The power of domicile

This post looks at two cases which show the  importance of the Brussels I Regulation’s primary rule of jurisdiction – that defendants should be sued in the jurisdiction of their domicile.  Those cases are Aspen Underwriting v Kairos Shipping [2017] EWHC 1904 (Comm), Bestolov v Povarenkin [2017] EWHC 1968 (Comm).  It is the fifth of our “new term catch up series”.

Aspen Underwriting achieves a potentially unsatisfactory result with some claims being tried in England and others capable of resolution only in the Netherlands (the place of domicile).  On the other hand, in Bestolov v Povarenkin, jurisdiction was established on the basis of domicile under the Brussels Regulation when it would not have been asserted at common law. Continue reading

Enforcing Arbitration Awards: update

The third post in our “new term catch up” series looks at the law concerning the enforcement of arbitration awards.  This is often neglected by parties and their legal representatives alike. This is ironic as it is arguably the most commercially critical stage of the entire arbitral process. Many a party has spent much blood, sweat, and money to achieve a positive result, only to find it an essentially pyrrhic victory.

It is with the crucial importance of this area of law in mind that in this post, the third in our new legal term series, two recent Commercial Court decisions concerning the circumstances in which recognition or enforcement of a New York Convention award may be refused are summarised.  The cases are Zavod Ekran v Magneco and Anatolie Stati v The Republic of Kazakhstan. Continue reading

Permission to serve out required before alternative service order can be made

Marashen Ltd v Kenvett Ltd [2017] EWHC 1706 (Ch) (06 July 2017)

Foxton QC in the Chancery Division overturned an earlier order permitting service of third party costs order on a person resident in Russia by means of alternative service on his lawyers’ offices in London, on the basis that there was no pre-existing order for permission to serve out. A court must have already given permission to serve out of the jurisdiction, before the power to permit alternative service (under CPR 6.15) arises. Pre-existing permission to serve out must exist even for alternative service within the jurisdiction. The power to make alternative service within England and Wales on a defendant resident outside the jurisdiction derives from CPR 6.37(5)(b)(i). In Hague Service Convention cases, there must be “exceptional circumstances” to grant an order for alternative service, outside the terms of the Convention.

Exceptional circumstances is a test going beyond mere good reason. Mere delay or additional expense did not constitute exceptional circumstances. Article 15 of the Hague Service Convention itself offers comfort to a claimant in the case of excessive delay in that, in the event of a delay exceeding 6 months, this article would allow the claimant to continue on with proceedings despite a lack of formal confirmation of service.

Italian law is no way out of swap liability for Prato

The Court of Appeal’s recent decision is another blow for litigants who hope that foreign law will allow them to escape from liability under English law contracts.  This case, Dexia Crediop SpA v Comune di Prato [2017] EWCA Civ 428 (15 June 2017) arose from a claim by Dexia (the Bank) for some EUR 6.5 million due under an interest rate swap.[1]  The contract was subject to English law and jurisdiction.

The defendant, an Italian local authority (Prato), sought to rely on various Italian law arguments.  Not one arrow in Prato’s “capacious quiver” [2] of defences struck home, however.  The result of Walker J’s judgments[3] was basically reversed.

The case demonstrates how hard it is to show that “mandatory” rules of foreign law should apply (due to Article 3(3) of the Rome Convention) where parties have expressly chosen English law.  The 2016 Banco Santander case[4] (discussed in my post on Blair J’s March judgment and the Court of Appeal’s December decision) covered similar ground but this case is more extreme.  Continue reading

Court agrees with Deutsche Bank – Singapore is not more convenient

An alleged fraud (relating to a sale of Indian cotton) between an Indian, a Malaysian and a Hong Kong company has generated multiple claims in Singapore and one in London, Detusche Bank AG v CIMB Bank Berhad.  These arise from the typical web of letters of credit, finance facilities and guarantees found in international commodities finance.   In London, Deutsche Bank (DB) claim reimbursement from CIMB (a Malaysian bank) of sums paid out under letters of credit issued by CIMB.

Of interest for this blog is the Commercial Court’s decision last week ([2017] EWHC 81 (Comm)) refusing to grant CIMB a stay of the London proceedings on the basis of forum non conveniens.  Teare J’s judgment is a pithy demonstration of the English court’s approach to such arguments applying the Spiliada[1] principles (discussed below).

