounds set out in paragraph 3.1 of Practice Direction 6B apply."

It was initially common ground that neither r6.32 nor r6.33 (each dealing with cases where permission of the court is not required) apply in this case. As I shall explain that position has altered in one respect since Harris 1st. In particular, r6.33(2B) allows service out of the jurisdiction without the need to obtain court permission in the case of claims in respect of contracts containing a term conferring jurisdiction on the courts in England and Wales and that provision is now also relied upon.

39. CPR r6.37(1) and (3) provide as follows (so far as material):

"6.37

(1) An application for permission under rule 6.36 must set out-

(a) which ground in paragraph 3.1 of Practice Direction 6B is relied on;

(b) that the claimant believes that the claim has a reasonable prospect of success;

(c) the defendant's address or, if not known, in what place the defendant is, or is likely to be found.

(2) …….

(3) The court will not give permission unless satisfied that England and Wales is the proper place to bring the claim."

40. PD 6B paragraph 3.1 sets out a wide range of grounds or jurisdictional gateways: 25 in all. Each is complete in itself and independent of the others. All are concerned to identify some "substantial and not merely casual or adventitious link between the cause of action and England" (Brownlie v Four Seasons Holdings Inc [2017] UKSC 80; [2018] 1 WLR 192 at [28] per Lord Sumption (see also White Book note 6.37.13)).

41. In this case, at the commencement of the hearing before me, the Defendants represented before me expressly accepted certain jurisdictional gateways were available and did not challenge the permission to serve out given in respect of certain causes of action on the basis that there was no available jurisdictional gateway. I do not express any view about the applicability or otherwise of gateways so far as no gateway issue was raised. However, the same Defendants did submit that the following gateways at PD6B paragraph 3.1 replied upon by the Claimant were not available and that I should set aside permission to bring the related claims on that ground (whether or not I set it aside on other grounds, such as a failure to meet the merits test). The gateways in question were paragraph 3.1(6)(a) and (c) and 3.1(8A)(a). The relevant provisions are as follows:

"Service out of the jurisdiction where permission is required

3.1 The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where—

Claims in relation to contracts

(6) A claim is made in respect of a contract where the contract—

(a) was (i) made within the jurisdiction or (ii) concluded by the acceptance of an offer, which offer was received within the jurisdiction;

(b) …

(c) is governed by the law of England and Wales;

(8A) A claim for unlawfully causing or assisting in:

(a) A breach of contract where the contact falls within one of paragraphs (6)(a) to (6)(c) above or within Rule 6.33(2B); or

A breach of contract falling within paragraph (7) above."

42. The duty of full and fair or frank disclosure arises from the fact that the application is (and was in this case) initially made and dealt with on a without notice basis.

43. I turn to consider each of the three requirements set out in the Kyrgyz Mobile Tel case in more detail.

(a) Serious issue to be tried

44. As regards a "serious issue to be tried", the test is, as I have said, the same as the summary judgment test, that is (in context) whether the claim has a "real prospect of success". This has been referred to as the "merits test".

45. The burden of showing that the individual cause of action has a "real prospect of success" lies on the claimant seeking permission to serve out of the jurisdiction. In VTB Capital plc v Nutritek International Corp.[2013] UKSC 5; [2013] 2 AC 337 (SC) Lord Neuberger said, at paragraph [90]:

"The mere fact that the defendant is challenging jurisdiction does not somehow impose a duty on him to specify his case. The onus is on the claimant to satisfy the court that there is a serious issue to be tried on the merits of the claim, and not on the defendant to satisfy the court that he has a real prospect of successfully defending it."

46. The authorities can be summarised as requiring the following:-

(1) A statement of case that is coherent and properly particularised and which sets out a claim that, on the assumption that the pleaded facts are supported by evidence, has a real prospect of success.

(2) Evidence supporting the pleaded allegations such that they have a real prospect of success.

(3) If (2) is met but there are defects in the pleading such that (1) is not met, then there may be a question as to whether amendment of the statement of case should be permitted.

(4) (1) and (3) must be met as regards (a) each claim brought and (b) each defendant against whom a claim is sought to be brought.

47. A claim does not raise a serious issue to be tried, that is a claim with a real prospect of success, in a number of identified circumstances:

"A claim does not have such a prospect where (a) it is possible to say with confidence that the factual basis for the claim is fanciful because it is entirely without substance; (b) the claimant does not have material to support at least a prima facie case that the allegations are correct; and/or (c) the claim has pleaded insufficient facts in support of their case to entitle the Court to draw the necessary inferences: Three Rivers District Council v Bank of England (No3) [2003] 2 AC 1."

