SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS at ABERDEEN

Case Ref: CA17/08		DECISION by Sheriff J K Tierney
		in the cause
		Oceanfix International Limited
		Pursuers
		against
		AGIP Kazakhstan North Caspian Operating Company NV
		Defenders

Act: Mr Gunnyeon

Alt: Mr Howlin

ABERDEEN, 3^rd April 2009

The Sheriff, having resumed consideration of the cause, repels the defenders' first plea in law; appoints parties to be heard on further procedure in terms of Rule 40.14 of the Ordinary Cause Rules; and fixes 16 April 2009 at 10.00am as a date for the hearing; reserves meantime all questions of expenses and appoints parties to be heard thereon on said date.

Sheriff J K Tierney

Note/.

Note

Introduction

[1] In this action, the pursuer is a limited company with its registered office in Aberdeen. The defender is a Dutch company with its registered office in The Hague, and a place of business in Atyrau in the Republic of Kazakhstan. In the debate before me the pursuer was represented by Mr Gunnyeon, solicitor, and the defender by Mr Howlin, advocate

[2] The pursuer claims payment from the defender of the sum of £66,400.67 being the balance admittedly withheld by the defender in respect of invoices rendered by the pursuer to the defender for work done under a contract between the parties.. In terms of that contract payment of invoices was to be made to the pursuer's nominated bank account in Aberdeen.

[3] The defender avers that the money which it has withheld has been properly withheld in terms of the law of the Republic of Kazakhstan. This is disputed by the pursuer.

[4] The defender's case is that the issue between the parties is whether they were obliged under Kazakhstan law (and therefore entitled and obliged in terms of the contract between the parties) to withhold tax when making payment of the pursuer's invoices. The defender says the courts of the Republic of Kazakhstan are the appropriate courts to determine this issue. This is denied by the pursuer.

[5] The defender submitted:-

(1) That it was open to the court to decline to exercise the jurisdiction which it has in respect of the dispute; and

(2) It should decline to exercise that jurisdiction and should sist the cause to enable the courts of Kazakhstan to determine the issue.

[6] The pursuer submitted:-

(1) It was not open to the court to decline to exercise the jurisdiction which it had in respect of the dispute; and

(2) Even if it was competent, it would be inappropriate for the court to do so, the court of Aberdeen being more appropriate for the determination of the dispute between the parties.

The Contract

[7] The parties entered into a written contract on 29^th March 2006. In the contract the pursuer is referred to as "Contractor" and the defender is referred to as "Company". The designation of the defender discloses that the defender has a branch registered at Atyrau, Republic Kazakhstan.

[8] The scope of work of the contract was the provision by the pursuer of qualified specialist personnel to act as client representatives for the defender during various surveying activities. The majority of the time of the personnel would be spent in the field either offshore or onshore in Kazahkstan, with some time in the defender's offices in Atyrau there.

[9] Schedule E of the contract contains special terms and conditions including the identity of the pursuer's bank account into which payments of invoices are to be made. That bank is in Aberdeen.

[10] Clause 6.3 of the General Terms and Conditions of the contract provides that within 30 days of receipt of a valid invoice the defender shall pay the approved amount into the pursuer's designated bank account by bank transfer.

[11] Clause 1 of the General Terms and Conditions contains a number of definitions including "Applicable Law". Reading it short, this means any law which creates or purports to create any requirement or rule that may affect, restrict, prohibit or expressly allow the terms of the contract or any activity under the contract to be carried out. For present purposes that means the law of Kazakhastan.

[12] Clause 18 of the General Terms deals with taxes. Clause 18.1 provides:-

"The contractor shall bear and be liable for all taxes and shall pay all taxes in accordance with applicable law and guarantees reimbursement to the company, and indemnifies the company in respect of all claims for such taxes."

[13] Clause 18.4 provides:-

"Company shall withhold from any payment to contractor such sums that represent any taxes that company is obliged to withhold and shall settle such taxes with the appropriate authorities in accordance with applicable law and shall provide contractor with proof of such settlement. In the event that contractor has not fully and properly fulfilled its obligations to justify any reduced rate of withholding tax and company is subsequently penalised by any tax authority, contractor hereby indemnifies company against all payments, losses, costs (including legal costs) and damages arising therefrom or consequently thereto."

