Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd

A contractual choice of court clause may operate alongside adjudication and arbitration provisions where the contract does not clearly replace those procedures. The Housing Grants, Construction and Regeneration Act 1996 does not prevent parties agreeing that adjudication enforcement proceedings should be brought in another jurisdiction. Its statutory and implied adjudication terms are construed under the contract’s proper law.

Under Schedule 4 to the Civil Jurisdiction and Judgments Act 1982, the defendant’s domicile, place of performance and an agreed jurisdiction clause provide jurisdictional gateways. They do not necessarily confer exclusive jurisdiction. The court may stay proceedings under section 49 where another competent forum is clearly or distinctly more appropriate. A valid right to sue in England will not lightly be disturbed, but the court will weigh the contractual and factual connections with the alternative forum.

Babcock engaged HS Barrier Coatings to carry out works at HMNB Clyde under a contract containing adjudication and Scottish arbitration provisions. A later Variation Agreement revised the contract value and stated that disputes concerning the agreement were to be determined by the Scottish courts.

Following two adjudications, Babcock commenced English proceedings to enforce the second adjudication decision. HS Barrier Coatings applied for relief from sanctions and challenged the English court’s jurisdiction, alternatively seeking a stay in favour of Scotland. The issues were whether the Variation Agreement contained an effective Scottish jurisdiction clause, whether that clause applied to adjudication enforcement, and whether Scotland was the more appropriate forum.

1. Relief from sanctions. The application was one day late under CPR 11(4). Applying the principles in Denton v TH White Ltd [2014] EWCA Civ 906, the default was neither serious nor significant, was caused by solicitor error, caused no prejudice, and was not opposed. Relief was granted and the time for the jurisdiction application was extended.
2. Construction of the Variation Agreement. The Variation Agreement validly varied the original contract. Its reference to disputes concerning the agreement extended beyond disputes directly under that document and included disputes affected by its terms. The Scottish court clause was therefore an effective jurisdiction agreement. It was to operate alongside adjudication and arbitration. Replacing arbitration with litigation would have required clear words, which were absent. The wording referring back to the original contract indicated that the existing dispute-resolution regime remained in place.
3. Adjudication enforcement. The Housing Grants, Construction and Regeneration Act 1996 did not prevent parties from agreeing a foreign jurisdiction clause. Where the statutory requirements are not satisfied, the implied terms under section 114(4) must be interpreted under the proper law of the contract. The parties accepted that adjudication was available and that enforcement could be sought in the United Kingdom. The question was whether enforcement should occur in England or Scotland.
4. Schedule 4 jurisdiction and forum. Rules 1, 3(a) and 12 of Schedule 4 to the Civil Jurisdiction and Judgments Act 1982 provided jurisdictional gateways, but none conferred exclusive jurisdiction. Section 49 preserved the court’s power to stay proceedings on forum non conveniens grounds.
5. Application of the Spiliada principles. Both England and Scotland were competent forums. Babcock had established jurisdiction in England through HSBC’s domicile, so the court would not lightly disturb that choice. Nevertheless, the project, performance, governing law, adjudication provisions and agreed jurisdiction clause all pointed to Scotland. Scotland was clearly the more appropriate forum, and the proceedings were stayed.

First-instance decision. No appellate history is stated in the judgment.