Challenging the court’s jurisdiction in stakeholder applications

Following the decision of the Court of Appeal in Stephenson Harwood v (1) Medien Patentverwaltung AG (2) Kagan (2020) EWCA Civ 1743.  Griffin Law was successful on behalf of Kagan in opposing the appeal of Medien Patentverwaltung AG. The substantive claim can now be heard in this jurisdiction.

The decision raises an important point in respect of the relationship between stakeholder claims and the ability to challenge jurisdiction.

A stakeholder claim (CPR Part 86) differs from a normal Part 7 claim in that the claim begins where a party who is holding property faces contesting claims for the ownership of that property. They therefore issue a claim asking for the court’s assistance in determining who is entitled to the property. The central point raised by this appeal was what was the correct procedure to be followed by a Respondent to a stakeholder claim if they wished to challenge the jurisdiction of the court. The Appellant sought to persuade the court that despite their failure to follow the Part 11 procedure in challenging jurisdiction there was an inherent ability in stakeholder claims to raise a further jurisdictional challenge. It was confirmed by the Court that the Part 11 procedure on jurisdiction applies to Stakeholder claims. The Appellant however sought to determine the difference between a party requesting the assistance of the court and the substantive claim essentially as between Kagan and MPV. They believed that as these matters were distinct there remained an ability to challenge the court’s jurisdiction. The court held however that the Appellant had mischaracterized the claim and that there was no distinction. Either they accept jurisdiction at the outset or challenge the jurisdiction. As they had failed to follow the requirements in Part 11 they were deemed to have accepted jurisdiction. This decision also emphasises the importance of challenging jurisdiction via the correct procedure at the correct point in the litigation and that a failure to do so will mean it likely that the Respondent is deemed to have accepted the jurisdiction of the court.

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