[14] Clause 18.5 provides:-

"Contractor will register with a tax committee in the Republic of Kazakhstan as a permanent establishment and provide company with a copy of the tax registration certificate prior to the date of first payment by company to contractor in accordance with the contract. If no such registration certificate is provided, company will deduct withholding tax from payments to contractor in accordance with Article 7.4" There is no Article 7.4 in the General Terms and Conditions. Article 7 has two sub-paragraphs, each of which deals with international property rights. It seems to me that the reference should be to Clause 18.4, which does deal with withholding taxes and it may be that the numbering has not been changed from an earlier version of the General Terms and Conditions. It is agreed that the pursuer did not register with a tax committee in Kazakhstan.

[15] Clause 21 of the General Terms and Conditions provides:-

"This contract shall be governed by and construed in accordance with the laws of Kazakhstan, and the parties hereby submit to the non-exclusive jurisdiction of the courts of Atyrau Region, Republic of Kazakhstan."

[16] Clause 24 of the General Terms and Conditions provides, among other things, that Clause 18 shall remain in full force and effect notwithstanding termination of the contract.

The issue on the merits

[17] The issue accordingly is (i)whether in terms of the tax laws of the Republic of Kazakhstan the pursuer was liable to pay Kazakhstan tax on the payments it received from the defender, and (ii) if so whether in terms of these laws and the terms of the contract between the parties the defender was entitled or obliged to withhold from payment of the defender's invoices and to pay to the Kazakhstan tax authorities the amount of tax exigible from the pursuer under Kazahkstan law on these payments.

[18] The defender does not dispute that Aberdeen Sheriff Court has jurisdiction to hear the case, but says that the courts of the Republic of Kazakhstan also have jurisdiction, the parties having prorogated the non-exclusive jurisdiction of those courts in the contract which they entered into, and that the courts of Kazakhstsn represent a more appropriate forum for hearing the case..

Authorities

[19] In the course of the debate I was referred to the following authorities:-

Civil Jurisdiction and Judgments Act 1982

Council Regulation (EC) No. 44/2001

Anton Private International Law 2^nd Edition

Douglas Heron & Co. v. Grants Trustees (1796) 3 Paton 503

Equitas v. Allstate Insurance [2008] EWHC 1671 Comm

Lane v. Foulds 1903 11 SLT 118

Mercury Communications v. Communication Telesystems International [1999] 2 All ER (Comm)

Owusu v. Jackson [2005] ECR-I-1383

Parkin v. Royal Exchange Assurance (1846) 8D 365

Scottish & Newcastle International v. Othon Ghalanos [2008] UK HL 11

Sim v. Robinow (1892) 19R665

Society du Gaz de Paris v. Society Anonim de Navigacion 1926 SLT 33

Spiliada Maritime Co. v. Cansulex
[1987] 1AC 460

"The Rothnie"
[1996] 2 LL Rep. 206

Williamson v. North East Railway Co. (1884) 11R 596

I have also had regard to:-

Turner v Grovit
[2004] ECR I-3565

Gasser v MISAT [2003] I-14693

West Tankers Inc v RAS Riunione Adriatica ECJ C185/07 (10^th Nov 2009)

Defender's Submissions:-

[20] Mr Howlin's first submission was that it was open to the court to decline to exercise its jurisdiction. It was implicit in the pursuer's approach that it considers that the court has jurisdiction by virtue of Article 5(1)(a) of Council Regulation (EC) No. 44/2001 (hereinafter Regulation No. 44). This provides:-

"A person domiciled in a member state may, in another Member State, be sued:- 1(a) in matters relating to a contract in the courts for the place of performance of the obligation in question"

[21] He referred to Section 49 of the Civil Jurisdiction and Judgments Act 1982 which provides:-

"Nothing in this Act shall prevent any court in the United Kingdom from staying, sisting, striking out or dismissing any proceedings before it on the ground of forum non conveniens or otherwise, where to do so is not inconsistent with the 1968 Convention...".

The reference to the 1968 Convention should be read as referring to Regulation No. 44, which is its successor.

[22] He referred to the case of Owusu v. Jackson. This was a decision of the European Court of Justice on a reference to it by the Court of Appeal in England in which the Court of Appeal sought a preliminary ruling on the following questions:-

"1. Is it inconsistent with the Brussels Convention..., where a claimant contents that jurisdiction is founded on Article 2, for a court of a Contracting State to exercise a discretionary power, available under its national law, to decline to hear proceedings brought against a person domiciled in that state in favour of the courts of a non-contracting state:

(a) if the jurisdiction of no other Contracting State under the 1968 Convention is in issue;

(b) if the proceedings have no connection factors to any other Contracting State?

2. If the answer to question 1(a) or (b) is yes, is it inconsistent in all circumstances or only in some, and if so which?"

[23] On the first question the Court (Grant Chamber) ruled that the Brussels Convention:-

"Precludes a court of a contracting state from declining the jurisdiction conferred on it by Article 2 of that Convention on the ground that a non-contracting state would be a more appropriate forum for the trial of the action even if the jurisdiction of no other contracting state is an issue or the proceedings have no connecting factors to any other contracting state.".

[24] The court declined to answer the second question on the grounds that the question was not necessary to enable the Court of Appeal to give judgment in the case before it.

[25] Article 2 of the Brussels Convention, which is effectively repeated in Article 2 of Regulation No. 44 provides:-

"Subject to this Convention parties domiciled in a contracting state shall, whatever their nationality, be sued in the courts of that state.".

[26] Article 2 jurisdiction, domicile, is not the ground of jurisdiction founded upon by the pursuers in this case and the decision in Osuwu has no direct application. There was therefore no binding authority which governed the present case, and the court therefore had the power to decline jurisdiction.

[27] The second question is whether that power should be exercised.

[28] Answers 1 and 2, but particularly answer 1, of the defences lodged by the defender set out in detail the basis for the defenders' argument that it would be appropriate for this court to decline jurisdiction. In his submissions Mr Howlin focussed on the fact that evidence of the law and practice of Kazakhstan would require to be considered, which he described as a cogent argument in favour of sustaining the plea; and on the fact that Article 2 of condescendence and answer 2 show that the question which is surely at issue is the question of whether the defenders were entitled or indeed obliged to deduct from its contractual payments to the pursuers sums which required to be deducted by way of withholding tax under the fiscal regime in force in Kazakhstan. This question, he submitted, turned either exclusively on issues of Kazak law or, failing that, on mixed issues of such law and of fact, the issues of fact being the manner in which the law is applied in Kazakhstan.

[29] He also submitted that the issues identified had no connection at all with Scotland and were connected solely with Kazakhstan.

[30] He referred to the averment that an essential element of the defence to the action turned on the question of the interpretation of the double taxation treaty between the United Kingdom and the Republic of Kazakhstan, and how that fell to be applied as regards the defenders' entitlement or obligation to deduct withholding tax from the sums brought out by the invoices, and that that question required to be determined by reference to the domestic legislation of Kazakhstan.

[31] He submitted that the courts in Kazakhstan were in a better position than the Scottish courts to do justice between the parties on these matters which was the test to be applied

.

Pursuers' Submissions

[32] Mr Gunnyeon, the solicitor appearing for the pursuers, submitted:-

(1) The court did not have the power to apply the doctrine of forum non conveniens;

(2) If it did have that power the defender had not discharged the onus in respect of the test for determining whether the power should be exercised and,

(3) As a final position that there were special reasons why the power should not be exercised even if the classic test was met.

[33] He submitted that jurisdiction could be found under Article 5(1)(a) of the Regulations. The place for performance of the obligation in question, namely payment of the invoices, was the pursuer's bank account in Aberdeen. That test was well understood and had not been changed in respect of a contract to be performed outside the EC by the introduction of the additional paragraphs in what is now Regulation No. 44.

[34] So far as the Owusu case was concerned, he accepted that on a strict reading the case was only binding in respect of Article 2 jurisdiction, but submitted it would be illogical to consider that one ground of jurisdiction under the Regulation precluded the plea of forum non conveniens, whilst another allowed it.

[35] He referred to paragraphs 41 and 43 of the judgment of the European Court of Justice. Paragraph 41 deals with the principle of legal certainty which was the basis of the Convention. Paragraph 43 stated that allowing the plea in the context of the Convention, now Regulation No.44, would be likely to adversely affect the uniform application of the rules of jurisdiction, contrary to the objective of the convention.

