Surrey (UK) Ltd v Mazandaran Wood & Paper Industries

The defendant's application to set aside the without‑notice order giving the claimant permission to serve out of the jurisdiction was granted. The judge held that the claimant had not established the required jurisdictional "gateways": it failed to show the "better argument" that it was the contracting party (title to sue) and failed to show that the contracts were made in England or that they were governed by English law under Article 4 of the Rome Convention. The judge also concluded that the claimant's without‑notice evidence was deficient and breached the duty of full and frank disclosure, which alone justified setting aside the order.

Background and parties:

• The claimant (Surrey) alleged unpaid sums and damages under contracts for supply and shipment of wood products to the defendant (MWPI) in Iran. The total asserted claim, including interest and costs, was about €3.3m.
• Surrey is an English company; MWPI is an Iranian company operating a paper mill in Sari, Iran. Much of the contractual negotiation and performance was said to involve a trader using the name "Lignum" and an individual who used the pseudonym "James Wilson" but who is said to be Mr Afkhami, connected to Surrey.

Nature of the application: An application by MWPI to set aside the order of Flaux J (4 July 2013) granting Surrey permission to serve the proceedings out of the jurisdiction and related relief.

Issues before the court:

1. Whether Surrey had title to sue (i.e. whether Surrey was the contracting party rather than another trading style or person).
2. Whether any contract(s) relied on were made within the jurisdiction (CPR 6BPD gateway relying on instantaneous communications).
3. Whether the contracts were governed by English law (Article 4 Rome Convention/Contracts (Applicable Law) Act 1990).
4. Forum conveniens: whether England was clearly the appropriate forum under the Spiliada principles.
5. Whether the claimant breached the duty of full and frank disclosure in its without‑notice evidence.

Court's reasoning and findings:

• Title to sue: the claimant bore the burden of showing the "better argument" that it was the contracting party. Applying the objective approach (Muneer Hamid), the judge concluded Surrey had not established the better argument. Contemporaneous documents and conduct did not identify Surrey as the counterparty, the asserted incorporation of Surrey into the dealings (for example by reference to terms and conditions said to have been sent in November 2008) was inconsistent with company records, and practical indicia pointed to contracts with "Lignum" or with Mr Afkhami.
• Contracts made within the jurisdiction: although principles from Entores/Brinkibon on instantaneous communications were accepted, the particular communications received in England did not amount to legal acceptances. They were, at best, invitations to treat or counter‑offers. Surrey failed to show the better argument that the contracts were made in England.
• Governing law: the Rome Convention presumption in Article 4(2) that the contract is governed by the law of the country of the supplier's central administration was addressed. Viewing the circumstances as a whole, the judge concluded the contracts were more closely connected with Iran and that the presumption was displaced by Article 4(5); the applicable law was therefore Iranian law.
• Forum conveniens: having regard to the likely issues at trial (in particular the alleged quality complaints, production evidence and witnesses in Iran), and balancing the parties' positions and evidence, the judge concluded Surrey had not shown that England was clearly the appropriate forum.
• Full and frank disclosure: the claimant's without‑notice witness statement was found seriously deficient on multiple material points (notably on title to sue, the alleged transmission of terms and conditions, and the significance of the Iranian connections). That breach alone justified setting aside the order.

Conclusion: The court refused to grant permission to serve out and set aside the order of Flaux J. Costs and consequential matters were to be agreed or determined.

The court set aside the order of Flaux J and refused permission to serve the proceedings out of the jurisdiction. The principal reasons were that Surrey had failed to show the "better argument" that it was the contracting party (title to sue), had failed to show any of the CPR Practice Direction 6B gateways (contracts made in England or governed by English law), and the claimant breached the duty of full and frank disclosure in its without‑notice application. The judge also concluded that England was not clearly the appropriate forum under the Spiliada test.