EUPillar Oceanfix International Ltd v AGIP Kazakhstan North Caspian Operating Co NV, Sheriff Court (Grampian, Highland and Islands) (Aberdeen), 2009 G.W.D. 17-266 (Sheriff J K Tierney)

Summary

The pursuer, a company with its registered office in Aberdeen, claimed payment from the defender, a Dutch company with its registered office in The Hague and a place of business in Kazakhstan. The sum claimed was for work done under a contract between the parties for the provision by the pursuer of qualified specialist personnel to act as client representatives for the defender during surveying activities. The defender averred that it was obliged under Kazakhstan law, which was designated by the parties as the applicable law, to withhold tax when making payment to the pursuer and therefore the money had been properly withheld. In terms of the contract, payment of invoices was to be made to the pursuer’s nominated bank account in Aberdeen. The issue on the merits of the case was whether, in terms of the Kazakhstan tax laws, the pursuer was liable to pay Kazakhstan tax on the payments it received from the defender, and if so whether in terms of these laws and the terms of the contract between the parties the defender was entitled or obliged to withhold the money and to pay to the Kazakhstan tax authorities the tax owed by the pursuer under Kazakhstan law on these payments. Under Clause 21 of the General Terms and Conditions, the parties agreed on the non-exclusive jurisdiction of the courts of Atyrau Region, Kazakhstan. Although the defender did not dispute that Aberdeen Sheriff Court had jurisdiction to hear the case, it averred that the Kazakhstan courts also had jurisdiction. The defender also alleged that Kazakhstan courts were the appropriate courts to determine this issue. It further averred that it was open to the Court to decline to exercise its jurisdiction and that it should sist the cause to enable the Kazakhstan courts to determine the issue. The first question for the Court to deal with was therefore the plea of forum non conveniens. The Court conducted a detailed examination of the relevant case-law of the CJEU in order to find the answer and following the judgment in C-281/02, Owusu v Jackson the doctrine of forum non conveniens cannot be used by a court of a MS in a case where its jurisdiction is based on the domicile of the defender in the forum under Brussels I. The issue in this case was whether a court of a MS which had jurisdiction in terms of Art 5 of Brussels I over a person domiciled in another MS is precluded from declining to exercise this jurisdiction on the ground that a court of a non-contracting state would be a more appropriate forum, was a matter to be referred to the CJEU. However the parties did not wish a reference to the CJEU so the Court dealt with the issue by analysing the CJEU case-law, recitals of Brussels I, and the purpose and the underlying principles of the rules of Brussels I. The Court concluded that once a UK court was properly seized of jurisdiction over a domiciliary of a MS under Art 5 of Brussels I, it was not open to it to decline to exercise that jurisdiction on the ground that a court of a non-MS would be a more appropriate court for the trial of the action and repelled the defenders’ first plea in law. The Court also stated that had it been open to it to sustain the plea, a preliminary proof on this issue would have been allowed as it would have found that Scotland was not the natural or appropriate forum to determine the issue and that the Kazakhstan courts clearly represented a more appropriate forum for the resolution of the dispute. The defender did not contest that the Aberdeen Sheriff Court had jurisdiction under Art 5(1)(a) on the basis that Aberdeen was the place of payment under the contract and therefore the place of performance of the “obligation in question”. The Court therefore did not have to decide whether the contract was a contract for services under Art 5(1)(b) of Brussels I and if it was that the place of provision of the services was in a non-MS (ie Kazakhstan) and therefore Art 5(1)(a) applied because Art 5(1)(b) did not apply (see Art 5(1)(c)).