International Trade Law

International Trade Law

In the case of Owusu vs. Jackson, of 1 March 2005, case number C-281/02, trading as 'Villa Holidays Bal Inn Villas', the judgment of the Court was that the English Courts must pay the costs. The decision, made in this particular case, leaves the English courts vulnerable to try any case, even though the Court may believe that this may not be the very bets forum in which to hear the case. In fact, England has been the most favored venue for those claimants, who become attracted to the jurisdiction in English courts, by the mere prospect of gaining for themselves generous awards in damages.

As a matter of fact, there have been several cases wherein the defendants of the cases have been attempting to resist being sued here, based of the fact that there would be a better country in which to try the same claim. However, after the case of Owusu vs. Jackson, for which Article 2 of the Brussels Convention would apply perfectly, a defendant who has been domiciled in the United Kingdom would no longer be entitled to ask the English Court to decline jurisdiction on the grounds of forum non-conveniens, that is, in other words, deciding that some other forum may be more appropriate for the case. Perhaps, because of this case, defendants have actually lost a very important and popular tactic in cases that have an international element in them.

What was the actual case? Mr. Owusu, an English claimant, filed proceedings against six defendants, one of whom was an Englishman, and the other five defendants were Jamaican. It must be noted that Jamaica is not a signatory of the Brussels Convention. What had happened was that Owusu had suffered a serious accident when he had been holidaying in Jamaica; in the villa that he had incidentally rented form the first defendant, Mr. Jackson, who was domiciled in England. Owusu then proceeded to sue Jackson for 'breach of contract', and the other five Jamaican defendants for 'negligence'. The defendants all argued that the case did in fact have closer links to Jamaica than to England, but to no avail. The judge rejected all the arguments of the defendants, and made the decision that England and not Jamaica was the appropriate forum for the particular case.

The judge also stated that he was not in any position to stay the action against Jackson, because of the fact that he was an individual who was domiciled in a Contracting State. This also meant that he would be unable to stay the action against the other defendants as well, because of the fact that this would mean that there would arise a definite risk that the Courts in two different jurisdictions would have to try the same facts and issues in the same case, and reach entirely different conclusions. After this statement was made by the judge, the defendants appealed to the Court of Appeals. The Court of Appeals subsequently referred to the Court of Justice, the question of whether or not, in the case that was brought under Article 2, the English Court would actually be able to exercise its 'forum non-conveniens' in favor of a non-contracting case, in this particular case, Jamaica.

The Court of Justice thereafter found that the Article 2 did in fact apply to any disputes that would arise out of a contracting and a non-contracting state. The Court also stated that article 2 was mandatory in nature, and that when the Convention had been drafted, there had been no provision made for any disputes based on forum non-conveniens, and therefore, the defendants' plea that, first and foremost, the distance between England and Jamaica was too much, and secondly, that the case needed to be assessed according to the standards in Jamaica, and not according to the standards of England, were all not applicable under the mandatory nature of Article 2. When the Court of Appeal asked the Court of Justice another important question, that is, whether or not a domestic court would be able to, under any circumstances, be able to exercise a 'forum non-conveniens' diction, like for example, if there were to be any litigation involving the same or similar cases before another court, the Court of Justice was not able to provide a satisfactory answer.

What was summarized in the case of Owusu vs. Jackson, was that when a defendant who has been domiciled in the United Kingdom has been sued under Article 2, then the English Court would in fact no longer have any discretion to stay the proceedings, even if it feels that the case appears to be appropriate enough to be heard elsewhere, in the primary and basic interest of justice. This type of decision, it is felt, would serve to encourage overseas claimants, especially in those cases where the legal systems may be developed to an infinitely lesser extent than that of England, and perhaps these claimants would attempt to follow claims against companies, in the English Courts because of this same reason. Furthermore, the foreign claimants may become attracted by the possibility of the availability of public funding, as it is the general case in England, for trying out group actions and also for the prospects of attractive and generous damage rewards that are accorded in English courts.

The ECJ made the decision in the case of Owusu vs. Jackson, that the 'Court has no jurisdiction to stay proceedings in favor of a non-contracting state'. This was a landmark judgment on the part of the ECJ, because of the fact that this was the judgment that actually put an end to the long drawn out controversy over whether or not the English Court has the power to stay the proceedings in favor of a non-contracting state, on the basis of a forum non-conveniens', namely, that the other jurisdiction would be more appropriate to deal with that particular case. The Court's decision was in fact contrary to a similar case, that of Harrods Buenos Aires Limited, in the year 1992, in which the Court of Appeals decided that it would not be the most appropriate to go to another jurisdiction to try the case. Therefore, it can be said that the ECJ's decision in the case of Owusu vs. Jackson, followed a recent line of discussions and debate, in which the ECJ had taken a stand of certainty over the flexibility that is generally demonstrated by the English law.

