HAVE THE DEFENDANTS’ SOLICITORS STATED THAT THEY WILL ACCEPT SERVICE? ANOTHER TRICKY CLAIM FORM ISSUE

In Motorola Solutions, Inc & Anor v Hytera Communications Corporation Ltd & Ors [2022] EWHC 2887 (Comm) Mr Justice Picken considered an issue relating to valid service.   A firm of solicitors, that stated it would accept service of proceedings, argued that this acceptance was in relation to a narrow aspect of the litigation and that service of substantive proceedings on them was not valid.  This argument was rejected.   It shows, however, the care that must be taken (and was in fact taken by the claimants in that case) in relation to confirming the scope of acceptance.

THE CASE

The claimants issued proceedings against the defendant foreign companies. An injunction had been obtained prior to service.  There was correspondence with the defendants’ solicitors in relation to service of the substantive proceedings.   An issue arose as to whether service on the solicitors was valid service.  This required a detailed consideration of the correspondence between the parties before the judge concluded that the solicitors had stated that they would accept service.

THE APPLICATION

The claimants issued an application for a declaration that service on the solicitors had been effective.

“That the Claim Form for these proceedings dated 28 April 2022 and attendant documents (the ‘Claim Form’) were, pursuant to CPR 6.7(1)(b) validly and effectively served on the first defendant, Hytera Communications Corporation Limited, (‘HCC’) at the offices of Steptoe & Johnson UK LLP at 5 Aldermanbury Square, London EC2V 7HR.”

THE JUDGMENT ON THIS ISSUE

The defendant argued that the correspondence stating that service would be accepted by the solicitors was confined to service in relation to issues relating to the injunction.  The judge read the correspondence in detail and held that the correspondence indicated that service was being accepted for a much broader set of proceedings.

1. 1. I propose, in those circumstances, to grapple with the substance of the application for a declaration and so resolve the issue which arises in that context based on the correspondence in March 2020. I will return, therefore, to whether or not, having granted the declaration as I have indicated I will, I should be considering the proposal that there, nonetheless, be a stay notwithstanding the absence of any application for such a stay.

1. 1. I, therefore, turn to the correspondence. In doing so, I bear in mind that I am required in essence to construe solicitors’ correspondence. In doing so, I have been reminded by the parties, first, that CPR 6.7(1)(b) is in the following terms:

“Subject to rule 6.51 where … (b) a solicitor acting for the defendant has notified the claimant in writing that the solicitor is instructed by the defendant to accept service of the claim form on behalf of the defendant at a business address within the jurisdiction, the claim form must be served at the business address of that solicitor.”

1. 1. Secondly, I have been reminded that, in construing the relevant correspondence between the solicitors, I must adopt the usual objective approach as though I were construing a commercial or, indeed, any contract. I need not, in the circumstances, take up time making reference to the now very well known authorities, in particular and perhaps most recently at the Supreme Court level, the case of Wood v Capita Insurance Services Limited [2017] AC 1173. The parties may take it that I have very much in mind the relevant principles.

1. 1. So, I turn to the relevant correspondence. This starts with a letter from King & Spalding on behalf of Motorola dated 16 March 2020. That is headed:

“Case No 1:17-cv-Motorola v Hytera.”

As such, this is a reference to the Illinois Proceedings. The letter then starts by pointing out that King & Spalding were instructed on behalf of Motorola, and continues as follows in the second paragraph:

“We are writing to you with respect to the above-captioned proceedings before the United States District Court for the Northern District of Illinois Eastern Division … between your clients, Hytera Communications Corporations Limited, Hytera America Inc and Hytera Communications America (West) … and Motorola … We would be grateful if you could please confirm by return that the London office of your firm is instructed to deal with any related matters in England and Wales, including accepting service of English court proceedings on behalf of Hytera. If your firm is not so instructed, please provide the details of Hytera’s appointed English counsel by return.”

1. 1. I interject to point out that Mr Sprange highlights the request there for confirmation by return that the London office of Steptoe & Johnson is instructed to deal with “any” related matters in England and Wales “including accepting service of English court proceedings on behalf of Hytera”. Mr Sprange, unsurprisingly, submits, in the circumstances, that the request there is in wide terms. Mr Rubin nonetheless draws to my attention the fact that this letter is concerned with the Illinois Proceedings, hence the reference at the top and paragraph 2’s express reference to those proceedings. In those circumstances, Mr Rubin submits that the request for confirmation that Steptoe & Johnson is instructed to deal with matters in England and Wales is more limited than Mr Sprange would have it.