[36] He submitted that the plea of forum non conveniens was no longer applicable in this country in cases where jurisdiction is founded on Regulation No. 44.

[37] His second submission was to the effect that the defender did not discharge the onus on them of satisfyingthe court of the classic test contained in Sim v. Robinow:-

"...the plea can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice".

[38] So far as the first of these matters is concerned, he made what he himself described as a technical point, namely that the defender did not aver the specific ground by which the defender would be liable to be sued in Kazakhstan. All that the defenders say is that there is a clause prorogating the jurisdiction of those courts, not that that is a ground of jurisdiction in those courts. The pursuer said that it was not

[39] He submitted that there were a number of connections which the contract had with Scotland. He submitted that it was entirely within the competence of a Scottish court to investigate and determine foreign law; a preliminary proof could be led in the matter; he referred to the various facts contained in condescendence 1 and 2.

[40] He submitted that there were special circumstances that would justify repelling the plea. If the defender lost in Kazakhstan it could not be assumed that it would pay. Indeed it could not even be assumed that the defenders could pay; the enforcement of a Kazak decree against a Dutch company in Holland would be a more complicated procedure than the enforcement of a Scottish decree, and the outcome, in terms of an enforceable decree being available in Holland, could not be guaranteed as it could be in respect of a Scottish decree. He said that justice would be better served by retaining the case in Aberdeen, and that justice was better guaranteed by doing so.

[41] Finally he referred to the language difficulty of litigating in Kazakhstan. He said it was contrary to the broader interests of justice that the party should be subjected to proceedings in a court which would require the use of a foreign language.

.

The Defender's submissions in reply

[42] In reply Mr Howlin submitted that it was quite appropriate that there should be different rules relating to the plea of forum non conveniens against jurisdiction founded on Article 2 of the Regulations and against the special jurisdictions found in Article 5. The point of Article 2 was that in the absence of any other ground the pursuers must seek out the defender at his domicile, and therefore should be protected from a plea of forum non conveniens.

[43] Such Scottish connection as there was in the action should be looked at in the context of the subject matter of the litigation which was clearly Kazakhstan tax law. The language issue would be important dealing, as the case would have to, with the nuances of tax law and practice in Kazakhstan. He submitted there was no merit in the pursuers' submission he may have difficulty in obtaining payment in the event that the pursuers were successful. This was pure speculation. The defender was part of a very large group of companies. The argument that it would voluntarily not pay did not get off the ground.

[44] Finally, in respect of the pursuer's contention that it would be contrary to justice to insist on the matter being litigated in Kazakhstan Mr Howland pointed to the fact that the jurisdiction of the Kazakhstan court came about because the pursuer had voluntarily submitted to it in the contract. It was difficult in these circumstances to see how it would be contrary to justice.

Decision

[45] Following Owusu it is beyond dispute that the doctrine of forum non conveniens can not be used by a court of a Member State in a case where its jurisdiction is based on Article 2, the domicile of the defender. The Brussels Convention has been superseded by Regulation No. 44, but the terms of Article 2 in the Regulation are for all practical purposes identical to the terms of the Convention.

[46] The first question in this case is whether the plea of forum non conveniens is available. Is a court of a Member State which has jurisdiction in terms of Article 5 of Regulation No. 44 over a person domiciled in another Member State precluded from declining to exercise this jurisdiction on the ground that a court of a non-contracting state would be a more appropriate forum, as it would be if jurisdiction was by way of Article 2? I was told that there was no direct authority on this question

[47] The jurisdiction of no other Member State than the UK is an issue in the proceedings, although the courts of the Netherlands would also have had jurisdiction over the defender based on Article 2 of the Regulation. The proceedings themselves have no connecting factors to any other Member State beyond the facts that the parties are domiciled in separate Member States and the place of performance of the obligation in question is the state of the pursuer's domicile.

[48] It is clear from the question which was referred to the European Court of Justice in Osuwu, from the ruling of the court, and from the opinion of the court, that the decision is intentionally strictly limited to the issue which was before the referring court, namely the availability of a plea of forum non conveniens when jurisdiction is founded on Article 2. The decision therefore is not in its terms binding in respect of jurisdiction founded on Article 5.

