10. Jurisdiction and Conflict of Laws Flashcards
International aspects of a dispute
When a dispute has an international dimension – so in some way it touches on a country other than England or Wales – there are three things to consider.
1 Do the courts of England and Wales have jurisdiction to determine the claim?
2 Which country’s laws will apply to determine a dispute?
3 Will it be necessary to enforce the judgment abroad and how will this be done?
Law and jurisdiction contrasted
The first question is concerned with whether the English / Welsh courts will decide a dispute – or is it a dispute that should not be resolved in some other court / tribunal. The second question is concerned with which laws the English and Welsh courts will apply to decide the dispute, assuming they do have jurisdiction.
Don’t confuse these two questions! In most cases you come across, the courts of England and Wales are applying English / Welsh law. But it may not be so. For example, for reasons you will go on to explore, an English Court might conclude that it has jurisdiction to hear a dispute, but that French law applies. The court will then determine the claim, but using French law. It will probably need expert evidence in relation to the French law.
Note that the CPR will always apply to disputes before the Courts of England and Wales, whether the applicable law is English law, French law or any other law. So a line has to be drawn between English procedural law like the CPR which always applies, and the English substantive law, which could be displaced in an international dispute with the law of another country.
Why does it matter?
It is also important to know which court(s) have jurisdiction because:
1 If you commence proceedings in a court which does not have jurisdiction, the court might refuse to decide the dispute, and this can lead to time and money being wasted; and
2 It is possible that more than one court has jurisdiction to determine a dispute. You might then be able to choose whichever is preferable.
It is important to understand which country’s law applies – without knowing which law applies, you cannot carry out a useful case analysis.
Jurisdiction: the Hague Convention
As a general rule, the Courts of England and Wales will determine disputes over matters occurring in England and Wales – not over matters that take place outside England and Wales or that concern nationals of other countries. If a dispute takes place outside England and Wales or involves a national from a different country, you need to consider whether there are additional criteria that must be satisfied to establish that the courts of England and Wales have jurisdiction.
The Hague Convention on Choice of Court Agreements (‘Hague Convention’) aims to provide certainty in this area for commercial parties that wish to choose a particular country’s courts to determine their disputes regardless of where the dispute takes place or where the parties are based. So it allows the parties to control which court will hear a dispute.
Note that the Hague Convention only applies to choice of court agreements concluded on or after 1 October 2015. Such a choice will be made in an agreement between the parties, for example in a contract between the parties. The parties to such an agreement may be based in any jurisdiction (ie they do not need to be based in a Contracting State of the Hague Convention in order to enter into such a choice of court agreement).
Hague Convention Approach
Civil and commercial matters
Firstly, the Hague Convention only applies to civil and commercial matters: this covers a wide range of matters, meaning most of the common types of contracts between commercial entities will be included. Public law and criminal disputes are not covered (Article 1(1)).
Exclusions
Secondly, certain types of disputes are excluded from the Hague Convention. This includes disputes with consumers and employment matters. There are other exclusions and in practice you should check the Hague Convention (Article 2).
Jurisdiction to a contracting state?
Thirdly, the Hague Convention only applies where the parties have chosen a Contracting State as the court that will have jurisdiction (Article 3(a)). The Contracting States at the time of writing are the UK, all EU members states, Mexico, Singapore and Montenegro. So if there is a clause in a contract stating that the Courts of France (an EU member state) have jurisdiction, then that falls within the Convention. If the clause indicates that the courts of a particular state in the USA have jurisdiction, then the Hague Convention will not apply in that situation. That does not necessarily mean that the clause will not be effective, it means that you will need to find the answer as to whether it is effective elsewhere (such as by applying the common law rules).
Exclusive jurisdiction
Fourthly, the Hague Convention only applies to clauses which give exclusive jurisdiction to a particular country – ie that country and no other has jurisdiction (Article (1) and Article 3(a) and (b)). So…
Concluded / evidenced in writing
The Hague Convention only applies if the jurisdiction agreement is in writing, or evidenced / documented in writing (Article 3(c)).
