The Dekagram: 21st October 2024

Articles

21/10/2024

Another week, another heartfelt thank you from the team for our readers’ support during the Directory Submissions Season – this time for references to Chambers & Partners, which have seen us ranked as a Band 1 set in Travel: Personal Injury, with four ranked silks and seven ranked juniors at all levels of seniority. But we’re only as good as the work you entrust to us – and we thank you for it.

In other less exciting news, we draw to your attention the announcement on 18th October by the International Civil Aviation Organisation of an increase in the Montreal Convention liability limits for death, injury, delay, baggage and cargo claims. The new limits will take effect from 28th December 2024 and are introduced in accordance with the Convention mechanism to update awards every five years to account for inflation. The limits will be revised as follows:   

1. The limit for death or bodily injury will increase from 128,821 SDRs to 151,880 SDRs (originally 100,000 SDRs in 2003). 

2. The limit for delay in passenger transport will rise from 5,346 SDRs to 6,303 SDRs  (originally 4,150 SDRs in 2003). 

3. The limit for destruction, loss, damage, or delay of baggage will increase from 1,288 SDRs to 1,519 SDRs (originally 1,000 SDRs in 2003). 

4. The limit for destruction, loss, damage, or delay of cargo will rise from 22 SDRs to 26 SDRs per kilogram (originally 17 SDRs in 2003). 

Salmon Fishing in Chile: another Case on Jurisdiction

A recent High Court decision involving Chilean salmon farming has given a useful example of how the English courts will approach applications for stays where another jurisdiction is available and better-placed to hear and resolve a dispute.

The underlying claims in Joyvio Group Co. Ltd v. Moreno [2024] EWHC 2493 (Comm) were premised on allegations of breach of contract and other failures arising from what the Claimants characterised as a fraudulent scheme to overproduce salmon in violation of Chilean law.

The Defendants’ application for a stay on the grounds of forum non conveniens was heard by Nigel Cooper KC, sitting as a judge of the High Court. He started by identifying the two-stage legal test governing an English court’s decision on whether to decline jurisdiction, articulated by Lord Goff of Chieveley in Spiliada Maritime Corporation v. Cansulex [1987] AC 460. At the first stage, a defendant must show that another forum is “clearly or distinctly more appropriate than the English forum”, an analysis which involves: (i) establishing the availability of a foreign forum (Unwired Planet International v. Huawei [2020] UKSC 37); and (ii) an evaluative judgment as to whether the case has a closer connection to that other forum (VTB v. Nutritek [2011] EWHC 3107 (Ch)). If the first stage is passed, the burden shifts to the claimant to show by cogent evidence that substantial justice cannot be done in the foreign forum.

A line of case law permits a claimant to argue that, in circumstances where it acted reasonably in issuing proceedings in England and not doing so in the potential alternative forum, it would be unjust to grant a stay in England because by operation of the law of the other jurisdiction the claim would be defeated by limitation rules (Altimo Holdings v. Kyrgyz Mobil [2012] 1 WLR 1804). Such an argument was raised by the Claimants before the High Court, and each party relied on expert evidence as to the applicable Chilean law.

On the jurisdiction of the Chilean courts, the judge considered domestic law and specifically what the Chilean Supreme Court would decide had it the question of competence before it. Having regard to a decision of that court, Holzmann v. Gainsborg (1950), he rejected the argument that Articles 109 and 112 of the Organic Code of Courts operated to exclude the Chilean courts once the English court was seized of a matter, in part because the weight of evidence indicated their terms were directed towards questions of the relative competence of courts within Chile. Articles 109 and 112 state:

“109. Once a matter has been brought before a competent court in accordance with the law, this jurisdiction shall not be altered by supervening cause.

112. Whenever according to the law, two or more courts have jurisdiction to hear the same case, none of them may excuse itself from hearing the same case on the pretext that there are other courts which can hear the same case; but the one which has taken jurisdiction excludes the other courts, which thereupon cease to have jurisdiction.”

(The Defendants argued that the court could avoid the potential problem that might result if the Chilean courts were to decide the jurisdiction point differently – i.e. that the English court stayed the claim and then the Chilean courts refused to hear it – by striking out the claim instead of staying it. The judge rejected that proposal on the ground that if the Chilean courts did refuse to hear the case, the English stay could be lifted.)

At the first stage of the two-stage test, the judge considered various factors, including:

(i) all of the Defendants were Chilean nationals and would travel to Chile for any proceedings there;

(ii) none of the Claimants had connections with England, two being Chinese companies and the other seven being Chilean companies;

(iii) there were strong factual connections to Chile, including that the underlying sale was of a group of Chilean companies, operating almost exclusively in Chile, by Chilean companies, pursuant to a contract governed by Chilean law, after in-person negotiations in Chile;

(iv) the majority of the witnesses were Spanish-speaking and based in Chile;

(v) 82% of the 18,356 documents used in a related arbitration were in Spanish and there was an advantage to a Spanish-speaking judge reading and assessing them; and

(vi) the applicable law of most if not all of the elements of the claim was Chilean law (and although the Claimants argued that some elements might be subject to Chinese law, a court in England was no better placed to apply Chinese law than a court in Chile).

Taking the factors together, the judge considered that the natural forum for the claims was clearly and distinctly Chile.

