Pre-action considerations and steps - Jurisdiction: mechanis...

Learning Outcomes

This article outlines mechanisms to determine jurisdiction over international civil claims in the courts of England and Wales, including:

• Distinction between jurisdiction and governing law as separate pre-action issues
• Choice of court clauses—exclusive, non-exclusive, and asymmetric—and their consequences
• The Hague Convention on Choice of Court Agreements 2005: application to exclusive jurisdiction clauses, exclusions, and limits
• Common law and CPR framework for establishing jurisdiction absent a valid exclusive clause, including service within and outside the jurisdiction
• Forum conveniens and the three-limb test for permission to serve out
• PD 6B jurisdictional gateways for contract and tort claims
• Jurisdiction challenges under CPR Part 11 and avoidance of submission to the merits
• Interaction between court jurisdiction, arbitration agreements, and anti-suit relief
• Practical steps and time limits for service within England and Wales and service out of the jurisdiction

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, with a focus on the following syllabus points:

• 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
• the PD 6B jurisdictional gateways, including key gateways for contract and tort
• the forum conveniens assessment and factors relevant to the “proper place” analysis
• the process for disputing jurisdiction under CPR Part 11 and avoiding submission to the merits
• post-Brexit changes to UK–EU jurisdiction and recognition/enforcement frameworks.

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.

1. Which of the following factors primarily determines whether the courts of England and Wales have jurisdiction based solely on service of proceedings?
   1. The claimant is domiciled in England.
   2. The contract was governed by English law.
   3. The defendant was served with the claim form while physically present in England.
   4. The dispute involves property located in Wales.
2. 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?
   1. The English courts will accept jurisdiction because one party is English.
   2. The English courts must accept jurisdiction under common law rules.
   3. The English courts are likely to decline jurisdiction in favour of the French courts due to the exclusive jurisdiction clause.
   4. The French courts would have to apply to the English courts for the case to be transferred.
3. Which international agreement provides a framework for the recognition and enforcement of judgments based on exclusive choice of court agreements between contracting states?
   1. The Lugano Convention 2007.
   2. The Brussels Recast Regulation.
   3. The Hague Convention on Choice of Court Agreements 2005.
   4. 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.

Jurisdiction analysis should be conducted alongside, but distinctly from, governing law. A robust pre-action plan also anticipates service requirements and time limits, the potential for jurisdictional challenges, and the likely path for recognition and enforcement in the target state.

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.

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.

Jurisdiction choices have practical consequences for:

• procedural rules (e.g., disclosure, interim relief, costs management)
• applicable limitation rules and available remedies
• convenience for evidence and witnesses
• recognition and enforcement prospects in other states.

Governing Law vs. Jurisdiction

It is essential to distinguish jurisdiction from governing law (also known as applicable law or choice of law).

A court’s jurisdiction depends on rules about place (e.g., presence, agreement, service gateways), whereas governing law depends on choice-of-law rules (e.g., Rome I for contract and Rome II for tort, as retained in UK law). A contract can, for instance, provide for English jurisdiction but French governing law, or vice versa. The analysis must address both aspects.

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 proceedings may also be brought elsewhere if another court asserts jurisdiction on other grounds
• asymmetric/hybrid: commonly used in finance documents, providing one party with the flexibility to sue in multiple courts while constraining the other party to a specified court.

Key points for practice:

• clarity matters: the clause should designate the courts of a specific state and state whether the choice is exclusive or non-exclusive
• scope: ensure the clause covers contractual and related non-contractual claims if intended (e.g., tort claims arising out of the relationship)
• carve-outs: consider carve-outs for urgent interim relief (e.g., injunctive relief) or for particular subject matters
• consumers and employees: different rules apply; consumer and employment contracts are often excluded from international instruments protecting exclusive jurisdiction clauses.

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).