Asymmetric agreements
An ‘asymmetric’ agreement is one that provides that one party can commence proceedings only in a specific named country, but the other party can commence proceedings in that country or any other which would have jurisdiction under any other relevant rules. So the same rights are not given to each party, hence the ‘asymmetry’.
Due to the way the Hague Convention is worded, it is unclear whether such a clause would fall within the Hague Convention or not.
Key principles of the Hague Convention
1 The court indicated as having jurisdiction will have jurisdiction, and cannot decline it on the basis that the dispute should be decided in another country (Article 5(1) and (2));
2 Any other court must refuse to hear the proceedings (Article 6 – there are limited exceptions).
The relevance of service
When it comes to establishing the jurisdiction of the courts of England and Wales, the question of jurisdiction is linked to service of proceedings. Broadly, the court will have jurisdiction under the common law if:
a. it is possible to serve the proceedings on the defendant in the jurisdiction (in England and Wales) – the defendant is ‘present’ in the jurisdiction; or
b. the court gives permission to serve the proceedings on the defendant outside of the jurisdiction; or
c. the Courts of England and Wales are given jurisdiction by a clause in a contract.
Serving the proceedings on the defendant in the jurisdiction
A defendant will (in principle) be subject to the jurisdiction of the courts of England and Wales if proceedings are served on the defendant whilst that defendant is within the jurisdiction. This is true even if the defendant is a foreign defendant (in the sense that it is based in another jurisdiction), or if the subject matter of the proceedings is based in / took place in another jurisdiction.
For example, proceedings can be served by a variety of methods, including personal service (CPR 6.5) – actually leaving the proceedings with an individual defendant. Proceedings can be personally served on an individual defendant in England and Wales even if they live in another jurisdiction and are only very briefly in England and Wales.
Similarly, a company not incorporated in England and Wales can be served at any place of business of the company within England and Wales (CPR 6.9(2)).
In a similar vein, if a defendant appoints a solicitor in England and Wales to accept service on its behalf, and the proceedings can then be served on that solicitor within the jurisdiction.
Permission to serve the proceedings on the defendant outside of the jurisdiction
If a party cannot (or for some reason does not want to) serve proceedings within the jurisdiction, it can apply to serve the proceedings on the defendant outside of the jurisdiction. If the court grants permission for this and the proceedings are duly served outside of the jurisdiction, then this gives the courts of England and Wales (in principle) the jurisdiction to determine the claim.
In order to obtain permission, three matters must be established (CPR 6.37):
1 The claimant needs to establish one of the grounds in 6B PD 3.1;
2 The claim must have reasonable prospects of success;
3 England and Wales must be the ‘proper place’ in which to bring the claim.
If these three matters are established, then the court may grant permission for service outside of the jurisdiction.
Permission – grounds in 6B PD 3.1
There are many grounds in 6B PD 3.1 on which an application for permission to serve outside of the jurisdiction can be based. Amongst the most important are:
A claim is made for a remedy against a person domiciled within the jurisdiction (1).
A claim is made in respect of a contract where the contract (6) –
(a) was made within the jurisdiction;
(c) is governed by English law; or
(d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract.
A claim is made in respect of a breach of contract committed within the jurisdiction (7).
A claim is made in tort where (9)
(a) damage was sustained, or will be sustained, within the jurisdiction; or
(b) damage which has been or will be sustained results from an act committed, or likely to be committed, within the jurisdiction.
These grounds are sometimes referred to as ‘jurisdictional gateways’.
Permission – reasonable prospects of success
The second matter that must be established is a reasonable prospect of success.
This is a relatively low threshold and has been equated to the prospect of success needed to resist an application for summary judgment: De Molestina v Ponton [2002] 1 Lloyd’s Rep 271.
Permission – England and Wales is the ‘proper place’
The third matter that must be established is that England or Wales is the proper place in which to bring the claim – sometimes referred to as the forum conveniens (convenient / appropriate forum).
England or Wales can be the proper place to bring the claim if it is the natural place to bring the proceedings, perhaps because the witnesses are based there, English law applies and/or the defendant is normally resident in England / Wales.
If England or Wales is not the natural place, but rather another jurisdiction is the natural place, the Courts of England and Wales can still be the proper place in which to bring the claim if justice nonetheless requires that the claim be tried in England – perhaps because there is a risk of improper government interference in a different jurisdiction, or some other reason why the trial will not be fair.
Jurisdiction clauses
Finally, the claimant can serve the claim form on a defendant outside the jurisdiction without the court’s permission where a contract contains a term to the effect that the courts of England and/or Wales shall have jurisdiction to determine that claim (CPR 6.33(2B)).
This provides protection in the same area as the Hague Convention (addressed in a different element). However, the Hague Convention only applies to exclusive choice of court agreements concluded on or after 1 October 2015. If the agreement was concluded before this date, or does not give jurisdiction to the courts of England and Wales exclusively, then the Hague Convention does not apply, and this rule provides an alternative route to establishing jurisdiction (CPR 6.33(2B)).
Serving a claim form outside the jurisdiction
Where a claim form has validly been issued, the period for service is six months where the claim form is to be served outside the jurisdiction (CPR 7.5(2)).
This gives the claimant a longer period than when a claim form is to be served within the jurisdiction, where it is normally valid for only four months (CPR 7.5(1)).
Service out – permission
By way of a brief reminder, it is not necessary to seek the court’s permission to serve proceedings out of the jurisdiction if the Courts of England and Wales have jurisdiction because:
a. the Hague Convention on Choice of Court Agreements gives the court jurisdiction; or
b. a contract contains a term to the effect that the Courts of England and/or Wales shall have jurisdiction to determine the claim
(CPR 6.33(2B)).
Permission of the court will be required to effect service in other circumstances.
Service out - procedure
If a claimant is seeking to serve an English claim form abroad without permission, it must file Form N510 when it issues and files its claim form. This essentially confirms to the court the basis upon which it has jurisdiction over a foreign-domiciled defendant in circumstances where the court’s permission has not been sought to serve the claim form abroad. (CPR 6.34).
If seeking to serve an English claim form abroad with permission, the claimant will have to make an application to court, asking the court to allow it to serve the claim form on the defendant. This will be an interim application made pursuant to the usual rules (CPR 23) using the usual application notice in Form N244.
Service outside the UK - methods
Whether or not permission is needed, there are a number of possible methods of service for service outside the UK. (CPR 6.40) Nothing in the rules (or in any court order) shall authorise or require any person to do anything in the destination country which is against the law of that country.
The methods of service to choose from when serving outside the UK include:
- Service in accordance with an agreed regulation, convention or treaty. Any regulation, convention or treaty in relation to service referred to in this element will only apply to whichever countries have contracted into it, along with the UK.
- Service through the government of the destination country (if that government is willing to do this).
- Service by any method permitted by the law of the destination country. In practice, it is often preferred to take local advice in the destination country and engage a local agent to effect service by a method which is permitted there.
Response times
Extended periods for filing an acknowledgment of service/defence apply when the claim form/ particulars of claim have been served out of the jurisdiction. The amount of ‘extra time’ allowed will vary, depending on which country is involved.
Difficulties with service
Sometimes, it is not possible to serve effectively through anyof the usual methods, whether within or outside of the jurisdiction. The rules therefore allow for an application to the court for an order to deal with this type of situation where this is justified. This will also be considered in this element.
In appropriate / exceptional circumstances, the only way to serve effectively, or achieve the certainty required might be to make an application to the court for one of the following orders:
1 An order for alternative service (CPR 6.15); or
2 An order dispensing with service (CPR 6.16).
Alternative service
The court may permit service by an alternative method if there is good reason to do so, ie where the other available methods of service would be ineffective or impossible.
An application must be made to court setting out why service in accordance with the methods listed in the CPR are not possible or why attempts to serve in accordance with these methods have been unsuccessful. The application should state the alternative method proposed.
