Business dealings and legal jurisdiction in contract claims

The Court of Appeal recently confirmed that, in determining the place of performance of a contract, it is for a Claimant before the English courts to present an argument that the English courts have jurisdiction over a claim brought under a contract for services.

In the case of JEB Recoveries LLP v Binstock [2016] EWCA 1008, the Claimant failed to present a good argument to the court that the place of performance of a contract was in England and Wales. The Defendant, who was domiciled in Spain, argued that the English courts did not have jurisdiction to hear the claim, as the contract was performed outside of the jurisdiction and the Defendant was domiciled outside of the jurisdiction.

There were other issues before the court and the matter was rather complicated, as there were in reality a number of Claimants who had had business dealings with the Defendant. The Claimants had transferred their right to claim against the Defendant to a partnership and issued the claim as a partnership - potential resulting damages to be divided between the partners. However, the court was not required to consider the Defendant's claim that the formation of the partnership and assignment of rights was champertous. If the court had decided that the agreement resulting in the formation of the partnership amounted to champerty, the partnership may have been prevented from bringing the claim as a party that, technically, had no previous interest in the potential resulting finances of the claim.

The issue of jurisdiction went to the Court of Appeal, which decided in favour of the Defendant. The Court of Appeal set out a number of principles to be considered when assessing whether jurisdiction arises. In the present case as, on the contract and evidence presented, the main place of performance of the contract could not be determined from the contract and services were provided in a number of EU member states but not in England, the English courts did not have jurisdiction. The judgment can be found here.

If you have any questions on the above please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.