Pablo Star Ltd v Emirates Integrated Telecommunications Company PJSC (t/a Du)

At the service-out stage, a claimant must show a reasonable prospect of establishing the claim. Contractual references to standard terms do not incorporate jurisdiction or arbitration clauses unless the terms are supplied or reasonably brought to the other party’s attention. A party cannot rely on undisclosed documents or select later terms that do not correspond with the incorporating reference. Where no choice-of-law clause is established, the Rome Convention presumption favours the law of the place of business of the party providing characteristic performance. That presumption may be displaced only where the circumstances as a whole show a closer connection with another country. If witness convenience is broadly balanced, the likely governing law may determine the proper forum.

Pablo Star Ltd claimed that it had entered into a 12-month contract with Emirates Integrated Telecommunications Company PJSC (t/a Du) for multimedia content, subject to a minimum monthly spend. It obtained permission to serve proceedings out of the jurisdiction.

The respondent challenged jurisdiction. The Mercantile Court judge held that the respondent’s terms, including Dubai law and arbitration provisions, had been incorporated, and that any breach occurred in Dubai. He set aside service and ordered the appellant to pay £10,000 in costs. The appeal concerned the arguability of the long-term contract, incorporation of contractual terms, applicable law, place of breach and whether England was the proper place for the claim.

The appeal was allowed unanimously. The order setting aside service was reversed and the order granting permission to serve out of the jurisdiction was restored.

1. Reasonable prospect of success. On an application concerning service out of the jurisdiction, the claimant had to show a reasonable prospect of establishing the alleged claim. The contemporaneous emails, purchase orders and the performance and payment of work for three months gave Pablo Star a strongly arguable case that EITC had committed itself to a 12-month contract with a minimum monthly value of US$30,000.
2. Incorporation of EITC’s terms. If EITC wished to incorporate terms dealing with applicable law or arbitration, it had to do what was reasonably sufficient to draw those terms to Pablo Star’s attention. The purchase orders referred to attached terms, but no terms were attached. It was therefore practically unarguable that the reference gave sufficient notice of the provisions on which EITC later relied.
3. The terms produced by EITC did not contain the five-day written-notice provision described in the purchase-order reference. They could not therefore be the terms to which that reference related. A party could not refer to its terms and conditions and later select any document that suited its purpose. Pablo Star’s own standard terms were not clearly incorporated either, because the parties had left detailed terms for later agreement. The contract arguably stood alone.
4. Applicable law. Article 4(2) of the Rome Convention created a presumption in favour of the law of the place of business of the party effecting characteristic performance. Under Article 4(5), the presumption had to be disregarded only if the circumstances as a whole showed a closer connection with another country. Pablo Star had the better argument that the contract was more closely connected with England, having regard to its English business, the place of negotiation and aspects of performance, despite substantial connections with Dubai.
5. That conclusion provided a jurisdictional gateway under Civil Procedure Rules 1998, CPR 6BPD 3-3.1(6)(c), making it unnecessary to decide where the breach occurred. England was also the proper place under CPR 6.37(3): witness convenience was broadly balanced, while a likely English governing law favoured trial in England.

• Court of Appeal (Civil Division): In Pablo Star Ltd v Emirates Integrated Telecommunications Company PJSC (t/a Du), [2009] EWCA Civ 1044, the appeal was allowed and permission to serve out of the jurisdiction was restored.
• Birmingham District Registry, Mercantile Court: His Honour Judge Simon Brown QC set aside service, holding that EITC’s terms had been incorporated and that any breach occurred in Dubai. He awarded EITC £10,000 in costs.