1. 1. The letter goes on under the subheading “Jury verdict against Hytera” to refer to the Illinois Proceedings. I need not, in the circumstances, set out the detail.

1. 1. The next section is headed “Undertakings”, and is in the following terms:

“In light of the above and the recent jury verdict and judgment, our client now invites each individual Hytera defendant in the Illinois proceedings immediately to provide a separate, formal and unequivocal written undertaking that …

3. Hytera will not in any way dispose of, deal with or diminish the value of any assets or interests in assets whether they are in or outside England and Wales up to the value of US$345,761,156, until such time as the judgment is paid to Motorola in full …”

There were other undertakings sought, but that one seems the most critical.

1. 1. The section then goes on to state as follows:

“This matter is urgent. Please provide the undertakings and confirmations in the terms set out above by midnight GMT Wednesday 18 March 2020.”

The letter then ends under a further subheading “English proceedings against Hytera” with the following:

“If the undertakings and confirmations sought are not received by midnight GMT Wednesday 18 March 2020, Motorola reserves the right to issue proceedings against Hytera in the High Court of England and Wales without further notice.”

1. 1. The response to that letter came two days later on 18 March 2020 and was similarly headed in a way which was consistent with the Illinois Proceedings. In the second paragraph Steptoe & Johnson said as follows:

“We confirm that we are instructed by Hytera in England and Wales. We set out Hytera’s response to your letter below.”

Then, under the heading “Your clients’ demands.” Steptoe & Johnson referred to the request that certain undertakings be given and stated as follows:

“For the reasons set out below, our client maintains that Motorola is entitled neither to the undertakings it seeks nor a worldwide freezing order from the English court. As much, Hytera is not prepared to provide the undertakings that Motorola has requested.”

Then Hytera’s position was set out, including under the heading “Status of the judgment” reference was made to the intention on the part of Hytera to appeal against the judgment obtained in Illinois.

1. 1. The next section, headed “Risk of dissipation,” refuted the suggestion that there was any such risk.

1. 1. Then, after dealing with delay, the letter had a section headed “Jurisdiction” which stated as follows:

“On this point, we note that your client’s claim was heard in the United States and that none of the parties to your client’s claim in the United States are English companies. As such, we see no clear jurisdictional basis for the bringing of a Freezing Order Application in England and note that your letter does not offer one.

Therefore, please set out by return the basis on which your client maintains that the English court will have jurisdiction to make a worldwide freezing order over Hytera.”

1. 1. Lastly, with a subheading of “Service.” This was stated:

“We note your client’s request for our confirmation that we are instructed to accept service on behalf of Hytera in England and Wales. Given the short timeframe provided for a response in your letter, you will appreciate that we are yet to finalise Hytera’s instructions on this point. We will do so in due course.”

1. 1. Two days after that, on 20 March 2020, King & Spalding wrote again, this time with a different heading to the letter. The heading instead referred to the two Motorola companies as Claimants and named the Hytera companies as the First, Second and Third Defendants, but with the addition as the Fourth and Fifth Defendants respectively of Project Shortway Limited and Sepura Limited. This Mr Sprange relies upon as demonstrating that the context of this particular letter was a section 25 action based on the Illinois Judgment, rather than a letter concerned with the Illinois Proceedings per se.

1. 1. The letter began by saying as follows:

“We write further to your letter of 18 March 2020. As you are aware, we instructed by … Motorola. We note that you are instructed by Hytera Communications Corporation Limited, Hytera America Inc and Hytera Communications America (West) Inc.

Please also confirm by return that you are also instructed on behalf of Project Shortway Limited and Sepura Limited, entities related to your clients, including with regard to accepting service on their behalf.

Please now find enclosed, by way of service, Motorola’s application filed with the High Court today, 20 March 2020, for a domestic freezing injunction and worldwide disclosure order (the ‘Injunction Application’). The Injunction Application comprises the following documents…”

The letter then listed, amongst other things, the claim form, certain affidavits, a draft freezing order and a skeleton argument, before going on, over the page, to state as follows:

“We also enclose, by way of service, Motorola’s application issued today, 20 March 2020, with regard to service out/service by alternative means (the ‘Service Application,’ and together with the Injunction Application, the ‘Applications’). This Service Application comprises the following documents…”

Then there was reference to an application notice, a witness statement, a draft order and a skeleton argument.

