Harrods Ltd v Dow Jones & Company Inc

For service on an overseas company under the default provisions of the Companies Act 1985, the claimant must prove that the company established a place of business in Great Britain and was therefore subject to the corresponding registration obligation. Carrying on business, or conducting activities through a closely associated English company, is not enough. The court must examine the relevant arrangements with care, including whether the local representative can bind the overseas company, while preserving the technical distinction between business activity and an established place of business.

In forum cases, limited publication and modest recoverable damages do not prevent an English defamation claim from being tried here where the claimant is an English company protecting its domestic trading reputation. The court may recognise vindication of reputation as a legitimate public-policy consideration.

Harrods Limited sued Dow Jones & Company Inc over an article published in The Wall Street Journal, online and through an interactive library. The article compared Harrods with Enron after Harrods had publicised an April Fool’s announcement concerning a proposed share flotation.

The claim was limited to publication in England and Wales. Dow Jones challenged service and sought a stay on grounds of forum non conveniens. Harrods applied, if necessary, for permission to serve out of the jurisdiction. The central issues were whether Dow Jones had established a place of business in Great Britain and whether England was the appropriate forum for the claim.

1. The claim was not validly served in England under section 695 of the Companies Act 1985. Section 695 operated as a default method of service only where the overseas company fell within section 691 and had an obligation to register documents and returns because it had established a place of business in Great Britain.

2. The relevant question was not simply whether Dow Jones carried on business in England. The court had to determine whether it had established a place of business at 10 Fleet Place. The distinction was technical but deliberate and recognised by the authorities.

3. The factors identified in Adams v Cape Industries were relevant, particularly the representative’s authority to bind the overseas company. DJI could not conclude advertising contracts binding Dow Jones without the latter’s editorial decision to publish. There was no sufficient evidence of direct reimbursement or of Dow Jones controlling the running of DJI’s business. The claimant therefore failed to prove an established place of business.

4. The alternative reliance on CPR rules 6.2 and 6.5 did not alter the result. Those provisions did not permit the claimant to bypass the statutory requirement that the company be an overseas company within section 691.

5. The stay was refused. English law recognised separate publication within each jurisdiction and presumed damage in defamation claims. The limited number of English publications and the possibility of nominal or modest damages did not create a de minimis rule or make the claim inappropriate. The claimant was an English company with a substantial connection to England and was entitled to seek vindication of its reputation here.

6. Permission was granted to serve out of the jurisdiction. The court encouraged the parties to seek a sensible compromise before incurring further costs.

Not stated in the judgment.