(Elite Property Holdings Ltd v Barclays Bank plc [2019] EWCA Civ 204 at [41]).

48. A slightly different formulation has been set out in Kawasaki Kisen Kaisha v James Kemball [2021] EWCA Civ 33 by Popplewell LJ ("Kawasaki"). That was conveniently summarised by Thompsell J in Playtech Software Ltd v Games Global Ltd [2024] EWHC 3264 (Ch) ("Playtech") at [16]-[17]:

"[16] The approach to the first requirement, the merits test, was summarised by Popplewell LJ in Kawasaki at [18] (which I reproduce below but without the case references supplied by the Judge):

"i) It is not enough that the claim is merely arguable; it must carry some degree of conviction.

ii) The pleading must be coherent and properly particularised.

iii) The pleading must be supported by evidence which establishes a factual basis which meets the merits test: it is not sufficient simply to plead allegations which if true would establish a claim; there must be evidential material which establishes a sufficiently arguable case that the allegations are correct."

[17] I will call these principles the "Kawasaki Test". The test applies where there is an application to amend a statement of case (see Kawasaki at [17]) as well as where there is an application to serve out."

49. (As I have mentioned, the decision of Thompsell J was the subject of a successful appeal but that turned on whether the Judge had correctly identified on the facts that a particular gateway was satisfied (turning on whether he had correctly identified the applicable law to the claim) and does not invalidate his statement of the relevant principles. The Court of Appeal in that case also addressed the question of appropriate forum).

50. Although therefore the evidence itself may be insufficient to raise a case with a real prospect of success, the starting point, and indeed the focus, should be on whether the particulars of the claim have been adequately pleaded. In Okpabi v Royal Dutch Shell [2021] UKSC 3; [2021] 1 WLR 1294, Lord Hamblen stressed the importance of judicial restraint so as to avoid mini-trials and also the need to focus on the statements of case:

"[21] At para 9 of Vedanta Lord Briggs JSC emphasised that where, as in this case, the jurisdictional issue is whether there is a triable issue as against a defendant, it is important to observe judicial restraint and to avoid minitrials, in accordance with the well-known guidance set out by Lord Hope of Craighead in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 ….

[21] Where, as will often be the case where permission for service out of the jurisdiction is sought, there are particulars of claim, the analytical focus should be on the particulars of claim and whether, on the basis that the facts there alleged are true, the cause of action asserted has a real prospect of success. Any particulars of claim or witness statement setting out details of the claim will be supported by a statement of truth. Save in cases where allegations of fact are demonstrably untrue or unsupportable, it is generally not appropriate for a defendant to dispute the facts alleged through evidence of its own. Doing so may well just show that there is a triable issue."

51. I should add that the warnings that I have just cited are warnings to defendants of the risks of seeking to challenge the case put forward by a claimant if such challenge in effect calls for a mini-trial. However, it is important to note that the claimant too should not assume that it can depart from its pleaded case and rely solely on evidence to put forward its case without amending its statement of case. In that respect, Lord Hamblen in the Okpabi case said as follows: at paragraphs [103] to [105]:

"The mini-trial

[103] This was a jurisdiction challenge and concerned whether it was appropriate to grant permission to serve proceedings out of the jurisdiction on a foreign defendant. Those proceedings were meant to be as defined in the particulars of claim for which permission to serve out was sought. In this case the challenge was made on the grounds that the claimants had no arguable case against the anchor defendant. Where, as in this case, there are particulars of claim, that is an issue which should ordinarily fall to be addressed by reference to the pleaded case.

[104] If the issues are addressed by reference to the pleaded case, then the focus of the inquiry is clearly circumscribed and problems of lack of proportionality should generally be avoided.

[105] In the present case, not only did the parties choose to swamp the court with evidence, but it appears that the claimants chose not to update their pleadings to reflect the evidence. We were told that this is because they wanted to avoid producing various iterations of the pleading, but if they wanted to advance a case which was not reflected by their existing pleading then they should have amended it. In that way the proper focus of the inquiry can be maintained. Whilst one can understand that this may not have been possible in relation to documents produced during the appeal hearing, the claimants' laissez-faire attitude to the pleadings set in long before that."

52. In this case, the relevant Defendants represented before me make the point that the Claimant's evidence as it has emerged in relation to the applications before me displays a failure to amend the pleadings (or seek permission to do so) in circumstances where it relies on unpleaded matters by way of witness statement. I shall have to return to this point later in this judgment. I would also make the point though that the necessary starting point of a focus on the pleadings confirms that the manner in which this application was commenced, with no pleadings nor reference to their details, was unsatisfactory.

