Chapter 4

Jurisdiction

PROFESSOR DR. ABDUL GHAFUR HAMID

 Introduction: Forum shopping
In problems of conflict of laws, the issue of jurisdiction is of
paramount importance. The question of what forum is appropriate
raises the vexed issue of “forum shopping”, nicely explained by Lord
Denning in:
The Atlantic Star [1973] QB 364
“If a plaintiff considers that the procedure of our courts, or the
substantive law of England, may hold advantages for him superior to
that of any other country, he is entitled to bring his action here.…This
right to come here is not confined to English citizens. It extends to
any foreigner. You may call this ‘forum shopping’ if you please, but
if the forum is English, it is a good place to shop in, both for the
quality and the speed of service.”
Nexus between parties/ cause of action and the
forum
 It is evident that there must be some nexus between the parties
and the cause of action on one hand and the forum on the other
for the court to exercise jurisdiction.
 Examples of nexus or connecting factors are: nationality or
domicile of the parties, presence or submission of the
defendant, and the place of cause of action.
 It is right that courts should not hear all conceivable cases, in
particular foreign cases with no local connection and where the
cause of action wholly arose elsewhere.
4.1 Two types of civil action
 Actions in the High Court can be split up generally
into two categories: actions in personam and actions
in rem.
 An action in personam is one directed against a
person, in order to compel him to do or not to do
something.
 An action in rem, on the other hand, is one brought in
relation to a specific res or thing, usually a ship or its
cargo, the jurisdiction of the court depending upon the
presence of the res in the country.
Two types of civil action
4.2 Action in personam
4.2.1 Presence
 When anyone enters a country, he comes within the
jurisdiction of the court of that country and can be brought
before that court by means of the appropriate writ of
summons.
 Indeed the issue of such a writ is the foundation of a civil
action in personam, and it does not matter that the party to be
served with the writ is a local or a foreigner or is, say, merely
passing through the country on his way to somewhere else.
Presence [Cont.]

 Subject to the effect of the EC Convention on Jurisdiction and

Enforcement of Judgments in Civil and Commercial Matters
1968 (The Brussels Convention), which has created a special
regime for the jurisdiction of civil and commercial matters
concerning the domiciliaries of EC member states, the English
courts have jurisdiction over any defendant where a writ has
been served on him while he was in England.
Maharanee of Baroda v Wildenstein

 A writ may be served on a defendant who is present in

England no matter how short the time he remains there.
 A vivid example is the case of Maharanee of Baroda v
Wildenstein [1972] 2 QB 283 CA, in which an unfortunate
defendant, a Paris art dealer, was held to be properly served
with writ, when it was served upon him when he was briefly
present at a race meeting in England.
 Grace v MacArthur
(1959) 170 F Supp 442

 In the extreme is the US case of Grace v MacArthur, where

one of the defendants was served on board an aircraft while it
was overflying Arkansas on a non-stop flight. That action was
founded on a contract instituted in a federal court in Arkansas.
 The court held that the service was effected within the
territorial jurisdiction of Arkansas.
Fraudulent inducement

 However, it would be otherwise if the plaintiff was fraudulently

or deliberately induced into the jurisdiction for the very purpose
of serving the writ (Watkins v North American Land and Timber
Co).
 In Lim Guan Teet v Tunku Akobe, the defendant came within the
jurisdiction of the Penang High Court at the invitation of the
plaintiff, and was then arrested for debt at the instance of the
latter. It was held that the plaintiff could not, ‘having induced
the defendant to come within the jurisdiction for one purpose
afterwards change his ground and arrest him. In courts of law,
clean hands are a necessity.’
‘Presence’ of a company

 Individuals can be served if they are present in England and

the same principle applies to companies.
 In La Bourgogne, Lord Halsbury said “They are here, and if
they are here they may be served.”
 A company is ‘here’ if it registered in England. Therefore,
service may be made to its registered office.
‘Presence’ of a company [Cont.]
 Where a foreign company carries on business in England
it may be served at its established place of business.
 In South India Shipping Corp v The Import Export Bank
of Korea, the defendant bank was incorporated in Korea
but it maintained premises in London. These were not
used for financial transactions with the public, but to give
publicity to the Korean bank and encourage trade
between the UK and Korea. Held: the writs had been
properly served.
4.2.2 Submission

