System of international trade



The purpose of this document is to critically discuss the court’s decision in Owusu V Jackson (C-281/02) and determine the impact of that decision on the systems of international trade.  The aim is to establish how trading partners from different can settle a commercial dispute that may arise in the course of trade and which county’s laws are applicable in international trade disputes. The issues involving international trade are becoming commonplace due to the effects of globalisation and the ensuing economic crisis. The handling of these cross-border commercial disputes takes different shapes depending on the forum in which litigation of the disputes is conducted. The country of jurisdiction affects the guiding principles and procedures of the applicable laws and ensuing remedies. Additionally, it influences the schedule and the cost of litigations hence it has economic and legal consequences. Furthermore, the State in which parties are domiciled, the location of witnesses, language barriers and international relations undermine effective handling of cases. As international trade gains its significance due to increasing business competitiveness the disputes among the trading partners continues to increase due to a breach of business contracts. The establishment of international trade laws focuses on harmonising international trade and setting a common mechanism for settlement of the dispute between the trading countries. The parties may, however, disagree on the courts responsible for handling the issue or put the jurisdiction of particular courts in question. Furthermore, parties may conflict with the applicable law between common law and the European Legislation when the matter is handled in the European court as was the case in Owusu V Jackson. The decision by the European Court of Justice (ECJ) had a basis on Brussels Convention and the doctrine of forum non conveniens thus it affected the court’s jurisdiction in later cases.

International trade laws are complex and unpredictable because they comprise of the body of laws drawn from various sources. The modern laws of international trade emerged after the Second World War which led to the establishment of General Agreement on Tariffs and Trade (GATT). The general rules and customers governing trade between countries include the World Trade Organization (WTO) laws, the laws regulating international currency and monetary system and laws on international development. The body of international laws governing trade are drawn from a body of commercial laws referred as Lex mercantoria and Lex maritima governing the land and sea merchants respectively.  The Europeans and United States economic liberalism theories of 18th century form the foundation international trade laws. Therefore, international trade laws is a composite of legal rules comprising of new Lex mercantoria and international treaties and acts of intergovernmental organisations governing international trade relations. The essence of establishing international trade laws was to promote fairness and eliminate trade malpractices among the international trading partners. Also, the laws are used in settlement of trade disputes arising from cross-border trade. The laws applicable in each country depends on the other member country and the level of economic integration and other membership in international organisations. Therefore, before engaging in international trade parties must be aware of both national and international laws on trade and they impact their activities. When making a contract, the parties must specify the terms of the agreement in the milieu of international trade laws and where possible agree on specific issues such the country’s laws that will be applicable in settlement of disputes which may arise in the course of trade.

The question as to whether the case involving parties from different states will be heard in the English courts or other countries depends on various factors. One of such factors is the exclusive jurisdiction which takes into consideration the validity of the business whereby the state in which the business and partners seat is granted an exclusive right to hear the trials involving that business. Also, the parties’ intentions play a great role in circumstances where they expressly or impliedly disclose the state in which trade disputes may be heard as established by the contractual exclusive jurisdiction clause. This means in the case of disputes between parties who specified in their contract on where the disputes should be resolved such state will have an exclusive right to other states or countries to handle the dispute. Nevertheless, in most cases, the parties fail to disclose in the contract the State where disputes should be handled or their jurisdiction preference. In this case, the Member State may determine the court best suited to handle the case, and in UK and US, the defendant may be sued in their state of domicile.

However, it is possible for the same case to commence in more than one state if the Member States have not adopted a common law that determines the country with a legal obligation to take the proceedings. In such circumstances, the validity of the court is the dominant factor to be considered hence the court first seised will have the jurisdiction to hear the case. However, the doctrine of forum non conveniens enables the seised court extensive discretion to determine whether a foreign court is well connected to the case and whether it is the best suited to handle that particular case. To avert the risk of one party presenting the case in a state that has no connection with the case, the Universal EU rule was introduced to govern the country’s laws applicable in respective disputes implying that individuals cannot make irrational choice of forum in which their cases are to be heard. These doctrines and procedures help the courts to achieve the best outcome for various cases involving cross-border trade disputes.

