England is well known as a leading centre for international disputes, with foreign parties often trying to litigate in London.
Establishing jurisdiction
Surprisingly, residency, nationality, domicile or even having a presence in England is not directly relevant to the question of the English court’s jurisdiction. So how can a Claimant establish that the English courts have jurisdiction to determine a claim?
The court will apply the three requirements set out by the Privy Council in AK Investment CJSC v Kyrgyz Mobil Tel, as approved by the Court of Appeal in Erste Group Bank v VMZ ‘Red October’, namely:
- There is a serious issue to be tried;
- There is a good arguable case; and
- England as the clear and distinct proper forum.
England as the clear and distinct proper forum
In cases involving service of a claim form, this requirement is also provided for in CPR 6.37(3), which states that ‘[t]he court will not give permission unless satisfied that England and Wales is the proper place to bring the claim.’
The burden will be on the Claimant to satisfy the Court that England, as opposed to another forum, is the most appropriate jurisdiction to determine the dispute. However, it is open to an application by a Defendant to challenge the English Court’s jurisdiction. If a Defendant makes an application challenging the Court’s jurisdiction, then the burden will shift to the Defendant to show why the English court is not the most appropriate forum. So what factors will the Court take into account?
The ‘most real and substantial connection’
The court will need to be satisfied that the forum of the courts of England and Wales is suitable for the interests of all the parties and the ends of justice. It does this by considering which factors connect the dispute to the jurisdiction, the so-called ‘connecting factors’. What are some (this is a not an exhaustive list) of the “connecting factors”?
1. Applicable Law
Surprisingly, a contract governed by English law is unlikely to be a significant factor when considering jurisdiction. This is because the English courts regularly apply foreign law when dealing with disputes. Further, where the claim is substantially a dispute of fact, then the applicable law will have relatively little importance.
2. Domicile of the parties
The domicile of the parties, or witnesses, will likely be an important factor in determining whether the English Court has jurisdiction.
3. Concurrent proceedings
The court may consider whether the risk of irreconcilable differences between the two courts is more theoretical than real.
4. Delay
Some jurisdictions are known for having a slow Court system. If the delays are likely to be significantly more than in England, the Court will consider this.
5. Jurisdiction Clauses
The Court will likely uphold the choice of jurisdiction contained in a contract. Where the proceedings have been brought in England in compliance with an English jurisdiction clause, it is likely to be upheld. In order to depart from this rule, there must be very significant reasons to do so, such as significant delay or no fair trial.
6. Proceedings involving tort claims
When dealing with tort claims, the place of the commission of the tort is a consideration that the Court will take into account. Therefore, if the harm occurs in England, the Court is likely to accept jurisdiction.
7. Cost recovery
The general rule in the English Courts is the losing party will pay the winning party’s costs. If there is no costs recoverability in a certain jurisdiction, then the Court will consider this.
How Gherson can assist
Gherson litigation team has considerable experience dealing with cross border disputes and issues involving jurisdiction. If you have a potential claim or facing a potential dispute matter, please do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on Twitter, Facebook, or LinkedIn to stay-up-to-date.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
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