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In this post, Maxie Chopard, a trainee solicitor with CMS, previews the decision awaited from the UK Supreme Court in the matter of FS Cairo (Nile Plaza) LLC v Brownlie (as Dependant and Executrix of Professor Sir Ian Brownlie CBE QC), an important case concerning various issues pertaining to service out with the jurisdiction. 

The Supreme Court has recently heard the appeal in FS Cairo (Nile Plaza) LLC v Brownlie: an important case concerning service out of the jurisdiction. The forthcoming decision is expected to provide clarity on the scope of where “damage was sustained” in a tortious claim against a foreign defendant and the interaction between a foreign governing law and English law in determining whether a claim has a reasonable prospect of success.

Background

In 2010, Sir Ian Brownlie QC and his wife, Lady Brownlie, stayed at the Four Seasons Hotel Cairo (the “Hotel”) while on holiday in Egypt. Lady Brownlie hired a chauffeur-driven car for a family excursion through the Hotel, which was operated by FS Cairo. A serious road traffic accident occurred in which Sir Ian Brownlie QC and his daughter were killed. Lady Brownlie and the remaining passengers were injured.

In 2012, Lady Brownlie brought claims in contract and tort against Four Seasons Holdings Incorporated (“FS Holdings”), a Canadian company, in the High Court; seeking damages for injury and losses suffered as a result of the accident. She was granted permission in 2013 to serve the proceedings out of the jurisdiction but FS Holdings challenged the English courts’ jurisdiction.

In 2018, the Supreme Court found that the English courts had no jurisdiction to try the claims against FS Holdings as it was a non-trading holding company that did not own or operate the Hotel (“Brownlie 1”).

Lady Brownlie was subsequently allowed to bring the claim against FS Cairo. As FS Cairo is an Egyptian company, Lady Brownlie required permission to serve her claim out of the jurisdiction and so must show in respect of each claim in contract and tort, that:

  • it falls within a jurisdictional gateway under CPR Practice Direction 6B (“PD 6B”);
  • it is a claim that has a reasonable prospect of success (also known as the “merits test”); and
  • England is the proper place in which to bring the claim (forum non conveniens).

Appeal to the Supreme Court

The High Court and a majority of the Court of Appeal (Arnold LJ dissenting) granted Lady Brownlie permission to serve proceedings on FS Cairo, holding that she had met all three elements of the above test in respect of her claims in contract and tort.

FS Cairo appealed to the Supreme Court against the decisions concerning the first two elements of the test, specifically:

  • the scope of the gateway for tort claims under paragraph 3.1(9)(a) PD 6B, which gives the English courts jurisdiction where “damage was sustained” within the jurisdiction (“Gateway 9a”); and
  • given that it had been established that Egyptian law would govern the claims, whether Lady Brownlie could rely on the presumption that Egyptian law is materially the same as English law to show that her claims had a “reasonable prospect of success”.

It was not contested that England, rather than Egypt, is the more convenient place for trial.

The Parties’ Submissions

  • Gateway 9a

FS Cairo submitted that the court should adopt a purposive approach to interpreting Gateway 9a, in contrast with Hale LJ’s view in Brownlie 1 that the “ordinary meaning” of the words should be used. The context and purpose of Gateway 9a was to insist on an identifiable and substantial link between the claimant and the foreign defendant in order to justify the English courts’ jurisdiction. Only direct damage could support a claim of jurisdiction. Lady Brownlie’s claim for losses suffered in England following the accident were indirect losses that did not provide the basis to assert that the English courts had jurisdiction.

FS Cairo drew a distinction between the jurisdictional gateway question as one concerning the interpretation and application of statute to determine the extent of the courts’ jurisdiction and forum non conveniens as the discretionary power given to the courts to decline to exercise its jurisdiction. It was submitted that Hale LJ and others in Brownlie 1 were incorrect in holding that it was acceptable to have wide jurisdictional gateways since the court’s discretion could be exercised at the forum non conveniens stage.

Counsel for Lady Brownlie submitted that Gateway 9a could be described as a general rule that could be applied flexibly whenever a claim was tortious in nature. It was submitted that any “significant” damage sustained within England and Wales would be sufficient to pass through Gateway 9a.

On the question of damage in personal injury cases, counsel for Lady Brownlie submitted that this should encompass the harm to the claimant wherever he/she was located for the duration of the harm. The court should take the ordinary meaning of the words in Gateway 9a in terms of where the damage was “sustained”. The Commonwealth approach of adopting a broad and general rule connecting damage and in defining “damage” as encompassing not just injury but all heads of loss was to be preferred.

In terms of the interplay between the jurisdictional gateways and forum non conveniens, counsel for Lady Brownlie submitted that the court only had to be satisfied that the damage suffered in England and Wales was “significant”, and if so, the courts could move on to the forum non conveniens element of the three-stage test.

  • Reasonable Prospect of Success

FS Cairo submitted that Lady Brownlie’s claims in tort would fail as the legal basis for her claims was English law. Egyptian law should govern all aspects of the claims in tort. In particular, her claim for bereavement and loss of dependency under the Fatal Accidents Act 1976 would not succeed as the act had no extra-territorial effect.

FS Cairo asserted that Lady Brownlie should not be entitled to rely on the presumption that Egyptian law is materially the same as English law, where it had been held that Egyptian law governed the claims. Foreign law must be proven as a fact and pleaded, as only in this way would the courts be able to determine whether there was a legal basis for an arguable case. The governing law defined the substantive rights and obligations of the parties. Removing this requirement would subvert the merits test and reverse the burden of proof to place it unfairly on the defendant. Similarly, Lady Brownlie had not shown using evidence from Egyptian law that her claim in contract would have a reasonable prospect of success.

Counsel for Lady Brownlie responded that Lady Brownlie had met both the legal and evidential standards of the merits test. The Court of Appeal and High Court were correct in finding that there was a serious issue to be tried based on expert evidence, including that a contract existed between the parties, FS Cairo as defendant was acting as principal of the chauffeur who had been in its employment at the time of the accident and that Egyptian law provided for the heads of losses claimed. FS Cairo knew the case that it had to meet.

On the presumption, counsel for Lady Brownlie submitted that to take FS Cairo’s proposed approach would change the current position where choice of law rules pointed to a foreign law on substantive but not procedural issues. It would lead to a frontloading of litigation as the claimant would be required to plead each point on the basis of the foreign law.

Significance

The Supreme Court’s judgment is eagerly anticipated as it will provide much needed clarity on how wide Gateway 9a should be and, correspondingly, the ease of bringing a claim against a foreign defendant in England and Wales. It will be interesting to see whether the Supreme Court will lean towards the approach taken in Commonwealth authorities by adopting a more generous definition of “damage” and the connecting factors to the jurisdiction, now that the UK is no longer tied to European notions of the defendant’s domicile.

The application of the presumption that Egyptian law is materially the same as English law also raises questions as to whether a defendant should know the full nature and extent of claims made at the pleadings stage or whether this is a case management decision.