In Cordoba Shipping Co. Ltd. v. The National State Bank, Elizabeth, New Jersey (The Albaforth)1 the Court of Appeal had to consider the principles applicable to the exercise of the discretion to allow service of a writ out of the jurisdiction under RSC Order 11, and ended up adopting a new approach towards the exercise of this discretion.

Cordoba Shipping Co. Ltd., the appellants, were a Liberian company which wished to commence proceedings against the National State Bank, Elizabeth, New Jersey, the respondents, for negligent misstatement in respect of a reference for a Connecticut company, I.T.I., which acted as a guarantor for the hire of the appellants’ ship by another Liberian company, Maro. Parker, J., in an ex parte order, gave the appellants leave to serve a writ out of the jurisdiction on the respondents on the basis that the action was founded on a tort committed within the jurisdiction2. Staughton, J., discharged this order. The Court of Appeal (Ackner and Robert Goff, L.JJ.) allowed the appeal and permitted service out of the jurisdiction.

There was little doubt that a tort had been committed within the jurisdiction. The telex message from the respondents which contained a glowing reference for I.T.I. was sent from the United States to London to brokers who acted for the appellants. The Court of Appeal regarded itself as being bound by its earlier decision in Diamond v. Bank of London and Montreal Ltd.3 where it was held that the tort of fraudulent or negligent misrepresentation is committed where the message is read and acted upon, and not the place from which it is sent. Applying this rule to the facts of the case, the message was undoubtedly read and acted upon in England because it was addressed to a director of the appellants’ brokers who concluded the charter-party on the appellants’ behalf after considering the credit reference for I.T.I. to be satisfactory.

This left the issue of the exercise of the court’s discretion. Staughton, J., although accepting that the case came within one of the heads of Order 11, had refused to allow service out of the jurisdiction. In looking for the appropriate forum for trial he took account of the U.S. element in the dispute. When a large part of the hire was not paid the appellants had tried to recover from Maro and I.T.I. in the U.S. under the charter-party and the guarantee. It was only when this had failed that the English action against the respondents was resorted to. In contrast to this strong U.S. element, Staughton, J., could see little connection with England and said that the appellants were forum shopping in coming to this country. The Court of Appeal, however,