In cross-border litigation the plaintiff must obtain the court’s permission to serve out of the jurisdiction by showing that its claim comes within one or more of the jurisdictional ‘gateways’ listed in [3.1] of Practice Direction 6B. The test which the plaintiff must satisfy is that it has a ‘good arguable case’ with respect to any facts it relies on as establishing that the court has jurisdiction. Two recent Supreme Court judgments of Lord Sumption have reformulated that test and a recent Court of Appeal judgment of Green LJ has given practical guidance on the reformulated test’s application.
For two decades, the starting point on the meaning of ‘good arguable case’ has been the statement of Waller LJ in Canada Trust Co v Stolzenberg (No 2)  1 WLR 547 at 555F‑G (Canada Trust), in which his Lordship explained that good arguable case means that ‘one side has a much better argument on the material available’. This entails the court being ‘satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which allow the court to take jurisdiction.’ Limitations at the interlocutory stage generally include that the parties have not made discovery and the absence of oral testimony.
Supreme Court’s Reformulation
Lord Sumption first proposed a reformulated test in Brownlie v Four Seasons Holdings Inc  UKSC 80;  1 WLR 192 (Brownlie). The case concerned the death of eminent international lawyer Sir Ian Brownlie, who was killed in a car accident while on holiday with his family in Egypt. His wife, Lady Brownlie, brought proceedings seeking damages for her own injuries and as executrix of her husband’s estate. On the issue of jurisdiction, Lord Sumption (with whom Lord Hughes agreed) held at  that the test in Canada Trust is ‘a serviceable test, provided that it is correctly understood’. His Lordship offered the following three-limb reformulation of the requirements under the test:
‘(i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the Court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it.’
His Lordship also added that he did ‘not believe that anything is gained by the word “much”, which suggests a superior standard of conviction that is both uncertain and unwarranted in this context’, a view that is well-supported in earlier case law and commentary. Lord Sumption’s reformulation was obiter, as noted by Lady Hale (with whom Lords Clarke and Wilson agreed) at  of Brownlie.
The Supreme Court subsequently endorsed the reformulation in Goldman Sachs International v Novo Banco SA  UKSC 34;  1 WLR 3683 (Goldman Sachs). The case involved a Portuguese bank that had borrowed a large sum from a Luxembourg company under a facility agreement governed by English law and subject to the exclusive jurisdiction of the English courts. Lord Sumption held at  of Goldman Sachs that, ‘For the purpose of determining an issue about jurisdiction, the traditional test has been whether the claimant had “the better of the argument” on the facts going to jurisdiction’. His Lordship then cited his reformulation of the test in Brownlie. Lord Sumption’s reformulation was unanimously endorsed by each of the other Supreme Court Justices.
Court of Appeal’s Guidance on the Test’s Practical Application
The test’s practical application fell for consideration by the Court of Appeal in Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV  EWCA Civ 10 (17 January 2019) (Kaefer Aislamientos). The plaintiff brought proceedings to recover sums alleged to be due under a contract for works performed on the oil rig the Atlantic Tiburon 1. The plaintiff alleged that two of the defendants were liable as undisclosed principals to the contract. On appeal, the key conceptual dispute between the parties was whether the test for jurisdiction was an absolute test (by reference to a fixed standard) or a relative test (by reference to the strength of the other side’s argument). An absolute test would have been more favourable to the claimant (because as long as it satisfies the test it is irrelevant if its argument is relatively weaker than the defendant’s).
Lord Green (with whom Davis and Asplin LJJ agreed) noted that the Supreme Court in Brownlie and Goldman Sachs had not explained how the reformulated test works in practice. His Lordship opined that, when considered in light of the pre-existing case law, ‘it is in my view possible to make sense of the new, reformulated, test’ (Kaefer Aislamientos at ).
Lord Green’s judgment provides the following guidance:
Thus, Green LJ held at  of Kaefer Aislamientos that the Supreme Court had endorsed a relative test ‘in part’, in view of the apparently fixed standard applied under limb (iii) as a tie breaker in circumstances where the court cannot reach a concluded view on the evidence.
The decision of Green LJ in Kaefer Aislamientos provides useful guidance on the test of good arguable case as reformulated by the Supreme Court in Brownlie and Goldman Sachs. The decision makes clear that under limb (iii) of the test a claim to jurisdiction will not fail simply because the state of the evidence is such that it is not possible to determine which side has the better argument. In such cases a claimant will still be able to establish jurisdiction if it has a sufficiently arguable case in the sense that there is a plausible, albeit contested, evidential basis for it. The reformulated test therefore rejects the suggestion, made in cases such as Erdenet Mining Corp v Kazakhstan  EWHC 299 (Comm) (2 February 2016) at , that a claimant’s assertion of jurisdiction would necessarily fail if the court is unable to say who has the better argument. The fixed standard applicable under limb (iii) is potentially of great assistance to litigants in contested jurisdiction cases where key evidence is within the control of a defendant who has refused to voluntarily disclose it such that the court must determine jurisdiction on limited material.