England as the proper place: English law as the applicable law

A significant question is whether the identification of English law as the law which will or should be applied to determine the merits of the claim bears on the requirement that England be the most appropriate forum for the trial of the action. It obviously has some bearing, but how much?

In cases based on a contract, the courts will generally accept that the bare fact that English law governs the contract will not automatically lead to the grant of permission to serve out; but where it appears that a party is resisting English jurisdiction in order to avoid the results which the application of English law would produce, the court should be prepared to detect and frustrate such subversive behaviour.

Where the parties have made an express choice of English law to govern the contract, it may be thought that they expected the English courts to be ready to exercise jurisdiction over it. To tell the truth, it is more often than not artificial to try to interpret the intentions which led the parties (or their lawyers) to express a choice of law but not to express a choice of court. A possible explanation, but which may be more rational than actual, may be that the parties sought to create certainty as to which law would govern the substance of their relationship, and which law would be applied if they reached the point of litigation, but saw no need, or did not wish, to tie their hands to a particular choice of court. It would follow that a choice of English law should not be too quickly seen as an actual but unexpressed choice of an English court, but should be taken at face value. If this is right, the courts are right not to equate a choice of English law to govern a contract with a choice of English courts.^[1]

On the other hand, an express choice of law deserves to be given its proper weight. If the evidence suggests that the foreign court would be unable or unwilling to apply the law chosen by the parties, or if the evidence suggests that the fact that the foreign court will be applying what is for it a foreign law, in circumstances which mean that the lack of an avenue of appeal to correct errors of law poses a real risk that the law chosen by the parties would not be properly applied, the court should be rather more willing to see England as the proper place to bring the claim, as an English court will be the only one in which the parties may obtain the adjudication they agreed to, and bound themselves to seek and settle for. Quite apart from that, the fact that a foreign legal system will not be able, reliably at least, to correct errors of English law, does not involve disparaging that foreign system, for the same, mutatis mutandis, is true of an English court when it seeks to apply foreign law. It reflects the elementary truth that court systems apply, and correct errors in, their own laws far better than they do with laws which are to them foreign.

In the absence of an express choice of English law, where all that may be said is that the English court’s conflicts rules would suggest that English law should be applied, the grant of permission will require greater caution. This is because there is no reason to suppose that the English approach to the issue of applicable law is universally shared, or is inherently superior. Having said that, insurance written on the London market will almost always be understood to be governed by English law, and the proposition that England will be the most appropriate forum will be easily sustained. Defamation arising from publication to an English readership will be governed by English law, and this fact alongside others will make England the most appropriate forum for the litigation which is confined to such a complaint. Where the claim in question falls within the scope of a statute which imposes a liability which would not or could not be applied by a foreign court, it is arguable that England is the most appropriate forum because it is the only forum in which the legislation can be applied.^[2] This may be of particular importance when dealing with applications falling within Paragraph 3.1(20) of the Practice Direction.

In tort cases which arise outside a contractual relationship, in particular, it had at one time been understood and accepted that the fact that the tort took place in England would be very likely to make England the proper place to bring the claim, for in many such cases there will be a coincidence of applicable law, and trial and witness convenience. It has been explained, however, that if this is a presumption it is certainly not a rule. In VTB Capital Pic v Nutritek International Corp^i}' the tort was held to have taken place in England, but the facts of the dispute were, in the evaluation of the court, overwhelmingly Russian, and this meant that England was not the proper place to bring the claim, or was not the most appropriate place for the trial of the action. Two reasons in particular support this: first, it is no longer the rule of English private international law that a tort is governed by the law of the place of its commission; and second, for some torts, particularly those of inflicting pure economic injury, there will often be no place where the tort can sensibly be said to have been committed. In those cases, to look for the place of the tort may be to look for something which is not really there, and to find it is to discover something of no real utility. As VTB Capital Pic v Nutritek International Corp demonstrates, the identification of the applicable law is a variable part of the overall evaluation, but in the end it is no more than that.

