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

China Signs the Hague Choice of Court Convention

On 12 September 2017, the People’s Republic of China signed the Hague Convention of 30 June 2005 on Choice of Court Agreements (the Convention). This is an important development in the field of cross-border dispute resolution, which will enhance the effectiveness of exclusive choice of court agreements concluded in commercial transactions. This is the fourth in the blog’s “catch up for the new term” series.

Continue reading

Merits of claim against anchor defendant matter (probably)

This second post in our “new term catch up series” looks at Sabbagh v Khoury [2017] EWCA Civ 1120, an important case about using an anchor defendant under the Brussels Regulation regime.

The use of anchor defendants in English proceedings is very common. Establishing a claim against an anchor defendant allows co-defendants to be sued in England when jurisdiction could not otherwise be established over them.  In Sabbagh v Khoury, the Court of Appeal considered whether, when the Brussels Regulation (or the Lugano Convention) applied, the claim against the anchor defendant had to be meritorious or whether even a hopeless claim against the anchor defendant would be enough to found jurisdiction.

Interestingly, but unhelpfully for litigants, the Court of Appeal judges disagreed with one another.  Patten and Beatson LJJ held that the claim against the anchor defendant must have a real prospect of success.  Gloster LJ considered that this was unnecessary although did agree that the anchor defendant regime cannot be invoked if the sole object of the claim is to oust the jurisdiction of the courts which would otherwise have jurisdiction over the non-anchor defendants.

There is also considerable scope for the issue to be re-argued because, in fact, the court’s decision on whether the claim against the anchor defendant needed to have a real prospect of success was obiter dictum. Continue reading

Position papers on judicial cooperation in civil matters: steps towards clarity?

As the new legal year starts in London, we’re running a short series of posts covering developments and cases you might have missed over the summer.  This first post in the series looks at the UK and EU position papers on Judicial Cooperation in Civil and Commercial Matters.

Since the Brexit Referendum of June 2016, there has been uncertainty as to how the current conflict of laws regimes concerning civil and commercial matters will change. (Other civil matters are outside the scope of this brief note.)

Until recently, there had been no indication from governmental levels as to the proposals both for the wind-down of the current regime and for the future basis of judicial cooperation (if any) between the UK and EU Member States.   This summer saw the publication of position papers by both the EU and the UK.  On 12 July 2017, the EU published its Position Paper on Judicial Cooperation in Civil and Commercial Matters.  On 22 August 2017, the UK published its paper entitled “Providing a cross-border civil judicial cooperation framework: a future partnership.”

Both papers set out proposals for the “wind-down” period.  The EU paper makes no proposals for any new relationship between itself and its former member, the UK. The UK makes some high level proposals in this regard. 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.

Article 50 and the Brussels Regulation

With Article 50 now triggered, amongst many other negotiations, attention will turn to the Brussels I Regulation. Rather than setting alarm bells ringing, this article by Sara Masters QC and Belinda McRae sets out three steps, based on previous examples of EU negotiations, of how the UK Government should assuage fears of upheaval in the system of commercial dispute resolution following Brexit.

The full article is here.

Asymmetric result?

The Commercial Court finds that asymmetric jurisdiction clauses are valid exclusive jurisdiction clauses for the purposes of the Brussels Recast. Given their prevalence in financial contracts,  a contrary decision could have produced significant instability.

Commerzbank Aktiengesellschaft v Pauline Shipping and Liquimar Tankers  [2017] EWHC 161 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

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

Hague Convention on Choice of Court Agreements is in force in Singapore from tomorrow

A year after it entered into force in EU countries, the Hague Convention on Choice of Court Agreements of 30 June 2005 will enter into force in Singapore tomorrow (1 October 2016).

I covered the basics of the Convention in my post last year.  Since then, the the UK has voted for Brexit.  This could add to the Convention’s importance. Post Brexit, the UK could sign up to the Hague Convention in its own right (not as part of the EU).  This would make sure that, in other Convention States (1) jurisdiction clauses in favour of the English courts and (2) recognition and enforcement of English judgments, would continue to be effective.

It is important to remember, though, that the Convention applies only to choice of court agreements in “civil or commercial matters” (subject to certain exclusions, e.g. consumer and employment contracts).

Finally, the Convention may be spreading.  In the last year, the Ukraine has signed the Convention (on 21 March 2016) but not ratified it.