Commercial Marine Piling Ltd v Pierse Contracting Ltd [QBD (TCC)]
| Jurisdiction | England & Wales |
| Judge | Ramsey J |
| Judgment Date | 11 September 2009 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 11 September 2009 |
Queen's Bench Division (Technology and Construction Court).
Ramsey J.
Simon Lofthouse QC (instructed by Speechly Bircham LLP) for the claimant.
Alexander Robson (instructed by Hill Dickinson) for the defendant.
The Following Cases Were Referred to in the judgment:
Agnew v Länsförsäkringsbolagens AB [2000] CLC 848; [2001] 1 AC 223.
Bank of Scotland v Seitz 1990 SLT 584.
Britten Norman Ltd v State Ownership Fund of Romania (unreported, 6 July 2000).
Eider, TheELR [1893] P 119.
Ennstone Building Products Ltd v Stanger LtdUNK [2002] EWCA Civ 916; [2003] 1 CLC 265.
Industrie Tessili Italiana Como v Dunlop AGECAS (Case 12/76) [1976] ECR 1473.
Samcrete Egypt Engineers & Contractors SAE v Land Rover Exports LtdUNK [2001] EWCA Civ 2019; [2002] CLC 533.
Societe Nouvelle des Papeteries de l'Aa v Machinefabriek BOA (1992, Nederlandse Jurisprudentie No 750, Dutch Supreme Court.
Unidare plc and Unidare Cables Ltd v James ScottIR [1991] IR 88.
Conflict of laws — Challenging court's jurisdiction — Guarantee — Place of performance — Applicable law — Irish parent of main contractor gave parent company guarantee to claimant subcontractor — Claim for sums said to be due for piling works — Liquidation of contractor — Claim on guarantee — Presumption that contract of guarantee most closely connected with Ireland displaced Place of business of Irish parent not significant connecting factor Contract more closely connected with England — Guarantor obliged to make payment in England whether guarantee governed by English law or Irish law — Challenge to jurisdiction of English court dismissed — Council Regulation 44/2001, art. 5(1)(a)Contracts (Applicable Law) Act 1990, Sch. 1 Rome Convention, art. 4(1), (2), (5).
This was an application by the defendant Irish company (“Pierse Ireland”) challenging the jurisdiction of the English court in relation to the claim brought by the claimant (“CMP”) on a guarantee.
An English company (“Pierse UK”), with the same name as the defendant Irish company, was retained as main contractor by Belfast Harbour Commissioners to construct a new ferry terminal in the Port of Belfast. The project included piling work which Pierse UK subcontracted to CMP. Pierse Ireland provided CMP with a parent company guarantee which provided that, in consideration of CMP undertaking to trade with Pierse UK, Pierse Ireland guaranteed to pay such money as might be due to CMP from Pierse UK if there should be any default by Pierse UK in payment of such money to CMP. A dispute arose between Pierse UK and CMP over the balance of sums due to CMP for the piling work and CMP commenced proceedings in the Technology and Construction Court against Pierse UK. Pierse UK then went into creditors” voluntary liquidation and judgment was entered against it.
CMP issued proceedings against Pierse Ireland for sums due under the guarantee. The claim form was served on Pierse Ireland which sought a declaration that the English court did not have jurisdiction to hear the claim.
CMP relied on art. 5(1) of Regulation 44/2001 on the basis that England was the place of performance of the obligation on Pierse Ireland to pay CMP under the guarantee.
Held, dismissing the challenge to English jurisdiction:
1. The performance which was characteristic of the contract was the performance of Pierse Ireland as guarantor and at the time of the contract Pierse Ireland had its central administration in Dublin, Ireland. As a result, if the presumption in art. 4(2) of the Rome Convention applied, Irish law would be the applicable law to determine the place of performance of the obligation to pay under the guarantee. However, the circumstances as a whole showed that the contract was more closely connected with another country, namely England, so that the art. 4(2) presumption was to be disregarded under art.4(5). The relevant considerations were the place of payment under the guarantee and the place of performance of CMP's obligation. CMP's obligation under the guarantee was to trade with Pierse UK and that would generally be under contracts or other arrangements made in England. Under the guarantee there was no express statement as to where Pierse Ireland's contractual obligation to make payment was to be performed. However, the relationship under the guarantee had a geographical centre of gravity in England. The only connection with Ireland was that it was an Irish company which was providing the guarantee, but it was doing so in relation to the English company. In this case the place of business of the party which was to effect the characteristic performance had no real significance as a connecting factor. Therefore English law was the applicable law. (Samcrete Egypt Engineers & Contractors SAE v Land Rover Exports LtdUNK[2001] EWCA Civ 2019; [2002] Clc 533Followed.)
2. The general rule in English law was that where no place of payment was specified the debtor had to seek his creditor. In the present case the obligation on Pierse Ireland was to guarantee to pay such sum of money as might be due to CMP from Pierse UK. That obligation to pay was not dependent on a demand but merely on the default of Pierse UK. The general rule, in the absence of any provision as to payment, would be that the payment should be made to CMPin England. It appeared that under Irish law similar principles applied to the question of place of payment so that if Irish law applied the place of payment under the guarantees would be payment to CMP in England. (The Eider [1893] P 119 and Bank of Scotland v Seitz 1990 SLT 584 applied; Unidare plc and Unidare Cables Ltd v James ScottIR[1991] IR 88considered.)
3. Thus the place of performance of the obligation in question in the guarantee was England and Pierse Ireland, although domiciled in Ireland, could be sued in England under art. 5(1)(a) of the Regulation.
Ramsey J:
1. This is an application by which the defendant Irish company, Pierse Contracting Ltd (“Pierse Ireland”), challenges the jurisdiction of these courts in relation to a claim brought by the claimant, Commercial Marine & Piling Ltd (“CMP”), in relation to a guarantee.
2. In February 2007, Pierse Contracting Ltd (“Pierse UK”), an English company with the same name as the defendant Irish company, was retained as main contractor by Belfast Harbour Commissioners to construct a new ferry terminal in the Port of Belfast. The project included piling work.
3. Pierse UK instructed CMP to submit a quotation for the piling work which CMP subsequently provided. Following discussions Pierse commenced piling work in March 2007.
4. By letter dated 20 March 2007 Pierse Ireland provided CMP with a “parent company guarantee” (“the guarantee”) signed by Mr Fearghal O'Nolan, the finance director of Pierse Ireland. The guarantee was in the following terms:
“In consideration of Commercial Marine & Piling Limited undertaking to trade with Pierse Contracting Limited (UK), we, Pierse Contracting Limited hereby guarantee to pay such money as may be due to Commercial Marine & Piling Limited from Pierse Contracting Limited (UK) if there should by [sic] any default by Pierse Contracting Limited (UK) in payment of such money to Commercial Marine & Piling Limited.”
5. A dispute arose between Pierse UK and CMP over the balance of sums due to CMP for the piling work. On 30 October 2008 CMP commenced proceedings (“the first action”) in the Technology and Construction Court against Pierse UK claiming a sum of £759,554 on a quantum meruit on the basis that there was no concluded subcontract; alternatively £937,270.03 if there was a sub-contract.
6. Also on 30 October 2008 Campbell Hooper, CMP's solicitors at the time, sent a letter to Pierse Ireland enclosing a copy of the claim in the first action. They referred to the guarantee and put Pierse Ireland on notice that if Pierse UK failed to satisfy any sums due to CMP, CMP would look to Pierse Ireland to fulfil their obligations to CMP.
7. In the first action directions were...
To continue reading
Request your trial