Service out of the Jurisdiction & Exclusive Jurisdiction Agreements – An Update

The jurisdiction of the English Court’s over a defendant who is domiciled outside of the jurisdiction is governed by the Civil Procedure Rules (“CPR”). Often the permission of the Court will be required to serve a claim out of the jurisdiction.

However, this article concerns circumstances in which the permission of the Court is not required to serve a claim outside of the jurisdiction and more specifically, the mechanism that applies where the parties have submitted to the exclusive jurisdiction of the English Courts.

After ‘Brexit’ the Civil Procedure Rules relating to service out of the jurisdiction were amended. In particular CPR 6.33 (2B) now provides that, without permission of the Court, a claimant may serve a claim form on a defendant outside the jurisdiction where:-

(a)    the court has power to determine the claim under the 2005 Hague Convention and the defendant is a party to an exclusive choice of court agreement conferring jurisdiction on that court within the meaning of Article 3 of the 2005 Hague Convention;

(b)   a contract contains a term to the effect that the court shall have jurisdiction to determine that claim; or

(c)    the claim is in respect of a contract falling within sub-paragraph (b).

The recent case of Pantheon International Advisors Ltd v Co-Diagnostics Inc [2023] EWHC 1984 (KB) is helpful in providing guidance on the requirements of CPR 6.33(2B)(b) which had not been the subject of much judicial scrutiny given its relatively recent introduction.

In order to rely on the jurisdictional gateway under CPR 6.33 (2B)(b) a claimant needs to satisfy the ‘good arguable case test’. Case law which proceeds the introduction of CPR 6.33(2B)(b) remains good law in providing guidance on what is a ‘good arguable case’ (see Brownlie v Four Seasons Holdings Inc [2017] UKSC 80; Goldman Sachs International v Novo Banco SA [2018] UKSC 34; Kaefer Aislamientos v AMS Drilling Mexico [2019] EWCA Civ 10).

The relevant question is whether there is a good arguable case that there is a contract containing a term that the English court has jurisdiction to determine the claim and that the dispute falls within the scope of the jurisdiction agreement. To satisfy this, the claimant must show there is a good arguable case that:

• the contract in respect of which the claim is made existed and was legally binding;

• whether such contract contained a valid and effective jurisdiction agreement in favour of the English Courts binding on the defendant; and

• the dispute falls within the scope of that jurisdiction agreement.

The Court was clear that the wording of CPR 6.33(2B)(b) limits its application to contractual claims and does not extend to claims brought outside of a contract. This is supported by the fact that CPR 6.33(2B)(c) was latterly introduced to bridge this gap.

On the facts of Pantheon the Court found that despite the contract in question having only been signed by the Claimant, there was a good arguable case that there was a binding contact with a valid and effective jurisdiction agreement covering the subject matter of the dispute.

However, Pantheon’s claim was a ‘mixed claim’ and whilst the contract claim fell within the jurisdictional gateway of CPR 6.33(2B)(b), the claim in unjust enrichment, although brought in relation to the contract, did not and at the time of service required the permission of the Court for service out. However, it would now fall within CPR 6.33(2B)(c). This did not prevent the validity of the contractual claim. In the alternative, the Court was prepared to retrospectively permit service out of the jurisdiction in respect of the contractual claim and noted that the interests of justice demanded this.

The case is a salient reminder of the importance of jurisdiction clauses within contracts. This is an issue that parties should regularly consider as relationships develop and contracts are renewed or amended. The judgment is useful in clarifying the application of the ‘good arguable case test’ to the issue of whether the jurisdictional gateway in CPR 6.33(2B)(b) is met. Further it clarifies the scope of CPR 6.33(2B)(b), and highlights the technical issues that can arise on service out and the critical need for a claimant to ensure the correct use of the jurisdictional gateways. However, in the interests of justice, the Court retains a relatively wide discretion to retrospectively permit service out of the jurisdiction if the necessary conditions are met.