Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd [2019] EWHC 1659 (TCC)

28th Jun 2019

Jennifer Jones acted successfully on behalf of the Defendant HS Barrier Coatings Limited (“HSBC”) in an application under CPR Part 11, contesting the Court’s jurisdiction in the matter of Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd [2019] EWHC 1659 (TCC), and considering the proper meaning and effect of Schedule 4 to the Civil Jurisdiction and Judgments Act 1982, which allocates jurisdiction between the different parts of the United Kingdom.

The proceedings were brought in the TCC by the Claimant Babcock Marine (Clyde) Limited (“Babcock”) claiming payment of £613,338.09 plus interest and adjudicator’s fees pursuant to an adjudicator’s decision dated 22 March 2019.

HSBC sought a stay of those proceedings because it did not submit to the jurisdiction of the English Courts: its case (accepted by the Judge) was that the Scottish Courts were the proper forum to determine the enforcement claim.

The underlying works were to carry out ship lift docking cradle re-preservation works and were instructed by an NEC 3 Engineering and Construction Short Contract (June 2005), which was subject to Scottish law.  The contract contained an arbitration clause, but no choice of court clause.

However, that contract had been varied (on HSBC’s case) by a letter signed by both parties.  The letter chose the Scottish Courts for the resolution of disputes.

Mrs Justice O’Farrell accepted HSBC’s submission that the choice of law clause in the signed letter was effective to vary the underlying contract and that it was intended to sit alongside the adjudication provisions and the arbitration agreement in that contract.  She held that the effect of the variation was that the Scottish Courts have jurisdiction regarding adjudication matters and also to supervise arbitral proceedings, as required.  She rejected a submission that adjudication was a sui generis system of dispute resolution that required her to disregard the parties’ agreement and to accept jurisdiction over enforcement matters.  She further found, in the exercise of her Spiliada discretion, that there were no broader considerations that point towards the Courts of Scotland being displaced.

In summary Mrs Justice O’Farrell, taking into account all the circumstances of the case, decided that Scotland is the most appropriate forum to determine the adjudication enforcement proceedings. She ordered that the Court would grant HSBC’s application to stay the current adjudication enforcement proceedings and that Babcock would have to proceed in Scotland.

Jennifer Jones acting (instructed by Hill Dickinson LLP) for the Defendant.

To read the full judgment please click here.

28 June 2019

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