Litigation Trending: A comfortable ride - English courts may be the 'Tesla' of litigation but does that matter?

The High Court has declined to exercise jurisdiction in a high profile ESG supply chain claim. It concluded that England is not the most suitable forum (forum non conveniens) for the claim. 

The judgment in Limbu and others v Dyson Technology provides an important insight into how the courts will determine the success of a type of jurisdictional challenge unavailable before Brexit. 

Background

The Claimants in the proceedings are Mr Limbu and 22 other migrant workers from Nepal and Bangladesh. The workers were employed at a factory in Malaysia which manufactured Dyson-branded products and were allegedly subject to various wrongdoings. The proceedings are brought against three entities in the Dyson Group: two domiciled in England, the third domiciled in Malaysia. The Claimants allege, among other things, negligence and unjust enrichment on the part of the Defendants by virtue of the control they allegedly exercised over their supply chain.

The claim was brought in the High Court, but the Defendants challenged jurisdiction, arguing that the more suitable and proper forum for the proceedings is Malaysia.

Forum non conveniens

Prior to Brexit, the English courts were unable to decline to exercise jurisdiction over English-domiciled defendants on forum non conveniens grounds: the EU's Recast Brussels Regulation did not allow them to do so. However, for claims issued since 1 January 2021, the Recast Regulation does not apply. Therefore, forum non conveniens arguments are potentially available to English-domiciled defendants.

The Court's task is to determine the forum where the case can most suitably be tried for the interests of all the parties and the ends of justice. This involves a two-stage test set out in The Spiliada [1987] 1 AC 460:

1. At the first stage, the Court asks whether England is the natural or appropriate forum or whether there is another available forum which is clearly and distinctly more appropriate.
2. If the answer at the first stage is that there is another available forum which is clearly and distinctly more appropriate, at the second stage the Court asks whether there are special circumstances such that justice requires the trial to take place in England.

The Court's role is not to exercise discretion but instead to carry out "an evaluative or balancing exercise", weighing up the various factors for and against accepting jurisdiction.

Stage 1: Malaysia is clearly and distinctly the more appropriate forum

Mr Sheldon KC (sitting as a Deputy High Court Judge) held that many of the factors to be considered were neutral as between England and Malaysia. Neither forum would be practically convenient for all parties, documents and witnesses were located in both jurisdictions, and there was a real risk of duplication of proceedings wherever the claim was heard because of separate defamation proceedings brought by the Defendants in the English courts and potential claims against the Malaysian Police in the Malaysian courts.

What tipped the scales in favour of Malaysia, however, was (i) Malaysia being the place where the alleged treatment took place and (ii) Mr Sheldon KC's view that "Malaysian law is also the governing law, and there are good policy reasons for letting Malaysian judges consider the novel points of law that are being raised in this claim within the context of their jurisprudence, rather than letting an English Court second guess what they might decide."

Stage 2: No special circumstances: justice does not require a trial in England

At Stage 2, the Claimants argued that they would not be able to obtain substantial justice in Malaysia, including because of:

• the Claimants' status as migrant workers;
• the complicated nature of the claims and the need for suitable advocates;
• the costs of disbursements such as experts; and
• the financial risks for the Claimants' lawyers.

Mr Sheldon KC was unconvinced by these arguments. The Defendants had offered to pay a significant proportion of the disbursements and adduced evidence (which Mr Sheldon KC found persuasive) from a Malaysian lawyer who was willing to take on the claims under a suitable fee structure. He found that "there is no real risk that the Claimants will not be able to obtain legal representation and necessary NGO funding to pursue their claims in Malaysia", and that even if the level of service was not the same as in England "there is no real risk that they will be unable to source suitably qualified and expert legal representatives to take on their case in Malaysia".

Key takeaways

1. Post Brexit, the English courts will be willing to consider forum non conveniens arguments in claims brought against English-domiciled companies and decline to exercise jurisdiction in an appropriate case. Given the increasing number of group claims against English-domiciled companies for events that occurred abroad, that is important and corporate Defendants will welcome this decision.
2. However, this will always be fact dependent. In Municipio de Mariana & ors v BHP Plc & BHP Ltd [2022] EWCA Civ 951, a group claim for losses arising out of the collapse of the Fundão dam in Brazil, the Court of Appeal held at Stage 1 of the Spiliada test that a Defendant had not established that a single action in Brazil was a clearly and distinctly more appropriate forum in which the claims could more suitably be tried. At Stage 2, the Court found that the Claimants had established that there was a real risk that they could not proceed together in a single action in Brazil.
3. The various undertakings given by the Defendants (e.g. to submit to the jurisdiction of the Malaysian courts and to pay a significant proportion of the claimants' disbursements in Malaysia) were important in enabling the court to reach the view that it should decline to exercise jurisdiction. That provides a valuable lesson for Defendants seeking to overcome some of the practical difficulties that might stand in the way of a successful application.
4. Governing law is important. That is especially the case where novel legal issues are involved and/or a different view might be reached under the foreign law from that which would apply under English law. In this case, the consideration that novel law in Malaysia should not be developed in a courtroom on the other side of the world was important.
5. The English courts are often viewed as the gold standard for litigation, with Mr Sheldon KC taking the opportunity to update (at Counsel's suggestion) references from "Rolls Royce" to "Tesla". However, that did not mean that the English courts should exercise jurisdiction. The question was whether there was a real risk that substantial justice would not be obtainable in the foreign jurisdiction.

Authors: Aaron Marchant, Associate; Jon Gale, Partner; Tom Cummins, Partner