Many construction and engineering projects have an international element, be it an overseas specialist contractor, an overseas parent company providing a guarantee or a foreign stakeholder.
In the UK, we are used to most disputes being referred to adjudication. But where there is an overseas party and adjudication is not compulsory under the Construction Act 1996, there may be a reluctance for both parties to agree to it. Adjudication is, after all, an unusual process, unfamiliar in other jurisdictions and it requires a prompt response and allocation of resources that may not be readily available from an overseas party.
You may therefore be left with litigation to resolve your dispute. However, the first step in English litigation is a tricky one: how to validly serve proceedings on the defendant abroad.
Do you need the court’s permission to serve abroad?
If you are lucky, you will not need the court’s permission to serve proceedings abroad. This depends upon a number of factors:
- The application of the European regime (the Judgments Regulation, the Brussels Convention and the Lugano Conventions – remember them?).
- Where exactly the defendant is domiciled.
- Whether there are relevant proceedings elsewhere.
- Whether and how the English courts have jurisdiction.
If the court’s permission is needed, you will need to jump through three hurdles:
- You will need to establish that the claim falls within one of 20 jurisdictional “gateways” under CPR Part 6B PD rule 3.1, which are designed to ensure that the claim has a connection with England or Wales. Example “gateways” include:
- the contract you are suing on is governed by English law;
- the breach was committed here; or
- the property in question is located here.
- The case as a whole must have reasonable prospects of success.
- England or Wales must be the proper place to bring the claim.
How do you serve abroad?
Having granted permission to serve proceedings abroad, the court will allow you an extra two months to serve your proceedings (six months rather than the usual four). However, you may find that you need every last day of that period, depending on what methods of service are available in the overseas territory where the defendant is situated.
For example:
- In many convention or regulation territories, you send the proceedings to a “transmitting agency” (here the High Court Foreign Process section), which transmits them to a “receiving agency” overseas, which then effects service.
- In non-convention territories, the claimant is left to serve through foreign governments, judicial authorities and British Consular authorities. This can be cumbersome.
Amalgamated Metal Trading
Another route is available in non-convention territories – a defendant can be served by “any other method permitted by the law of the country in which it is to be served” (CPR Part 6.40.3(c)). However, as the claimant found in Amalgamated Metal Trading v Alain Baron, a narrow view may be taken as to what is “permitted” under local law. There is no inference that methods that are not expressly prohibited should be taken to be permitted.
The court in Amalgamated Metal Trading did offer a further option. It found it had inherent jurisdiction to allow alternative methods of service abroad (to complement its express power under CPR Part 6.15 to allow alternative service here). This could benefit claimants who find the prescribed methods of service abroad time-consuming.
The court in Abela v Baardarani amplified upon Amalgamated Metal Trading by finding that, as well as ordering alternative methods of service, it could direct alternative places of service (including a place in England or Wales) and retrospectively validate otherwise defective service overseas.
Tips for service abroad
Nevertheless serving a claim overseas is not a straight forward task and may prevent you from getting your case up and running as quickly as you would like. To help you avoid such delays, here are some tips for good service abroad:
- Be prepared.
- Act early.
- Get it right.
Be prepared. You wouldn’t leave for a foreign trip without a passport. Likewise don’t do business with an overseas entity without a contract that adequately deals with disputes:
- Tailor your contract to facilitate service of proceedings on an overseas party. For example:
- agree a practical method of service in the contract; and
- designate agents who are authorised to accept service of proceedings in England and Wales if possible.
- Make the contract subject to English law and jurisdiction, to help create a connection with the English courts.
Act early. Establish in advance whether you need permission to serve out, what you need to get it, what the prescribed methods of service are in the territory and whether they are practical. Seek local advice early on if necessary.
Get it right. The courts may have little sympathy where service is invalidly effected and this could result in a wasted costs order. If it is too late to correct the position, the claimant risks losing its entire financial recourse on the claim.
