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Incorporation of English Jurisdiction Clause Arguably 'Went Without Saying'

In a novel decision of interest to the international trading community, the High Court ruled it arguable that an English jurisdiction clause was incorporated in a petroleum supply contract notwithstanding that the alleged deal was done informally over the telephone, without any discussion of jurisdictional issues.

A Swiss petroleum supplier claimed to have contracted with a Liberian purchaser for the supply, in multiple shipments, of 100,000 metric tonnes of gas oil and mogas. The supplier launched proceedings in London against the purchaser, claiming in excess of $2.2 million for alleged breach of that contract.

The purchaser asserted that even had such a contract been concluded – which it denied – it contained no English jurisdiction clause and that the English courts thus had no business considering a dispute in which neither the contracting parties nor the factual matrix of the case had any connection to England.

Ruling on the matter, the Court noted that there was no evidence that the inclusion of an English jurisdiction clause was discussed during the telephone conversation that was said by the supplier to have resulted in the formation of the contract. However, the Court accepted that the supplier had a properly arguable case that the incorporation of such a clause went without saying.

The supplier had put forward a perfectly plausible case that a binding contract was concluded during the call. The course of its past dealings with the purchaser, which included numerous contracts containing English jurisdiction clauses, gave rise to a plausible evidential basis for asserting that the contract in question incorporated such a clause. The purchaser's challenge to the Court's jurisdiction failed.

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