The dispute was between the claimant buyers and defendant sellers in respect of the sale of a Chilean company, which was in the business of salmon farming, for breach of contract, damages and rescission in excess of US$1 billion. Amongst others, arbitral and criminal proceedings were commenced in Chile before proceedings were brought in England. The defendants disputed jurisdiction of the English proceedings in favour of the Chilean Court.

To determine whether the English Court would decline to exercise its jurisdiction over the defendants, the English Court relied on the two-stage test laid down in the landmark case of Spiliada Maritime Corp v Cansulex, namely:

1. Stage 1 – the burden is on the defendant to establish that there is another forum which is “clearly or distinctly more appropriate than the English forum”.
2. Stage 2 – if the defendant discharges the burden at Stage 1, then the burden of proof shifts to the claimant to show by way of “cogent evidence” that justice requires that a stay should not be granted.

In considering and applying the Spiliada  principles and the factors to be considered under each stage, the proceedings were stayed for, inter alia, the following reasons:

1. Chilean legislation did not prevent the Chilean Court from being an available forum simply because the English Court was first seised and would not impede it from accepting jurisdiction.
2. A Chilean Court would find that it would have relative competence if the claims were brought before it on the grounds the claims relate to wrongful acts committed in Chile and/or to a contract concluded in Chile.
3. The cost and delay inherent in having proceedings in England due to the witnesses being both based in Chile and Spanish speaking, with the documents also mainly in Spanish.
4. Experience and knowledge of the dispute have already been accumulated by Chilean counsel in arbitration proceedings commenced in Chile.
5. The claims are governed by Chilean law, and although the claimants sought to introduce claims that may be governed by Chinese law, the English Court can no more easily determine any issues of Chinese law than a Chilean Court.
6. The claimants’ argument that their claim may be time-barred in Chile can be addressed by having the defendants undertake to submit to the jurisdiction of the Chilean Court and waive any limitation defence to the relevant claims.
7. There is no factual connection between the events underlying the claims and England, but there is with Chile.

This case is a useful reminder of the many considerations to bear in mind and the nuances when considering the application of the Spiliada  principles, as a claimant should not lightly be deprived of a jurisdiction they have established as of right.