London is the world's number one venue for international litigation and many cases are heard in England which relate to foreign contracts. In one such, the landlord of factory premises in Mexico has won permission to enforce in England and Wales a $10.5 million judgment given by an Arizona court.
The landlord was left out of pocket after the factory's tenant abandoned the premises in 2003, leaving substantial rent arrears. A Bermuda-registered company which had its principal base of business in Hong Kong had guaranteed the tenant's obligations under the lease.
After the landlord launched enforcement proceedings in the USA, the Superior Court of Arizona upheld the validity of the guarantee and the company was ordered to pay $10.5 million. The company had subsequently exhausted the lengthy appellate processes available in the USA without success.
The landlord then applied to the High Court in London for permission to enforce the money judgment against the company's assets in England and Wales. In allowing that application, the Court rejected the company's arguments that the Arizona court had no jurisdiction to resolve the dispute.
The Court found that the company had unequivocally agreed to be bound by an amendment to the original lease which conferred jurisdiction on the Arizona court. The company had in any event submitted to that court's jurisdiction by having voluntarily appeared in the proceedings. In declaring that the Arizona court was a tribunal of competent jurisdiction, the Court also rejected arguments that the jurisdiction clause was contrary to the laws of Mexico.
Accordingly, the landlord was able to enforce the ruling of the Arizona court in the UK.
For further information on this article and related matters, please contact Roy Colaba on 0121 698 2231, email r.colaba@sydneymitchell.co.uk or fill in our online enquiry form.
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