[49] In its pleadings the pursuer, as it is obliged to do by the Ordinary Cause Rules, discloses the ground of jurisdiction on which it founds. Condescendence 1 states:-

"This action concerns an obligation to make payment of sums due. The place of performance of this obligation is Aberdeen. This court accordingly has jurisdiction."

Answer 1 for the defender contains the phrase "admitted that this court has jurisdiction". Even if this does not amount to an admission that the ground of jurisdiction claimed by the pursuer in fact gives jurisdiction to this court I am satisfied that it does. There is also clearly jurisdiction under Article 24

[50] The question whether Regulation No. 44 precludes a court of a Member State from declining the jurisdiction conferred on it by Article 5(1) of the Regulation on the ground that a court of a non-contracting state would be a more appropriate forum for the trial of the action is clearly ultimately a matter for the European Court of Justice.

Mr Howlin expressly stated that he did not wish a reference to be made to the European Court of Justice in this case. Nor did Mr Gunyeon want such a reference to be made

[51] Notwithstanding that the ECJ has recently dealt with a number of cases on the questions of forum non conveniens and anti suit actions and that their decision on the issue in this case would be of great interest to many commercial bodies, and to lawyers both in the courts and in academic life, given that the parties do not wish me to do so, the additional time it would take for the parties to have their dispute resolved and given that the amount at issue in this action (some £66,000) whilst not by any means a small amount is nonetheless not so large as might warrant the considerable additional expenses of such a referral, I will accede to Mr Howlin's suggestion that I deal with the matter myself.

[52] Although the European Court of Justice in Owusu was dealing only with the question relating to jurisdiction founded on Article 2, in the course of its decision the Court referred to the principles behind the Convention

[53] At paragraph 37 the Court noted that no exception on the grounds of forum non conveniens was provided for by the authors of the Convention, though it was discussed at the time of the accession of Denmark, Ireland and the UK to the Convention in 1978. At paragraph 38 it said :-

"Respect for the principle of legal certainty, which is one of the objectives of the Brussels Convention .......would not be fully guaranteed if the court having jurisdiction under the Convention had to be allowed to apply the forum non conveniens doctrine"

[54] At paragraph 41 it identified first that the doctrine of forum non conveniens was a discretionary doctrine. It said

"Application of the forum non conveniens doctrine, which allows the court seised a wide discretion as regards the question whether a foreign court would be a more appropriate forum for the trial of an action, is liable to undermine the predictability of the rules of jurisdiction laid down by the Brussels Convention, in particular that of Article 2, and consequently to undermine the principle of legal certainty which is the basis of the Convention."

[55] Having dealt in paragraph 42 with the problem that a defendant might not be able reasonably to foresee before which other court he might be sued, the Court said at paragraph 43:-

"Moreover allowing forum non conveniens in the context of the Brussels Convention would be likely to affect the uniform application of the rules of jurisdiction contained therein insofar as that doctrine is recognised only in a limited number of contracting states, whereas the objective of the Brussels Convention is precisely to lay down common rules to the exclusion of derogating national rules."

[56] These observations apply equally to Regulation No.44.

[57] I consider that these paragraphs are highly relevant to consideration of the question as to whether the doctrine of forum non conveniens is available to a national court in respect of a case where jurisdiction is founded on Article 5 as they disclose an important part of the ratio decidendi of the Court's decision.

[58] The United Kingdom, in all three of its jurisdictions, is of course one of the limited number of Member States referred to in paragraph 43 as states recognising the doctrine. I do not know if there are others. The determination of the question as to whether a foreign court would be a more appropriate forum for the trial of an action is a discretionary matter in the United Kingdom (Lords Sumner and Buckmaster in Society du Gax de Paris, approved by Lord Goff in Spiliada Maritime Co.).

[59] The concern which the European Court of Justice has expressed in paragraph 41, namely that the application of the doctrine is liable to undermine the predictability of the rules of jurisdiction laid down by the Brussels Convention, and consequently to undermine the principle of legal certainty which is the basis of the Convention, is not a concern exclusively about Article 2. It is a concern in respect of all of the rules of jurisdiction, and "in particular Article 2" The European Court of Justice was clearly concerned that the application of the doctrine had the potential to undermine all the rules of jurisdiction contained in the Convention.

