UK: Court of Appeal Affirms Decision to Refuse to Set Aside Service Out of Jurisdiction


    In Faraday Reinsurance Co Ltd v Howden North America Inc & Anor [2012] EWCA Civ 980, the Court of Appeal ruled that the judge at first instance, Judge Beatson, was entitled to conclude that English proceedings would serve a useful purpose when he refused to set aside a service out of the jurisdiction of negative declaratory proceedings by Faraday against Howden.

    In the Commercial Court decision, Beatson J refused to set aside the service because he found that the policy in question was governed by English law; the English proceedings served a useful purpose; and England was the convenient forum. Please see our blog on this decision here.

    On appeal, Howden submitted that Beatson J was wrong to conclude that English proceedings served a useful purpose because a judgment by an English court would not achieve Faraday’s goal of establishing deference by the Pennsylvania court, where there were competing proceedings, to the English court.

    The Court of Appeal held that Beatson J had correctly concluded that Faraday had shown that the proceedings had utility as English proceedings might assist the Pennsylvanian court to know what the English law was and an English judgment about liability in English law could be useful if a judgment was to be enforced outside Pennsylvania. Overall, Beatson J was aware of the need to ensure that the proceedings would serve a useful purpose and he directed himself accordingly in exercising his discretion.

    Furthermore, the Court of Appeal stated that it was inappropriate to have battles about foreign law resolved at an interim stage of the proceedings and this appeal only increased unnecessary expense and delay.

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