Summary
Service out of the jurisdiction under the additional-claims gateway requires the claimant to establish a serious issue to be tried, a good arguable case that the foreign defendant is a necessary or proper party, and that England and Wales is clearly or distinctly the proper forum.
The proper-party inquiry asks whether the claims involve one investigation or are closely bound by a common thread. Different contracts, governing laws, parties, periods, rates and issues may show that the claims are separate, even where the transactions are commercially connected.
An exclusive foreign jurisdiction clause should ordinarily be respected. Foreseeable inconvenience, fragmentation, parallel proceedings and a risk of inconsistent judgments will not ordinarily amount to very strong reasons for disregarding the parties’ bargain.
Factual background
Astivenca brought a Part 20 claim against Petroleo, a Venezuelan company, seeking damages and an alleged indemnity under a Venezuelan-law Services Contract. The claim was connected factually with the main action concerning charterparties for two vessels, but arose under different contracts.
Permission had been granted to serve Petroleo out of the jurisdiction. Petroleo applied under CPR Part 11 to set aside service, contending that Astivenca could not satisfy the additional-claims gateway and that Venezuela was the proper forum. The application also raised the construction and effect of clauses providing for Venezuelan jurisdiction.
Held
- Application allowed. Service of the Part 20 Claim Form and Particulars of Additional Claim on Petroleo was set aside. The parties were invited to agree consequential orders, including costs.
- Astivenca had to establish three matters: a serious issue to be tried; a good arguable case that Petroleo was a necessary or proper party to the main action or an inter-defendant claim; and that England and Wales was clearly or distinctly the proper place for the claim. The good arguable case standard required Astivenca to show the better argument, without imposing an excessively high standard at the jurisdiction stage.
- Petroleo was neither a necessary nor a proper party. The main action concerned the Charterparties and Protocol, while the Petroleo claim concerned the Services Contract. They involved different parties, contractual terms, periods, rates, governing laws and factual and legal issues. There was no single investigation, close common thread or back-to-back contractual structure. The possibility that Petroleo witnesses might assist on the alleged oral agreement did not make Petroleo a proper party.
- The alleged indemnity did not create a material common issue. It was pleaded for substantially more than Astivenca’s alleged liability to CH and added nothing meaningful to the debt and damages claims. There was no real risk of inconsistent findings on a significant issue.
- Clause 31 of the Services Contract contained a valid and operable exclusive jurisdiction agreement in favour of the courts of Cumana. The allocation of competence, the reference to jurisdiction in the heading, and the words excluding any other forum demonstrated exclusivity. The maritime character of the claim did not defeat the clause because the Cumana court could transfer the claim to the specialist Venezuelan court. The same applied to any issue concerning Petroleo’s status as a state entity.
- There were no very strong reasons to disregard the contractual choice. Alleged judicial bias was unsupported and, in any event, foreseeable. Nor did foreseeable inconvenience, separate proceedings or possible inconsistent judgments justify departure from the agreement. Even if the clause were non-exclusive, the circumstances gave no clear balance of justice and fairness in favour of England and Wales.
The court’s approach to earlier authorities
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Key cases cited
18 authorities cited.
- AK Investment CJSC v Kyrgyz Mobil Tel Limited and others (Isle of Man) [2011] UKPC 7
- Bols Distilleries BV (trading as Bols Royal Distilleries) v Superior Yacht Services Ltd [2006] UKPC 45
- Donohue v. Armco Inc and Others [2001] UKHL 64
- Spiliada Maritime Corpn v Cansulex Ltd (The Spiliada) [1987] AC 460
- Joint Stock Company 'Aeroflot-Russian Airlines' v Berezovsky & Ors [2013] EWCA Civ 784
- VTB CAPITAL PLC v NUTRITEK INTERNATIONAL CORPORATION AND OTHERS [2012] 2 Lloyd's Rep 313
- Goldstone v Goldstone & Ors [2011] EWCA Civ 39
- Limit (No 3) Ltd v PDV Insurance Co [2005] 2 All ER (Comm) 347
- Standard Bank Plc & Anor v Just Group LLC & Ors [2014] EWHC 2687 (Comm)
- Euromark Ltd v Smash Enterprises Pty Ltd [2013] EWHC 1627 (QB)
- Astrazeneca UK Ltd v Albemarle International Corp & Anor [2010] EWHC 1028 (Comm)
- Konkola Copper Mines Plc & Anor v Coromin Ltd. & Ors No.2 [2006] EWHC 1093 (Comm)
- West Tankers Inc v Ras Riunione Adriatica Di Sicurta Spa & Anor [2005] EWHC 454 (Comm)
- Massey v Heynes & Co 21 QBD 330
- BP PLC v AON LTD [2006] 1 Lloyd's Rep 549
- THE ERAS EIL ACTIONS [1995] 1 Lloyd's Rep 64
- BRITISH AEROSPACE PLC v. DEE HOWARD CO. [1993] 1 Lloyd's Rep 368
- Jialing Motorcycle (America) Corporation v Pacific Motors CA
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Cases citing this case
1 later case · 1 caution
Most senior citing decisions:
- Zephyrus Capital Aviation Partners 1d Limited & Ors v Fidelis Underwriting Limited & Ors [2024] EWHC 734 (Comm) distinguished
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