Samcrete Egypt Engineers and Contractors SAE v Land Rover Exports Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE POTTER,LORD JUSTICE THORPE |
| Judgment Date | 21 December 2001 |
| Neutral Citation | [2001] EWCA Civ 2019 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2001/0262 |
| Date | 21 December 2001 |
[2001] EWCA Civ 2019
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BIRMINGHAM MERCANTILE COURT
(Her Honour Judge Alton)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Thorpe and
Lord Justice Potter
Case No: A3/2001/0262
Adam Tolley Esq (instructed by Shadbolt & Co, Surrey, for the Appellant/Defendant)
Andrew Thompson Esq (instructed by Wragge & Co, Birmingham, for the Claimant/Respondent)
INTRODUCTION
This is an appeal by the defendant ("Samcrete"), a company incorporated and carrying on business in Egypt, from the order of Her Honour Judge Alton made in the Birmingham Mercantile Court and dated 4 January 2001 dismissing Samcrete's application for a stay of proceedings on the ground of forum non conveniens in respect of the claim of the claimant ("Land Rover") pursuant to a guarantee dated 11 March 1996 which became binding through its acceptance by Land Rover on 18 July 1996.
The guarantee contained no 'choice of law' clause. The principal question which arises on this appeal is that of the weight to be attached to the presumption contained in Article 4.2 of the Rome Convention on the Law Applicable to Contractual Obligations ("the Rome Convention") in the case of such a contract of guarantee, where the underlying contract to which the guarantee relates contains a choice of law and/or governing jurisdiction clause.
THE CONVENTION PROVISIONS
The Rome Convention has the force of law in the United Kingdom pursuant to s.1 and Schedule 1 of the Contracts (Applicable Law) Act 1990. Its relevant provisions are as follows.
Article 3 (Freedom of Choice) provides:
"1. A contract shall be governed by the law chosen by the parties. The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable for the whole or a part only of the contract."
Article 4 (Applicable Law in the absence of choice) provides:
"1. To the extent that law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected …
2. Subject to the provisions of paragraph 5 of this Article, it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or un-incorporate, its central administration. However, if the contract is entered into the course of that party's trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other than the principal place of business, the country in which that other place of business is situated.
3. …
4. …
5. Paragraph 2 shall not apply if the characteristic performance cannot be determined and the presumptions of paragraphs 2., 3 and 4 shall be disregarded if it appears from the circumstances as a whole that the contract is more closely connected with another country."
FACTUAL BACKGROUND
At the time of the provision of the guarantee, Samcrete was a 20% shareholder in another Egyptian company called Technotrade S.A.E. ("Technotrade") which was until June 1997 Land Rover's appointed distributor in Egypt pursuant to a distributorship agreement dated 11 May 1993. That agreement related to Range Rover and Land Rover vehicles and parts and their distribution within the territory of Egypt. Clause 1(I) of the distribution agreement provided as follows:
" Law and Disputes
(i) This Agreement shall be governed by and construed in all respects in accordance with the laws of England
(ii) The English courts (to whose jurisdiction.. [the parties].. hereby submit) shall be competent to entertain and adjudicate upon any matter arising out of or in connection with this Agreement"
In 1996, Land Rover and Technotrade corresponded about an arrangement for ninety days' credit and Land Rover indicated that it required a parent company guarantee in order to grant such credit. It proffered a format for the guarantee which included a term that the guarantee should be construed in accordance with English Law and should be subject to the exclusive jurisdiction of the English Courts. It seems clear that Samcrete was not willing to include such a clause in that, on 11 March 1996, without requesting deletion of the clause, it simply signed a version of the guarantee from which the clause had been deleted, without substitution of any alternative choice of law clause and sent it to Land Rover. On 18 July 1996, Land Rover sent Technotrade a fax, agreeing to provide it with credit and indicating that it accepted the guarantee as signed subject to receipt of the original (which was thereafter provided). It seems (though it is not entirely clear from the evidence) that Land Rover's acceptance of the form of guarantee signed came about through its oversight that the choice of law clause had been deleted.
The guarantee signed by Samcrete was headed 'Re Distributor Agreement between Land Rover … 'the supplier' and Technotrade S.A.E. 'The Distributor' dated 11 March 1993'. It provided:
"In consideration of your continuing to supply our subsidiary, the Distributor, with Land Rover Group products, we, Samcrete.. do hereby guarantee without set off or counterclaim the payment on demand of all sums not paid on due date by [Samcrete] in respect of invoices raised on [Samcrete] with regard to the purchase of Rover Group products under any agreement from time to time in force between Rover Group Limited, or any of its associated companies including [Land Rover] and [Samcrete] for the supply of the products.
…
This guarantee is and shall be unconditional and irrevocable to [Land Rover] for all debts whatsoever and wheresoever contracted by [Samcrete] with [Land Rover] in respect of Rover Group products from time to time delivered to the Distributor.
