Yannis Constantine
One of the primary considerations in any litigation action with a foreign element is the question of jurisdiction. To put it simply, if a UK based client wants to issue proceedings against a Defendant who is abroad, where should he start the action?
The question of jurisdiction can be a difficult one. Ultimately, the answer will depend on what international private law dictates in relation to the circumstances governing each case.
Another important question is that of recognition and enforcement of foreign judgments. How can foreign judgments be recognised and what does a party to an action have to do, if anything?
These are obviously very important considerations for UK based clients, as proceedings outside the UK are likely to be far more consuming in terms of both time and costs. Understandably, a UK based individual or small/medium size company with limited resources would want to bring proceedings or be able to enforce foreign judgments at the local courts.
Action between parties in the EU, Norway, Switzerland or Iceland
If both parties in an action are based in the EU, Norway, Switzerland or Iceland, the basic rule is that the Claimant must sue the Defendant at his local courts.
a) The Defendant is an individual
If the Defendant is an individual, this will be the courts of the country where he domiciles. Domicile is a complex legal notion and can be a contentious issue. For the purposes of this article, it will suffice to say that the underlying idea is that domicile refers to a combination of personal factors which indicate the State of the Defendant’s permanent home.
b) The Defendant is a Company
If the Defendant is a limited company or other body corporate, then the Claimant should normally commence proceedings where the company has its statutory seat, central administration or principal place of business. In practice, it is unlikely that these will be different, although not impossible, in which case the claimant would have a choice. Statutory seat means where the Defendant company has its registered office or, otherwise, the place where it was incorporated or formed.
c) Special jurisdiction: Contract cases
In contract cases, private international law allows a party to a contract to sue the other party in the courts where the contractual obligation in question was (or was to be) performed. This is an alternative to the basic rule explained under (a) and (b) above.
So, for instance, in a sale of goods and/or provision of services case, the Claimant can commence court proceedings where the goods and/or services were (or were to be) delivered and/or provided. In that case, if UK is the place of contractual performance but the Defendant is based say in France, the UK claimant can start action at the local courts rather than the French Courts. Of course, this option only applies if the contract does not contain a specific jurisdiction clause or other jurisdiction agreement between the parties.
d) Special jurisdiction: Torts
Similar to contract cases, in tort cases international private law confers special jurisdiction on the courts of the country where the harmful effect occurred or may occur. Again, this is an alternative to the basic rule explained under (a) and (b) above.
So for instance, if say as a result of a harmful publication by a publishing company based in Spain a UK based client suffered defamation in the UK, the UK based client may sue the Spanish company in the UK rather than in Spain.
e) Special Cases
Special jurisdiction rules also apply in specific cross-border contractual disputes such as in relation to insurance contracts, consumer contracts and individual employment contracts.
In addition, exclusive jurisdiction rules apply in cases such as those involving disputes over immovable property, intellectual property and enforcement of foreign judgments in the UK.
Clients are advised to seek specialist advice in those cases.
Action against a party outside the EU, Norway, Switzerland or Iceland
The basic rule on jurisdiction where the Defendant is based outside EU, Norway Switzerland or Iceland is that the UK based claimant can start proceedings at the local courts if the claim was served on the Defendant while present in the UK, regardless how briefly.
If the Defendant is a foreign company or other corporation but with a place of business in UK, then proceedings can be served on the person who is authorised on behalf of the company to accept service in the UK and whose name should appear in the Companies Register.
If, on the other hand, the Defendant is not present in the UK, the Claimant must seek permission from the local court to serve his claim abroad. The court will only grant permission if the claimant proves certain grounds e.g. where permission is sought to enforce a contract which is governed by UK law or where the contractual breach occurred in the UK.
The Defendant has however the right to object to the proceedings continuing in the UK by making an application for a declaration that the action should take place at the foreign court. The Defendant would have to show that in all circumstances of the case the foreign court is a more appropriate forum for dealing with the dispute.
Recognition and enforcement of foreign judgments in the UK
Between EU member States, Norway, Switzerland and Iceland a judgment given in one State shall be recognised by another of those States without any special procedure being required. If a dispute arises as to recognition in the UK, an interested party may apply in the High Court for the judgment to be registered. Recognition may be refused only on certain and limited grounds which are laid down by private international law.
Similarly, a judgment handed down in an EU member State, Norway, Switzerland or Iceland shall be enforced in another of those countries if it is enforceable in the country where the judgment was made. If a party wishes to enforce a foreign order in the UK, it may apply at the High Court for a declaration that the judgment was enforceable at the country of its origin. The application is made without notice to the Defendant, which aims to protect the Claimant from the possibility of the Defendant removing his assets from the UK.
On the other hand, where the issue is the recognition or enforcement in the UK of a judgment obtained outside EU member States, Norway, Switzerland or Iceland, the position is governed by English common law as well as by some special statutes particularly in connection to Commonwealth countries. Here, it may be sufficient to say that in the most common example of foreign creditors seeking to enforce a foreign judgment for debt in the UK, domestic civil procedure rules allow for an enforcement order from a UK court to be obtained quickly and without the Defendant being allowed to defend, on the ground that he has no reasonable prospects of success.
