Learning Outcomes
This article outlines the core principles for determining which country's courts have the authority (jurisdiction) to hear a civil claim involving international elements, such as parties residing in different countries or events occurring abroad. You will learn about the mechanisms used to establish jurisdiction, including party agreements and international conventions like the Hague Convention 2005. Understanding these rules is essential for advising clients on where to commence proceedings and the potential implications of facing litigation in a foreign court.
SQE1 Syllabus
For SQE1, you are required to understand the principles governing jurisdiction in international contractual and tortious claims. This includes the mechanisms used by the courts of England and Wales to decide if they have the power to hear a case with a foreign element. A practical understanding of these rules is necessary to advise clients appropriately before litigation begins.
As you work through this article, remember to pay particular attention in your revision to:
- the distinction between jurisdiction and governing law
- mechanisms to determine jurisdiction over international claims, including party agreements
- the role of the Hague Convention on Choice of Court Agreements 2005
- common law rules for establishing jurisdiction, including service within and outside the jurisdiction
- the requirement for permission to serve proceedings out of the jurisdiction.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
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Which of the following factors primarily determines whether the courts of England and Wales have jurisdiction based solely on service of proceedings?
- The claimant is domiciled in England.
- The contract was governed by English law.
- The defendant was served with the claim form while physically present in England.
- The dispute involves property located in Wales.
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A contract between an English company and a French company contains a clause stating: "The parties agree that the courts of France shall have exclusive jurisdiction to settle any dispute arising out of this contract." If the English company attempts to sue the French company in the English courts, what is the likely outcome regarding jurisdiction?
- The English courts will accept jurisdiction because one party is English.
- The English courts must accept jurisdiction under common law rules.
- The English courts are likely to decline jurisdiction in favour of the French courts due to the exclusive jurisdiction clause.
- The French courts would have to apply to the English courts for the case to be transferred.
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Which international agreement provides a framework for the recognition and enforcement of judgments based on exclusive choice of court agreements between contracting states?
- The Lugano Convention 2007.
- The Brussels Recast Regulation.
- The Hague Convention on Choice of Court Agreements 2005.
- The Rome I Regulation.
Introduction
When a potential civil claim involves parties, assets, or events located in different countries, a key preliminary question arises: which country’s courts have the authority to hear the dispute? This authority is known as jurisdiction. Establishing the correct jurisdiction is a fundamental pre-action step, as commencing proceedings in the wrong court can lead to wasted costs, delays, and difficulties in enforcing any judgment obtained. This article examines the primary mechanisms used to determine jurisdiction in international contractual and tortious claims within the courts of England and Wales.
Determining Jurisdiction: General Principles
Before examining specific mechanisms, it is important to understand some foundational principles relevant to jurisdiction in international civil claims.
Importance of Jurisdiction
Jurisdiction dictates whether a court has the power to make binding decisions concerning the parties and the subject matter of the dispute. If a court acts without proper jurisdiction, its judgment may be challenged and potentially unenforceable, both domestically and internationally. Therefore, correctly identifying the appropriate forum (the country whose courts will hear the case) is essential for effective dispute resolution.
Governing Law vs. Jurisdiction
It is essential to distinguish jurisdiction from governing law (also known as applicable law or choice of law).
Key Term: Jurisdiction The authority of a court to hear and decide a particular legal case. It concerns where a case can be brought.
Key Term: Governing Law The system of substantive law (e.g., English law, French law) that will be applied by the court to determine the rights and obligations of the parties in the dispute. It concerns which law the court will use.
A court in England might have jurisdiction to hear a case but may apply the substantive law of another country if, for example, the contract specified that foreign law as the governing law. Conversely, a contract might specify English law as the governing law, but jurisdiction might lie with the courts of another country. These are separate inquiries, though often related.
Mechanisms for International Claims
Several mechanisms determine which court has jurisdiction over an international claim. These often interact and depend on the specifics of the dispute, the location of the parties, and any agreements between them.
Agreements Between Parties (Choice of Court / Jurisdiction Clauses)
Parties involved in international transactions frequently include clauses in their contracts specifying which country's courts will resolve any future disputes.
Key Term: Jurisdiction Clause A contractual term where parties agree in advance that the courts of a particular country will have the authority (jurisdiction) to resolve disputes arising from or related to the contract.
These clauses, also known as choice of court or forum selection clauses, provide certainty. English courts generally uphold valid jurisdiction clauses, especially in commercial contracts, respecting the principle of party autonomy. Clauses can be:
- Exclusive: Only the courts of the specified country have jurisdiction.
- Non-exclusive: The specified courts have jurisdiction, but parties are not prevented from bringing proceedings elsewhere if another court also has jurisdiction on other grounds.
The Hague Convention on Choice of Court Agreements 2005
The UK acceded to the Hague Convention on Choice of Court Agreements 2005 (in its own right) with effect from 1 January 2021, following its departure from the EU. This Convention provides a framework for the recognition and enforcement of exclusive jurisdiction agreements in civil and commercial matters between its contracting states (which include the EU member states, Mexico, Montenegro, Singapore, and the UK).
Key Term: Hague Convention 2005 An international treaty that facilitates the recognition and enforcement of judgments based on exclusive choice of court agreements in civil and commercial matters between its member states.
Key aspects include:
- The court designated in an exclusive choice of court agreement generally must hear the case (Article 5).
