FOREIGN CLAIMS AND UK JURISDICTION

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Syed Rahman of Rahman Ravelli assesses the doctrine of forum (non) conveniens and a court’s decision regarding jurisdiction on a foreign claim.

In the context of civil litigation, forum conveniens is a commonly-considered principle wherein the court decides whether to permit the service of proceedings outside the jurisdiction through the English courts, or to acknowledge that another forum would be more appropriate.

The recent judgment in Traxys Europe SA v Sodexmines Nigeria Ltd [2020] EWHC 2195 (Comm) considered whether the Commercial Court of England and Wales could exercise its jurisdiction over a claim in Nigeria. As a case, it is a useful illustration of the factors a court will consider when deciding whether a case should be heard in the UK.

Background

The claim concerns the sale of products by the first defendant, Sodexmines Nigeria Limited (Sodexmines), to the claimant, Traxys Europe S.A. (Traxys), in Nigeria. The second defendant, Mr Ali, is the beneficial owner of Sodexmines. It was alleged that the first defendant dishonestly substituted the purchased products with products described as “worthless” which were then provided to the claimant. The claimant then brought claims in contract/restitution against Sodexmines and in tort against the two defendants.

The contract between the parties provides for English law and jurisdiction. Therefore, permission to serve outside the jurisdiction (i.e. Nigeria) was granted. In this case, Mr Ali applied to the court to stay the proceedings against him on the grounds that Nigeria is the forum conveniens and so this English court should not exercise its jurisdiction.

The Burden of Proof

In an application to stay the exercise of the court’s jurisdiction, the burden would lie with the defendant to show there is a more appropriate forum.

However, the judge in this case said that, on the facts and notwithstanding that Mr Ali was seeking a stay, this case falls into a second class of cases regarding the court’s exercise of its discretionary power to allow service outside of the jurisdiction. In this latter class, the burden would fall on the claimant (as in Spiliada Maritime Corp. v Cansulex Ltd. [1987] 1 AC 460). It was, therefore, decided that the burden of proof lay upon the claimant to establish that the appropriate forum, in this case, was England, rather than Nigeria.

The Claimant’s Argument

The claimant put forward the following factors in support of the submission that England is the appropriate forum:

1 – Sodexmines agreed to an exclusive English jurisdiction clause in the disputed contract.

2 – As per the contract, Sodexmines agreed for English law to govern its relationship with Traxys.

3 – The claim against Sodexmines is proceeding in England, and will continue to do so, even if the court stays the claim against Mr Ali.

4 – The evidence and the relevant documents will be in English.

5 – Mr Ali is a British citizen, and the English court is likely to be a convenient venue for both parties. By contrast, Mr Ali has fled and is avoiding entry to Nigeria.

6 – Mr Ali has repeatedly and continually told the Nigerian courts, in sworn evidence, that the civil dispute ought to be litigated in England and Wales.

7 – There is an accusation of evidence that Mr Ali interfered with a witness – so the claimant seeks to have the case heard in the UK under the “intense scrutiny” of an English court.

The Court’s Response

Having studied each of the points made by the claimant, the court considered that:

1 and 2 – The first and second Defendants are legally separate and distinct persons – and so Mr Ali has not agreed to English law and jurisdiction for claims against him;

3 – The court held that it is unlikely the claim in tort will go ahead against the first defendant in England.

4 – The fact that the evidence and documents are in English is not a reason for the forum conveniens to be England.

5 – Mr Ali is likely to give evidence by video link, whether in Nigeria or England;

6 – It is true Mr Ali submitted before the Nigerian Courts that the civil claim was a matter for the English court.

7 – The point regarding alleged witness interference could not be resolved in this hearing as it needed to be scrutinised by the court (in the forum conveniens) with care.

Judgment

The judgment held that the claimant’s factors, as outlined above, were “lacking in cogency” and that the claimant had failed to establish that England is the forum where the case should more appropriately be tried in the interests of the parties. The “centre of gravity” of the case is in Nigeria, not England.

The judge agreed with Mr Ali’s supporting points that Nigeria was the appropriate forum because the tortious events took place in Nigeria and the witnesses are in Nigeria. The judge, therefore, granted Mr Ali’s application for a stay of proceedings in this jurisdiction. However, it was judged that the worldwide freezing order (WFO) in place against Mr Ali – that was imposed by the English court – could and should remain until the claimant secures similar relief in Nigeria, at which point this court will set the WFO aside.

The details of this case, especially its outcome, will be useful to anyone considering bringing a claim in the UK, where the fundamental focus of the litigation may be abroad. It will also be of use to those who have to defend such a claim.  It outlines some valuable factors concerning the circumstances that the court will deem appropriate for a case to be heard in the UK, where that case has a foreign jurisdictional anchor.

 

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