An absent defendant may confer jurisdiction on the English

court in any of four ways:
(1)Submission by accepting the service: If the defendant
accepts service of an English writ he is taken to have
submitted to the jurisdiction.
(2)Submission by plea on the merits: If the defendant pleads
to the merits of the case he submits to the jurisdiction. This
includes requesting the court to stay its proceedings, as
implicit in a stay is acknowledgment that the court has
jurisdiction. Pleading to the merits is distinguished from
challenging the court’s jurisdiction over him.
Submission [Cont.]
(3) Contractual submission: If the defendant has contracted with
the plaintiff to submit disputes to the jurisdiction of the English
court and agrees that the writ may be deemed served on him at a
place in the jurisdiction, he submits to the jurisdiction. A
jurisdiction clause is different from a choice of law clause. It is
only in the former that the defendant submits to the jurisdiction.
In the latter the court has a discretion to serve outside the
jurisdiction.
(4) Submission by institution of proceedings: Where a person
abroad sues a person within the jurisdiction in the English court,
the plaintiff submits to any counterclaim related to the plaintiff’s
claim.
4.2.3 Extended jurisdiction by service
abroad
 At common law a court had no jurisdiction to entertain an action
in personam against a defendant served with a writ outside the
jurisdiction of the court, where he did not submit to that
jurisdiction. Submission was all important.
 The English Common Law Procedure Act 1852, modified the
position and gave the court discretionary power to assume
jurisdiction over overseas defendants in limited circumstances.
 The power to do so was until 2008 regulated by rules of court
and now in the Civil Procedure Rules r.6.36.
Extended jurisdiction by service abroad [Cont.]

 This discretionary power of serving on a foreigner outside

local jurisdiction has to be exercised with caution due to
the apparent interference with the sovereignty of the
foreign State concerned.
 In England, the court is given discretion in specified
circumstances to allow service of a writ on a defendant
who is abroad only if the plaintiff can show that:
Extended jurisdiction by service abroad [Cont.]

(i) the case is a proper one for service abroad,

(ii) the English court is the appropriate forum (forum conveniens)
to hear the action (see Spiliada Maritime Corporation v
Consulex Ltd.) and that
(iii) he has a good and arguable case against the defendant.

 The court will be reluctant to allow service out of the

jurisdiction where the defendant has already submitted to the
jurisdiction of a foreign tribunal, for instance, by an exclusive
jurisdiction clause in the contract in question.
4.3 Action in rem
 An action in rem is an action in respect of a res, a
thing, and the usual subject of such an action is a ship
or its cargo.
 The basis principle of law is that for a court to
exercise jurisdiction over a ship, the ship must be
‘present’ within the jurisdiction.
 An extension of this basic principle is that although
the ship against which a legal action has
Action in rem [Cont.]

 to be taken does not come within the jurisdiction, the

court may still exercise jurisdiction if another ship
owned by the same shipping company enters the
jurisdiction of the court.
 This is know as ‘sister-ship’ principle.

 Inthe UK, the relevant law as to Admiralty actions in

rem is the English Supreme Court Act, 1982.
Action in rem [Cont.]

 In practice, the arrest of a ship is not uncommon: an

arrest often potentially so expensive that the owner
or charterer may well acknowledge service of the
writ, provide appropriate bail (or bond) and so
secure the release of the ship.
 In effect, it becomes a form of submission like in
the case of action in personam.
4.4 Jurisdiction: The Malaysian
Practice
4.4.1 Civil Jurisdiction: S 23(1), The Courts
of Judicature Act 1964
“…the High Court shall have jurisdiction to try all civil proceedings
where—
(a) the cause of action arose;
(b) the defendant or one of several defendants resides or has his place
of business;
(c) the facts on which the proceedings are based exist or are alleged to
have occurred; or
(d) any land the ownership of which is disputed is situated within the
local jurisdiction of the Court
and notwithstanding anything contained in this section in any case where
all parties consent in writing within the local jurisdiction of the other
High Court.
Civil Jurisdiction [Cont.]
 It may be noted that S 23(1)(b) of the CJA 1964 refers to the
residence or place of business of a defendant, and not his
presence in the jurisdiction.
 Unless, therefore, the cause of action or the relevant facts
occurred or arose within the jurisdiction, or the case involves the
ownership of land situated within the jurisdiction, the mere
presence of a defendant within the jurisdiction would not confer
jurisdiction on the court.
 There must be some nexus between the parties and the forum.
Courts should not hear all conceivable cases, in particular foreign
cases with no local connection and where the cause of action
wholly arose elsewhere.
4.4.2 Extended jurisdiction by service abroad:
Order 11 of the Rules of Court 2012

