AMIN RASHEED SHIPPING CORPORATION V.
KUWAIT made or that with which the transaction has its closest and most real
INSURANCE
FACTS:
1. The plaintiffs, a Liberian corporation, whose business was
carried on from Dubai, owned a small cargo vessel which they
insured against war and marine risks under a policy issued by
the defendants, a Kuwaiti insurance company.
2. The form of the policy was based upon the Lloyd's standard
form of marine policy with modifications but gave Kuwait as
the place of issue and provided for claims to be payable there.
3. There was no provision in the policy as to the law which was to
govern the contract.
4. The vessel was detained by Saudi Arabian authorities and the
master and crew were imprisoned for some months apparently
in connection with a claim, denied by the plaintiffs, that the
vessel had been engaged in an attempt to smuggle oil.
5. The judge held that Kuwaiti law was the proper law of the
contract and, accordingly, there was no jurisdiction to serve
notice of the writ out of the jurisdiction.
ISSUE: Whether or not Kuwaiti law was the proper law NO
RATIO (LORD DIPLOCK):
Two step process of determining proper law of contract Intention or
close connection.
The first step in the determination of the jurisdiction point is to
examine the policy in order to see whether the parties have, by its
express terms or by necessary implication from the language used,
evinced a common intention as to the system of law by reference to
which their mutual rights and obligations under it are to be ascertained.
There is no conflict between this and Lord Simonds's pithy definition
of the "proper law" of the contract to be found in Bonython v.
Commonwealth of Australia [1951] A.C. 201, which is so often
quoted, i.e., "the system of law by reference to which the contract was
connection." It may be worth while pointing out that the "or" in this
quotation is disjunctive, as is apparent from the fact that Lord Simonds
goes on immediately to speak of "the consideration of the latter
question." If it is apparent from the terms of the contract itself that the
parties intended it to be interpreted by reference to a particular system
of law, their intention will prevail and the latter question as to the
system of law with which, in the view of the court, the transaction to
which the contract relates would, but for such intention of the parties
have had the closest and most real connection, does not arise.
A claimant must show good reason why service on a foreign defendant
should be permitted. This head of jurisdiction was an exorbitant
jurisdiction, one which, under general English conflict rules, an
English court would not recognise as possessed by any foreign court in
the absence of some treaty providing for such recognition. Comity
dictated that the judicial discretion to grant leave should be exercised
with circumspection in cases where there existed an alternative forum,
that is, the courts of the foreign country where the proposed defendant
carried on business and whose jurisdiction would be recognised under
English conflict rules. In exercising its discretion, it is not normally
appropriate for the court to compare the quality of justice obtainable in
a foreign forum which adopts a different procedural system (such as
that of the civil law) with that obtainable in a similar case conducted in
an English court.
Arbitration agreements are not covered by the Rome Convention, and
their proper law is decided according to common law principles which
require selection of the law of a country as the proper law governing
the agreement.
Lord Wilberforce said: It is not appropriate . . to embark upon a
comparison of the procedures, or methods, or reputation or standing of
the courts of one country as compared with those of another.
Jurisdiction: England and Wales