Two notable English court judgments on jurisdiction have been handed down in the last few months – the first being the Court of Appeal’s decision in Limbu & Others v. Dyson Technology Ltd & Others [1], and the second the High Court’s decision in da Silva & Others v. Brazil Iron Ltd & Another [2]. Both cases involved group litigation against UK-domiciled companies in respect of the actions of third parties overseas. In both cases, the defendants challenged the English courts’ jurisdiction on the grounds that the respective foreign courts were the more appropriate forum for the dispute. In both cases, the court rejected the challenge and retained jurisdiction. In Limbu, the Court of Appeal found, contrary to the conclusion of the High Court, that England was the more appropriate forum. In da Silva, however, the High Court found that Brazil was the more appropriate forum, but it nevertheless retained jurisdiction on the grounds that there was a real risk that the claimants would not obtain substantial justice in Brazil.
The two-stage test in forum challenges
Both decisions involved the application of the two-stage approach to the determination of forum non conveniens challenges set out in Spiliada Maritime Corp v. Cansulex Ltd[3]:
- Stage one: The defendant must show that there is another forum that is ‘clearly and distinctly more appropriate’, meaning that the case may be tried more suitably there for the interests of all the parties and the ends of justice. To determine this, the courts will look at the factors that connect the claim with the respective jurisdictions. There is a range of potentially relevant factors, but key considerations include where the alleged events/damage occurred, the applicable law, where the parties/documents/witnesses are, and the (potential) existence of proceedings involving the same issues which may result in conflicting judgments.
- Stage two: If the defendant has succeeded at stage one, the court will relinquish jurisdiction unless the claimant can prove that there are ‘special circumstances’ which nevertheless justify the court retaining jurisdiction. It is well-established[4] that a real risk of a claimant not being able to obtain substantial justice in the foreign jurisdiction would amount to a special circumstance and would result in the court retaining jurisdiction.
Limbu & Others v. Dyson Technology Ltd & Others
This claim was brought by migrant workers employed by two Malaysian companies that supplied components and parts to the Dyson group. The workers claimed to have been trafficked and severely mistreated by the suppliers. The claim was brought against three companies in the Dyson group (two incorporated in England and one in Malaysia). The alleged bases for the defendants’ liability were the high degree of control they had over the operations and working conditions at the suppliers’ factories, their defective policies relating to suppliers and modern slavery (amongst others), their failure to ensure implementation and enforcement of the relevant policies, and their knowledge of their suppliers’ practices.
The defendants applied for a stay of proceedings on the grounds that Malaysia was the appropriate forum. They gave undertakings that they would submit to the jurisdiction of the Malaysian courts. They also gave undertakings to pay certain disbursements on the claimants’ behalf (which would not be covered by any funding agreement) to address their concerns that they would not be able to cover necessary costs (e.g., the costs of expert witnesses).
The High Court determined that Malaysia was the appropriate forum.
In relation to Spiliada stage one, the High Court considered the fact that Malaysian law would govern all but one of the claims, and the fact that the events took place and alleged harm was suffered in Malaysia were key factors that weighed strongly in favour of Malaysia. The court noted that the first and second defendants had brought defamation proceedings against Channel 4 in England, and considered that the multiplicity of proceedings and the risk of inconsistent judgments may have weighed strongly in favour of England, but that this was diminished by the fact that the defamation claim was likely to proceed entirely independently of this claim.
In relation to Spiliada stage two, while the court considered that the claimants had a well-founded fear for their safety if they were to give evidence in Malaysia, this could be addressed by them giving evidence remotely (which would be allowed by the Malaysian courts). As to the funding of the claim, the court determined that there was little risk that the claimants would not find lawyers willing to take the case on under a conditional fee agreement. While there was likely to be some costs that would not be covered by such an agreement, the defendants had undertaken to pay certain disbursements on the claimants’ behalf, and the court considered that any other shortfalls would very likely be funded by nongovernmental organisations.
The claimants appealed to the Court of Appeal, which overturned the High Court’s judgment on the grounds that it contained the following errors of principle:
- The judge had failed to take proper account of the fact that the primary defendants (i.e., the first and second defendants) were domiciled in England. Domicile is the basis for establishing jurisdiction; it connotes allegiance to the country’s institutions, including its courts, which means the party can reasonably expect, and be expected, to meet claims against it in such courts.