According to an e-bulletin that was prepared by the 'Herbert Smith Association', Owusu had struck his head in Mammee Bay, Jamaica, when he had been swimming. Owusu had in fact struck his head against a submerged sandbank, and as a result, had to suffer serious injuries. The holiday villa, in which Owusu had been swimming, had been let to him by the first defendant, Jackson, who was also a British domicile. Owusu sued Jackson, in the English Courts, stating that there had been a breach of an implied term that the beach in which Owusu was swimming would actually be free form any hidden dangers, and would be safe for the purpose of swimming. In the same action, Owusu also sued several Jamaican companies, which had either owned, or leased, or licensed the use of the beach in which Owusu had hurt himself.

What was alleged was the fact that there had been an earlier accident of the same kind some time earlier on the very same beach, and the Jamaican companies had failed to issue a warning of any sort, and in addition, and the fact was that had they posted a warning of some kind, then perhaps the accident would have been averted. The fact that the warning was not issued was quoted in the action against the Jamaican companies. The ECJ had in fact initially rejected the argument that had been put forward by the defendants, and by the United Kingdom Government, that according to the Brussels Convention and its domicile rules, in Article 2, there would be no possibility of application, because of the fact that the claimant, that is, Owusu, and one of the defendants, that is, Jackson, were in fact domiciled in the United Kingdom, and the other defendants were domiciled in Jamaica. Therefore, according to Article 2 of the Brussels Convention, what was stated was that according to the provisions of the Convention, those persons domiciled in a contracting state must, whatever shall be their nationality, they may be sued in the courts of that state.

The Court also stated that the Article 2 would not be subject to any condition wherein there would be as a result a legal relationship between several numbers of contracting states. However, in order for the convention to apply at all in the case, there must exist, an international element, as it did indeed exist in the case of Owusu vs. Jackson. The Court further went on to state that the 'forum non-conveniens' doctrine was in fact not applicable and also incompatible with the Brussels Convention. There were many factors quoted for the reasons for this type of incompatibility, and they were the following: Article 2 of the Brussels Convention is in fact mandatory, and it can only be derogated from in the numerous ways and means that have been expressly provided for in the Convention.

Similarly, there was no provision for the forum non-conveniens in Article 2 of the Convention, and this was despite the fact that the Doctrine was discussed at the time when Denmark, Ireland and the United Kingdom acceded. Another factor stated was that legal certainty would never be fully guaranteed if there was such an incompatibility between the Brussels Convention and the forum non-conveniens doctrine, and furthermore, the very predictable nature of the rules of jurisdiction would become severely undermined. In addition, when a defendant has to come before the courts for any reason whatsoever, it would be infinitely better for him if he were to come before the courts of his own domicile, rather than anywhere else, and this would also mean that he would be unable to reasonably foresee the fact of which other courts he may be sued before.

If a foreign court were to be a better and a more appropriate forum, then the claimant would have to establish the fact of whether or not he would be able to avail of justice before the court of his domicile, or before a foreign court. He must then further be able to establish the fact that he would not be able to obtain better justice before that court, or, that the foreign court does in fact have no jurisdiction, or that the claimant does not, in practice, have an access to proper justice from that court. All of this must be carried out and analyzed by the claimant, and this must be done irrespective of the cost of actually bringing a fresh action before a court that exists in some other state, and that this would quite naturally entail the prolongation of the general procedural time limits. Finally, the forum non-conveniens would be recognized only in a few and limited number of contracting states, and this would mean that it would serve to affect the consistent and uniform application of the various rules of jurisdiction in contracting states.

The defendants of the case of Owusu vs. Jackson stated that there would plenty of negative consequences that would arise from the fact of the exclusion of the forum non-conveniens, when it was put into real practice. There were, according to the defendants, the following: the expenses for the defendants of holding proceedings in another country, quite a distance away form their own hometown Jamaica, would be stupendous, and these would have to be borne by the defendants. This is a true negative result, they stated. Another reason that the defendants said was negative was the fact that they would find it extremely difficult to recover costs and expenses were the claimant's action to be dismissed, for any reason, because of the fact that they would have to travel from their hometown of Jamaica each and every time they would have to collect the costs.

In addition, if the very logistical reason of the huge geographical distance between England and Jamaica were to be taken into account, then it was indeed a negative point against them, they said. The defendants stated that they desired the case to be judged according to the standards that existed in their hometown Jamaica, and not according to the standards as exhibited in England, which may work against them. Finally, the defendants said that the enforceability in Jamaica of a default judgment was a very real possibility, and in addition, if there were to be an impossibility of enforcing cross claims against the other defendants, then it would be an extremely difficult proposition for them. However, the Court had this to say, that although all the above claims appeared to be as genuine as ever, it had basically no right to question the very mandatory nature of the Article 2 of the Brussels Convention, according to which this was the fundamental and basic rule.