Scope and limits:

• applies to exclusive choice of court agreements designating the courts of contracting states
• excludes certain matters (for example, consumer and employment contracts; status of persons; family matters; insolvency; some intellectual property validity disputes; some carriage and immovable property disputes)
• non-exclusive and asymmetric clauses are outside the Convention’s core definition of “exclusive” and therefore typically fall back to national rules
• transitional issues may arise regarding agreements concluded before a state’s entry into force; always check the date of the agreement and the target enforcement state’s position.

Practical steps:

• confirm the clause is exclusive and falls within the Convention’s material scope
• identify the contracting states involved (place of chosen court and place of enforcement)
• where the clause is exclusive, rely on Hague 2005 for stay/dismissal in non-chosen courts and for recognition/enforcement in other contracting states.

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.

Three principal bases are relevant:

• presence: service on a defendant physically present in England and Wales at the time of service
• submission: the defendant takes steps in the proceedings that amount to submission to the jurisdiction
• service out: claimant seeks permission to serve out of the jurisdiction and satisfies the applicable tests and a PD 6B gateway.

Key Term: Presence-based jurisdiction
Jurisdiction based on the defendant being physically present in England and Wales when served with the claim form, even if that presence is temporary.

Key Term: Submission
Jurisdiction may be established if a defendant takes steps in the proceedings that go to the merits (e.g., filing a defence without disputing jurisdiction). A defendant who intends to dispute jurisdiction must comply with CPR Part 11.

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.

Key Term: Domicile
For jurisdictional purposes, a person’s permanent home or, for a company, its registered office or principal place of business in England and Wales.

Presence-based service has practical limits:

• if England is not the proper place (forum conveniens), the defendant may apply to stay the proceedings
• if there is a valid exclusive foreign jurisdiction clause, the court may enforce it by staying the English proceedings.

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, unless a specific rule permits service out without permission.

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 serious issue to be tried on the merits
• 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.

Key Term: PD 6B gateway
A specific category in Practice Direction 6B paragraph 3.1 that permits service out of the jurisdiction for defined types of claim (e.g., contract claims connected with England, tort claims where damage is sustained in England).

Commonly used gateways include:

• contract: the contract was made within the jurisdiction; or by or through an agent trading or resident within the jurisdiction; or the contract is governed by English law; or contains an agreement to the jurisdiction of the English courts
• tort: damage was sustained, or will be sustained, within the jurisdiction; or damage sustained results from an act committed, or likely to be committed, within the jurisdiction
• claims about trusts, property within the jurisdiction, and certain enforcement matters.

Key Term: Forum conveniens
The “proper place” for the trial of the action; a discretionary assessment weighing connecting factors, convenience, the availability of an alternative forum, and the interests of justice.

Forum conveniens factors typically include:

• where the alleged wrong occurred
• locations of parties, witnesses, and documents
• applicable governing law
• availability of an alternative forum and its connection with the dispute
• risk of parallel proceedings and inconsistent judgments.

Practicalities of service out:

• time limit: claim form served out must be served within six months of issue
• method: service must comply with the law and service rules of the foreign state (often via the foreign judicial authorities or through the British Consul)
• formality: for service out, a statement of the grounds for service must be completed (e.g., using the appropriate form to indicate the PD 6B gateway relied upon).

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 serious 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.

Worked Example 1.3

A UK seller and a German buyer contract for the sale of machinery. The contract contains a non-exclusive clause: “The courts of England shall have non-exclusive jurisdiction.” The buyer sues in Germany. The seller wishes to bring parallel proceedings in England.

Answer:
A non-exclusive clause does not trigger the Hague Convention’s mandatory stay framework. The English court may accept jurisdiction (based on the contractual connection or an English law clause/gateway) but will consider forum conveniens. Parallel proceedings risk inconsistent outcomes. The court may stay the English proceedings if Germany is the proper place. The seller should weigh factors such as governing law, witness location, and efficiency before commencing in England.

