Dispute resolution

Jurisdiction clauses

Published on 18th Jan 2022

As we have mentioned in previous editions of Litigation Brief, where a dispute between the parties will be resolved can become of crucial importance further down the line and choosing the "wrong" jurisdiction can be a costly mistake (because, for example, proceedings may cost more and your ability to enforce any judgment might be affected).

A recent Court of Appeal case required a decision as to which clause applied in a "battle of the forms" dispute. The issue of which jurisdiction clause governed the dispute arose in TRW Ltd v Panasonic and required the Court of Appeal to determine when the parties had reached a binding contract in the first place. The purchaser had initially signed the seller's "customer file", which set out how the relationship between them would work and stated that the purchaser had "received and acknowledged" the seller's general conditions, which included a jurisdiction clause.

However, the purchaser argued that there was no binding contract at that stage and one was only formed when "orders" were put in by the purchaser: those orders were said to be made in accordance with the purchaser's terms and conditions (including a different jurisdiction clause).

The Court of Appeal agreed with the judge that there was a binding contract when the customer file was signed and so this was a case where, unusually, the "last shot" doctrine did not apply. Although there was no obligation on the purchaser to buy at that stage, it had contractually agreed that if it did so, it would be on the seller's terms and conditions.

An argument about a lack of consideration also failed and the Court of Appeal, interestingly, had this to say about consideration arguments generally: "A 'no consideration argument' is…..one that is much less successful these days than it used to be".

Another recent case involving a jurisdictional battle, this time between England and California, was Ditto Ltd v Drive-Thru Records. One of the issues was whether the contract has been made in England (so that a claim form could be served under the relevant contractual gateway in PD6B). The contract was concluded over the telephone – did that mean whoever uttered the words of acceptance determined where the contract was concluded? That was the position laid down in the 1955 case of Entores v Miles Far East.

However, here, Deputy Master Francis disagreed with that approach and found that the contract was made in both England and California, so that the contractual gateway for service out had been satisfied.

A further issue arose when the judge considered whether England was the appropriate forum for the dispute. This is (broadly) something the English courts need to assess where there is no jurisdiction clause governing a claim. In the past, one of the factors to be taken into account was the location of the witnesses. However, here it was held that: "the location of witnesses more generally no longer has the importance it may previously have been ascribed now that it is routine as a result of the pandemic for witness to attend trial for examination remotely; as a result I afford this consideration only limited weight".

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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