Project Dispute Resolution - Using Choice Of Law And Jurisdiction Clauses To Maximise The Prospects Of Efficient Dispute Resolution And An Enforceable Judgment Or Award

Originally published in The Lawyer, June 25th 2012

Recent announcements of projects such as the intention of the Kuwait Petroleum Company to fund the redevelopment of Britain's first producing but currently abandoned North Sea Oilfield and the intention of the State Grid Corporation of China to buy into the electricity transmission line business in Brazil serve to remind that projects involving the energy and off-shore industries often, if not almost inevitably, involve complex contractual structures between parties from differing legal systems. Finding a choice of law and forum for dispute resolution is not therefore necessarily straightforward particularly as the current economic climate forces greater attention on the issue of whether any judgment or award will ultimately be enforceable. This briefing aims to consider some of the recent developments encouraging commercial certainty when English law is the law of the contract and showing how the choice of forum can assist in the efficient disposal of a dispute.

So far as choice of law is concerned, English law continues to be seen as an option that provides for commercial certainty in its approach to the construction of contracts. There have been suggestions that the approach to contractual construction now advocated in the decision of the Supreme Court in Rainy Sky SA v Kookmin Bank [20011] 1 WLR 2900 undermines that certainty given the court's acknowledgement that where there are two possible constructions the court is entitled to prefer the construction which is consistent with business common sense. However, while what is business common sense may be a matter of dispute, particularly where the businesses in question come from different political and cultural backgrounds, the willingness of the court to allow for some flexibility in its approach to interpretation can only be commended in an international context given that it allows a court or tribunal a greater opportunity to consider the commercial background against which the contract was made. In any event, as Eder J has recently confirmed in Ted Baker PLC v Axa Insurance UK PLC [2012] EWHC 1406 at [81], where a contract when fairly read is not open to more than one interpretation the court has to give effect to that interpretation.

Moving from the realms of gentlemen's apparel back to the off-shore environment, the importance of putting a contract in its commercial context and construing particular provisions with regard to the...