In another example of high-value international litigation making its way to England’s Commercial Court – despite the bitter objections of one side – a Korean shipbuilder engaged in a $179 million contract dispute will have to submit to defending itself in London.
The operator of a tanker fleet (the buyer) ordered a new vessel from the shipbuilder at a cost of $42.5 million. It had also entered into options to purchase 12 more identical vessels. The buyer purported to terminate both contracts on the basis that the shipbuilder’s failure to secure refund guarantees amounted to a fundamental breach. That claim was contested by the shipbuilder.
The dispute in respect of the shipbuilding contract had been submitted to mediation in London; however, the options, although expressly governed by English law, did not contain any arbitration or jurisdiction agreement. The buyer claimed damages for ‘loss of bargain’ and launched proceedings in London.
In rejecting the shipbuilder’s challenge to English jurisdiction to hear the case, the Court found that the proceedings had been properly served on the London address from which the shipbuilder carried on its UK operations. Given that the outcome would hang on issues of English law, the Court also found that London was a ‘substantially more convenient’ forum for the case to be tried than Korea.