Summary

It was inappropriate for the English courts to assume jurisdiction of a claim and allow service outside of the jurisdiction where although it had been shown that there was a good arguable case that there was an agreement between the parties which was governed by English law the underlying claim had no merits and there was no serious issue to be tried between the parties.

Facts

The applicant company (T) applied for permission to serve a claim form on the respondent Jamaican company (W) out of the jurisdiction or for permission to effect alternative service of the claim form on W. T and W had entered into an agreement for the sale by T to W of shares in a third party company. The ultimate price to be paid by W was to be calculated according to a formula that provided for the price to be uplifted if the underlying assets of the third party company rose by a certain amount. The formula also allowed for the deduction of certain costs and expenses from the price. The agreement provided that if a dispute arose between the parties a reference could be made by the parties to a jointly appointed expert and that his decision on the dispute would be final. A dispute did arise and a reference was made to the expert. In the course of submissions to the expert W purportedly conceded that certain sums fell to be paid by it to T. T commenced proceedings seeking payment of those sums. T contended that (1) the claim was an appropriate one for the court to assume jurisdiction of and that it should grant T permission to serve a claim form on W outside the jurisdiction; (2) it should be granted permission to serve the claim form at the office of directors of W in London.

Held

(1) To obtain an order permitting service outside the jurisdiction, T needed to show firstly that it had a good arguable case and secondly that on a consideration of the merits of its claim there was a serious issue to be tried, Seaconsar (Far East) Ltd v Bank Markazi Jomhouri Islami Iran (Service Outside Jurisdiction) (1994) 1 AC 438 HL applied. T clearly had a good arguable case as it was apparent that the parties had agreed that English law would apply to the agreement. However, it was apparent that there was no serious issue to be tried as T's claim had no merits. It was clear that the expert to whom the parties had referred their dispute had not yet determined that W owed T any sum. Moreover, the fact that W might have made certain concessions as to monies that it owed T was irrelevant as it was open to W to withdraw those concessions and the agreement between the parties did not provide for the payment of interim sums. (2) It was inappropriate to allow T to effect alternative service of the claim form on W. Where T had sought service outside of the jurisdiction and had been unable to satisfy the requirements for servicing claim form outside jurisdiction, it was inappropriate to allow T to sidestep those requirements by granting it alternative service of the claim form on W.

Applications refused