Jurisdiction

Where the parties have agreed to subject their contract to English law, and an issue as to whether the English courts should assert jurisdiction over any dispute arises, the fact that English law is the applicable law will generally make it appropriate for the English courts to hear the action. However, that is not an absolute rule, and there may be cases in which the dispute is factual and the relevant evidence is outside England. In such a situation, as long as the English court is satisfied that English law will be applied by the foreign court seised of the action, there is no particular basis for an assertion of jurisdiction by the English court. Such a case was Mujur Bakat Sdn Bhd and Anr v Uni Asia General Insurance Berhad and Ors [2011] EWHC 643 (Comm).

Mujur Bakat: the facts

The first and second claimants, both Malaysian companies, were respectively the owner and manager of the vessel MV Mujur 1. The vessel was insured with the defendant insurers, who were also Malaysian companies, the policy being written on the terms of the Institute Time Clauses Hulls 1983. The policy was expressly stated to be governed by ‘English law and practice’. The vessel grounded on 15 January 2009 off Indonesia and the claimants asserted that it was a constructive total loss. The claimants sought and obtained permission from Flaux J to serve a claim form on the insurers. The grounds upon which permission was obtained were that the policy was governed by English court and that it was subject to the jurisdiction of the English courts. The present application was to set the permission aside, and it was conceded by the claimants that the phrase ‘English law and practice’ did not amount to a jurisdiction clause. However, the application was maintained on the ground that the policy was governed by English law. The question was whether England was the forum conveniens for the bringing of the action, in that England was the proper place for the action to be heard in accordance with CPR 6.37(3). It appeared that the defences to be raised by the insurers were: (a) breach of warranty in relation to the licensing of the vessel with the Mongolian registry and compliance with the registry’s regulations; (b) breach of warranty in relation to the maintenance and management of the vessel; and (c) failure to sue and labour. The insurers confirmed that there was no utmost good faith defence.