1. 1. The next section of the letter, headed “Service,” as Steptoe & Johnson’s letter had also done, was in these terms:

“In our letter of 16 March 2020 we sought your confirmation (by return) that the London office of your firm is instructed to deal with any related matters in England and Wales, including accepting service of English court proceedings on behalf of Hytera. Your letter of 18 March 2020 indicated that you are instructed regarding matters in England and Wales, but did not provide the confirmation sought with regard to accepting service on behalf of Hytera. Given the passage of time and the urgency, may we now hear from you substantively.

As we have been obliged now to issue the Service Application, we take this opportunity to reserve all our rights, including with regard to costs.”

1. 1. Four days later, on 24 March 2020, Steptoe & Johnson, using the same heading as King & Spalding had in their letter of 20 March 2020, responded as follows:

“We note the deadline in your letter of noon yesterday for us to confirm our clients’ position on the apparent urgency of the Applications and the availability of our clients’ counsel. This deadline was unreasonable and unnecessary.

We set out below our clients’ initial response to the Applications.”

Then, again under the heading “Service,” the letter went on as follows:

“We confirm that we are now instructed to accept service in England and Wales on behalf of the following entities:

1. Hytera Communications Corporation Limited;

2. Hytera America Inc;

3. Hytera communications America (West) Inc;

4. Project Shortway Limited; and.

5. Sepura Limited.

We explained in our letter of 18 March 2020 that we are in the process of finalising our clients’ instructions as to our firm’s authority to accept service on their behalf. We confirmed that we would do so in due course, and we have now done so just three working days later, despite the fact that our clients are based in China and the general disruption due to the coronavirus pandemic.

In the circumstances, the Service Application was premature and should not have been issued, and we invite your clients to withdraw it and confirm that they will bear the costs that have been unnecessarily incurred as a result of it.”

1. 1. It is Mr Rubin’s submission before me that the correspondence, specifically the letter from King & Spalding on 16 March 2020 and the letter on 20 March 2020, was concerned (and only concerned) with the proposed Freezing Order Application that Motorola were telling, through King & Spalding, Steptoe & Johnson they were proposing to make. In this respect, Mr Rubin highlights how the letter from King & Spalding dated 20 March 2020, was specific in using defined terms, namely the “Injunction Application” and the “Service Application,” when informing Steptoe & Johnson what it was that Motorola were doing. There was no mention of any underlying Enforcement Proceedings, whether actual or contemplated. In those circumstances, Mr Rubin submitted very simply but powerfully that Steptoe & Johnson’s responsive letter on 24 March 2020 should be taken (and only taken) as agreement to accept service in England and Wales on behalf of the five companies listed at the top of King & Spalding letter dated 20 March 2020 in relation to the freezing order proceedings and not anything else. Mr Rubin submitted that there was nothing else that Hytera and Project Shortway Limited and Sepura Limited for that matter were being asked to deal with.

1. 1. In this context, Mr Rubin has drawn my attention to a decision of Mr Justice Colman, namely Firstdale Limited v Quinton [2005] 1 All ER 639 specifically at paragraph 24 where Mr Justice Colman said, amongst other things, the following by reference to CPR 6.4 and 6.5:

“The words of rr 6.4 and 6.5 are not drafted by reference exclusively to a claim form or, indeed to a claim, but to a document. That document need not therefore be a claim form. It is, however, clearly intended that ‘the document’ the subject of the solicitor’s notification under r 6.4(2) and the ‘address for service’ under r 6.5(2) must have been in some way defined in advance by reference to its essential characteristics. Thus, an indication by a potential defendant’s solicitor that he is authorised to accept service of proceedings which have already been the subject of discussion or which raise a claim which has already been put forward cannot ordinarily be taken to have indicated his authority to accept service of a document relating to different proceedings or to a different claim. The solicitor who represents that he is authorised to accept service of a claim form in respect of claim X does not engage r 6.4 in relation to service of a claim form in respect of claim Y unless he is also indeed authorised to accept service of such a document. If, therefore, one approaches the question by asking whether it would necessarily follow that a solicitor originally authorised to accept service of a claim form would necessarily also be authorised to accept service of a claim form under which any assignee of the original claim was the claimant, the answer is bound to be No. There might be very good reason why the proposed defendant would not wish that particular solicitor to act for him against that particular assignee.”

Mr Rubin submits that the same reasoning is applicable here in that the proceedings that had (in the language of Mr Justice Colman) “already been the subject of discussion” and “already been put forward” were (and were only) the freezing order proceedings and not any subsequent and separate Enforcement Proceedings which came, as it happened, to be issued some two years later.