53. The next point to note is that, as pleaded, the Claimant's case is largely built upon inference, and in some parts, inference on inference. The main allegation, which is of infringement of the intellectual property rights of Trayport and/or misuse of Trayport's confidential information, relies upon inference from matters set out in paragraph 90 of the PoC. That paragraph pleads a "belief" of Trayport in such infringements/misuse (rather than a positive case that there are such infringements/ misuse) which it is pleaded "is properly to be inferred from the following facts and matters". There are then set out some 8 sub-paragraphs lettered from (a) to (g). However, some of those so-called "facts and matters" are themselves only established if further inferences are first drawn.

54. Thus the first matter, in paragraph (a), is that it took a very short time to create an Exxeta/E-Star product akin to Joule compared with the time that it took to develop Joule. But that depends upon an inference that it took this very short time ("Trayport infers the development of the [E-Star product] took less than 2 years").

55. Similarly, sub-paragraph (g) relies upon the "targeted recruitment" of former employees of Trayport as earlier particularised. However, the earlier particulars pleaded refer to 4 employees having left Trayport following Mr Schmid leaving Trayport and the "understanding" of Trayport being that they are now employed by Exxeta/E-Star. The dates that the employees are said to have commenced employment with E-Star are not known but it is the understanding of Trayport that they perform substantially similar roles to those that they performed when employed by Trayport, "In the premises, Trayport infers that …one or more of the Defendants encouraged the Trayport leavers to resign" which is said to be properly inferred from the close relationship between Mr Schmid and the employees; the timing of their resignations and the similar nature of their roles at Trayport and at E-Star.

56. I accept the submission of [counsel for the third defendant Karsten Schmid] that in considering whether a particular claim has a real prospect of success, I have to consider the issue of inferences carefully and that as regards a particular inference, I must consider two questions:

(1) Whether there is a sufficient evidential basis for each of the pleaded facts said to support the inference such that there is a real prospect of each pleaded fact being proven at trial; and

(2) As regards those facts where a real prospect of success at trial is made out, is there a real prospect of those facts taken together being sufficient to support the inference that the court is invited to draw.

57. In this respect I was referred to UKIP v Braine & Ors [2020] EWHC 1794 (QB), [2020] WL 03662051 at [25]. I refer particularly to sub-paragraph (d) on the inference point. Sub-paragraph (e) deals with a separate point, which is the point that the court must, before deciding whether a claim has no real prospect of success, be alive to the evidence that can reasonably be expected to be available at trial whilst not allowing that consideration to act as a charter to plead an unsustainable case but to say that it may become sustainable after disclosure (what used sometime to be referred to as "fishing"). Sub-paragraphs (d) and (e) are as follows:

"(d) Fourth, where a party invites the court to draw inferences of arguable wrongdoing, there must be a sufficient prior pleaded factual foundation supporting such inferences. That foundation might come, for example, from expert evidence in a data breach case, even if in draft form prior to formal permission under CPR 35. The foundation for an inference might also come from the inherent probabilities that certain events would have followed upon other events which have been established as arguable by evidence. Naturally, a court will be less willing to draw an inference that there was arguable serious wrongdoing involving, for example, acts of dishonesty, concealment or bad faith than more neutral conclusions.

(e) Fifth, in reaching its interlocutory conclusions the court must take into account not only the evidence actually placed before it on the application for summary judgment but the evidence that can reasonably be expected to be available at trial (a point specifically emphasised by Counsel for the Claimant). Again, this point only goes so far and should not be interpreted as a charter to plead a factual case which it is said may become sustainable when disclosure is given."

As regards sub-paragraph (e), Saini J made a similar point in the same case at paragraph [99], when determining the application:

"[99] … One cannot plead an unsustainable case and then pray in aid potential disclosure to save it from summary judgment and striking out"

58. As regards the drawing of inferences, I also refer again to Elite Property Holdings Ltd v Barclays Bank plc [2019] EWCA Civ 204 at [41], which paragraph I have cited earlier in this judgment.

59. At some points in his submissions [counsel for the claimant Trayport] seemed to me to come perilously close to saying that, because Trayport did not know what had happened, matters that gave rise to suspicion were enough to found a case with a real prospect of success and that an absence of pleading or evidence at this stage was quite in order because without disclosure the claimant could not make good its suspicions. This he seemed to say, at least at some point, was a different practice to the norm reflected by e.g. paragraph [99] of Saini J's judgment in the UKIP Ltd v Braine case, cited earlier in this judgment.

