Snookes v Jani-King (GB) Ltd.

A contractual jurisdiction clause requiring proceedings to be brought in a court of competent jurisdiction in London concerns the commencement of proceedings. It is enforceable where it satisfies the reasonableness requirement under the Unfair Contract Terms Act 1977 and is sufficiently certain. A clause identifying the geographical court location does not necessarily impose a restrictive or onerous condition. Where proceedings are commenced in breach of the clause, the claimant must show a strong case before the court will permit them to continue. Transfer is not appropriate where it would deprive the defendant of a limitation defence.

The claimants were franchisees of the defendant under standard-form franchise agreements containing a clause providing that proceedings arising out of or in connection with the agreements were to be brought in a court of competent jurisdiction in London. They commenced claims alleging misrepresentation and breach of contract in Swansea District Registry.

The defendant applied for the claims to be struck out or stayed. The issues included the construction and enforceability of the jurisdiction clause, its interaction with Council Regulation (EC) 44/2001 and domestic jurisdiction legislation, and the appropriate remedy.

1. Commencement. Proceedings are brought when they are commenced. Clause 27.14 therefore required the claims to be issued in a court of competent jurisdiction in London. The clause was mandatory and sufficiently certain.
2. Unfair Contract Terms Act 1977. The agreements were made on the defendant’s written standard terms, so section 3 applied. The defendant discharged the burden under section 11. Relevant considerations included the time available to the claimants to consider the agreements, the absence of evidence of pressure, the mutual operation of the clause, and the absence of any obvious disadvantage in commencing proceedings in London. The clause was reasonable.
3. Section 13(1)(a) did not assist the claimants. The clause identified where proceedings were to be commenced and, on the evidence, was not restrictive or onerous. It did not exclude or restrict rules of evidence or procedure under section 13(1)(c). In any event, the clause satisfied the reasonableness test. The analogy with time-limitation clauses was rejected.
4. The judge’s provisional view was that article 23(1) of Council Regulation (EC) 44/2001 applied, including where the relationship had no international element, and that the clause conferred exclusive jurisdiction. The issue was academic because the result followed independently from section 16 of the Civil Jurisdiction and Judgments Act 1982 and paragraph 12 of the Civil Jurisdiction and Judgments Order 2001, or alternatively from common law principles.
5. Applying the approach used for foreign jurisdiction clauses, the claimants had to show a strong case for allowing proceedings brought contrary to the agreement to continue. They failed to do so. The limitation risk resulted from their decision not to issue protective proceedings in London, and there was no significant disadvantage in complying with the clause.
6. The claims were not transferred to London. The claim forms were set aside and the claimants were ordered to pay the defendant’s costs. Permission to appeal was refused.