1. 1. I should also refer to paragraph 26 of the same judgment where Mr Justice Colman said as follows:

“Having regard to these considerations I have no doubt that the scope of solicitors’ authority to accept service of the claim form must be defined not only by reference to the claim which has already been indicated by the potential claimant but also by reference to the identity and capacity of that claimant. An affirmative response to an inquiry whether a solicitor is authorised to accept service of a particular claim form for a debt by X is not ordinarily notification that he is also authorised to accept service of a claim brought by Y in relation to the same debt and certainly not if Y claims not as creditor but as assignee.”

I should just observe, in passing perhaps, that Mr Sprange invites me to conclude that the ratio of this case is as set out in paragraph 26 rather than as expressed in paragraph 24. I do not agree with Mr Sprange about that. It seems to me, on the contrary, that Mr Rubin must be right and that the focus should, as Mr Justice Colman put it, be on the nature of the claim, whether that involves a different claimant or a different defendant, as well as the underlying claim.

1. 1. That notwithstanding, it does not seem to me that this dictates a conclusion of the sort urged upon me by Mr Rubin in the present case. On the contrary, it seems to me clear that Steptoe & Johnson were agreeing in the correspondence to which I have referred to accept service of any proceedings and not merely or only the freezing order proceedings which were then on foot or soon to be on foot. I emphasise in this context the nature of the original request as contained in King & Spalding’s 16 March 2020 letter, namely the request for confirmation:

“…that the London office of your firm is instructed to deal with any related matters in England and Wales, including accepting service of English court proceedings on behalf of Hytera.”

The use of the word “any” seems to me to make it abundantly clear that the request was not limited to any particular type of proceedings. The fact that the relevant sentence went on to refer to the acceptance of service of English court proceedings as being wrapped up in the request concerning “any related matters” underlines that conclusion. The request, putting it shortly, did not confine itself to any particular type of proceedings, but was far more general in form.

1. 1. Indeed, the letter from Steptoe & Johnson dated 18 March 2020, in introducing a separate section headed “Service”, seems in my assessment to underline the point to which I have just referred. There was no effort on the part of Steptoe & Johnson there to restrict the nature of the request that was being made by King & Spalding. On the contrary, the subheading rather confirms what must, in my assessment, have been obvious: that King & Spalding were seeking confirmation that there was agreement to accept service generally.

1. 1. In this respect, it seems to me that there is considerable force in the submission made by Mr Sprange concerning the nature of section 25 proceedings. As he points out, such proceedings have as their reference foreign proceedings in which typically a judgment has been obtained. That was the case here with the Illinois Judgment. Implicit in their commencement, therefore, is the fact, and certainly the likelihood, that underlying enforcement proceedings would at some point be commenced. In those circumstances, to approach, as Mr Rubin was inclined to do, the correspondence and, in particular, the letter of 20 March 2020 which identifies the five defendants/respondents to proposed section 25 proceedings as being limited only to those proceedings seems to me to be artificial.

1. 1. Putting the point even more shortly, Steptoe & Johnson must have appreciated that the Freezing Order Application would involve at some point the commencement of underlying enforcement proceedings. Given this, the submission now made (that the request for confirmation that there was agreement as to acceptance of service in the 16 March letter should be viewed restrictively) is unreal. There will always have been in the contemplation of Steptoe & Johnson that there would be enforcement proceedings commenced because they would need to be commenced in order for freezing order relief to be obtained.

1. 1. I am also satisfied that Mr Sprange is right when he makes the observation that, in stating what they did in their letter of 24 March 2020, Steptoe & Johnson should be taken as understanding that they were agreeing to acceptance of service of proceedings in a non-restricted way. As Mr Sprange rightly observes, agreeing to accept service on behalf of a client is significant; it is not something that is likely to be done by a solicitor lightly. It is something which a solicitor will wish to take care about. In those circumstances, if Steptoe & Johnson really had intended to agree to accept service of proceedings referable only to the freezing order proceedings, then, one would have expected that to have been spelt out. That is not what the letter of 24 March 2020 did; on the contrary, it states very simply that:

“We are now instructed to accept service in England and Wales on behalf of the following entities …”.

It then lists the five defendants named in the letter of 20 March 2020. There is no hint there that the agreement was somehow limited to the Freezing Order Application and that cannot, in my assessment, have been an accident.

1. For those reasons, I am entirely satisfied that this is a case in which there has been agreement to accept service of proceedings generally and, therefore, that it is appropriate that the declaration sought by Motorola is granted.