Brussels Convention

The Brussel convention requires that a person is sued in their country of domicile and the laws of that state be applied in the legal proceedings irrespective of their nationality and as long as the country in which they are domiciled is a Member State. Also, the defendant can be sued in another country which is a Member State or a contracting State. The Brussels Convention contains the fundamental rules on jurisdiction in international trade disputes between the trading partners in the European Union. The ratification of Brussels Convention in the EU international commercial law had great significance because it helped to promote certainty and predictability of the law hence putting to an end the inflexibility created by the doctrine of forum non conveniens. Article 2 of Brussels Convention aims at promoting predictability of the cases about the country or court best suited to commence the trial involving international parties. Furthermore, the Convention prohibits the contracting country from assigning the responsibility of hearing the trial to a non-contracting country even if it believes such non-contracting country is well placed to handle the case.

Article 2 of the Brussels Convention requires the persons to be sued in the countries of their domicile irrespective of their nationalities if that country is contracting state. The European Court of Justice (ECJ) sought to apply the Article 2 of Brussels Convention in the trial proceedings based on the parties’ country of domicile. The Article 2 establishes lis pendens rule which stipulates that in circumstances in the events where similar cases involving same parties and requiring similar cause of action have been brought before different courts of different Member States all other courts other than the court first seised my stay their proceedings until the court first seised issues rulings of the case after which those other courts must drop its jurisdiction in favour of the court first seised.

Doctrine of Forum Non Conveniens

The doctrine of forum non conveniens is recognised both the UK and in the United States and it pertains to the disputes involving parties from different nationalities. This doctrine grants judges of the first court seised discretion to stay the proceedings and allow another court in Member State to exercise the jurisdiction on the cases if the court with the first jurisdiction considers that alternative court well placed to deal with the case. The aim of the doctrine was to ensure trials are conducted in forums that are more convenient and closely linked to the case to ensure most fair ruling. It establishes a principle that allows a national court to halt the trial of a case proceeding if that court has a feeling that another court in a different country is in a better position to handle that case effectively for the sake of discharging justice for the benefits of all parties to the case. The decision of House of Lords in the English case of Spiliada Maritime Corporation vs. Cansulex Ltd (1987) defined the doctrine of forum non conveniens arguing that the court will be allowed to stay the proceedings on the basis of forum non conveniens if it is satisfied that there is another existing forum with competent jurisdiction that makes it suited to handle the case for the best interest of all parties

This doctrine is applicable in conditions where there is more than one forum with jurisdiction to launch the proceedings and that the litigation in Forum State will potentially disadvantage the plaintiff or claimant and the outcome of the ruling will deprive the defendants of their justice. Furthermore, the case before the court must have an international element to allow the first seised court to consider the option of staying the proceedings in favour of another court with different jurisdiction. The doctrine of forum non conveniens is entrenched in the standard of adjudicatory comity to enable nations to identify and administer the verdicts of foreign States. It aimed at bringing flexibility into the stiff international footing and eliminate inconveniences that would be brought about by conflicting doctrine. It arose from the moral necessity to practice justice in exchange for justice between the countries. The aspect of legal flexibility come about as the defendants can petition the first seised court to stay the proceedings in favour of another court with different jurisdiction which has the potential to handle the case conveniently to bring justice to the defendants. In case the court first seised decides to exercise its power it can decline the hearing of the case to allow the alternative court continue with the hearing.

The implementation of the doctrine of forum non conveneins involves two distinct processes. First, the defendant has the honours to prove to the court of the existence of another forum with better jurisdiction in the case than the English court and must establish the connectedness of that forum to the case. If the defendants succeeds in convincing the court about the existence of a better forum outside the UK to handle the case, the responsibility shifts to the plaintiff to demonstrate that in case the English Court decide to stay its proceedings in favour of an external forum which is non-contracting State it will deprive the claimants the justice of fair hearing. Nevertheless, the court cannot exercise its freedom to decline to hear the case in favour of another country in an environment where the State has adopted Brussels Convention. For this reason, the doctrine of forum non conveniens has limited application.

Facts in Owusu V Jackson Case

In the case of Owusu v Jackson and Others, the claimant (Mr Owusu) was a British citizen domiciled in the UK. While swimming in a rented villa in Jamaica, the claimant sustained severe head injuries after hitting his head against sandbank submerged in a swimming pool which rendered him tetraplegic. The claimant brought legal action of tort for breach of contract in English court against the owners of the private beach for breach of safety arguing that there was an implied term of the contract he would enjoy the property with reasonable safety and free from any hidden peril. Both claimant and defendant were domiciled in the UK. The claimant also sued several other defendants domiciled in Jamaica in the same case who owned, operated, managed or had access to the beach at the time of injury. The defendants included Mammee Bay Club Ltd who owned and occupied the mammee beach, the Enchanted Garden Resorts & Spa Ltd who operated a holiday complex in the area and whose clients shared similar Mammee Bay Beach, and the Town Country Resorts Ltd which operated a hotel in the same place and had a licence to use the same Mammee Bay Beach. From the previous records, it was noted that another claimant also a British national had suffered a similar fate in the same beach two years earlier which created an implication of defendant’s negligence to caution the swimmers of an impending danger as a result of submerged sandbank and of their failure to take regard of the previous accident. The element of dispute, in this case, was in relation to whether the defendant had given the claimant an assurance of safety of the beach by agreeing to rent it to the claimant. The claimant argued that the defendants had the duty of maintenance, control and organising the beach.

