Sharab v Al-Saud

For the contract-made gateway to service out, a contract made within the jurisdiction remains so made where it is later varied abroad. The result differs only if the later agreement discharges and replaces the original contract.

The breach gateway requires a good arguable case that the contract required performance only within the jurisdiction. A willingness to pay into an account to be nominated does not, without more, impose a contractual obligation to pay in England.

On a forum challenge, the availability and enforceability of a judgment are relevant advantages. An appellate court should be slow to disturb a detailed first-instance assessment of the appropriate forum.

Mrs Sharab claimed US$10 million commission from Prince Al-Waleed Bin Talal Bin Abdal-Aziz Al-Saud for arranging the sale of an aircraft to Libya. She obtained permission to serve him outside the jurisdiction.

The High Court dismissed the Prince’s application under CPR Part 11, holding that there was a good arguable case that the alleged commission contract had been made in London and that England and Wales was clearly the appropriate forum: [2008] EWHC 1893 (Ch).

The Prince appealed, challenging the service-out gateways and the forum finding. After the hearing, he also sought to offer an undertaking to submit to the jurisdiction of the Libyan courts.

1. Appeal dismissed. Richards LJ, with whom Rimer LJ and Arden LJ agreed, upheld the finding that there was a good arguable case that an oral commission contract was made in London. The alleged April 2003 agreement in Libya changed the rate of commission only. It did not discharge the London agreement and substitute a new contract. The claim therefore fell within CPR 6.20(5)(a).

2. The court rejected the Prince’s submission that a claimant must satisfy both the letter and the spirit of a service-out gateway. Any broader concern about the appropriateness of exercising jurisdiction belonged to the discretionary forum assessment, not to the threshold question whether the gateway was met.

3. The court disagreed with the deputy judge on CPR 6.20(6). The evidence did not establish an agreed contractual obligation to pay commission only in London. The Prince had at most indicated a willingness to pay into an account subsequently nominated by Mrs Sharab. There was no consideration for a contractual variation, no basis for the proposed implied term, and no effective nomination. The breach gateway was therefore not satisfied. That did not affect the availability of the contract-made gateway.

4. The court refused to accept the Prince’s post-hearing undertaking to submit to the Libyan courts. The appeal was a review of the deputy judge’s decision on the material then before him. The Prince had deliberately declined earlier opportunities to offer the undertaking. Accepting it would materially change the case and unfairly require fresh argument.

5. The deputy judge’s conclusion that England and Wales was clearly the appropriate forum remained properly open to him. The Prince had not shown that the Libyan courts could exercise jurisdiction over him. The comparative ease of enforcing an English judgment was a legitimate factor favouring England. Applying the appellate restraint stated in Spiliada Maritime Corporation v Cansulex Ltd, [1987] 1 AC 460, the court found no basis to interfere.

• Court of Appeal (Civil Division): Dismissed the Prince’s appeal and upheld the dismissal of his jurisdiction challenge: [2009] EWCA Civ 353.
• High Court of Justice, Chancery Division: Mr John L Powell QC, sitting as a deputy judge, dismissed the Prince’s CPR Part 11 application challenging service out and the exercise of jurisdiction: [2008] EWHC 1893 (Ch).