Navigators Insurance Company & Ors v Atlantic Methanol Production Company Llc

For service out of the jurisdiction, the claimant must show a good arguable case within CPR 6.20, a serious issue to be tried, and that England is clearly or distinctly the appropriate forum. A claim for a negative declaration warrants caution because it reverses the usual roles and may create procedural complications. An English governing-law clause does not, by itself, make England the appropriate forum where the legal issues are straightforward and the competing forums have substantially similar laws. The court should weigh the location of witnesses and documents, the factual centre of gravity, the progress of related foreign proceedings, and the risk of duplicated costs or inconsistent decisions.

Underwriters sought declarations that they had avoided extensions to a project insurance policy, or were otherwise not liable for a claim arising from the shutdown of a methanol plant in Equatorial Guinea. The defendant, incorporated in the Cayman Islands and headquartered in Texas, challenged an order permitting service of the proceedings in Texas and the Cayman Islands.

The dispute concerned alleged non-disclosure and misrepresentation, policy exclusions, and whether the claim was covered. Related proceedings had been brought in Oklahoma and Texas. The central issues were whether there was a serious issue to be tried and whether England was clearly the appropriate forum.

1. Application granted. Service of the proceedings out of the jurisdiction was set aside.
2. The claimants bore the burden of showing a good arguable case falling within CPR 6.20, a serious issue to be tried, and that England was clearly the appropriate forum. The allegations concerning non-disclosure, misrepresentation, the refractory lining exclusion, and delay to substantial completion were obscure and weakly supported. The arguable strength of the defence was borderline, although the court assumed for the forum analysis that a triable issue existed.
3. The request for a negative declaration was a material consideration. Such relief is unusual because it reverses the ordinary roles of claimant and defendant and can create procedural complications and possible injustice. The caution identified in Messier-Dowty Ltd v Sabena SA (No 2) [2000] 1 WLR 2040 at 2051 was applicable.
4. The English governing-law clause did not create an implicit expectation that disputes would be tried in England. The issues were principally factual, while any construction issues were straightforward. The observation in Du Pont de Nemours v Agnew [1987] 2 Lloyd’s Rep 585 at 594 concerned a novel and undecided question of English public policy and did not govern this case.
5. Most witnesses and documents were in Equatorial Guinea and the United States, particularly Texas. The Texas proceedings had jurisdiction, had reached discovery, involved additional relevant parties, and were managed towards an earlier trial. The risk of increased costs and inconsistent decisions provided substantial support for declining jurisdiction.