25th Oct 2017 | Articles

In this month’s edition of our Commercial and Insolvency Update, Chloe Shuffrey considers the recent Court of Appeal case of Sabbagh v Khoury [2017] EWCA Civ 1120.

Article 6 (1) of the Brussels I Regulation (44/2001) (now found in Article 8 (1) of the Brussels I (Recast) Regulation (1215/2012)) is in practice one of the most important provisions of the Brussels Regime. Providing an exception to the general rule that defendants must be sued in the courts of their domicile, it enables claimants in cross-border litigation to bring defendants domiciled abroad (possibly in a number of different jurisdictions) under one jurisdiction so that related claims can be heard together. The practical benefit of this, in particular the avoidance of irreconcilable judgments, is self-evident. However, the exception contained in Article 6 (1) has given rise to concerns of its being
deployed tactically by claimants who artificially construct a claim against a defendant in their preferred domicile so as to oust the jurisdiction of the courts in the domicile of the defendant(s) that is/are the real target of their claim. The Court of Appeal in Sabbagh v Khoury has given detailed consideration to the relevant principles and jurisprudence in relation to Article 6 (1).


The Claimant was the daughter of the late Mr Hassib Sabbagh, a prominent Palestinian businessman who co-founded the largest engineering and construction company in the Middle East. After Mr Sabbagh died intestate in 2010, the Claimant, who was entitled under Lebanese law to one third of her father’s estate, brought claims against various family members and companies under their control alleging financial wrongdoing in relation to her father’s business. Her claims were essentially twofold: an asset misappropriation claim, in which she accused family members of making improper and unauthorised investments with dividends from her father’s business which were not accounted for or applied for the benefit of Mr Sabbagh (and his estate); and a share deprivation claim, where she alleged that the defendants conspired to deprive her of her entitlement to a third of the shareholding in her father’s company by  unlawfully procuring the transfer of the shares to one of the defendant companies owned and controlled by other defendant family members.

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