60. At the end of the day however, I did not understand him to disagree with what I regard as the orthodox position regarding what is required for an order for service out as regards the merits test. First, that any cause of action must be adequately pleaded and secondly, that the pleading must be sufficiently backed up by evidence so as to raise a case with a real prospect of success. As regards pleading, I understood his position, on analysis, to be no different to what was said by Arnold LJ in Celgard, LLC v Shenzhen Senior Technology Material Co Ltd [2020] EWCA Civ 1293; [2021] FSR 1 at [48]:

"I do not wish in any way to diminish the importance of proper particulars of trade secrets being provided in cases of this nature. What amounts to sufficient particularisation must depend on the circumstances of the individual case, however. Furthermore, a lesser degree of particularisation may be acceptable at the outset of a case than at later stages of the case. Still further, I accept that it is relevant to take into account the claimant's ability to provide further particulars, and the extent to which the claimant has been hampered by obstructiveness, or at least non-cooperation, on the part of the defendant. In the circumstances of the present case, I consider that Celgard has done enough for now, although it will undoubtedly have to give further particulars at a later stage."

61. In short, mere suspicion is not enough. In the case of inference there must a belief in the truth of facts that give rise to a pleaded inference, which facts have a real prospect of success of being established and, if established, the inference must have a real prospect of success of being drawn and must be believed as being the appropriate inference. It is not enough simply to plead or say: "we are very suspicious, it may be that the various elements of a cause of action can be made out but it may be that they cannot, we have no idea but once we have disclosure we will find out and the point will either be clear or we will be clear about what inferences we are inviting the court to draw and which have a real prospect of success, and we will then plead our position."

62. Finally, in this context, I should mention the issue of amendment. I will come back to the point later, but as I see the dispute between the parties it is a dispute as to whether, if the PoC are defective in any way, permission to amend should be given (and leave to serve out left to stand) or whether the Claimant has had opportunities to amend and, not having taken them, it is now too late to allow permission to amend to be granted and to "save" any permission for serve out in relation to a defectively pleaded case. As to this, there are some minor tidying up points that I would allow permission to amend for. However, where it is unclear precisely what amendment should be made to establish a properly pleaded cause of action I would either have to adjourn the questions before me until I had a properly pleaded statement of case on the relevant issue or I would set aside leave and leave it to the claimant to re-apply both to amend and for permission to serve out. Given the history of this matter, I would incline to the latter course.

“the appropriate forum”

63. There was no real dispute as to the applicable law and principles.

64. In summary:

(1) The burden is on the Claimant to persuade the court that England is clearly the appropriate forum (Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (HL) at 481D; Altimo Holdings v Kyrgyz Mobil [2011] UKPC 7 at [88]. This burden follows the principle that the courts must be "exceedingly careful" in deciding whether it "ought to put a foreigner, who owes no allegiance here, to the inconvenience and annoyance of being brought to contest his rights in this country".

(2) The "appropriate forum" is that in which "the case may be tried more suitably for the interests of all the parties and the ends of justice" (Spiliada at 476C; Lungowe v Vedanta Resources plc [2019] UKSC 20; [2020] AC 1045 at [66]).

(3) CPR r6.37(3) puts the test in terms of permission not being granted unless the court is satisfied that England and Wales is "the proper place in which to bring the claim" but this formulation simply encapsulates the "appropriate forum" test (Lungowe at [66]).

(4) In determining what is clearly the appropriate forum, the court conducts a summary examination of connecting factors to determine the forum with the "most real and substantial connection", including matters of practical convenience (such as accessibility to courts for parties and witnesses and the availability of a common language so as to minimise the expense and potential for distortion involved in translation of evidence) and also such matters as the system of law which will be applied to decide issues, and the place where the wrongful acts or omissions occurred and the place where the harm occurred (Spiliada at 478A-B; Lungowe at [66]).

(5) The court's decision is an evaluative one. It is not an exercise of discretion (VTB Capital pc v Nutritek International Corp [2013] 2 AC 337 at [97], [156]).'

Exposition - Full and fair disclosure

Separately, the Judge in Trayport went on to consider the principles attached to the obligation to give full and frank disclosure, when making a without notice application (here, to obtain permission to serve out of the jurisdiction). For those interested, this is set out in a footnote[2]. 

Collatory Case Series

The Collatory Case Series, is an series of bulletins, designed to report that one case (perhaps, with a few extra authorities), which collates the essential principles/propositions of law, for a particular doctrine/area of law. It is not designed as a deep and comprehensive review of an area of law, but to provide that quick 'go to' case.

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