In Teekay Tankers Ltd v STX Offshore & Shipping Co [2014] EWHC 3612 (Comm)it was held that service of a claim on an overseas company’s registered UK establishment was valid service for the purposes of regulation 7 of the Overseas Companies Regulations 2009 and s1139(2) Companies Act 2006, even though the claim did not relate to the UK establishment itself.

In early 2013, Teekay Tankers Ltd (Teekay), a Marshall Islands incorporated shipping company and STX Offshore & Shipping Co (STX), a shipping company incorporated in the Republic of Korea, entered into a series of shipbuilding contracts, including an English law governed option agreement (the Option Agreement). A dispute arose under the Option Agreement, and Teekay issued a claim in the Commercial Court on 11 April 2014 claiming USD 179 million plus interest (the Claim).

STX’s “London Address” 

Since 3 March 2014, STX has been registered with Companies House as “having established a UK establishment in the United Kingdom” under s1046 Companies Act 2006 (2006 Act). Overseas Company Regulations 2009 No 1801 Reg 7 requires an overseas company to register particulars of “(e) the name and service address of every person resident in the United Kingdom authorised to accept service of documents on behalf of the company in respect of the establishment, or a statement that there is no such person …”. When STX filed its particulars (using the prescribed form OS IN01) it gave the name of a Mr Kang and identified an address in London (the London Address) as his address for service.

The court considered three issues: (i) was STX validly served by Teekay within the jurisdiction?; (ii) if so, should the proceedings be stayed on forum non conveniens grounds?; and (iii) if not, should permission be given to serve out of the jurisdiction? For the purpose of this article, we focus on the first question.

Service of the Claim by Teekay 

Teekay served its claim form at the London Address, relying on s1139(2) 2006 Act:

“(2) 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, or if any such person refuses service or service cannot for any other reason be effected, by leaving it at or sending it by post to any place of business of the company in the United Kingdom.” 

For this purpose, the “registered address” is the current address in the register available for public inspection (s1139(3)).

STX argued that Mr Kang was not authorised to accept service of the Claim because Reg 7 and form OS IN01 refer to a “person resident in the United Kingdom… authorised to accept service of documents on behalf of the company in respect of the establishment” and that the Claim was not in respect of the business of the establishment itself.

In addition, STX contended that the London Address was not a “place of business” of the company because, among other reasons, the office was not in its own name and was not fully operational when the Claim was served. 

Decision – good service 

Hamblen J held that service on Mr Kang’s registered address was good service under s1139(2)(a). Section 1139(2)(a) is expressed in general terms and is not limited to claims in respect of the UK establishment and s1056(a) is expressed in mandatory terms (the regulations must require the company to register details of persons authorised to accept service on behalf of the company). If the requirement had been intended to be limited to business carried on by the establishment, the regulations would have been express on the point.

In addition, none of the leading texts suggests that service on a registered person under the Companies Act 2006 provisions is limited to documents concerning the business of the UK establishment.

The court also considered that this interpretation was in line with the statutory and historical context, and concluded that it had long been the position that, in relation to service on overseas companies, it was not necessary to establish a link between that subject matter of the claim and the business carried out in the UK (s694 Companies Act 1985 was an anomalous exception to that general rule in that it expressly permitted service of process on a branch of an overseas company only “in respect of the carrying on of the business of the branch”).

The court also found that the London Address was a “place of business” of the company at which STX was validly served under s1139(2)(b) Companies Act 2006 and/or CPR r6.9(2) paragraph 7 because: (i) registering a UK establishment involves opening a place of business in the UK, even if it is yet to start carrying on business; or alternatively, (ii) STX had a place of business in the UK as a matter of fact having regard to all the evidence (relevant factors included the submission of the OS IN01 form, the fact that Mr Kang had authority to negotiate the lease on that address and that the address was listed as an office on STX’s website). In reaching this conclusion, Hamblen J reiterated earlier authority that an address with which a company has no more than a transient or irregular connection would not be sufficient to constitute a place of business. 

For completeness, the court refused STX’s application for a stay on forum non conveniens grounds and indicated that had Teekay required permission to serve the Claim out of the jurisdiction, it would have granted it.

Comment

Serving process out of the jurisdiction can be a complex, expensive and time-consuming process requiring claimants to navigate a combination of English law, international conventions and the laws of the jurisdiction(s) in which service is intended to be effected. This case provides welcome clarification that it is not necessary for the subject of a claim to relate to the activities of an overseas company’s registered UK establishment for the claim to be validly served at that address, allowing a broader selection of claims to be served within the jurisdiction. This makes the process of commencing a claim in England against a foreign-domiciled defendant more straightforward, efficient and cost effective for parties who are able to take advantage of this decision.