A key point to note is that the mere risk of inconsistent decisions on a factual point and the duplication of costs was not enough to justify a stay of English proceedings.  The case also should give parties pause to consider before beginning parallel proceedings in another jurisdiction (see my final thoughts on tactics)

20 Essex Street’s Andrew Fulton appeared for Deutsche Bank. Continue reading

Court of Appeal confirms that Portuguese “mandatory” law is no defence to swaps liability

Earlier this year (see my March post), Blair J held that Lisbon based transport companies could not use “mandatory” provisions of Portuguese law to defeat a multi-million Euro claim by Santander under interest rate swaps contracts.  The Court of Appeal has now upheld this decision in Banco Santander Totta SA v Cia Carris de Ferro de Lisboa SA [2016] EWCA Civ 1267 (main judgment, Sir Terrance Etherton MR).

In short, under article 3(3) of the Rome Convention, a “mandatory” provision of national law could only displace the parties’ express choice of law in a contract if the situation is truly domestic – an “international situation” (even if not pointing to a specific other country) is sufficient to prevent article 3(3) applying. Continue reading

Submission: Golden Endurance v RMA Watanya

Golden Endurance Shipping SA v RMA Watanya SA [2016] EWHC 2110 (Comm)

An interesting recent judgment of Phillips J in the Commercial Court has clarified the law concerning submission to the jurisdiction of a foreign court.  20 Essex Street’s Michael Collett QC was instructed for the claimant.

The court held that a Moroccan judgment would not be recognised in England because the claimant had not submitted to the jurisdiction of the Moroccan court. Although the claimant had appeared in the Moroccan proceedings, it had done so in order to ask the court to stay the Moroccan proceedings in favour of arbitration and had only engaged with the merits as it was obliged to do so under Moroccan law.

As a result, the claimant ship-owner was not estopped by a Moroccan judgment from asking an English court for a declaration of non-liability for alleged damage to a cargo. Continue reading

Failure to follow service rules is the end of a claim

In Asefa Yesuf Import and Export v A.P. Moller-Maersk A/S (16 June 2016) Simon Bryan QC (as a Deputy Judge of the High Court) made an important decision on service under EU rules.  I was instructed for the successful defendants.

The Judge set aside service of a claim form on defendant shipowners in Denmark on the basis that the proceedings had not been validly served under EU Regulation 1393/2007 on service of judicial documents on the territories of the Member States.

Although service did not establish substantive jurisdiction in this case, which was based on the Judgments Regulation, the failure to serve the claim form led the court to declare that it had no jurisdiction (in the narrow sense) to hear the case under CPR Part 11. The consequence for the claimants was that they had to issue a new claim form.  Unfortunately for the claimants, by this time, their claims had been extinguished under the one-year time bar in the contracts of carriage on which they wished to sue. Continue reading

Lungowe v Vedanta – a boost for claims against multi-nationals

The opportunity for claimants from developing countries to bring claims in England and Wales against multi-national corporate groups that have caused loss in their home country has been given a significant boost by Coulson J’s recent decision in Lungowe v Vedanta Resources Plc [2016] EWHC 975 (TCC).

1,826 Zambian claimants commenced proceedings in the TCC alleging that Konkola Copper Mines (“KCM”) and its parent company Vedanta Resources PLC (“Vedanta”) were liable for personal injury, damage to property, loss of income, and loss of amenity and enjoyment of land due to pollution/environmental damage caused by the Nchanga copper mine which KCM operated. The Defendants, as invariably happens in claims of this sort, denied that the English Court had or should exercise jurisdiction, arguing the natural forum for the dispute was clearly Zambia.

Coulson J rejected both Vendata’s and KCM’s challenges to the jurisdiction. Continue reading

What benefit? Interpretation of a Jurisdiction Clause: Perella Weinberg Partners UK LLP v Codere SA

In its decision on 20 May 2016, the Commercial Court (Walker J) considered a non-standard jurisdiction clause which fell within the regime of the Brussels I Recast Regulation (Regulation 1215/2012).   Perhaps unsurprisingly, he held that a clause, expressed to confer non-exclusive jurisdiction on the English courts, “for the benefit of” the Claimants did not in fact confer exclusive jurisdiction on those courts.

The decision demonstrates that the court will use both a literal and a common sense business reading when construing the jurisdiction clause.  Further, the Court was reluctant to allow the parties to import new elements (such as symmetry of obligations) into Articles 25 and 31 of the Recast Regulation. Continue reading