- Courts of other contracting states must generally suspend or dismiss cases brought in breach of an exclusive choice of court agreement (Article 6).
- Judgments given by the chosen court must generally be recognised and enforced in other contracting states (Articles 8 & 9).
Worked Example 1.1
A UK company enters into a contract with a company based in Singapore. The contract contains a clause stating, "The courts of England shall have exclusive jurisdiction over any disputes arising from this agreement." A dispute arises, and the Singaporean company commences proceedings in Singapore. What should the UK company do?
Answer: Both the UK and Singapore are parties to the Hague Convention 2005. The jurisdiction clause is exclusive. Under Article 6 of the Convention, the Singaporean courts should suspend or dismiss the proceedings brought before them because the English courts were designated in the exclusive choice of court agreement. The UK company should apply to the Singaporean court for a stay or dismissal based on the jurisdiction clause and the Hague Convention.
Rules Where No Valid Agreement Exists (Common Law / CPR)
If there is no valid jurisdiction clause or applicable international convention, the jurisdiction of the English courts is determined by domestic rules, primarily found in the Civil Procedure Rules (CPR) Part 6 and common law principles.
Defendant Domiciled or Present in England & Wales
The English courts generally have jurisdiction if the defendant is domiciled in England and Wales. Domicile refers to the place where an individual has their permanent home or, for a company, its registered office or principal place of business.
Furthermore, jurisdiction can be established if a claim form is validly served on the defendant while they are physically present within England or Wales, regardless of how temporary their presence might be. This is known as 'presence-based' jurisdiction.
Defendant Outside England & Wales (Permission to Serve Out)
If the defendant is outside England and Wales, the claimant generally needs the court's permission to serve the claim form out of the jurisdiction.
Key Term: Service out of the jurisdiction The formal process of delivering court documents (like a claim form) to a defendant who is located outside the territory of England and Wales, usually requiring the court's permission.
Permission will only be granted if the claimant can satisfy the court on three points (CPR 6.36-6.37):
- There is a real issue which it is reasonable for the court to try.
- The claimant has a good arguable case that the claim falls within one of the specified 'jurisdictional gateways' listed in Practice Direction 6B (e.g., the contract was made within the jurisdiction, the contract is governed by English law, the breach occurred within the jurisdiction, or the tortious act/damage occurred within the jurisdiction).
- England and Wales is the proper place (forum conveniens) in which to bring the claim.
The court exercises its discretion in granting permission, balancing factors such as the connection of the case to England, convenience for parties and witnesses, and the applicable governing law.
Worked Example 1.2
An English tourist is injured in a road traffic accident in Spain caused by a driver resident in Spain. The English tourist wishes to sue the Spanish driver in the English courts. Can they establish jurisdiction?
Answer: The defendant is not domiciled or present in England & Wales. The claimant would need permission to serve out. They would need to satisfy the three-stage test. While there is likely a real issue and potentially a good arguable case under a relevant gateway (e.g., damage sustained within the jurisdiction resulting from an act committed abroad - PD 6B para 3.1(9)(a)), the claimant might struggle to show England is the forum conveniens. Factors like the accident location, witness locations (likely Spain), and potentially applicable law (likely Spanish) might favour the Spanish courts as the more appropriate forum. Permission might be refused.
Exam Warning
Be careful not to confuse the rules. The Hague Convention 2005 primarily applies to exclusive jurisdiction clauses. Where there is no such clause, or the clause is non-exclusive, or a party is outside a contracting state, the common law/CPR rules regarding domicile, presence, or permission to serve out will likely determine jurisdiction for the English courts. Always check the facts provided in the scenario.
Post-Brexit Considerations
Prior to Brexit, the Brussels Recast Regulation provided the primary framework for jurisdiction between the UK and EU member states. This regulation largely ceased to apply to the UK for proceedings commenced after 31 December 2020.
The UK's accession to the Hague Convention 2005 provides some continuity for exclusive choice of court agreements. However, for situations not covered by Hague (e.g., non-exclusive clauses, tort claims without a prior agreement, defendants in EU states where no exclusive clause exists), the jurisdictional analysis now primarily relies on the common law/CPR rules (domicile, presence, service out permission) or potentially other bilateral treaties, leading to potentially less predictability than under the former EU regime.
Key Point Checklist
This article has covered the following key knowledge points:
- Jurisdiction refers to a court's authority to hear a case, distinct from governing law, which is the substantive law applied.
- Establishing the correct jurisdiction is a critical pre-action step in international claims.
- Jurisdiction clauses in contracts allow parties to agree in advance which country's courts will hear disputes.
- The Hague Convention 2005 provides rules for recognising and enforcing exclusive choice of court agreements between contracting states (including the UK and EU members).
- Where no valid agreement or convention applies, English courts' jurisdiction depends on common law/CPR rules: primarily the defendant's domicile or presence within England & Wales, or obtaining court permission to serve proceedings outside the jurisdiction.
- Permission to serve out requires satisfying the court on the merits, jurisdictional gateways, and forum conveniens.
- Post-Brexit, the Brussels Recast Regulation no longer governs UK-EU jurisdiction for most new cases; Hague 2005 and common law rules are now key.
Key Terms and Concepts
- Jurisdiction
- Governing Law
- Jurisdiction Clause
- Hague Convention 2005
- Service out of the jurisdiction
