Proceedings can be served at UK establishment of overseas company despite claim not arising from that establishment

The Commercial Court has held that proceedings can be served on an overseas company at the registered address of its UK establishment, under section 1139 of the Companies Act or alternatively part 6 of the Civil Procedure Rules, regardless of whether the claim relates to the business of that establishment: Teekay Tankers Limited v STX Offshore & Shipping Co [2014] EWHC 3612 (Comm). Although a first instance decision, the Court of Appeal has refused leave to appeal.

This ruling is likely to lead to time and costs savings for parties wishing to serve proceedings on an overseas company which has registered a UK establishment, as it avoids the need to obtain leave to serve out of the jurisdiction (where it would otherwise be required) and comply with the necessary formalities for service in the relevant overseas jurisdiction. John Corrie and Maryam Oghanna outline the decision below.

Background

The defendant company was incorporated in South Korea but had a registered UK establishment at Companies House under section 1046 of the Companies Act 2006,  and an identified individual who was authorised to accept service at a specified London address.

The claimant served proceedings on the defendant at the London address. It relied in part on section 1139(2) of the Companies Act, which provides that a document may be served on an overseas company whose particulars are registered under section 1046:

(a) by leaving it at, or sending it by post to, the registered address of any person resident in the United Kingdom who is authorised to accept service of documents on the company's behalf, or

(b) if there is no such person, by leaving it at or sending by post to any place of business of the company in the United Kingdom.

The claimant also relied on CPR 6.9(2) paragraph 7, which permits service on "any place of business of the company within the jurisdiction".

The defendant argued that service was not effective, on the basis that section 1139(2)(a) only applied to proceedings relating to the UK establishment (which was not the case here) and that the London address did not constitute a "place of business" under section 1139(2)(b) or CPR 6.9(2).

Decision

The Commercial Court (Hamblen J) held that service was effective.

It rejected the argument that service at the address of a UK establishment under section 1139(2)(a) was limited to documents relating to the business of that establishment, including because the sub-section was expressed in general terms and was not stated to contain such a limitation.

Even if that was incorrect, the claimant had effected valid service under section 1139(2)(b) and CPR 6.9(2). In the court's judgment, registering a UK establishment involved opening that establishment as a place of business in the UK, even if it had yet to start carrying on business. In any event, the court found that in this case the defendant was in fact carrying out business activity from the London address.

Comment

This is a welcome decision as it has clarified the application of section 1139(2) of the Companies Act 2006.  It comes not long after the decision in Key Homes Bradford Ltd & Others v Rafik Patel [2014] EWHC B1 (Ch) considered here, in which  a High Court Master found that service on the English address registered by a company director under section 1140 of the Companies Act 2006 was good service, regardless of whether the director was resident in England.

Taken together, the decisions are likely to simplify matters for claimants wishing to serve English proceedings on overseas companies or directors who have registered a UK address.