U.K.: Court’s Jurisdiction founded on Defendant’s place of business in England

December 2000

In Domansa v Derin Shipping and Trading (unreported 2.11.00 - Insurance Day 22.11.00) a ship owned by the Defendant exploded in Cuban waters. The dependants of the crew sued in England alleging negligence against the Defendant, a Liberian company, and breach of contract of employment against the Defendant’s agents, a Cypriot company. The crew’s contracts provided that failing agreement, Cypriot law and jurisdiction applied.

The Defendant applied for a stay of the English proceedings on the basis of the exclusive jurisdiction clause in favour of the Cypriot court.

The English court would only have jurisdiction over the Defendant if it had a place of business in England for the purposes of s 42(3) Civil Jurisdiction and Judgements Act 1982. The Defendant was a one vessel company with no employees, premises or agent in England. Its director and shareholder had a London property which he visited about ten times a year. Its notepaper gave a London address, however, and when the Claimants had telephoned this address they were told that it was the Defendant’s office. The Defendant also held bank accounts here and its central management and control was exercised in London. It was therefore held that the Defendant did have a place of business in England and the English court had jurisdiction.

Although the Claimants claims under the contracts of employment fell within the exclusive jurisdiction clause their claims in tort did not.

The court found that Cyprus was not clearly or distinctly a more appropriate forum, considering where the tortious acts took place and the location of the witnesses. It found that it was in the interest of the parties and the ends of justice for the trial to take place in England. The Defendant’s application to stay the English proceedings was therefore dismissed and the claims were allowed to proceed in England.

 

With thanks to Sally-Ann Underhill of Richards Butler for preparing this article