Finally, the result of the decision of the court was that the claimant would be entitled to bring the court proceedings to England, even though the actual incident of the accident did not in fact happen anywhere in England, and also that Jamaica in fact appeared to be better suited to the trial than England. There was in fact a second question put forth to the court, and this was whether or not the application for forum non-conveniens would be from here on be ruled out in all circumstances. The court in fact refused to answer the question, and because of the fact that this had not been dealt with in this case, it would leave open the possibility or the probability of the forum non-conveniens being applicable to certain circumstances, even if not for all. Particularly, where the involved parties would have chosen the jurisdiction of a non-contracting state, or where other proceedings would be pending in the other state involved in the case, or where the subject matter of the dispute is such that a contracting state would have by right taken the jurisdiction of the case, like for example, when the dispute pertains to land that is situated in that country, and so on.

The case of Owusu vs. Jackson would have a tremendous impact on the basic determination of various jurisdiction questions, where the claimant in the case sues both English domiciled defendants, as well as foreign domiciled defendants from a non-contracting state, in the same case and in the same proceedings. The conclusion that came about after the case was tried may be that if a number of defendants were to be sued in England, but only one of the defendants were to be actually domiciled in England, the English court will not stay the proceedings, even if it were brought to the notice of the court that the natural forum of the case is based in a non-contracting or a non-regulating state, or even if the principal defendant, in this case Owusu himself, is domiciled in a non-contracting or a non-regulating state. This type of defendant, may in fact find himself dragged into the proceedings in England, even in cases where neither he himself or the basic subject matter of the proceedings of the case have no relation whatsoever with England. It was therefore established that 'antisuit' injunctions have absolutely no place in any litigation that would involve the Brussels Convention countries, the basic principle behind it being that each court must be left to make its own decision regarding its own jurisdiction, without any sort of interference form a foreign court.

What exactly is the Brussels Convention, and what does it do, and how does this impact the jurisdiction of various countries? The Brussels Convention is nothing but a Treaty that establishes the European Economic Community', and it was in fact implemented to establish and to acknowledge the fact that it is essential for all courts to determine the international jurisdiction of their courts, and also to facilitate and to help the recognition of the introduction of an expeditious procedure to secure the basic enforcement of judgments, and of authentic instrument, and of court settlements.

In the question of cross border contractual disputes between the members of the European Union, how can one decide which country has the jurisdiction? The Consumer Provisions of the Brussels Regulation, which is implemented through the Civil Jurisdiction and the Judgments Order of 2001, states that in general, any sort of legal action in a civil or in a commercial dispute, is generally taken only as a last resort. This is especially true in most cross border consumer cases, wherein the disputes extend from one country to another, across the borders. Therefore, the government is committed to providing and promoting low cost and user-friendly substitutes and alternatives to expensive court action. At the same time, the government is also actively supporting the several different types of initiatives that would create and develop and promote cross border 'alternative dispute resolution schemes', or ADR, as they are known.

These schemes may be that of ombudsman, and also arbitration. It is generally widely believed that such ADR schemes would be able to contribute to consumer confidence, and to self-assurance in the single market of the European Union, and in the area of electronic commerce. But the fact remains that with the advancement of cross border shopping carried out through the Internet, several traders and consumers may become involved in contractual disputes, and any court, when faced with such a case, must decide whether or not it has the jurisdiction for the case. In fact, in the year 2000, the European Union adopted the Council Regulation, -- EC, number 44/2001, on the jurisdiction and on the resolution of the enforcement of the judgments in both civil as well as in commercial disputes, and this came to be known as the Brussels regulation.

The various EU Rules are thereafter set out in the Civil Jurisdiction and the Judgments Order 2001, which was implemented in March 2002, as SI 2001, no. 3929. The Brussels Regulation in fact ratified and modified the Brussels Convention that had been formulated in 1968, and which had been implemented through the Civil Jurisdiction and the Judgments Act of 1982, in the law of the United Kingdom. The countries that the Brussels Regulations covers are in fact all the members of the European Union, and with the sole exception of Denmark. Iceland, Switzerland, and Norway utilize and apply the rules of the 1988 Lugano Convention, which is quite similar to the Brussels Convention. Denmark is one country that still follows the rules of the Brussels Convention, because of the fact that it opted out of following the rules of the Brussels Regulation.