1. (1) Service of a notice of a writ out of the jurisdiction is

permissible with the leave of the Court in the following cases:
(a)if
the whole subject matter of the action begun by the writ is
immovable property situated within the jurisdiction;
(b)ifin the action begun by the writ relief is sought against a
person domiciled or ordinarily resident or carrying on business
within the jurisdiction;
(c)ifthe action begun by the writ is for the administration of the
estate of a person who died domiciled within the jurisdiction;
Order 11 of the Rules of Court 2012

(d) if the action begun by the writ is brought against a defendant to enforce,
rescind, dissolve, annul or otherwise affect a contract, or to recover
damages or obtain other relief in respect of the breach of a contract, being
(in either case) a contract which—
(i) was made within the jurisdiction;
(ii) is by its terms, or by implication, governed by the law of
Malaysia
(e) if the action begun by the writ is founded on a tort committed within
the jurisdiction;
(f) if the action begun by the writ is brought under the provisions of any
written law relating to carriage by air;
(g) if the claim is brought to enforce any judgment or arbitral award.
Extended jurisdiction by service abroad

 The Malaysian Rules of court 2012 define the principal

cases in which service of notice of writ out of
jurisdiction is permissible. “Permissible’ means ‘with
the leave of the court’, and the granting or withholding
of that leave is a matter entirely within the discretion of
the court.
 The basic principles of the jurisdiction of the HC are
laid down in sections 23 and 24 of the CJA 1964 and
Order 11 is an extension or, alternatively, a refinement
of those principle.
4.4.3 Actin in rem: Malaysian practice

 In Malaysia, we can invoke section 24 of the Courts of

judicature Act, 1964, supplemented by Order 70 of the
Rules Court of 2012 for all admiralty proceedings.
Section 24(b), the Courts of judicature Act,
1964: admiralty jurisdiction
S 24: Without prejudice to the generality of section 23 the civil
jurisdiction of the High Court shall include—
(b) the same jurisdiction and authority in relation to matters of
admiralty as is had by the High Court of Justice in England
under the UK Supreme Court Act1981.
S 21 of the UK Supreme Court Act 1981, deals with mode of
exercise of admiralty jurisdiction and provides that “In any case
in which there is a maritime lien or other charge on any ship for
the amount claimed, an action in rem may be brought in the
High Court against that ship.”
Rules of Court 2012, Order 70

 The Malaysian Rules of Court 2012 Order 70 deals

with “admiralty proceedings.”
 Order 70, R. 1 (1): “action in rem” means an
Admiralty action in rem.
 The normal procedure is to serve the writ by
affixing it for a short time on any mast of the ship
or on the outside of any suitable part of the ship’s
superstructure.
4.5 Stay of proceedings and forum
non conveniens
 The most common grounds on which a stay of proceedings is
sought are:
(i) Lis alibi pendens (a litigation is pending in another
jurisdiction );
(ii) The existence of a foreign jurisdiction clause; and
(iii) The doctrine of forum non conveniens.
 Doctrine of forum non conveniens
 According to the doctrine of forum non conveniens, the defendant in an
actin may try to induce the court to refrain from exercising its
jurisdiction on ground that the trial in the forum is manifestly
inconvenient because the action has little connection with the forum,
and the evidence needed for trial is situated elsewhere.
 In reality, the defendant is trying to persuade the court that there is a
more appropriate foreign court in which the plaintiff’s claim ought to
be brought.
 Although the doctrine of forum non conveniens has been accepted in
Europe and other countries like US for quite some time, until relatively
recently English courts in principle respected the right of a plaintiff to
choose a forum which suited him best. A stay of proceedings was not
easily granted.
House of Lords and forum non conveniens

