Canyon Offshore Ltd v GDF Suez E&P Nederland BV

For jurisdiction under Article 5(1) of Council Regulation (EC) 44/2001, the claimant must show a good arguable case that the relevant jurisdictional facts exist. A contract requiring payment in return for continued performance is not necessarily a contract for the provision of services under Article 5(1)(b). The characteristic obligation must be identified.

Where Article 5(1)(b) does not apply, the place of performance under Article 5(1)(a) is determined by the law governing the obligation under the forum’s conflict rules. More than one place of payment does not automatically prevent Article 5(1)(a) from applying. The claimant may choose between places having sufficient proximity to the dispute and which a normally well-informed defendant could reasonably foresee.

Canyon, a Scottish company, claimed payment from GDF, a Dutch company, for sums allegedly owed under an arrangement concerning direct payment of a subcontractor’s invoices. GDF applied to contest the English court’s jurisdiction.

The parties accepted that GDF was domiciled in the Netherlands and that Article 2 did not confer jurisdiction. The dispute therefore centred on Article 5(1). The issues were whether the alleged arrangement was a contract for the provision of services under Article 5(1)(b), and, if not, where the payment obligation was to be performed under Article 5(1)(a).

1. Good arguable case. Canyon was required to show a good arguable case, meaning a better or much better argument on the material available, that the jurisdictional facts existed. The alleged contract could not properly be construed in isolation from the circumstances in which GDF’s letter was presented at the meeting with Canyon. The factual context supported Canyon’s case sufficiently for the application.
2. Article 5(1)(b). The alleged contract required GDF to pay Cecon’s debt to Canyon in return for Canyon completing the trenching contract. Its characteristic obligation was the assumption of the payment obligation, not the provision of trenching services. It was therefore not a contract for the provision of services, and Article 5(1)(b) did not apply.
3. Article 5(1)(a). The obligation in question was GDF’s alleged obligation to pay Canyon. Its place of performance was determined under English conflict rules and the governing law of that obligation. The ordinary rule requiring a debtor to seek out the creditor may be displaced by the contract, including implicitly through conventional commercial payment arrangements.
4. The invoices and surrounding circumstances provided a good arguable basis for concluding that payment could be made in England or Scotland. The existence of two possible places of performance did not itself bar Article 5(1)(a). Applying the requirements of proximity, legal certainty and predictability, GDF could reasonably foresee being sued in either place.
5. The jurisdiction challenge failed. Permission to appeal was granted, at least on the European-law issues.

First-instance jurisdiction application in the High Court (Commercial Court). The application to contest jurisdiction was dismissed. Permission to appeal was granted on at least the European-law aspects.