Following the takeover of Rover Group by BMW in 1996, on 29 November 1996 Land Rover gave Technotrade six months' notice of termination of the distributorship agreement, making clear that the termination was not a reflection of any dissatisfaction with the performance of Technotrade, but was rather the result of a decision to select BMW's Egyptian distributor as the single importer for both BMW and Rover.
A dispute developed between Land Rover and Technotrade as to the state of the account between them and the consequences of the termination of the distributorship.
Land Rover claims that it is owed the sum of £646,162.89 by Technotrade in respect of unpaid invoices which it seeks to recover against Samcrete under the terms of the guarantee. Technotrade however asserts that on the overall account between the parties in respect of their mutual dealings under the distributorship, monies are due to Technotrade. Technotrade claims damages for wrongful termination of the distributorship. A written demand under the guarantee was made by Land Rover upon Samcrete on 20 July 1999, followed by a further written demand from Land Rover's solicitors. The claim form in these proceedings was issued on 11 April 2000 and, on 28 April 2000, an order was made giving permission to serve on Samcrete out of the jurisdiction. On 26 June 2000, the claim was amended prior to service, such service being acknowledged by Samcrete on 20 July 2000.
Meanwhile, Technotrade had commenced proceedings in the Giza Court in Egypt against Land Rover seeking, in effect, an order for an account in relation to all sums due as between the parties under the distributorship agreement. Those proceedings have yet to be served upon Land Rover.
THE PROCEEDINGS BELOW
Before the judge, Samcrete relied upon (1) the witness statement of Doctor Youssef, the chairman of Technotrade, in which he deposed to the nature of Technotrade's claims against Land Rover and asserted that their failure properly to consider such claims had led to the application made by Technotrade to the Giza Court for the appointment of an accountant expert to review the accounts between Land Rover and Technotrade; (2) the expert witness statement of Doctor Abdelwahed, an Egyptian lawyer, in which he stated that, according to Egyptian law, the content and effect of the guarantee was governed by Egyptian law; also that, under section 788 of the Egyptian Civil Code, a creditor is not able take proceedings against a guarantor alone unless it has first taken proceedings against the debtor. He also stated that once the Egyptian Court has made a ruling in the action for an account, if it determines that Land Rover is owed sums by Technotrade, Land Rover will then be able to take steps to recover the sums due from Technotrade, and to proceed against Samcrete in default of recovery from Technotrade.
In respect of Technotrade's Egyptian action, Doctor Youssef did not dispute the evidence for Land Rover that not only the language of the contract but also invoices, accounts and other correspondence passing between the parties were in English. However, he stated that it was logical for Technotrade to bring its claim before the Egyptian Court because all such invoices and related correspondence concerning vehicles, spare parts and other goods supplied by Land Rover were at Technotrade's premises...
To continue reading
Request your trial
-
Anco Santander Totta S.A. v Companhia De Carris De Ferro De Lisboa S.A. and Others
...a) Adopting a purposive approach, and not literally ( Samcrete Egypt Engineers and Contractors S.A.E. v Land Rover Exports Limited [2001] EWCA Civ 2019 at [26]), Art. 33 providing that each of the different languages is "equally authentic". b) With a view to "achieving uniformity" in its "......
-
Ennstone Building Products Ltd v Stanger Ltd
...Sea Insurance Co Ltd v Bouygues SA [1994] CLC 855; [1995] 1 AC 190. Samcrete Egypt Engineers and Contractors SAE v Land Rover Exports Ltd [2002] CLC 533. Société Nouvelle des Papeteries de l'Aa v Machinefabriek BOA [1992] NJ No. 750. Conflict of laws — Contract — Tort — Applicable law — Lim......
-
British Arab Commercial Bank Plc v Bank of Communications
...review of academic authority in Oldendorff v Libera Corp [1996] CLC 482 at p. 505–6, cited by Potter LJ in Samcrete Egypt Engineers and Contractors S.A.E. v. Land Rover Exports Ltd [2002] C.L.C. 533 at [26 —27]). It follows that both parties must be shown with reasonable certainty to have......
-
Commercial Marine and Piling Ltd v Pierse Contracting Ltd
...with another country” and in this case the contract was more closely connected with England and he relied on Samcrete Egypt Engineers and Contractors SAE v. Land Rover Exports Ltd [2001] EWCA Civ 2019. 15 In reply, Mr Robson referred to the decision by Peter Leaver QC in Britten Norman Ltd......
-
Escape From Uncertainty: Article 4(3) Rome I Regulation
...v Marek Lieberberg Konzertagentur GmbH [2001] 1 WLR 1745 [8]. 100Samcrete Egypt Engineers & Contractors SAE v Land Rover Exports Ltd [2001] EWCA Civ 2019, [2002] CLC 533, [47]. 101Apple Corps Ltd v Apple Computer Inc [2004] EWHC 768 (Ch), [2004] 2 CLC 720 [62]. 15 S.S.L.R Escape From Uncert......