17/03/2020

Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV and Others (The “Atlantic Tiburon 1”)

Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV and Others (The “Atlantic Tiburon 1”) Court of Appeal (Davis, Asplin and Green LJJ) [2019] EWCA Civ 10 – 17 January 2019

Practice – Service of claim form out of jurisdiction – Exclusive jurisdiction agreement – Whether third and fourth defendants were undisclosed principals – Test to be applied for determination of jurisdictional question – Brussels Regulation (Recast), Council Regulation 1215/2012/EU, article 25

In The Atlantic Tiburon 1, the Court of Appeal has provided extensive and important clarification of the appropriate test to use in determining jurisdictional challenges.

The Claimant was contracted to refurbish a cantilever jack-up rig, The Atlantic Tiburon 1. The Contract was executed by the Second Defendant, but stated that invoices should be addressed to another party, the First Defendant, for settlement. The Contract expressly provided for English law, and stated that the “High Court in London” had exclusive jurisdiction “for the resolution of any disputes arising in connection with the supply of goods under these Terms and Conditions and the relevant Purchase Order/Contract.”

The Claimant commenced action against both the First and Second Defendants, and the Third and Fourth Defendants. The Claimant maintained that the Third and Fourth Defendants were the undisclosed principals, and that the First and Second Defendants had been acting as their agents.

In the High Court, the Claimant had sought a declaration that the English Court had jurisdiction in relation to the Third and Fourth Defendants. The Claimant was unsuccessful in its application, and appealed. The Court of Appeal confirmed the first instance decision in terms of its ultimate result, though they differed from the Judge on the reasoning applied.

The Court of Appeal held that the appropriate test to determine the jurisdictional question was the three-limb test set down by the Supreme Court in Goldman Sachs International v Novo Banco SA [2018]. The Supreme Court decision had not been available when the High Court reached its decision in this case. The test is as follows:

“(i) the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway;

(ii)         that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but

(iii)        the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it.”

The older tests of “good arguable case” and “much the better argument” should be laid to rest. The Court of Appeal also made clear that the correct test involves relative assessment:  the Claimant must show that it has the better argument. The Court of Appeal also called for judicial common sense and pragmatism in the approach to evidence at an interlocutory stage, and in the application of the test.