The first hearing of the case was in Sheffield District Registry, and all respondents were summoned to appear for the hearing. However, the defendants applied to the British court challenging its jurisdiction to hear their case. In their application, they argued that Jamaican courts had a close connection to the case hence it was the favourable forum to settle the disputes. The defendants alleged the English court should be guided by the doctrine of forum non conveniens to stay its proceedings and allow the Jamaican courts to handle the case for the “best interests of all the parties and the ends of justice.”  However, by citing paragraphs 59 to 61 of the rulings in Case C-412/98 UGIC v Group Josi [2000] the judge argued that the application of Article 2 of the Brussels Convention was only applicable in disputes involving defendants with a domicile in contracting states and a claimant with a domicile in the non-contracting state. The judge also dismissed the view in of the Court of Appeal in In re Harrods (Buenos Aires) Ltd [1992] in which the court had stated that an English Court could apply the doctrine in Article 2 of the Brussels Convention to decline its jurisdiction to handle the case in favour of a court in a Contracting state.  The presiding judge ruled that the European court was well suited to handle this case as opposed to the Jamaican court. He also expressed his concern of the likelihood of two jurisdictions getting involved in a similar case with consequences of conflicting ruling that would jeopardise delivery of justice to the parties.

When the defendants appealed the previous ruling the court of appeal reiterated that the European courts had the jurisdiction to hear the case involving interstate parties with domicile in the non-contracting state under the Brussels Convention as opposed to the connectedness of with country with the events that had occurred. Therefore, there was no way the claimant could launch a parallel suit in Jamaica under the same doctrine since the two states, not both contracting states.

The Rational of Courts Decision

The English Court examined the validity of Article 2 of the Brussels Convention and decided they were bound by the convention in issuing legal decision involving international disputes. There was no option for the court to dissent from the requirements of the convention as the case was involving a Member State and a non-Member State. The lis pendens principle has equal application to disputes involving both Member and non-Member States. The uniform rule established by the Convention is not restricted to a single market as the jurisdiction of the Member State does not confer an obligation on non-Contracting State. Therefore, Article 2 was compulsory in the handling of international disputes, and the court could not deviate from conventions requirements unless the power to deviate is provided for in the convention itself of which was not the case.

The court also embarked on the nature of international laws and the significance of Article 2 of promoting jurisdictional predictability and legal certainty. The ECJ observed the intentions of the convention to create legal certainty would be compromised if the doctrine of forum non conveneins were to be recognised. The doctrine further undermines predictability of the jurisdictional procedures since individuals cannot determine the country where the proceedings of their cases will be held. Furthermore, it fails to protect the integrity of national defendants as they can be denied the mechanical rule when the trials are taken to another Member State based which are domicile of the defendants.

Another issue that came into consideration when determining this case was the effect of the doctrine of forum non conveniens on the uniformity of the law. The ECJ observed that most of the Member States do not recognise this rule in their jurisdiction. The Article 2 of the Brussels Convention prohibit a court of a Contracting State from surrendering its jurisdiction to another court of the non-contracting state on the basis that another court is well suited to settle the dispute due to its connectedness to the case. So considering most of the member states do not recognise this doctrine and the prohibition of the Member State to apply to decline their jurisdiction in favour of another non contracting Member State it becomes apparent that adoption of Article 2 of the convention helps to promote uniformity of the application of international trade rules.

Although ECJ did not clarify whether the ruling in the case was to apply retroactively, it is evident the ruling is to be applied retrospectively, and all courts should lift the existing stays on the proceedings. Also, the court’s ruling limited the application of the doctrine in cases that do not apply Brussels Convention. The ECJ could not act contrary to their rulings in future cases because this would undermine the uniformity, predictability and certainty of the jurisdiction hence creating a probability of arriving at irreconcilable decisions.  The convention cannot be applicable anymore in the European civil legal procedure, and the European Court is legally bound to exercise the jurisdiction in the cases which fall under Article 2 of the Brussel convention.

