Lloyd's Maritime and Commercial Law Quarterly
SERVICE OUT OF THE JURISDICTION GETS EASIER: DEFENDANT, BEWARE!
Seaconsar Far East Ltd. v. Bank Markazi Jomhouri Islami Iran
There has long been a fog of doubt swirling around Order 11 of the Rules of the Supreme Court, and the principles by which an English court (i) determines whether it has, and (ii) if so, should exercise, the power to authorize service of a writ out of the jurisdiction. The cause of the doubt can be traced to two linked, and often tangled, questions. First, how should the court proceed when it is not clear whether the facts of the plaintiff’s claim fall within one of the heads1 (or grounds) where service out may be allowed? Second, how should a court proceed if it is not clear that the plaintiff has a strong case on the merits of his underlying claim? As is well known, the language of the rule is delphic: “no such leave shall be granted unless it shall be made sufficiently to appear to the Court that the case is a proper one for service out of the jurisdiction under this Order”.2
The nature of the problem should not be under-estimated. When a defendant applies3 to challenge the granting of leave to serve out to the plaintiff, he will have been careful not to have taken a step in the action beyond the making of the challenge, for otherwise he will have submitted to the jurisdiction and thrown away his shield. All the court will therefore have before it is the plaintiff’s statement of claim, and such affidavit evidence as the parties may have put in in relation to the jurisdictional challenge. Certainly the court will have not seen the defendant’s defence; still less will it be able to judge how convincing the evidence in support of the underlying claim will be. It is no wonder that there may be difficulty and doubt, and decisions made in conditions of unavoidable doubt do run the risk, in their turn, of being infected by that doubt.
In Seaconsar Far East Ltd. v. Bank Markazi Jomhouri Islami Iran,4 an application had been made for leave to serve a writ on the defendants out of the jurisdiction. Seaconsar, an arms trader, had sold a large volume of munitions to the Government of Iran. Payment was to be by letter of credit. Seaconsar had made two presentations of documents under the letter of credit to a London bank. Bank Markazi had failed or refused to make the necessary payments, apparently alleging
1. These are listed in R.S.C. Ord. 11, r. 1(1). They are applicable in cases where the Brussels Convention on Jurisdiction and Judgments does not apply to give, or to deny, jurisdiction to the English court.
2. R.S.C: Ord. 11, r. 4(2).
3. Under R.S.C. Ord. 12, r. 8.
4. [1993] 3 W.L.R. 756. The decision of the House of Lord (Lords Templeman, Griffiths, Goff, Browne-Wilkinson and Mustill) to allow service of the writ out of the jurisdiction reverses that of the Court of Appeal: [1993] 1 Lloyd’s Rep. 236.
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