UK: Court Will Ordinarily Apply English Law In Absence Of Evidence Of Relevant Foreign Law, Unless Defendant Shows It Would Be Inappropriate To Do So

Last Updated: 15 November 2018
Article by Maryam Oghannah

The High Court has held that where a claim was, in principle, governed by foreign law, but the claimant had not pleaded or proved the content of that law, the court would apply English law to the claim. The claimant had pleaded a viable cause of action which could be determined under English law, and the defendant had not raised any basis for a contention that it would be inappropriate to do so: Iranian Offshore Engineering and Construction Company v Dean Investment Holdings SA [2018] EWHC 2759 (Comm).

This decision confirms that, in most cases, the court will apply English law to a claim unless the claimant pleads and proves the content of a relevant foreign law or the defendant shows that it would be inappropriate to apply English law eg because that would be too strained or artificial in the particular circumstances.

A defendant cannot therefore merely assert that a foreign law applies and thereby put the burden on the claimant to plead and prove the content of that law.

Maryam Oghanna, an associate in our disputes team, considers the decision further below.

Background

The claimant brought claims of an alleged fraud which induced payments to purchase an offshore drilling rig, totalling USD$87million. The claims against the fifth and sixth defendants arose from acts that allegedly took place in Iran and the UAE, and caused damage in Iran. The claimant did not plead any case as to which country’s law applied to its claims.

The fifth and sixth defendants pleaded that the claims against them were governed by Iranian Law, but did not plead any case as to the content of Iranian law. Their defence reserved the right to amend after seeking expert evidence on Iranian law. No party had sought expert advice on Iranian law at the point of the pre-trial review (seven weeks before trial).

The claimant did not dispute that, in principle, its claims were governed by Iranian law, but it said this was irrelevant as neither side had pleaded any Iranian law.

The claimant relied on the general common law principle, sometimes referred to as an evidential presumption of English law, which is stated as Rule 25(2) in Dicey, Morris & Collins, “The Conflict of Laws”. Rule 25 states:

  1. In any case in which foreign law applies, the law must be pleaded and proved as a fact to the satisfaction of the judge by expert evidence or sometimes by certain other means.
  2. In the absence of satisfactory evidence of foreign law, the court will apply English law to such a case.

Dicey goes on to note, however, that there may be cases in which the application of English law will be too strained or artificial to be appropriate. Where that is the case, it suggests, the court may regard a party who has pleaded but failed to prove foreign law as having failed to establish its case.

At the pre-trial review hearing, the question arose as to whether it was open to the defendants to contend that English law should not apply in default under Rule 25(2). More specifically, whether the defendants could argue at trial that the claimant had to plead and prove the principles of Iranian law that govern its claims and that, since it had not done so, the claims must fail.

The claimant sought an order to confirm that Rule 25(2) would apply at trial.

Decision

The High Court (Baker J) at the pre-trial review found in favour of the claimant, confirming that Rule 25(2) would apply at trial and that the defendants could not contend otherwise. Although this was subject to the defendant making a successful application to amend the pleadings for trial, the court did not encourage such an application and indicated the view that such an application would be very unlikely to succeed.

The judge’s analysis of the applicable principles was, in summary, as follows:

  • It is not necessary for a claimant to plead the intention to rely on Rule 25(2), as it is a default position and applies unless there is a reason for it not to apply;
  • Where the claimant neither needs nor chooses to plead foreign law and can plead a complete and viable cause of action if the claim be determined under English law, a contention that it would not be appropriate to determine the claim under English law is “a reasoned denial of liability” which should be properly pleaded;
  • Even where (in principle) the law governing a claim might be a foreign law, a contention that it is inappropriate to apply Rule 25(2) must be based on matters which are particular to the claim in question;
  • There is no absolute rule precluding reliance at trial on a contention that ought to have been pleaded, as the court could allow a late amendment, or reliance at trial on an unpleaded case, or the court could raise the point of its own motion – though it would rarely be fair for that to occur very close to trial.

His analysis was, he said, supported by the obiter remarks of Arden LJ (as she was then) in OPO v MLA [2014] EWCA Civ 1277 and Brownlie v Four Seasons Holdings Inc [2015] EWCA Civ 665, where she expressed the view that, in the absence of evidence as to foreign law, the presumption of foreign law being the same as English law should apply.

The defendants relied on Belhaj v Straw [2014] EWCA Civ 1394 in support of their contention that, where a claim was governed by foreign law, the claimant had to plead a case under foreign law. However, Baker J said he did not interpret Belhaj as laying down a rule of general application to that effect. If it did, it was obiter and was not consistent with the Court of Appeal’s approach in OPO v MLA, which he found compelling. Accordingly, he would decline to follow it.

Regarding the current case, Baker J found that:

  • The claims, as pleaded by the claimant, did not involve or imply the advancement of a case as to the content of Iranian law. There was therefore no requirement for the claimant to plead the content of foreign law.
  • The defendants had not pleaded any case denying the appropriateness of applying Rule 25(2) at trial. The fact that a foreign law was, in principle, the applicable law to a claim self-evidently did not disapply Rule 25(2). It did not, without more, render it too strained or artificial to judge the claim at trial by reference to English law in the absence of evidence as to the foreign law.
  • The defendants had merely reserved the right to amend their defence after having taken advice on Iranian law. The clear message conveyed was that their plea that Iranian law applied was immaterial unless some other case as to the content of Iranian law was pleaded. That had not been done.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions