Choice Of English Law And The Forum Conviens Test

Mujur Bakat BHD v. Uni Asia General Insurance Berhad & Ors [2011]1 Commercial Court, 18 March 2011

In launching proceedings in the English court against a party outside England, it is generally necessary for the Claimant to obtain the permission of the court to serve out of the jurisdiction. That application, by definition, must be brought before the proceedings are served on the Defendant, and hence only the Claimant is represented. However, once served, the Defendant has an opportunity to return to the court and to challenge the order for service out, seeking to have it set aside.

There are a number of alternative grounds upon which the Claimant may base an application for service out of the jurisdiction, and these are enumerated at Practice Direction 6B to Part 6 of the Civil Procedure Rules. Perhaps the most obvious ground is that the parties have expressly conferred jurisdiction upon the English court, by agreement in the policy. An English jurisdiction clause will have this effect. In some cases, however, the policy may fall short of an express choice of jurisdiction. It may, as was true in this case, identify English law as the governing law of the policy but fail to say anything at all about jurisdiction.

While a choice of English law constitutes one of the grounds for service out, the English courts have repeatedly made clear that a contractual choice of English law alone is not the same as a choice of English jurisdiction2. Consequently, an order for service out which is based purely upon a choice of English law is particularly susceptible to challenge by the Defendant. Upon hearing any such challenge, the court will need to consider whether England is clearly the most appropriate forum for the trial of the action, or whether in fact some other forum is more appropriate (the so-called "forum conveniens" test). This determination is a matter of the court's discretion, having considered the issues in the case, the location of the parties and other matters going to the practicality of the litigation, including for example the location of evidence and witnesses.

Where the dispute gives rise to some particularly difficult issues of English law, the court may well conclude that England is the appropriate forum. If it believes that the foreign court will fail to apply English law, or have doubts as to how it is to be interpreted, then it is clearly of benefit that the matter be heard in England. Where, however, the dispute is one about...