Worked Example 1.4

A UK company sues a US company in tort for misrepresentation causing financial loss. The representations were made in New York; the loss was suffered in London.

Answer:
For service out, the claimant must satisfy PD 6B gateways and forum conveniens. A tort gateway may be available if damage was sustained within England (financial loss materialising in London). The court will weigh the proper place: where the misrepresentation occurred, the location of witnesses and documents, and applicable law. If the US proceedings are more closely connected and available, permission to serve out may be refused unless England is shown to be the proper place.

Disputing Jurisdiction (Procedural Steps)

A defendant who wishes to contest the court’s jurisdiction must follow CPR Part 11:

• file an acknowledgment of service indicating intention to contest jurisdiction
• within the prescribed period, apply for a declaration that the court has no jurisdiction or should not exercise any jurisdiction it may have
• avoid taking steps on the merits (e.g., filing a full defence) until the jurisdiction challenge is determined, to prevent submission.

If the court agrees, it may set aside the claim form, set aside service, discharge prior orders, and stay proceedings. If the challenge fails, the defendant must proceed to file a defence within the period directed.

Presence and Anti-suit Relief

Presence-based service may confer jurisdiction, but it does not guarantee the English court is the proper place. Where foreign proceedings are brought in breach of an exclusive English jurisdiction clause, the English court may grant anti-suit injunctions (particularly against parties outside the EU) to restrain the foreign proceedings, subject to principles of comity and discretion.

Key Term: Anti-suit injunction
An order restraining a party from pursuing proceedings in another jurisdiction, commonly used to enforce exclusive jurisdiction agreements or protect the court’s processes.

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.

Avoid common pitfalls:

• assuming governing law determines jurisdiction
• overlooking consumer/employment exclusions from Hague 2005
• failing to use PD 6B gateways appropriately
• submitting to the merits when intending to challenge jurisdiction.

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.

Recognition and enforcement:

• Hague 2005 supports recognition and enforcement of judgments from the chosen court based on exclusive clauses between contracting states
• outside Hague 2005 (or where the clause is non-exclusive/asymmetric), recognition and enforcement of English judgments in EU states depend on the national law of the enforcing state and any applicable bilateral arrangements
• the UK is not currently a party to the Lugano Convention; watch for changes, but do not assume Lugano’s regime applies.

Interaction with arbitration:

• arbitration agreements are governed by the New York Convention; jurisdiction questions about court litigation are separate
• the presence of an arbitration clause typically ousts court jurisdiction for merits, though courts remain available for supportive measures (e.g., interim relief) where appropriate.

Practical planning:

• check dates of jurisdiction agreements and target states’ positions on Hague 2005 entry into force
• build a service plan that accounts for time limits (four months for service within the jurisdiction; six months for service out)
• anticipate parallel proceedings and consider applications for stays or anti-suit relief when justified.

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, with distinctions between exclusive, non-exclusive, and asymmetric clauses.
• The Hague Convention 2005 provides rules for recognising and enforcing exclusive choice of court agreements between contracting states (including the UK and EU members), subject to scope and exclusions.
• 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 serious issue to be tried, jurisdictional gateways (PD 6B), and forum conveniens (proper place).
• Presence-based jurisdiction and submission to jurisdiction have distinct procedural consequences; a defendant wishing to challenge jurisdiction must follow CPR Part 11.
• 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, and recognition/enforcement outside Hague depends on foreign national law.
• Anti-suit injunctions may be used to enforce exclusive jurisdiction clauses in appropriate cases, particularly outside the EU framework.
• Practical service rules and time limits must be observed, including methods for service out and the six-month service period.

Key Terms and Concepts

• Jurisdiction
• Governing Law
• Jurisdiction Clause
• Hague Convention 2005
• Service out of the jurisdiction
• Presence-based jurisdiction
• Domicile
• PD 6B gateway
• Forum conveniens
• Submission
• Anti-suit injunction