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Dispute Resolution in London the Oil on Wheels of International Trade

Jurisdiction clauses are one of the most disputed clauses when there are contractual issues. Almost by default, jurisdiction will be argued to either delay a claim or to hinder proceedings being issued.

The High Court in the case below had a relatively easy decision to determine as the contract had a jurisdiction clause for the English Courts and English Law. It goes without saying the Court accepted jurisdiction.

This is not always the case, if a contract does not have such a clause matters can get quite messy.

The English commercial courts are truly multinational and are often seen as the oil on the wheels of world trade. In one case, the High Court in London was considered the right venue in which to resolve a $6 million contract dispute between Liberian ship owners and Nigerian oil traders.

The underlying dispute concerned alleged mis-delivery of six oil cargoes and had culminated in the arrest of three merchant vessels in Lagos and Durban. However, a settlement was alleged to have been reached by which the oil traders agreed to pay the ship owners $6 million. The latter argued that only $200,000 of that had been paid and launched enforcement proceedings in London in respect of the balance.

The oil traders argued that the settlement agreement had not been validly executed and was thus not binding. They also challenged the Court’s jurisdiction to hear the case. None of the parties were English companies; the agreement had been drawn up in Nigeria, where the disputed events took place; and it was submitted that the dispute had no real connection to England.

However, in finding that London was the most convenient forum in which to resolve the matter, the Court noted that the agreement stated on its face that English law and exclusive English jurisdiction would apply. The oil traders did not have the better of the argument as to the validity of the agreement and the nationality and location of the parties was a neutral factor. The location of the witnesses was also fairly evenly balanced and the signing of the agreement in Nigeria was of no significance.

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MLA 2017 18 Shortlisted 2