Key takeaways
Serving proceedings in England and Wales
The defendant’s presence in England and Wales is a substantive jurisdictional requirement.
Temporary absence from England and Wales
Service in the jurisdiction may still be valid if the defendant intends to, and can return, to England and Wales.
Service out of the jurisdiction
Where necessary, claimants should take steps to serve out of the jurisdiction without delay and to obtain leave to do so if required.
Fridman -v- Agrofirma Oniks LLC and another [2026] EWCA Civ 139
The Court of Appeal has held that it has no personal jurisdiction over a sanctioned individual, where leave to remain in the UK has been cancelled and the individual is not permitted to return to the UK.
In doing so, it disagreed with the Commercial Court, which had found that the individual’s absence from the UK was only temporary for these purposes, and that proceedings served at the individual’s usual or last known address in London were validly served.
The background facts
In 2016, Mr Fridman, who has dual Israeli and Russian citizenship, purchased a London property, Athlone House, as a family residence. He had resided in the UK since 2013 and, in January 2019, he was granted indefinite leave to remain in the UK.
On 15 March 2022, Mr Fridman was designated under regulations 5 and 6 of the Russia (Sanctions) (EU Exit) Regulations 2019 (Russia Regulations) and Part 1 of the Sanctions and Anti-Money Laundering Act 2018. Mr Fridman's assets were frozen in consequence. In addition, he became an 'excluded person' within section 8B of the Immigration Act 1971. This meant that his leave to remain in the UK was cancelled and he was not permitted to enter the UK (Travel Ban).
In August 2023, a letter before action was sent to Mr Fridman at Athlone House by the claimants’ solicitors. He did not respond. In September 2023, he left the UK, partly for medical reasons, for Israel. He then relocated to Moscow. He does not own a property in Israel but does own a property in Moscow. Mr Fridman still owns Athlone House, and the property remains fully staffed. The property is managed by Athlone House Limited (AHL).
Following his designation, Mr Fridman was granted a number of licences by the Office of Foreign Sanctions Implementation (OFSI) to make payments to various entities. However, the OFSI refused to grant licences to make certain payments to AHL, which had concluded a service contract with Mr Fridman for the purposes of managing Athlone House. Mr Fridman’s challenge to this refusal was unsuccessful even though Mr Fridman had indicated to the Court, through his solicitors, that he intended to return to the UK.
In February 2024, the claimants commenced proceedings against Mr Fridman and served the proceedings on Mr Fridman at Athlone House. Mr Fridman denied that he was present or resident at Athlone House at the relevant time. The claimants subsequently served the proceedings on:
Mr Fridman’s London solicitors, who were not however instructed to accept service;
AHL, at its registered address; and
LetterOne Limited, an investment company founded by Mr Fridman. He is not, however, a shareholder or director.
An issue arose as to whether Mr Fridman had been validly served with the proceedings. It was not disputed that Mr Fridman had become aware of the proceedings and the purported service. Nonetheless, Mr Fridman sought to challenge the English Court’s jurisdiction over him on the ground that he had not been validly served.
The Commercial Court decision
At first instance, the Commercial Court judge concluded that Mr Fridman had not ceased to be a resident within the jurisdiction despite the Travel Ban. The Court, therefore, had jurisdiction at common law to exercise jurisdiction over him. The Court also found that the claimants had a good arguable case that Athlone House was Mr Fridman's 'usual residence' when the claim form was served.
Additionally, even if that were wrong, the Court concluded that Athlone House was Mr Fridman's 'last known' address; the claimants had taken reasonable steps to ascertain the address of Mr Fridman's current residence and could not find it, with the consequence that they were entitled to serve the claim form at Athlone House.
The Court of Appeal decision
The Court of Appeal has allowed Mr Fridman’s appeal.
It highlighted that the common law principle that a person may only be served with process in England and Wales if he is present in England and Wales is not a mere matter of procedure. Its source is to be found within international law and the principle of territoriality. For the purposes of service of process within England and Wales, presence within England and Wales was a substantive jurisdictional requirement.
The Court of Appeal made clear that the broad principles of international comity in questions of jurisdiction must always be assumed to underlie the rules of court; and the English Civil Procedure Rules (CPR) must be interpreted against the background of the common law concerning the jurisdiction and powers over persons not resident in the UK.
Mr Fridman was not physically present at Athlone House at the time of service. However, temporary absence did not necessarily negate presence for the purposes of jurisdiction. Nonetheless, the concept of temporary absence for this purpose had to be kept within relatively narrow bounds.
The judge had been entitled to take into account Mr Fridman's declared intention to return to Athlone House. Indeed, he had given it great weight. However, the judge had not evaluated the possibility of Mr Fridman being able to put that intention into effect. In this connection, an intention to return must be differentiated from a mere hope or aspiration.
Given that UK sanctions against Russia were severe and open-ended and likely to continue indefinitely until the Ukraine war ended, Mr Fridman’s absence from the UK could not be described as temporary in this context. The fact that he was legally prevented from returning to Athlone House for an indefinite period which showed no sign of ending (and showed no sign of ending at the date of service) was a definite break in the pattern of his life.
Mr Fridman might wish to return, but whether he could put that wish into effect was, for practical purposes, outside his control. Not only would he have to await the removal of the designation, but he would also have to reapply for leave to enter the UK. In no ordinary sense of the words could Mr Fridman be said to have been present (or resident) at Athlone House after 27 September 2023.
Consequently, despite the claimants' compliance with the CPR, the Court did not have personal jurisdiction as of right over Mr Fridman. The claimants would need to apply for leave to serve the proceedings on Mr Fridman out of the jurisdiction.
Comment
This is a noteworthy decision for those who may have potential claims against sanctioned individuals who were, pre-sanctions, resident in the UK but are currently absent from the jurisdiction for an unknown period of time. The fact that they may intend to return to the UK in due course may not be sufficient to establish that their absence is only temporary for service purposes.
Any difficulties or delays in effecting service out of the jurisdiction may be irrelevant and, therefore, leave to serve out, where it is required, should be sought in good time during the validity period of the claim form.
