The origin of an application heard in the London Commercial Court on 20 February 2015 was in a maritime accident in 2008 in which a vessel which the first Defendant (a Saudi Arabian citizen) was the registered owner of, and which the second Defendant (a UAE company) was the manager of, allegedly damaged an underwater telecommunications cable when the vessel raised its anchor. The Claimant, Navigators Insurance Co, had issued P&I insurance cover to the Defendants.
Following the accident, the Emirates Telecommunication Corporation (ETC) began proceedings in Abu Dhabi against a company (UIBC) representing itself as the vessel’s owner, and which was co-owned, operated and managed by the first Defendant. In those proceedings, it was found that UIBC was liable to compensate ETC, and Navigators were ordered to indemnify UIBC once ETC had been paid.
On the grounds that the Defendants were in breach of various warranties and conditions precedent under the policy, Navigators had denied liability under the policy and had sought a declaration of non-liability. In these proceedings, the Defendants applied to set aside Navigators’ application. As there was an exclusive jurisdiction clause under the policy in favour of English courts and the express choice of English law, it was at issue in these proceedings as to whether Navigators had in fact submitted to the jurisdiction of Abu Dhabi court. The Defendants’ application was refused on the grounds that there was insufficient evidence to show that Navigators’ had submitted to the jurisdiction of the Abu Dhabi court in which Navigators had been found liable under the policy.
In this application hearing, the Defendants submitted that the English Court should not exercise its jurisdiction as the matter was res judicata (i.e. already decided) in the Abu Dhabi proceedings. Significantly, the Defendants also argued that although Navigators had challenged the jurisdiction of the Abu Dhabi court, they had in fact engaged with the merits of the case, thereby going further than was necessary. In making this submission, the Defendants relied on a memo issued by Navigators, submissions Navigators had made to the Abu Dhabi court and the evidence of a UAE lawyer stating that jurisdiction is submitted to if an engagement is made with the merits of the case.
In reaching his decision to refuse the Defendants’ application, Eder J held the following:
- It could not be said that Navigators had submitted to the jurisdiction of the Abu Dhabi court, as the Defendants had accepted that the memo had been specifically produced to respond to the question of the jurisdiction of the Abu Dhabi court.
- The Court was of the view that even if Navigators had engaged with the merits of the case during a hearing in Abu Dhabi, this did not amount to submission to the jurisdiction of the Abu Dhabi court.
- Without expert evidence and cross-examination, it was impossible to reach a decision on whether the evidence provided by the UAE lawyer was correct.
- Finally, even if the Court were wrong in concluding that Navigators had not submitted to the Abu Dhabi court, where a party had “no practical alternative” than to engage with the merits of the case, it could not be regarded as having submitted to the jurisdiction of the foreign court.