[60] Paragraph 43 in my opinion represents a clear concern on the part of the Court that the uniform application of the rules of jurisdiction contained in the Convention (and the Regulation) would be adversely affected by allowing a small number of states to apply the doctrine of forum non conveniens in the context of the Convention as a whole, not merely Article 2. Nor does the Court see this as a mere possibility. They see it as "likely to affect the uniform application of the rules of jurisdiction"

[61] The preamble to Regulation No. 44 sets out some of the principles which underpin the Regulation. Recital 2 of the preamble states:-

"Certain differences between national rules governing jurisdiction and recognition of judgments hamper the sound operation of the internal market. Provisions to unify the rules of conflict of jurisdiction in civil and commercial matters..... are essential".

Recital 4 provides:-

"In accordance with the principles of subsidiarity set out in Article 5 of the Treaty, the objectives of this Regulation cannot be sufficiently achieved by the member states and can therefore be better achieved by the Community. This Regulation confines itself to the minimum required in order to achieve those objectives."

Recital 8 provides:-

"There must be a link between proceedings to which this Regulation applies and the territory of the member states bound by this Regulation. Accordingly common rules on jurisdiction should, in principle, apply when the defendant is domiciled in one of those member states."

.

Recital 11 provides:-

"The rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile and jurisdiction must always be available on this ground........

"(12) in addition to the defendant's domicile there should be alternative grounds of jurisdiction based on a close link between the court and the action, or an order to facilitate the sound administration of justice".

[62] The will of the parties to a contract is however recognised in recital (14) which provides:-

"The autonomy of the parties to a contract.... must be respected subject to the exclusive grounds of jurisdiction laid down in this Regulation."

[63] These principles underpin the Regulations and are the statutory basis on which the Court in Owusu expressed the concerns which it did in paragraphs 41 and 43.

[64] The doctrine of forum non conveniens has no place in disputes where the courts of two or more Member States have or may have jurisdiction. Article 27 of the Regulation makes this clear. In the situation where proceedings involving the same cause of action are raised in the courts of different Member States all courts other than the court first seized of the matter must of its own motion stay its proceedings until the jurisdiction of the court first seized is established. The determination of that issue is a matter for the court first seized. If the jurisdiction of the first seized court is established all other courts shall decline jurisdiction in favour of the first seized court. No other Member State court can review the decision of the first seized court, and no other Member State court can grant an anti suit injunction against a party precluding that party from commencing or continuing proceedings in the courts of another Member State, even when the jurisdiction of that other court has been invoked in bad faith. See Turner v Grovit . The primacy of the first seized court is emphasised by the case of Gasser v MISAT where the ECJ decided that the court of a Member State on which exclusive jurisdiction had been conferred in terms of Article 23 cannot issue an injunction restraining a party from prosecuting proceedings before a court of another Member State if the courts of that other state was first seized of the proceedings. Both of these cases were referred to by the ECJ in Owusu in respect of what it called the "compulsory system of jurisdiction set up by the Brussels Convention". The decisions are based in part on the mutual trust which the courts of each Member State should have in the courts of the other Member States to apply the jurisdiction rules properly and consistently and on the right of the courts of each Member State to determine its own jurisdiction.

[65] Finally in respect of the European jurisprudence in West Tankers Inc v RAS Riunione Adriatica the ECJ by a decision dated 10^th February 2009 ruled, on a referral by the House of Lords, that it was inconsistent with Regulation No. 44 for a court of a Member State to grant an order restraining a party from instituting or continuing proceedings in the courts of another Member State on the ground that such proceedings are in breach of an arbitration agreement. This would be an unwarranted interference with the autonomy of the court of the other Member State to rule on its own jurisdiction. Once again the Court stressed the need for mutual respect. Part of its reasoning was that all Member States are parties to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) which requires courts to give effect to arbitration clauses. This decision is quite in line with what I see to be, at least in part, a common ratio in Gasser, Turner and Owusu and I did not consider it necessary to afford parties an opportunity to address me on it.

[66] Gasser , Turner and West Tankers all relate to anti suit injunctions, not forum non conveniens applications. They are however relevant for the purposes of understanding the importance of the principles behind the single set of rules of jurisdiction throughout the EC which the Convention and now the Regulation have put in place.

