Mitsubishi Corporation v. Aristidis Alafouzos - Q.B.D. (Com.Ct.) (Steyn J.) - 19 October 1987

Leave to serve out of jurisdiction - Whether shipbuilding contract void for illegality on public policy grounds - Whether proper law of guarantee English Law

By a shipbuilding contract dated 1 November 1984 Mitsubishi (the sellers) agreed to build a bulk carrier and to sell and deliver it to the Pharal Shipping Corporation (the buyers), a Greek company which was beneficially owned by the defendant. The price of 4 billion Japanese yen was payable in instalments. The contract contained an express choice of English law as the governing law of the contract, and further provided for disputes to be settled in a neutral forum, i.e. by London arbitration. Contemporaneously with the execution of the contract, the defendant signed a performance guarantee in favour of the sellers. The guarantee contained no choice of law clause.