• [1] MacSteel Commercial Holdings (Pty) Ltd v Thermasteel Canada Inc [1996] CLC 1403; BP Exploration Co (Libya) Ltd v Hunt (No 2) [1976] 3 All ER 879; The Elli 2 [1985] 1 Lloyd’s Rep 107; Sawyer v Atari Interactive Inc [2005] EWHC 2351 (Ch), [2006] ILPr 8; Novus Aviation Ltd v Onur Air Tasimacilik AIS [2009] EWCA Civ 122, [2009] 1 Lloyd’s Rep 576. 2 If there is an issue of English public policy, such a matter can generally only be decided by an English court, and this will make England more obviously the natural forum: E. I. Du Pont de Nemours v Agnew (No 1) [1987] 2 Lloyd's Rep 585; see also CGU International Insurance Pic v Szabo [2002] 1 All ER (Comm) 83; Novus Aviation Ltd v Onur Air Tasimacilik AIS [2009] EWCA Civ 122, [2009] 1 Lloyd’s Rep 576. 3 Wright v Deccan Chargers Sporting Ventures Ltd[20 1] EWHC 1307 (QB), [2011] ILPr 781. 4 Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd [2011] EWHC 56 (Comm), [2011] 2 All ER (Comm) 95, esp. [143]; Baturina v Chistyakov [2014] EWCA Civ 1134 (a stay case, but the point is general); Catlin Syndicate Ltd v AMEC Foster Wheeler USA Corp [2020] EWHC 2530 (Comm), [67] (an injunction case). But if the foreign court will be well able to apply the relevant aspects of English law, this point is much diminished: Baturina v Chistyakov [2014] EWCA Civ 1134; also Mujur Bakat Sdn Bhd v UNI Asia General Insurance /?/z<7 [2011 ] EWHC 643 (Comm), [2011] Lloyd’s Rep IR 465. 5 English law nevertheless being the law which governs the contract. 6 Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 QB 649; CGU International Insurance Pic v Szabo [2002] 1 All ER (Comm) 83; Lincoln National Life Insurance Co v Employers' Reinsurance Corp [2002] EWHC 28 (Comm), [2002] Lloyd's Rep IR 853; Strijs Reinsurance Co Ltd v United India Insurance Co [2003] EWHC 741, [2004] ILPr 4; Prifti v Musini [2003] EWHC 2796 (Comm); Market International Insurance Co Ltd v La Republica Campania Argentina de Seguros Generales SA [2004] EWHC 1826 Comm, [2005] 1 Lloyd's Rep IR 90; Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645, [2005] 2 Lloyd’s Rep 457 (a case concerning reinsurance brokerage in the London market). But in many such cases, English law will be expressly chosen. 7 Berezovsky v Michaels [2000] 1 WLR 1004. But in the case of mass publication, the court may not now have the jurisdiction it had in those cases: Defamation Act 2013, Section 9.
• [2] This may be particularly significant in intellectual property and trade secret cases: see for example Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd [2020] UKSC 37; Shenzhen Senior Technology Material Co Ltd v Celgard LLC [2020] EWCA Civ 1293. 2 And see, in the Australian context, Akai v People’s Insurance Co (1997) 188 CLR 418; Reinsurance Australia Corp Ltd v НІН Casualty and General Insurance Ltd (in liq) (2003) 254 ALR 29, [293]: Australian court cannot be inappropriate, and therefore no stay will be granted, if it is the only court in which a claim under the Trade Practices Act 1974, or its successors, could be fully and properly entertained. 3 It may be different if the torts are associated with contracts which contain choice of law or choice of court agreements: the contracts may exercise an influence on the law governing the tort, or on the proper place to sue in respect of it: see VTB Capital Pic v Nutritek International Corp [2013] UKSC 5, [2013] 2 AC 337. 4 The Alhaforth [1984] 2 Lloyd’s Rep 91; Berezovsky v Michaels [2000] 1 WLR 1004. 5 [2013] UKSC 5, [2013] 2 AC 337; see also NavigS Pte Ltd v Al-Riyadh Co for Vegetable Oil Industry [2013] EWHC 328 (Comm), [2013] 2 Lloyd’s Rep 104, [27]. 6 Both the Rome II Regulation, and the Private International Law (Miscellaneous Provisions) Act 1995 before it apply, as a starting point, a ‘place of the direct/immediate damage' rule. 7 Apparently the factual issues as to the corrosive properties of allegedly damp sulphur are difficult to understand and determine. By contrast, for a refusal to see this factor as being of particular importance,