Kaefer Aislamientos SA De CV v AMS Drilling Mexico SA De CV & Ors

The jurisdictional good arguable case inquiry is a flexible, three-limbed test. A claimant must ordinarily show a plausible evidential basis and have the better argument on the material available, without proving its case on the balance of probabilities. The court must resolve factual disputes where it can reliably do so. If it cannot make a reliable assessment at the interim stage, a plausible, contested evidential basis may suffice.

Where Brussels I Regulation (Recast) Article 25 is engaged, the inquiry must also reflect the need for clear and precise evidence of consensus to the jurisdiction agreement. An entire agreement clause and express identification of contractual parties are cogent evidence against an alleged undisclosed principal, though they do not necessarily exclude one.

Kaefer Aislamientos SA de CV sought payment for refurbishment and asbestos-abatement work performed on a drilling rig. The purchase order was signed by Atlantic Marine Services BV and contained an English exclusive-jurisdiction clause.

The claimant served the claim in Singapore on the rig-owning company, Atlantic Tiburon 1 Pte Ltd, and its parent, Ezion Holdings Ltd. It alleged that the signatories to the purchase order had contracted for them as undisclosed principals. The High Court set aside service and declared that it lacked jurisdiction over those two defendants.

The appeal concerned the correct test for establishing jurisdiction under Article 25, the treatment of incomplete evidence at an interim hearing, and whether the evidence showed that either respondent was an undisclosed principal bound by the jurisdiction agreement.

1. Appeal dismissed. The court unanimously upheld the order declining jurisdiction over Atlantic Tiburon 1 Pte Ltd and Ezion Holdings Ltd.

2. The deputy judge had erred by treating a good arguable case and having the better argument as two separate tests, and by equating the former with the summary-judgment test. Properly understood, the jurisdiction inquiry is the three-limbed approach restated in Brownlie v Four Seasons Holdings International [2017] UKSC 80 and Goldman Sachs International v Novo Banco SA [2018] UKSC 34. The claimant must normally have a plausible evidential basis and the better argument. The word “much” adds no requirement. The test is not proof on the balance of probabilities.

3. The court must try to resolve evidential disputes on the material available where it can reliably do so. If a reliable assessment cannot be made because of the limitations of the interlocutory process, the claimant may nevertheless establish the gateway through a plausible, albeit contested, evidential basis. The deputy judge had in substance applied that approach. He pragmatically tested the claimant’s case on assumptions favourable to it and was entitled to decide the material issues from the documents.

4. For an undisclosed principal to be bound, the agent must have actual authority, must intend when contracting to act for that principal, and the contract and surrounding circumstances must not exclude that result. The deputy judge was entitled to find that Atlantic Tiburon 1 had the better argument that it was not an undisclosed principal, and that no arguable case existed against Ezion.

5. The entire agreement clause and the express identification of the contracting parties were not neutral. They were cogent evidence against the alleged undisclosed-principal case, although they did not conclusively exclude an undisclosed principal. This additional error by the deputy judge strengthened, rather than altered, the result.

6. An appellate court should not re-perform a close evaluative assessment of complex interim evidence merely because it might reach a different view. There was no material legal or evaluative error justifying intervention.

• Court of Appeal (Civil Division) — dismissed the claimant’s appeal and upheld the refusal of jurisdiction: [2019] EWCA Civ 10.
• High Court, Commercial Court — Mr Peter Macdonald Eggers QC, sitting as a deputy High Court judge, declared that the court had no jurisdiction over the third and fourth defendants and set aside service out of the jurisdiction.