Importance Of Making Express Choice Of Law

Lupofresh Limited v Sapporo Breweries Limited [2013] EWCA Civ 948

The Court of Appeal has considered whether contracts for the supply of hops by a Japanese company (Sapporo) to an English company (Lupofresh), which were subject to the EU Convention on the law applicable to contractual obligations (Rome Convention), were governed by English or Japanese law.

The parties originally concluded four contracts in 2005, which were subsequently renegotiated due to difficulties encountered by Sapporo in meeting its contractual obligations. The renegotiated contracts were on substantially less favourable terms for Lupofresh, which subsequently refused to pay amounts due. None of the contracts contained an express choice of law. Sapporo commenced proceedings, contending that the agreements were governed by Japanese law. Lupofresh counterclaimed for duress, contending that English law applied.

Bean J held that Japanese law applied and gave judgment for Sapporo. Lupofresh appealed.

The Court of Appeal turned down the appeal. It agreed that under the Rome Convention (which governed the law of contracts made before 17 Dec 2009) the place of "characteristic performance" governed and this was Japan. It rejected two "incidents" relied on by Lupofresh as demonstrating an implied choice of law, namely a ceremonial handshake in Kent and a reference in...