A recent decision from the appeal court with responsibility for the sheriffs located in Tayside, Central & Fife has affirmed the long-established but often overlooked rule of Scots law that, unless agreed otherwise, a debtor is bound to pay his creditors at their principal place of business.
MacRoberts successfully challenged the decision of a Sheriff who ruled that European rules had changed long settled Scots law in this regard. Sheriff Principal Dunlop, QC upheld MacRoberts' appeal and found the Scottish rule to be unchanged. As such, Scots law continues to recognise that creditors can sue their debtors at the Scottish court with jurisdiction over the place where payment was to have been made.
Very often debtors will move house or shut down their business before re-locating to other legal jurisdictions or more remote parts of Scotland. Those pursuing such debtors are then left with potentially awkward scenarios e.g. passing their claim on to untested lawyers to raise proceedings in those foreign jurisdictions or suing at a Scottish court entirely remote from themselves, their solicitors or their witnesses. The Scottish rule, affirmed by the judgment that a debtor should seek out his creditor, allows claims to be raised at the relevant court in Scotland (provided that parties have not agreed otherwise or that the rule has not been clearly superseded by UK law, European law or treaties agreed with other jurisdictions).
The Sheriff Principal's decision binds the sheriffs of Tayside, Central & Fife but would likely be regarded as highly persuasive by all sheriffs in Scotland. It can be read here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