Therefore, in the event of a dispute, a consumer in another European union or an EFTA Country would have the right to seek and find legal action in his own home court. Any judgment that may be made there would be thereafter applicable in the United Kingdom, and except in the case of an existing consumer contract, it is unlikely that a trader may be sued in any outside European Union territory, and in any EFTA country, in the case of the standard contract stating that in the event of any dispute, the English or the Scottish, or the Irish court would have complete jurisdiction over the case. Therefore, it must be stated that according to the 'Civil Jurisdictions and Judgments Order', the rules that are laid within the order deal primarily with jurisdiction in civil and in commercial disputes between the various litigants, and this would provide for the recognition and for the enforcement of one member country of the European Union, in the courts, of the judgments that have been given in another court of another state.

The several rules therein would be similar in cases that come up between the three United Kingdom jurisdictions. In addition, the order deals with generally deals with cases where there is jurisdiction in civil and commercial disputes, where, for example, one party would sue the other for any failure to deliver under a specific contract. These particular rules would not apply to revenue, to customs, and to administrative matters, and neither would they apply to civil cases where insolvency would be involved. What is important here is that the Civil Jurisdiction and Judgments Order does not concern itself with which country's law would actually apply to the dispute that is being fought in a court of law, and the rules would more likely than not be more relevant to the commercial field, wherein there may be several disputes between businesses. They also apply equally to the consumer contracts that are written between two parties, and they generally contain certain special provisions in them.

The general rules within the Civil Jurisdiction and Judgments Act of 1982, remain, however, unchanged, and according to Article 2 of the Brussels Convention, which is also the Schedule 1 of the Act, sets forth this rule: subject to the various provisions within the Brussels Convention, those persons who are domiciled in a contracting state shall, whatever may be their nationality, be sued in the courts of that particular state. What this in essence means is that any individual, including a sole trader, or a single partner in a business that has many partners, who has been sued on his own, in an individual capacity, can be sued where his principal residence actually is at the moment. Article 60 provides, in addition, that the domicile of a person or a company or a partnership or any other form of association between individuals would refer to the place where the company may have its statutory set, or its registered office, or its central administration, or it's most important place of business.

The Articles 5.1 and 5.5 of the Brussels Convention, which are responsible for setting the various rules of all types of contract cases, are also unchanged, like the Article 2, as mentioned earlier. What these two articles state is that a person when he has been domiciled in a contracting state may be sued in another contracting state, if: the issue or dispute is related to the terms of the contract, in the courts for the place of the performance of the so called obligation under question. The person may also be sued in another contracting state if the dispute arises out of the various operations of the branch, or agency or the establishment, at the court, where the agency or the establishment or the company is situated at present.

In general, the legal system in any country is based on the fact that all the true facts of a given situation would only emerge if all the parties to a court action would act as if they were in fact adversaries, and not as if they were cooperative participants in the system. It is only if this were done that justice will emerge as a direct result. The growth of a court's ability for international jurisdiction has led to litigants' being given a much wider choice in deciding exactly where they would want to submit their petitions about their various disputes. However, what must be remembered is the fact that common law courts have also given themselves the power to take their own comparable decisions on where the cases would be tried, and thereafter to put forth certain limitations about the litigants' preferences about where they would like the disputes to be filed and then determined. This is probably the reason why several courts in several common law countries today enjoy the ability to decide, 'where in the world' the litigation can be filed and submitted and adjudged, even though it is a fact that this power is a limited one as of today.

The doctrine of forum non-conveniens is what helps these courts in these matters, and the other one that helps them is the 'anti-suit' injunction. As a matter of fact, it was the speech made by Lord Goff of Chievely, during the Spiliada case that served to help bring the doctrine of the forum non-conveniens into English law. Lord Goff happened to claim that this doctrine was one of the most civilized principles of the legal principles to date, and that it would help the court itself impose certain restrictions and limitations upon itself, and to exercise a broader proportions and perspective in the wider international jurisdiction that it would be involved in. this would offer these courts the innate right to either claim or to refuse any particular case, that the plaintiff would have brought before it.

The Spiliada Doctrine is one such doctrine that demands of the court that it must reach some sort of conclusion wherein either the court, or some other relevant foreign court, would serve as the natural forum for the litigation. In case the court were to decide that it would sufficiently serve as the natural forum for the case and the litigation, then the case may be able to proceed without further delay. If, on the other hand, it were to decide that another court would be more appropriate and right as the natural forum, then the local court must declare that the proceedings must be stayed, or it must refuse to hear the case in its court. This is in essence what the forum non-conveniens is about, and when this forum was adopted in England, it made a very deep and favorable impression on several other courts all over the world, like for example, in New Zealand, and in Fiji, in Canada, and also in Singapore. This even led to the formation of a similar kind of doctrine, which though similar was infinitely more restrictive than the one in England and this was the doctrine that was developed in Australia, in Voth vs. Manildra Flour Mills Pvt. Ltd., and which later came to the notice of the Supreme Court of the land.