- As to the location of the relevant events, while the alleged mistreatment and harm occurred in Malaysia, it was unlikely that there would be significant dispute regarding the fact of the ill treatment. On the other hand, the claim against the defendants was particularly focussed on the promulgation and implementation of policies, and failure to take action in response to knowledge of the suppliers’ conduct, all of which took place predominantly in England.
- Accordingly, it was likely that much of the relevant documentation would be in England.
- Contrary to the High Court judge’s assertion that the defamation claim would proceed independently of this claim, it was in fact highly likely that the management of the cases would be coordinated by the courts.
- The defendants would be coordinating and conducting their defence from England.
- There would be a greater equality of arms between the parties if the case proceeded in England. The claimants would be able to attend in person, and there would be less disparity between the quality of the parties’ legal representation.
- The undertakings given by the defendants to pay the claimants’ disbursements was ‘unprecedented’, represented a clear conflict of interest and was an unsatisfactory mechanism to address the shortfall in funding.
The defendants have lodged an application for permission to appeal to the Supreme Court of the United Kingdom. This has yet to be determined.
Oliveira da Silva & Others v. Brazil Iron Limited & Another
This claim was brought by 103 individuals against two UK-domiciled companies for environmental damage caused by a mine operated by the companies’ subsidiary in Brazil. The claimants alleged that the subsidiary operated the mine under the control and direction of the defendants.
The defendants applied for a stay of proceedings on the grounds that Brazil was the appropriate forum. Similar to the defendants in Limbu, they also gave undertakings to pay certain disbursements on the claimants’ behalf.
While the judge noted that the domicile of the defendants was a significant connecting factor to England, and it was likely that evidence regarding the defendants’ control of their subsidiary would emanate from England, he nevertheless determined that Brazil was the more appropriate jurisdiction:
- The most important issues in the case were likely to concern the operation of the mine and its impact on the claimants, which obviously occurred in Brazil.
- The claimants and most of the likely witnesses were located in Brazil and only spoke Portuguese.
- Brazilian law applied to the dispute, including potentially to issues regarding the status of the claimants as ‘Quilombola’ people, with which the English courts (while adept at dealing with foreign law issues) would be entirely unfamiliar.
Having determined that Brazil was the more appropriate jurisdiction, the court went on to consider the Spiliada stage two.
In this regard, the judge considered that there was cogent evidence of a real risk that the claimants would not be able to fund, or obtain funding for, legal representation necessary to litigate the claim to a proper conclusion. While deferred fee agreements were available in Brazil, they were damages based and subject to caps. Due to the relatively low value of the individual claims, the maximum return for a successful claimant lawyer would be equally limited. The judge determined that, in light of the likely complexity, length and cost of conducting the case, lawyers contemplating taking the case on would consider that there was too high a risk of them being left substantially out of pocket. The judge, agreeing with the sentiments of the Court of Appeal in Limbu, also rejected the defendants’ undertaking to pay the claimants’ disbursements.
The judge noted that the nonavailability of financial assistance in the foreign jurisdiction does not automatically mean that the English courts should retain jurisdiction under Spiliada stage two. Claimants cannot be allowed to forum-shop in order to secure ‘Rolls Royce’ representation in England as opposed to a more rudimentary presentation in the foreign jurisdiction. However, it has been established that where the lack of financial assistance means the claimant will not have legal representation in a case that cannot be tried without the assistance of professional lawyers, that will represent a real risk of a claimant not being able to obtain substantial justice. The judge found that this was the case and accordingly dismissed the defendants’ application.
Takeaway
While these cases do not break new legal ground, they indicate the English courts’ willingness to retain jurisdiction over disputes which (at least on the face of it) have little connection with England beyond a defendant’s domicile.
We shall see whether the Supreme Court is minded to hear the appeal in Limbu. While all such cases turn on their own particular facts, if the appeal does go ahead, the resulting judgment should provide some definitive guidance on how to balance competing connecting factors.
[1] [2024] EWCA Civ 1564.
[2] [2025] EWHC 606 (KB).
[3] [1987] AC 460.
[4] Lungowe v. Vedanta Resources Plc [2019] UKSC 20 [2020] AC 1045.
Contributors
Alex Radcliffe