SMT Global Logistics Limited v Georgian Airlines LLC

A contractual reference by international commercial parties to the courts and laws of the United Kingdom may, in context, identify the High Court of England and Wales and English law. Jurisdiction clauses should be construed broadly, purposively and commercially, with preference given to an interpretation that gives the clause effect.

Where an English jurisdiction clause exists, a stay for forum non conveniens requires strong or overwhelming reasons. Foreseeable matters of convenience, including the location of witnesses and documents, will ordinarily be insufficient.

The Montreal Convention concerns claims within its substantive liability regime. It does not provide an exclusive jurisdictional code for every contractual dispute arising between an airline and its contracting counterparty.

The claimant, a Hong Kong air-cargo logistics company, claimed damages and repayment of deposits and prepaid freight after the defendant Georgian airline terminated contracts for cargo charter flights.

The contracts provided that unresolved disputes would be submitted to the court in accordance with the current legislation of the United Kingdom. The defendant challenged jurisdiction under CPR Part 11, arguing that the clause was not a jurisdiction clause, that Georgia was the more appropriate forum, and that the Montreal Convention governed jurisdiction. The claimant alternatively sought permission to serve out under CPR PD 6B(6)(c).

The issues were whether the Montreal Convention applied, how clause 7.2 should be construed, whether a stay should be granted, and whether permission to serve out should be given.

The Jurisdiction Application and the associated application for a stay were dismissed. Permission to serve the claim out of the jurisdiction was granted, subject to the defendant’s liberty to apply to set aside service.

1. Montreal Convention. The Convention did not apply to claims for repayment of a deposit or prepaid freight, failure to return the claimant’s equipment, or consequential loss arising from the defendant’s failure to carry the goods at all. Articles 29 and 33.1 were concerned with claims within the Convention’s substantive regime, including passenger, baggage and cargo claims of the kind identified in Articles 17 to 19. They did not govern every contractual claim between an airline and its counterparty.
2. Even if the Convention applied to some claims, the English court would have jurisdiction for claims concerning London Stansted as the place of destination. Forum non conveniens could not be used to challenge jurisdiction where the Convention applied. The binding decision in Milor was applicable.
3. Applying English law, clause 7.2 was construed as providing that unresolved disputes would be submitted to the High Court of England and Wales in accordance with the current laws of England and Wales. The references to the United Kingdom were read in their international commercial context. The clause was to be construed so as to give it effect and was to be interpreted broadly.
4. The clause fell within CPR 6.33(2B)(b) and (c). It was immaterial whether the clause was exclusive or non-exclusive, although it was properly construed as exclusive. The defendant had been validly served and the court had jurisdiction.
5. A stay was inappropriate. The parties had chosen England as a neutral forum. The defendant relied on foreseeable matters, including its Georgian domicile and the location of witnesses and documents. Those matters did not amount to strong or overwhelming reasons for departing from the contractual choice, and a standard Spiliada balancing exercise was inappropriate.
6. Permission was also granted under CPR PD 6B(6)(c). There was a good arguable case that the contract was governed by English law, a serious issue to be tried, and England was clearly or distinctly the appropriate forum.

Not an appeal. The judgment determined applications concerning jurisdiction, stay and service out at first instance.