Not goodbye – Canada Trust revisited
The decision of the Court of Appeal in Kaefer Aislamientos SA v. AMS Drilling Mexico SA & Ors is essential reading for anyone seeking to establish or challenge jurisdiction in the High Court of England & Wales or in a court which will be guided by English law principles. Despite many attempts, the courts have struggled to define the test to be met by a claimant asserting the jurisdiction of the English courts. Particular controversy has surrounded the question of the inter-relationship between the requirement for a ‘good arguable case’ and the so-called Canada Trust gloss, namely that a claimant should have ‘much the better argument’.
The Court of Appeal has now clarified the approach under English law. Dismissing an appeal against a successful challenge to the High Court’s jurisdiction, the Court of Appeal considered and applied the recent judgments of the Supreme Court in Brownlie (2017) and Goldman Sachs (2018). A claimant asserting jurisdiction must establish:
- A plausible evidential basis for the application of a relevant jurisdictional gateway;
- If there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so;
- If the nature of the issue and the limitations of the material available at the interlocutory stage is such that no reliable assessment can be made, there will be a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it.
This three-limbed test is a confirmation of the test in Canada Trust requiring a claimant to show that it has the better argument based on plausible evidence. The burden of proof remains on a claimant but the test is context-specific and flexible. A court must be astute not to express any view on the ultimate merits of the case. The word ‘much’ has now been laid to rest.
In relation to limb (ii) of the test, the Court has expressly acknowledged that it is an instruction to courts to seek to overcome evidential difficulties and arrive at a conclusion if they reliably can. A court is to use judicial common sense and pragmatism. Limb (iii) of the test addresses the situation where it is not possible for a court to assess the relative merits of each party’s case at an early interlocutory stage. A claimant still has to establish a sufficiently plausible evidential basis for the application of a jurisdictional gateway.
The Court emphasised that disputes over jurisdiction should be determined with dispatch and should not become a distraction from the main event. The Court also made a number of other findings on matters which commonly arise in jurisdictional disputes.
The Court dismissed the appeal with costs.
Nigel Cooper QC acted for the successful party and kindly wrote this blog.
Nigel Cooper QC