Golden Ocean Group Ltd. v Salgaocar Mining Industries PVT Ltd & Anor

For an application to serve proceedings out of the jurisdiction, the claimant need only show a serious issue to be tried and a claim with a reasonable prospect of success. A guarantee may satisfy section 4 of the Statute of Frauds 1677 through an agreement made in writing by a sequence of electronically signed communications. The court may read the negotiations together, without limiting the number of documents, where the final communication impliedly refers back to the contractual sequence. England may remain the appropriate forum where English law governs the bargain and the alternative forum may invalidate an arguable claim under its own law.

Golden Ocean claimed that Trustworth Shipping had repudiated a long-term charterparty and that Salgaocar Mining Industries had guaranteed Trustworth’s obligations. It also claimed against Mr Salgaocar for breach of warranty of authority. The defendants applied to set aside permission to serve the claim in Goa, contending that the guarantee was unenforceable under the Statute of Frauds 1677, that the warranty claim did not satisfy the jurisdictional gateway, and that Goa was the more appropriate forum.

The court considered whether the e-mail negotiations disclosed an arguable written agreement or memorandum, the proper law of the warranty claim, and the forum conveniens question.

1. Permission to serve out. The order permitting service out was maintained. Golden Ocean had a serious issue to be tried and a reasonable prospect of success on the alleged charter, guarantee, repudiation and warranty claims. Mr Salgaocar was a necessary or proper party because trying the alternative claims together avoided inconsistent findings and duplicated costs.
2. Statute of Frauds. The guarantee wording remained part of the charterparty negotiations. Once the final charterparty terms were agreed, the guarantee could become contractual, even though the concluding e-mails did not repeat the guarantee expressly. The court could examine the whole sequence of negotiations, including numerous e-mails, because the final communications impliedly referred back to the earlier contractual negotiations. There was no rule confining the court to a very small number of documents.
3. The working charterparty and broker stamps did not themselves constitute a sufficient memorandum signed on behalf of SMI. The court nevertheless held that it was well arguable that the agreement was made in writing and satisfied section 4. Earlier references to a guarantee, before the charterparty terms were concluded, were offers or negotiating documents rather than memoranda of an existing guarantee.
4. Warranty of authority. Under Article 4 of the Rome Convention, the characteristic performance of a warranty of authority was attributable to the warrantor. The contract was therefore presumed to be most closely connected with India, Mr Salgaocar’s habitual residence. Golden Ocean had not shown that the warranty claim had the better argument for English governing law.
5. Forum. England was the more appropriate forum. The contract and guarantee were strongly connected with English law, the Statute of Frauds was an important issue better determined by an English judge, and there was a real risk that an Indian court would invalidate the guarantee under Indian foreign-exchange law. The location of witnesses, Mr Salgaocar’s health, the Indian proceedings and comparative cost did not outweigh those factors. Evidence could, if necessary, be given by video link.
6. The defendants’ non-disclosure complaints had some substance, but there was no deliberate non-disclosure and the service-out order should not be set aside on that ground. The applications were dismissed and the March 2010 order was left standing.