At the second stage of the two-stage test, the Claimants argued (inter alia) that there was a real risk that their claims would be barred by Chilean limitation rules. The judge disagreed, finding that Article 2332 of the Chilean Civil Code provided a four-year limitation period and the time started running at the Claimants’ date of knowledge rather than the date of damage. The judge went on, however, to require as a condition of granting a stay that the Defendants to waive any limitation defence that might nevertheless be available to them in Chilean law. The Defendants had offered a waiver in the event the English court considered it necessary; and the judge considered it “appropriate to require such an undertaking as a condition of granting the stay and thereby depriving the Claimants of the jurisdiction they have established as of right”.

Accordingly, the judge stayed the English case in favour of the jurisdiction of the courts of Chile.

About the Author

William Dean has a busy personal injury practice involving both domestic and foreign accidents. He is a contributor to the Butterworths Personal Injury Litigation Service, in which he is the author of the “Foreign Accidents” section. He also acts in tribunal claims against the Criminal Injuries Compensation Authority, including in cases involving foreign jurisdictions, and is a contributor to the leading textbook in that field.

State Immunity for torts causing personal injury in the UK: Shehabi v Bahrain [2024] EWCA Civ 1158

In Shehabi v Bahrain the Court of Appeal considered whether a foreign state was entitled to rely on state immunity in a claim for damages for harassment where its agents, located abroad, had caused spyware to be remotely installed on the computers of individuals located in the United Kingdom. The Claimants had suffered psychiatric injury upon discovering the intrusion.

The issues which the Court of Appeal had to decide were:

  • Whether such remote activities constituted an act by the foreign state in the United Kingdom at all;
  • Whether immunity is only lost if all the acts by agents of the foreign state take place in the United Kingdom; and
  • Whether psychiatric injury is ‘personal injury’ within section 5 of the State Immunity Act 1978.

At first instance, Knowles J had found in favour of the claimants on all three issues. There remains some doubt as to the underlying basis of the claim under the Protection from Harassment Act 1997, but the appeal before the Court of Appeal was concerned only with the scope of the State Immunity Act 1978.

The State Immunity Act 1978

Males LJ gave the lead judgment and set out the framework of the 1978 Act. Generally, the Act provides that states are immune from the jurisdiction of the courts of the United Kingdom, save in certain circumstances. One such exception is claims for personal injuries and damage to property, based on an act or omission in the UK.

Analysing the background to the 1978 Act, the Court noted the historical development of international law from a near absolute principle of state immunity to a more restrictive theory, distinguishing between ‘acta jure imperii’ and ‘acta jure gestionis’ and applied the usual principles of statutory interpretation, whilst noting that s.5 of the Act had previously been described as “as plain as plain can be” by members of the House of Lords.

Ground 1: An act in the United Kingdom?

The acts alleged were essentially the “remote manipulation from abroad of a computer located in the United Kingdom”. In relatively short fashion, the Court held that such manipulation was an act within the UK. To describe such manipulation as an “effect” of an act committed in Bahrain would be “artificial and unprincipled”.  The Court was particularly critical of the Defendant’s argument “that when a person uses a pen to create a manuscript document the marks on the page are not part of the act of writing but only the effect of that act.” The reality was that a foreign state which committed such acts would be interfering with the territorial sovereignty of the UK. In modern terms, the hacking of a person’s computer was “equivalent to burglars breaking in and stealing the contents of a safe”.

Ground 2: Must all acts have taken place in the United Kingdom?

The Court of Appeal agreed with Knowles J that foreign states did not have immunity for personal injury caused by an act within the UK, even if other causative acts had taken place abroad. Again, by the fundamental principle of international law on which state immunity is based, if a foreign state hacks a computer located in the UK, it thereby interferes with the territorial sovereignty of the UK, even if some of the acts in question take place abroad. Rather than infringing principles of international comity, the Court’s conclusion would uphold the purposes of sovereign equality without leading to absurd results. If a foreign state is committing torts within the jurisdiction of a second state, that second state has the competence (derived from its independence) to bring the tortfeasor state within its adjudicative jurisdiction.

Ground 3: Is psychiatric injury ‘personal injury’ within the meaning of s.5?

It was, said the Court of Appeal, “a general principle of statutory interpretation that a statute is not frozen in time at the date of its enactment, but should be interpreted taking into account changes that have occurred since its enactment”. It was common ground that, whatever the position in 1978, English law now regards psychiatric injury as falling within the term ‘personal injury’. S.5 should be so interpreted, and there were no compelling reasons to the contrary.

Conclusion

As Warby LJ noted when concurring, “A claim for damages for harassment by spying is unusual. At first sight it seems paradoxical.” But if a foreign state is caught interfering with the territorial integrity of the UK, and its acts fall within an exception to the 1978 Act, the foreign state cannot hide behind the principle of the sovereign equality and independence. That principle is intended to facilitate comity in inter-state relations, not to facilitate wrongful interference.

About the Author

Called in 2011, prior to pupillage Conor Kennedy spent two years working with a leading insurance law firm, gaining experience across regulatory, employment, leisure, travel and public sector teams. He has a varied civil practice and is accredited for Direct Access instruction, but has a particular interest and expertise in claims involving fundamental dishonesty.

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William Dean

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Conor Kennedy

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