Internet businesses operate in the ether and many of them call no country home. In one case involving an alleged online gambling fraud, a High Court judge observed that tracking down their centre of operations can have something of the grin of Lewis Carroll’s Cheshire Cat about it.
A betting agency had launched proceedings in England against 12 individuals who it accused of causing it substantial loss by means of a fraudulent conspiracy. Amongst other things, a cheque for $10 million which had been raised by way of security for gambling activities was said to be worthless.
The agency was incorporated in Alderney and the individuals were all resident in Peru at the relevant time. In those circumstances, three of the latter argued that the agency’s claims in respect of them should be struck out on the basis that the English courts had no jurisdiction to consider the matter.
In rejecting their application, however, the Court noted that all relevant decisions were taken by an executive of the agency who was based in London. It was there that the risk was assumed and where the alleged losses crystallised. In common with many online businesses, the agency had hardly any physical presence in any jurisdiction. However, it did have a place of business in London and the Court was satisfied that London was the hub of its operations.
In finding that England was clearly the most appropriate forum for the trial of the action, the Court placed some importance on the agency’s concerns about corruption in the Peruvian legal system. Each of the agency’s claims – which included breach of contract, fraudulent misrepresentation and conspiracy to injure – raised serious issues to be tried.