Problems of the Applicable Law of the Contract in the English Common Law Jurisdiction Rules: The Good Arguable Case

Abstract

English law as the applicable law of the contract is a basis for jurisdiction in English service out cases (ie cases involving foreign defendants that are not covered by the Brussels I Regulation or the Lugano Convention). It is also a factor in the exercise of jurisdiction. In both instances the determination of the applicable law and the assessment of its relevance raise difficult legal and practical questions. The courts use the “good arguable case” test to resolve those difficulties. Many recent decisions illustrate that the test is insufficiently clear. This article discusses those questions. It concludes that the differences between the existence and the exercise of jurisdiction have been overlooked. Further it suggests that the problem lies in the competing objectives underlying the decision on jurisdiction.

Keywords: Contract law, Lugano, Lugano Convention, jurisdiction

JEL Classification: K4, K40, K41