[2025] EWHC 2089 (Comm)

Insofar as the Charterers as the Claimant are relying on the existence of a contract to secure jurisdiction, they bear the burden of establishing a good arguable case that the claim falls within the scope of CPR rule 6.33(2B)(b) or (c).

The considerations which determine the existence of a good arguable case have been explained in a series of important decisions, including Brownlie v Four Seasons Holdings Inc [2017] UKSC 80; [2018] 1 WLR 192, para. 7; Goldman Sachs International v Novo Banco SA [2018] EWCA Civ 34; [2018] 1 WLR 3683, para. 9; Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10; [2019] 1 WLR 3514, para. 72-80.

In Clifford Chance LLP v Société Générale SA [2023] EWHC 2682 (Comm), Henshaw J succinctly summarised the applicable principles at para. 79:

“The party alleging a binding jurisdiction agreement needs to show a good arguable case. In practice this means that:

i)

The party relying on the existence of the agreement must supply an evidential basis showing that it has the better argument (and not much the better argument).

ii)

If there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so.

iii)

The nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the existence of the agreement if there is a plausible (albeit contested) evidential basis for it.”

In order to demonstrate that they have a good arguable case, the Charterers must have the better of the argument in support of their case that there was a contractual relationship between the Charterers and Middle Volga on the evidence available insofar as the Court can reliably make such a determination. If, however, Middle Volga has the better of the argument, then the Charterers will not have established the requisite good arguable case.

Middle Volga maintains that it has the better of the argument in support of its case that Middle Volga was not a contracting party to the Charterparty, and that the Charterers do not have the better of the argument.

The Charterers’ case is that limb (iii) applies to the present case, but if that is not the case, then they have the better of the argument in support of their case that Middle Volga is subject to the English jurisdiction agreement in the Charterparty.

As to limb (iii), in Kaefer Aislamientos SA de CV v Atlas Drilling Mexico SA de CV [2019] EWCA Civ 10; [2019] 1 WLR 3514, at para. 79-80, Green LJ said:

“79.

The relative test has been endorsed “in part” because limb (iii) is intended to address an issue which has arisen in a series of earlier cases and which has to be grappled with but which as a matter of logic cannot satisfactorily be addressed by reference to a relative test: see e g Antonio Gramsci [2012] 2 Lloyd's Rep 365, paras 39 and 44–48, per Teare J citing WPP Holdings Italy Srl v Benatti [2007] 1 WLR 2316, para 44 (“WPP”) per Toulson LJ. This arises where the court finds itself simply unable to form a decided conclusion on the evidence before it and is therefore unable to say who has the better argument.

80.

What does the judge then do? Given that the burden of persuasion lies with the claimant it could be argued that the claim to jurisdiction should fail since the test has not been met. But this would seem to be unfair because, on fuller analysis, it might turn out that the claimant did have the better of the argument and that the court should have asserted jurisdiction. And, moreover, it would not be right to adjourn the jurisdiction dispute to the full trial on the merits since this would defeat the purpose of jurisdiction being determined early and definitively to create legal certainty and to avoid the risk that the parties devote time and cost to preparing and fighting the merits only to be told that the court lacked jurisdiction. In Antonio Gramsci and in WPP the court recognised that a solution had to be found. In WPP, at para 44, Toulson LJ stated that the court could still assume jurisdiction if there were “factors would exist which would allow the court to take jurisdiction” and in Antonio Gramsci, at para 48, Teare J asked whether the claimant’s case had “sufficient strength” to allow the court to take jurisdiction. The solution encapsulated in limb (iii) addresses this situation. To an extent it moves away from a relative test and, in its place, introduces a test combining good arguable case and plausibility of evidence. Whilst no doubt there is room for debate as to what this implies for the standard of proof it can be stated that this is a more flexible test which is not necessarily conditional upon relative merits.”

In Kado v Bankmed SAL [2023] EWHC 2606 (Comm), Foxton J referred to the discussion of the “good arguable case” approach adopted in jurisdictional challenges and said as regards limb (iii) at para. 7:

“There was some debate between the parties as to the point at which limb (iii) cut in, the Bank, in particular, being keen to depict it as very much an option of last resort. On the face of things, the idea of the court being “unable to form a decided conclusion” on who has the better case on the evidence appears an improbable one - indeed, both sets of legal advisers are likely to have done exactly that. However, the evidence in some cases will be such that reaching a judicial decision on relative merit will be incompatible with the nature of the hearing, and the injunction not to conduct a mini trial. Further, the limitations of the material may be such that any decision on relative merit will lack the robustness which a judicial decision of this significance requires. Green LJ referred in his discussion of limb (iii) to Teare J’s decision in Antoni Gramsci Shipping Corp v Recoletos Ltd & Ors [2012] EWHC 1887 (Comm), [39] and [45], in which he referred to cases where there is “a conflict of evidence which cannot be resolved without appearing to conduct a pre-trial,” instancing “a stark dispute between opposing witnesses” in a case where “to seek to judge who has the better of the argument on such evidence risks a pre-trial at the interlocutory stage.” Earlier in his judgment, Green LJ had cited Lord Sumption in Goldman Sachs International v Novo Banco SA [2018] UKSC 34, where he described limb (iii) as applying where “no reliable assessment” can be made of relative merit.”

In considering whether limb (iii) is applicable, when evaluating evidence at a hearing of a jurisdictional challenge, the important consideration is the ability of the Court to reach a view reliably on the basis of the evidence available. However, if there are any substantial shortcomings in the evidence available at the jurisdictional hearing which belie the available evidence, or if there is a conflict in the evidence which cannot be resolved at an interlocutory hearing, the Court must be astute to ensure that no assessments are made which run counter to the limitations of the available evidence and therefore could not be regarded as reliable. In such a case, the Court must have regard to satisfying itself that there is a plausible basis for the claimant’s case. In undertaking this exercise, the Court should not be seduced into speculating whether further evidence might be forthcoming at some future time and what that evidence might reveal. Mere speculation has no role to play (Yangtze Navigation (Asia) Co Limited v TPT Shipping Limited [2024] EWHC 2371 (Comm), para. 61(iv)(d), 74(v)).