An Isle of Man judgment reviewing conflicts of law has underlined the significance of the overriding objective in assessing where a cross-border dispute should be tried. The interlocutory case of Ian Bryan v Waterman LLC(1) came before High Bailiff Needham as a result of the defendant challenging the jurisdiction of the Isle of Man court to hear a dispute.
Waterman LLC was registered in the Isle of Man, but asserted that the claim had its closest focus with Azerbaijan, where it was agreed that the contract in question had been made and was being performed. At this interlocutory stage, the court had to decide whether the Isle of Man case should be stayed with a view to the action going ahead in Azerbaijan.
This is a familiar situation, particularly in offshore jurisdictions where parties which litigate in the courts are frequently not based in that jurisdiction. The claimant, Mr Bryan, was a UK national who lived in Azerbaijan. The high bailiff made it clear that the Isle of Man court always has jurisdiction over a Manx-registered company since that is founded "as of right". This supported the judgment of Deemster Cain in Locke v Bellingdon.(2) Therefore, in the case of a Manx entity challenging jurisdiction, the burden falls on that Manx entity to show that the Isle of Man is not the natural or appropriate forum for the trial, and that another available forum is clearly more appropriate.
The high bailiff decided that Waterman had not discharged that burden and had not shown that Azerbaijan was clearly and distinctly a more appropriate forum for the dispute than the Isle of Man.
In coming to that decision, the Isle of Man court took note of the well-established fact that the principles governing assessment of the correct forum were generated by the 1986 English case of Spiliada.(3) The seven principles are summarised as follows:
- the forum with the most real and substantial connection to the case in point;
- the forum which is most convenient;
- the forum which would be better in terms of cost;
- the availability of witnesses;
- the law governing the relevant transaction;
- the place where the parties reside or carry on business; and
- whether the parties would obtain justice in the other forum.
The high bailiff was alive to the fact that since Spiliada, both in England and in the Isle of Man, the courts have incorporated into the procedural rulebooks the concept of the overriding objective. In the Isle of Man, the overriding objective is at Rule 1.2 of the Rules of the High Court of Justice 2009 and the entire rulebook is prefaced with the statement that the rules are a procedural code with the overriding objective of enabling the High Court to deal with cases justly. Dealing with a case justly is broken down into five key points:
- equality of standing;
- saving expense;
- proportionality;
- expeditious and fair dealing; and
- resources.
The high bailiff found that the assessment of the seven Spiliada factors had to be overlaid with the overriding objective. He said:
"I do acknowledge that in considering such questions [the Spiliada factors] I must overlay the overriding objective in terms of the interests of justice and ensuring that parties are on an equal footing, saving expense and generally dealing with matters proportionately, expeditiously and fairly."
The high bailiff then proceeded to analyse the facts of the case and how the seven Spiliada factors with the overlay of the overriding objective were properly answered. The high bailiff also drew attention to the English case of Sharab v Prince Al-Waleed Bin Tala Bin Abdal-Aziz-Al-Saud.(4) On appeal in that case, the court felt that since the case had been commenced in England, it was necessary to ask what would be achieved in the interests of the parties by staying the case and having the same parties start afresh in a foreign jurisdiction. The court stated:
"it is relevant to ask rhetorically what is achieved consistent with the interests of the parties and the ends of justice in acceding to the [defendant's] application and thereby depriving [the claimant] of the advantage of that initiative [commencing proceedings] and resulting in her having wasted time and costs to date. The answer to the question is nothing."
In this interlocutory decision the Isle of Man court has shown its willingness to overlay the overriding objective in respect of all of its decision making and to focus on practical points, such as saving expense and time and taking a commonsense approach to what might hitherto have been difficulties that were analysed primarily on a strictly legal basis. The approach is to be applauded.
For further information on this topic please contact John T Aycock at M&P Legal by telephone (+44 1624 695800), fax (+44 1624 695801) or email ([email protected]).
Endnotes