The Court of Appeal has considered the issue of valid service in the circumstances where the defendant is subjected to sanctions.
Mr Mikhail Fridman, a dual Russian-Israeli national, resident in the UK was sanctioned under the Russia (Sanctions) (EU Exit) Regulations 2019 in March 2022. He has been an “excluded person” within section 8B of the Immigration Act 1981 and consequently his leave to remain in the UK was cancelled. He is not permitted to enter the UK.
At first instance, the High Court held that Mr Fridman had been validly served with a claim form. However, the Court of Appeal disagreed and overturned that decision.
The Court of Appeal held that Mr Fridman could not be said to have been present (or resident) at his home in the UK (Athlone House) after 27 September 2023, being the date on which Mr Fridman left UK soil. Despite the Claimants’ compliance with the Civil Procedure Rules, the court did not have personal jurisdiction as of right over Mr Fridman.
The Claimants were directed to obtain the permission of the court to serve proceedings outside the jurisdiction, relying on one or more of the gateways listed in Practice Direction 6B. If such permission is granted, the Claimants will be able to apply for an order for substituted service at Athlone House.
Factual background on service
On 9 February 2024 the Claimants commenced proceedings against Mr Fridman (among other Defendants).
On 20 March 2024, the Claimants posted (by first class post) the Claim Form to Mr Fridman at his known UK address, Athlone House. Accordingly, if service were effected, it would have been deemed to have occurred on 22 March 2024.
The Claimants took various additional steps to effect service of the Claim Form and the Response Pack including: personal service at Athlone House, and postal and personal service at alternative addresses.
It was accepted on Mr Fridman’s behalf that service at one of the alternative addresses was effective in bringing the claim form to Mr Fridman’s attention.
Presence within the jurisdiction
The common law principle is that a person may only be served with process in England and Wales if he is present in England and Wales.
The House of Lords expressly accepted in Barclays Bank of Swaziland Ltd v Hahn [1989] 1 WLR 506 that for the purposes of service of process within England and Wales, the appellant’s presence within England and Wales was a “substantive jurisdictional requirement.”
The recipient must be present within the jurisdiction, and not simply resident.
Temporary absence
It was recognised that temporary absence will not negate ‘presence’ for the purposes of jurisdiction.
However, counsel for Mr Fridman made a distinction between a temporary absence that is voluntary, and an absence that is imposed on the defendant.
In this case, Mr Fridman could not choose to return to his home in Athlone House. Even if it was Mr Fridman’s intention to return to Athlone House, he was not capable of putting that intention into effect.
Mr Justice Bryan held that Mr Fridman’s enforced and indefinite removal from the United Kingdom could not be described as a “temporary absence.”
The impact of sanctions
By imposing sanctions on Mr Fridman, the state itself has denied Mr Fridman the right to be present in England and Wales.
Counsel’s argument was that it would be legally incoherent for the state on the one hand to claim jurisdiction over Mr Fridman on the ground of his presence in England and Wales, and on the other hand to deny him the right to be present there. The Court of Appeal agreed.
If a person is under an indefinite travel ban, which makes it illegal for him / her to enter the UK, that person can no longer be said to be resident in England and Wales while the travel ban is in place.
The fact that the sanctioned person owns a house in the UK does not change the position. In these circumstances, Mr Fridman cannot use or occupy Athlone House, so he could not be regarded as present there for the purposes of finding jurisdiction over him.
Jurisdiction: “the rough and the smooth go together”
Key to this argument is the reciprocal nature of benefitting from (“protection”) and submitting to (subjection) a country’s laws. In other words, a person who is physically present in the country has the benefit of its laws, but they must also accept their amenability to the process of its courts.
As the judge put it, we “must take the rough with the smooth.”
In Mr Fridman’s case, he was precluded from entering the UK, and so could not benefit from the laws of the UK. He therefore could not be made to accept the jurisdiction of its courts.
Comment
This decision serves as helpful guidance for claimants who wish to bring proceedings against sanctioned individuals. Even if the sanctioned individual has had a residence in the UK, it does not necessarily follow that valid service can effected at that residence.
The decision makes it clear that service at a ‘last known residence’ within the jurisdiction under CPR 6.9 is not available where a defendant has left the jurisdiction.
If the defendant is subject to a travel ban and has no choice but to avoid entry into the UK, it may be necessary to serve the defendant outside of the jurisdiction, using one of the gateways in Practice Direction 6B.
Read the Court of Appeal’s decision in this case here: Mikhail Fridman v Agrofirma Oniks LLC & Anor [2026] EWCA Civ 139
