Description
The Pursuers raised an action for payment of a sum that the Defenders had withheld in respect of invoices rendered for work done under a contract between the parties. The Defenders were a Dutch company registered in The Haig with a place of business in the Republic of Kazakhstan. The Defenders claimed that they had withheld the money properly in terms of Kazakhstan law. The issue between the parties was whether the Defenders were obliged under Kazakhstan law to withhold tax when paying the Pursuers' invoices. The parties had entered into a written contract in terms of which the Pursuers provided qualified specialist personnel to act as client representatives for the Defenders during various surveying activities, most of which took place off-shore or on-shore in Kazakhstan. Payment was to be made into the Pursuers' bank account in Aberdeen. “Applicable Law” was defined in the contract, and for the purposes of the present action, that was the law of Kazakhstan. A number of clauses in the contract covered the liability for taxes. The Defenders did not dispute that Aberdeen Sheriff Court had jurisdiction to hear the case, but argued that the Courts of Kazakhstan also had jurisdiction and the parties had prorogated the non exclusive jurisdiction to those Courts in terms of the contract. Those Courts were a more appropriate forum for hearing the case. It was open to the Sheriff Court to decline to exercise its jurisdiction and it should do so in this case for a number of reasons. In particular, the law and practice of Kazakhstan would have to be considered and the issue in dispute had no connection with Scotland. The Kazakhstan Courts were in a better position to do justice between the parties and this was the test to be applied. The Pursuers submitted that it was not open to the Sheriff Court to decline to exercise the jurisdiction which it had in respect of the dispute. It was submitted that the plea of forum non conveniens was no longer applicable in Scotland in cases where jurisdiction was founded on Council Regulation number 44/2001. Article 5 (1)(a) of that Regulation provided that “a person domiciled in a Member State may, in another Member State, be sued …. in matters relating to a contract, in the Courts for the place of performance of the obligation in question“. Jurisdiction in the present case could be founded on the place for performance of the obligation, namely payment of the invoices, which was the Pursuers' bank account in Aberdeen. Even if this was competent for the Court to decline to exercise jurisdiction, this would be inappropriate as Aberdeen Sheriff Court was a more appropriate forum for the determination of the dispute. The contract had a number of connections with Scotland and a Scottish Court could investigate and determine foreign law. If the Court did have the powerto decline to exercise jurisdiction, the Defenders had not discharged the onus in respect of the test for determining whether that power should be exercised as laid down in Sim v Robinow (1892) 19R 665. Finally, even if the test had been met, there were special reasons why the power should not be exercised. These related to difficulties which might arise in relation to the enforcement of a Decree from the Kazakhstan Courts. The Sheriff had to determine whether the plea of forum non conveniens was available in this case.
