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The Commercial Litigation Journal: May/June 2013

Paul Green examines recent case law on corporate liability

For over 110 years, it has been an established legal principle that the acts and omissions of a company are its own, and that such acts or omissions do not reflect on its shareholders or other companies in the same corporate group. This relationship has been used by companies for years as an engine for investment, allowing the effective management of risk, but recent events at the Court of Appeal may have skewed this following the case of Chandler v Cape plc [2012].

Dan Smith discusses when proceedings can be stayed because of earlier proceedings elsewhere in the EU

The English Court of Appeal has considered the application of Articles 27 and 28 of Brussels Regulation 44/2001 (the Judgments Regulation) in an insurance dispute involving multiple proceedings – first in the English, then Greek, then English Courts. The Court of Appeal stayed the second English proceedings under Article 27 (where the same cause of action between the same parties has commenced in another member state) on the grounds that the Greek courts were first seised of the relevant cause of action, even though the stay was sought only on appeal. Although the point was moot, the Court of Appeal also decided it could not have granted a stay under Article 28 (where there are related actions) because the jurisdiction could only be exercised by courts other than those first seised of a related action, and here the court first seised was the English court itself in the first English proceedings.

John MacKenzie reviews recent case law on security for costs

In Geophysical Service Centre Company Ltd v Dowell Schlumberger (Middle East) Inc [2013], the defendant applied for security for costs. The defendant stated they had sufficient evidence that the claimant would not be able to pay an adverse costs order. The claimant insisted that it would be able to pay an adverse costs order as it had an After the Event insurance (ATE) policy. In response, the defendant argued that an ATE policy could not be considered effective security due to the inherent risk that an insurer may avoid or cancel the policy. The case therefore considers the extent to which a party can rely on an ATE policy as effective security.

Jonathan Speed and Claire Morel de Westgaver consider whether arbitration should do more to embrace summary judgment procedures

A criticism that is often levied at international arbitration is that it does not provide for a mechanism similar to summary judgment available in many jurisdictional national courts. The debate around summary judgment procedures in international arbitration was recently re-opened. Practitioners have claimed that arbitrators should have the power to strike out unmeritorious claims or defences. Separately, there have been interesting developments in the field of arbitration in the financial services sector. In this article, we explore what opportunities there are for the industry to consider summary disposal as a means to exploit the flexibility of arbitration and make better use of the process with particular emphasis on financial disputes.

Philippa Charles and Al Trent consider the vexed question of which law governs an arbitration agreement

Arbitration practitioners will be aware that the law governing an arbitration agreement can differ from the law governing its parent contract. For those not so familiar with the intricacies of the arbitration world, that proposition may seem counter-intuitive. Surely where a contract specifies a system of law by which it is to be construed, that stipulation will apply across the board, including to any dispute resolution provisions?

Alistair Maughan and Sarah Wells look at whether a duty of good faith can ever be implied into a contract?

Charles Dickens once wrote that ‘the one great principle of English law is to make business for itself’. This often-quoted view is still true today and is perfectly illustrated by a pair of recent cases about the issue of whether a general duty of good faith can be implied into an English law contract. And, in a through-the-looking-glass twist, of which Dickens’ fellow Victorian Lewis Carroll would have approved, the court considering a contract without a good faith clause found itself prepared to imply a duty of good faith after all, whereas the court examining a contract actually containing such a clause did exactly the opposite and rejected the concept that a good faith doctrine exists in English law.

Martin Meredith analyses a recent ECJ decision on the role of in-house lawyers

The decision of Prezes Urzedu Komunikacji Elekronicnej & Republic of Poland v European Commission [2012], recently handed down by the European Court of Justice (ECJ), closes another door on the role in-house lawyers occupy within the ECJ’s jurisdiction. A little over two years ago the ECJ put legal professional privilege under the microscope. Now the subject of representation, in the context of Article 19 of the Statute of the Court of Justice, has been critically scrutinised by the ECJ.