Furthermore, the convention limits the freedom of forum shopping which could otherwise result in the abusive jurisdiction. This implies the freedom of the defendants to seek for a more competent court to handle the case outside European court was curtailed by the ruling in Owusu V Jackson case. This is an advantage to the extent that the handling of cases in one Member Country without any chance of the defendants shifting the proceedings to another court is likely to result in quick hearing and delivery of justice for both parties.

The issues about the place where the case would be heard whether in Jamaica or England took centre stage as defendants questioned the jurisdiction of the British court to handle the case.  In paragraph 32 of the case, the defendants and the US government raised a claim against this ruling citing that Article 2 of the Brussels Convention was only applicable in contracting state. Considering the circumstances of the case such the evidence of the beach, the witnesses and the defendants were all in Jamaica, it was convenient for the case to be heard in Jamaica. Furthermore, UK was not a contracting state although the parties domiciled in that country. However, it is worth noting that the essence of Brussels convention is to enhance smooth operations of a common market between various countries and it aims at minimising the challenges of dispute resolution relating to parties in contracting states. In so far as creating a harmonious mechanism for international dispute resolution, it was apparent that Brussels Convention applied to individual contracting state as well and other non-contracting state as was the situation in this case.

Consequences of the Court’s Decision in the Case

Since the House of Lords ruling in the case of Spiliada Maritime Corp v Cansulex there has been many controversies surrounding the court’s jurisdiction in cases which they believed could be handled by other courts. The House of Lords established the doctrine of forum non conveniens which allowed courts to stay the proceeding in favour of another court in the non-contracting state in the view that that other court had jurisdiction to handle the case better. This doctrine also created a lot of uncertainty in the hearing of legal cases since the parties (claimant or defendant could not certainly predict the court or the country that would preside over the case. The ECJ’s decision in the case of Owusu vs. Jackson has had many consequences in the application of law and justice proceedings. First, it narrowed the application of forum non conveniens in later cases which do not fall within the scope of Brussels Convention. The authors of the doctrine of forum non conveniens require the court to stay the proceedings and allow another court in a different country to stay the proceedings in circumstances where they feel that another court is well suited to handle the case. They did not provide any exception for courts to continue the proceedings in such circumstances. However, after the ruling in Owusu V Jackson various courts have applied the principle in the case to continue with the trial

Also, the case did not give the Court of Appeal any opportunity to stay the proceedings. The consequences of such limitations are that the Member States in which the parties to the cases are domiciles have to continue with proceedings of cases even if they believe that such cases could be handled effectively in other countries in which the case has a close connection with the case.

The ECJ’s ruling in the Owusu V Jackson case also increases the issue of certainty regarding the country where cases of involving international parties can be settled. The court first seised is prohibited from delegating its jurisdiction to another court in the Member State. Therefore, the claimants has the assurance of the jurisdiction to apply on their case, and the defendant can also prepare for legal counsel to preside over their case. If the defendant succeeds in an application to have the case head in a different jurisdiction of Member State, the claimant has the responsibility to demonstrate that the transfer of the trial to foreign court will prevent him or her from obtaining justice or cause other inconveniences such as inaccessibility of jurisdiction or impose economic hardships.

The court’s ruling does not offer general preference for the court to decline the jurisdiction in favour of another non-European court to handle the cases. Considering that in the cases involving European and non-European nationals are a likely increase in the future and those other countries have varying jurisdictional principles without consideration for court first realised this would create a scenario of parallel court proceedings. The resulting parallel resolutions involving related cases will create complexity due to irreconcilable court decisions which cannot be implemented. This is a major drawback in the establishment of harmonious court proceedings for the achievement of a speedy settlement of international civil and commercial disputes.

Under Article 6(1) of EC 44/2001 of the convention, if a person is domiciled in a Member State, and that person is a part of many other defendants of a case having close connection, that person can be sued in a jurisdiction where one of the other defendants is domiciled since it is convenient for the cases to be heard simultaneously to minimize the risk of arriving at irreconcilable decisions that would arise if the cases were determined separately. Therefore, it became apparent in the case that Article 2 of the Brussels Convention is compulsory and must be observed when dealing with international civil or commercial disputes.

The Owusu V Jackson case also provided the basis for examining the compatibility of Brussels Convention with the doctrine of forum non conveniens. It can be argued that one of the aims of Brussels convention is to create certainty in the application of law. It provides common guiding principle to various national courts and the with respect to application of their jurisdiction before proceedings in specific cases that can present to those courts. It becomes apparent then that a court cannot apply the doctrine of forum non conveniens and at the same time be guided by the Brussels Conventions. Brussels Convention and the doctrine of forum non conveniens are incompatible in the sense that the doctrine of forum non conveniens empowers the first court seised to consider the possibility of an external court taking over the trial of a case presented before as a matter of convenience or for being well suited to handle the case effectively. Consequently, the application of this doctrine undermines the principle of legal certainty and predictability of jurisdictional rules which forms the basis of the Brussels Convention.

