On 19 October 2020, the Commercial Court handed down judgment in the latest round of a jurisdiction dispute concerning an alleged oil trading fraud. The jurisdiction dispute has extended over 5½ years to date.
Arcadia Petroleum Limited (now known as Alta Trading UK Limited), Arcadia Energy (Suisse) SA and Arcadia Energy (PTE) Ltd, the First to Third Claimants, are companies in the Arcadia groups of companies, which is wholly owned by Farahead Holdings Limited, the Fourth Claimant, a company ultimately owned by trusts settled by John Fredriksen, the Norwegian-born shipping billionaire. Peter Bosworth and Colin Hurley, the First and Second Defendants, are the former CEO and CFO of the Arcadia companies.
In February 2015, the Claimants commenced proceedings against 10 defendants, including Mr Bosworth and Mr Hurley, in respect of an alleged fraud that the Claimants say had been perpetrated on them by the Defendants. The claims included claims for unlawful means conspiracy and breach of fiduciary duty.
In March 2015, Mr Bosworth and Mr Hurley challenged the jurisdiction of the English Court on the basis that the claims against them were ‘matters relating to individual contracts of employment’ for the purposes of Article 18 of the Lugano II Convention, and hence that the claims against them were required to be brought in the court of their domicile (Switzerland).
Burton J heard the application and gave judgment on 1 April 2015:  EWHC 1030 (Comm). He ruled that the English Court did have jurisdiction over the claims against Mr Bosworth and Mr Hurley, save only for those claims for breach of fiduciary duty brought by the First and Third Claimants against Mr Bosworth and Mr Hurley in respect of those periods when they were employed by that Claimant (which claims were ‘matters relating to individual contracts of employment’).
Burton J’s judgment was upheld by the Court of Appeal in August 2016:  EWCA Civ 818.
The Supreme Court granted Mr Bosworth and Mr Hurley permission to appeal and heard a further appeal on 10 and 11 April 2017. In the course of that hearing, the Supreme Court raised the question whether Mr Bosworth and Mr Hurley were “employees” in the sense required by Articles 18-21 of the Lugano II Convention. The Supreme Court referred four questions to the Court of Justice of the European Union (“CJEU”) – three questions relating to the classification of the claims (i.e. whether they were or were not ‘matters relating to individual contracts of employment’) and one question relating to the nature and extent of a “relationship of subordination” required for a person to be recognised as an employee for the purposes of Articles 18-21 of the Lugano II Convention.
The Advocate General considered that Mr Bosworth and Mr Hurley were not “employees”. He also went on to express the view that the claims were matters relating to contracts of employment. The CJEU gave judgment on 11 April 2019: Case C-603/17 Bosworth and Hurley v Arcadia Petroleum Limited and Others. It answered only the “employee” question relating to “relationship of subordination”, considering it unnecessary, in light of its answer to that question, to answer the remaining questions. It answered the question as to the test for a “relationship of subordination” (under the Lugano II Convention and under the Recast Regulation (Regulation (EU) 1215/2012), which is in identical terms) and said that it appeared, on the material before it, that Mr Bosworth and Mr Hurley did not have the requisite “relationship of subordination”.
Following the CJEU judgment, the parties made written submissions to the Supreme Court as to the effect and consequences of the CJEU’s judgment. The Supreme Court ruled on 27 March 2020 that the Claimants were not prohibited from withdrawing the previous concession that that they had made before the English Court that Mr Bosworth and Mr Hurley were employees for the purposes of Articles 18-21, but that the matter of whether Mr Bosworth and Mr Hurley were or were not employees in the relevant sense should be remitted to the Commercial Court to hear further evidence and submissions on whether there was a relationship of subordination in the light of the CJEU judgment.
The remitted matter came back before Sir Michael Burton GBE. He gave judgment on 19 October 2020  EWHC 2757 (Comm) and held that the Claimants had a good arguable case that there was no relationship of subordination between the Claimants and Mr Bosworth and Mr Hurley.
However, the Judge also granted Mr Bosworth and Mr Hurley permission to appeal in relation to the test for a relationship of subordination and the application of the CJEU’s judgment in Case C-603/17 Bosworth.
This long-running jurisdiction dispute therefore continues.
Sir Michael Burton GBE’s judgment is here.
Fionn Pilbrow QC and David Heaton appeared for the Claimants, instructed by Jones Day (both at the recent hearing and in respect of the post-CJEU submissions before the Supreme Court). Fionn Pilbrow also acted for the Claimants in all previous hearings, alongside Mark Howard QC (Commercial Court, Court of Appeal and CJEU) and Edward Harrison (Commercial Court and Court of Appeal).
Richard Eschwege appeared for Mr Bosworth and Mr Hurley, instructed by Quinn Emanuel (both at the recent hearing and in respect of the post-CJEU submissions before the Supreme Court). He also has acted for them in all previous hearings (alongside, in the original Commercial Court hearing, Michael Swainston QC and Richard Blakeley).