The Respondents had obtained an arbitral award of approximately US$1.6bn against Mr Barzani which was unsatisfied. The Respondents issued a claim form (Claim Form) in the BVI seeking registration and permission to enforce the award. Subsequently, the Respondents obtained by way of ex parte order (Ex Parte Order) a provisional charging order against the shares in a BVI company (Shares) which the Respondents alleged were beneficially owned Mr Barzani albeit which were registered in the name of another individual – Mr Shani. By the same order the Court (inter alia) joined Mr Shani to the proceedings, granted a proprietary injunction to secure the Shares and granted permission to serve all relevant proceedings on Mr Shani out of the jurisdiction.

Mr Shani applied to set aside the Ex Parte Order on a variety of grounds which were dismissed. Mr Shani then appealed and his appeal was also dismissed.

Among the points raised by Mr Shani was that the judge had been wrong to join Mr Shani to the proceedings when the Claim Form pleaded no claim against him. The EC CoA held that this argument was wrong for a variety of reasons including that a party may be joined where it is desirable to do so even if there was no pleaded claim against them. The EC CoA held that this also accorded with fairness because joinder allowed Mr Shani to be heard in respect of Shares which were registered in his name.

Mr Shani also alleged that it was wrong for the Court to find that service out could be permitted under the necessary or proper party gateway. The EC CoA also held that this was wrong because the necessary or proper party was no less wide than the Court’s power to join a party.

A further argument raised by Mr Shani was that the judge was wrong to hold that personal jurisdiction does not need to be established over a party whose assets are sought to be charged. The Court held that this was incorrect. The Court noted that the order creates an interest in property such that it attaches to the property itself. If persons wished to object to charging orders it was open to them to do so and the Court could give directions to resolve such issues.

Harneys have acted for the successful Respondents throughout the BVI proceedings.

The EC CoA judgment is located here.