[67] In this case a person domiciled in one Member State has sued a person domiciled in another using the permissive jurisdiction contained in Article 5 to avoid the otherwise mandatory ground of jurisdiction, namely domicile, contained in Article 2. He could also have instituted proceedings in Kazakhstan, thereby avoiding any involvement of the Regulation, but chose not to do so. Having properly raised his action in a court of Member State with undoubted jurisdiction under the Regulation, namely the UK, might he now be compelled by that court to litigate in Kazakhstan ?

[68] From the point of view of domestic Scots law, excluding the Regulation, the answer would be "yes", as it would be in England and Wales and in Northern Ireland. From the point of view of most if not all other Member States the answer would be "no".

[69] In my opinion to sustain the defender's plea of forum non conveniens and sist the action in order that the matter can be litigated in Kazakhstan would be to derogate from the principle of legal certainty which is the basis of Regulation No.44 and from the objective of the Regulation, namely to lay down common rules to the exclusion of derogating national rules. An answer could be obtained in a UK court directly opposite to the answer in those other jurisdictions which do not recognise forum non conveniens That would be inconsistent with the Regulation and therefore would not fall within the provisions of section 49 of the 1982 Civil Jurisdiction and Judgments Act

[70] In all of the circumstances I conclude that once a United Kingdom court is properly seized of jurisdiction over a national of a Member State under Article 5 of Regulation No. 44 it is not open to it to decline to exercise that jurisdiction on the ground that a court of a non Member State would be a more appropriate court for the trial of the action.

[71] I accordingly repel the defenders' first plea in law.

[72] Had I considered it open to me to sustain the plea in law I would, subject to one other matter, have done so. I would have found that Scotland is not the natural or appropriate forum to determine the issue between the parties, and that the courts of the Atyrau region of Kazakhstan clearly represent a more appropriate forum for the resolution of the dispute. The dispute relates to a contract for the provision of services which were to be provided by the pursuer to the defender in Kazakhstan in respect of the defender's business in Kazakhstan and relating to the defender's branch office there.. Scotland has really nothing to do with it. The issues as to whether the sums to be paid by the defenders to the pursuers in respect of the work carried out by the pursuers in Kazakhstan were or were not subject to Kazakhstan tax, having regard to Kazakhstan tax law and practice, whether in these circumstances Kazakhstan law required the tax to be withheld by the defenders and the issues relating to the construction of the contract are in my opinion manifestly matters better adjudicated upon by the courts of Kazakhstan. I would not have considered that there were major issues of fact which would have required the presence of numerous witnesses from Scotland or, even if there were, I would have considered that would be a natural and foreseeable consequence of agreeing to submit to the jurisdiction of the Kazakhstan courts. I would not have attached much weight to the pursuer's stated concerns about enforcement of any decree. The defender is a subsidiary of an international oil company which is itself a subsidiary of one of the largest corporations in Italy. In the absence of specific averment of some particular concern as to its ability and willingness to pay its lawful debts I would assume it would do so. I would not have attached much weight to the pursuers' submission that the Kazakhstan courts were not in general appropriate. The parties had agreed as a matter of contract that they were.

[73] The one matter which I would have required to have been satisfied on was whether the Kazakhstan courts in fact have jurisdiction to determine the matter. While that is a matter for the courts of Kazakhstan I would not sustain a plea of forum non conveniens in favour of a court which I did not consider had jurisdiction in the matter.

[74] The defender avers in answer 2:-

"The courts of Kazakhstan are another forum available to the parties which is clearly more appropriate than this court. In the light of the whole circumstances of the action the courts of Kazakhstan are the natural forum with which the action has the most real and substantial connection for the reasons hereinafter condescended. There is a jurisdiction clause in favour of the courts of Kazakhstan as set out in their contract".

[75] Notwithstanding Mr Gunnyeon's submission that the defender does not explicitly say so, I think that passage can only be read to indicate that the defender contends that the prorogation of the non-exclusive jurisdiction of the Kazakhstan courts is a ground of jurisdiction which the courts of Kazakhstan can exercise in this dispute. The pursuers deny that and say that a prorogation of jurisdiction is not a ground of jurisdiction in Kazakhstan. I would accordingly have allowed a preliminary proof on this issue.