 After much uncertainty, the HL has applied the principle of

forum non conveniens to applications by defendants to stay
English proceedings in the light of the existing or contemplated
proceedings abroad.
 The leading case on the application of forum non conveniens in
the UK is the House of Lords decision of Spiliada Maritime v
Consulex Ltd [1987] AC 460.
 Spiliada Maritime v Consulex Ltd
[1987] AC 460 (HL)
Lord Goff set out guidelines and thereby defined the doctrine of
‘forum non conveniens’:
(1)The court will only grant a stay if it is satisfied that there is
another court having competent jurisdiction, which is the
appropriate forum for the trial of the action, ie in which the case
may be tried more suitably for the interest of all the parties and
the ends of justice.
(2)The defendant must show not merely that the English court is
not an appropriate forum, but that there is another forum which is
clearly more appropriate.
 Spiliada case [Cont]

(3) When considering the question whether there is another

natural forum for the dispute, the court will look for connecting
factors which indicating that the action has its most and
substantial connection with another forum. Such factors include
the convenience or expense of the case (such as the availability
of witnesses), which law governs the transaction in question, and
the place where the parties respectively reside or carry on
business.
 Spiliada case [Cont]

(4) If the court concludes that there is some other

available forum which is clearly more appropriate for
the trial of the action, it will ordinarily grant a stay
unless there are circumstances by reason of which
justice requires that a stay should not be granted. For
example, if the plaintiff can establish by objective and
cogent evidence that he will not obtain justice in the
foreign jurisdiction.
 The Waylink
[1988 1 Lloyd’s Rep. 475]
There has been a collision between two ships in a West German
river. At first instance in a Gilbraltan court a stay had been
refused because it was found that there was no more than a
balance of convenience in favour of Germany and this was
outweighed by the disadvantage which would be suffered by
the plaintiffs by the loss of the Gilbraltan discovery procedures.
The Gilbraltan Court of Appeal overruled this on two counts. First,
they found that Germany was clearly the more appropriate
forum. The only connection
 The Waylink [Cont]

with Gilbraltar was that one ship was owned and managed by
Gilbraltan companies, who were defendants in the action. On
the other hand, all the evidence relating to the collision was in
Germany where surveys were carried out and one ship was
repaired. Also there was a lis alibi pendens (dispute elsewhere
pending) in Germany.
Secondly, the loss of the Gilbraltan discovery procedures would
not cause injustice to the plaintiffs.
 The Waylink [Cont]

• The Gilbraltan Court of Appeal followed Spiliada and

affirmed that Spiliada has laid down two-stage test:
“A stay will be granted where:
(a) the defendant can show that there is another forum which is
the appropriate forum for the trial of the action, ie in which
the case may be tried more suitably for the interests of all
parties and the ends of justice, unless;
(b) the plaintiff can show that he will not obtain justice in the
foreign jurisdiction.”
4.6 Restraining foreign proceedings

 The Privy Council considered the question of when

the English courts will exercise their discretion to
restrain a party in the jurisdiction from commencing
or continuing proceedings abroad in SNI Aerospatial
v Lee Kui Jak [1987] AC 87. The PC held that the
principle of forum non conveniens did not apply.
 An injunction of the foreign proceedings would only
be ordered if their pursuit was vexatious or
oppressive.
 SNI Aerospatial v Lee Kui Jak
 The plaintiff was a Portuguese employed in the second
defendants’ Panamanian ship, he suffered injuries on board
when the ship was in English waters. He started an action
in England against the first defendants, a UK company, and
the second defendants for damages.
 He was then advised to commence a second action in the
US since his advisors had discovered that both defendants
were members of a group of Texan companies. Higher
damaged could be obtained in the US courts where they
were decided by juries.
 SNI Aerospatial v Lee Kui Jak [Cont]

 The second defendants had already admitted liability and

made an interim payment.
 An injunction to restrain the continuance of the Texas
proceedings was refused by both CA and HL.
 Lord Scarman stated that the Texas court was as much a
natural forum as the English court. In addition the
plaintiffs had the legitimate personal advantage that
damages might be higher in the US proceedings.
Jurisdiction clause and restraint of foreign
jurisdiction
 The English courts prefer to hold parties to their
contractual obligations and, therefore would not restrain
an action abroad if brought pursuant to a jurisdiction
clause properly effected.
 On the other hand, where the foreign proceedings are
commenced in the face of a clause of the contract
submitting to the jurisdiction of the English courts, the
court will be more likely to stay the foreign proceedings
than it will be if no such clause exists.
 Thank you
For
your kind attention