Examples of alternative service methods are: (i) serving on solicitors acting for a party where the solicitor has not been authorised to accept service; and (ii) placing an advert in a newspaper notifying the defendant that proceedings have been commenced against it.
The court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service.
Alternative service cannot be used retrospectively and it cannot be used to remedy irregular service.
Dispensing with service
The court may dispense with service of a document. This discretion is usually only exercised where the other side is already aware of the document.
Example: if the claimant wished to make an amendment to its particulars of claim and the defendant agreed to that amendment being made, the claimant would need to make an application to court to amend the document.
If the court agreed to the amendment being made, it might dispense with service, ie order that the claimant does not have to serve the document on the defendant, because the defendant is aware of the amendment.
It is very rare for the court to dispense with service of a claim form where the other party is not aware of the proceedings.
Disputing the court’s jurisdiction
A party on receipt of court proceedings may wish to challenge the English / Welsh court’s jurisdiction to hear a dispute – either by arguing that the court does not have jurisdiction at all, or that the court should decline to exercise its jurisdiction. This might happen for a variety of reasons, for example:
1 The claimant alleges that the court has jurisdiction pursuant to a convention such as the Hague Convention on Choice of Court Agreements but the defendant disputes this.
2 The claimant has obtained for permission to serve proceedings out of the jurisdiction, but the defendant considers that none of the gateways for obtaining such permission (6B PD 3.1) are satisfied and/or the courts of England and Wales are not the proper place for the claim to be heard.
3 The proceedings have been served on the defendant within the jurisdiction, but there is another more appropriate forum.
Substance of the objection
The substance of the defendant’s objection depends on the grounds that the claimant is relying on to establish jurisdiction.
For example, the defendant may challenge the allegation that the claim falls within the Hague Convention or the way that the Hague Convention has been interpreted. It could challenge that the common law rules apply, or that a gateway (6B PD 3.1) is established.
It could argue that England and Wales is not the proper place for the claim to be heard.
The fact that the court has determined that England and Wales is the proper place for the claim to be heard when granting permission does not prevent the defendant from, upon receipt of proceedings, seeking to argue that England and Wales is not the proper place for the claim to be heard.
Procedure
The procedure for disputing the court’s jurisdiction involves the following key points:
1 The defendant must first file an acknowledgement of service (CPR 11(2)) – there is a box on the acknowledgement of service to indicate that the defendant intends to contest jurisdiction.
2 The defendant must then apply within 14 days after filing the acknowledgement of service, disputing the court’s jurisdiction. That application must be supported by evidence.
Submitting to the court’s jurisdiction
Submitting to the court’s jurisdiction can be considered the opposite of disputing it. If a party submits to the jurisdiction of the Courts of England and Wales, then they cannot later dispute that jurisdiction, so effectively the court’s jurisdiction is established.
To avoid submitting to the court’s jurisdiction, a defendant served with proceedings must not take any steps to engage with the proceedings beyond filing an acknowledgement of service and then applying to court to challenge its jurisdiction, as set out earlier in this element. The party must not, for example, file a defence.
Of course, it may be that a party is content for proceedings to continue before the Courts of England and Wales, in which case it will be content to submit to the proceedings, and in that way, the court’s jurisdiction is established.
Conflict of laws: contract
Prior to Brexit, the majority of contractual disputes were governed by Regulation 593/2008 which is referred to as the Rome I Regulation (‘Rome I’). At the end of the post-Brexit transition period on 31 December 2020 Rome I was adopted into English law, with minor amendments, by the Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc.) (EU Exit) Regulations 2019 and the Jurisdiction, Judgments and Applicable Law (Amendment) (EU Exit) Regulations 2020.
Accordingly, the relevant law is, broadly, the Rome I Regulation. In this element we use the term ‘Rome I’ to refer to the regulation as amended and retained in the law of England and Wales, and article references are references to this amended Rome I.
Note that:
1 There are some areas of law which are excluded from Rome I (Article 1);
2 Rome I does not apply to contracts entered into before 17 December 2009;
3 There are special provisions in Rome I for contracts of carriage, consumer contracts, employment contracts and insurance contracts.