Additionally, the ruling in the Owusu V Jackson case reinforced the protection of justice for the parties involved. First, by upholding Article 2 of the Brussels Convention ECJ promoted the creation of legal certainty thus enabling the defendants to determine the court in which they case can be taken for trial. Having such information before the court proceeding is crucial because the defendants can prepare on how they will defend the case. Also, it limits the application of the doctrine of forum non conveniens by the court first seised from staying the proceedings of declining to hear the case in favour of another well suited court in another country hence minimizing the complexity of legal jurisdiction and, cost and time involved in carrying the trial in a foreign country hence enhancing quick delivery of justice.

There are negative consequences associated with the court’s ruling in the case. The application of Article 2 of Brussels Convention limits the possibility of the first court seised transferring the case to another foreign court because the article conflicts with the doctrine of forum non conveniens. Therefore, in the case of a defendant domiciled in another country other than the contracting state can be sued in another court far from the state of domicile if the case involves several defendants and some of the defendants are domiciled in other countries. Such a situation will result in a high cost for the defendant facing trial in another country other than the state of his or domicile. It creates technical complications related to distance and the anxiety of recovering their expenses in a foreign country in case the claimant loses the case.

The ECJ ruling in the case puts limitations on the extent to which the parties can willingly pursue justice in the court of law. In the international trade, the trading partners have different legal and economic background. When conflicts arise, it would be more convenient for the aggrieved party to commence court proceedings in a jurisdiction which offer better chances for justice. However, this is not the only factor to consider in an international judicial process. The defendant would better have the litigation process conducted in a country which has a close connection with the case. For instance, in the case of Owusu V Jackson, the defendants preferred Jamaican jurisdiction particularly because the evidence of the case was in that country and the company which insured rented property was in Jamaica. Therefore, there was no way the insurer could compensate its clients for the case settled in another country of other than in the country where it was insured. However, with the ECJ’s decision limiting the application of forum non conveniens it is improbable for the parties to pursue justice in the country of their economic convenience. The Brussel Convention limits the flexibility of parties to seek legal redress of the disputes arising from international trade.

The acceptance of ECJ to handle the case in which the United States’ court had better jurisdiction than the European Court undermines the doctrine of forum non conveniens. It creates a leeway for the European court to continue hearing the cases involving international disputes in disregard of the clause of stay proceedings. Even in circumstances where the court intends to stay proceedings, it will be a challenge the magnitude of the cases which are to be handled by other non-European States. Furthermore, the European court is likely to continue with proceedings of a case which they lack adequate legal mechanism to deliver justice to both parties. It undermines the flexibility of defendants to seek redress in the court of their choice on the basis of direct linkage to the case.


The Brussels Convention is applicable in legal cases involving parties of different nationalities. If the first court seised is from Contracting States and the other parties are domiciled in the Member State, but the case has a connection with another country which is non Member state the seised court must exercise its jurisdiction to settle the dispute without staying the proceedings in favour of another country even if the defendants believes that the alternative court is better suited to handle the case. The decision of the ECJ in the case of Owusu V Jackson deprives the Member States of applying forum non conveniens. This will promote certainty and predictability of legal jurisprudence. It minimises the risk of conducting parallel proceedings in various countries jurisdiction which otherwise could result in irreconcilable results. The rule established by Article 2 of Brussels Convention requires the party to be sued in their country of domicile although the question regarding the effectiveness of justice for the parties will always arise. Also, there is finance and economic concerns when a person is sued in a foreign country. Nevertheless, the convention prevents the defendants from shopping forum in other countries for economic convenience as opposed to legal justice. The ECJ’s decision has undesired consequences of undermining the flexibility of legislation process. As more countries engage in international trade disputes arising from the breach of contract will increase significantly and resulting in an influx of litigations in various courts. Also, more parties would prefer to have their cases determined in the court of their choice particularly in countries which have a close connection with the case. Article 2 has introduced rigidity in the handling of international cases With such rigidity created by the Brussels Convention it remains sceptical whether the courts of the Member States have competent jurisdiction to handle all cases and deliver justice to all parties. The authority to derogate jurisdiction in a different way from the stipulations of Article 2 must be provided by the convention itself.

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