Eleftheria

The court’s considerations in respect of the issue of conflict of laws in a contractual situation can be seen from the case of The Eleftheria (1969). In this case, plywood was shipped from a Rumanian port to an English port on board a Greek ship. The bill of lading provided that disputes should be resolved in Greece with the application of Greek law. An English company sought to bring an action in rem against the vessel in England. The court laid down a number of factors which should be taken into account when deciding whether to allow an action to continue which is prima facie (at first sight) contrary to the provisions of a jurisdiction clause: Where is the evidence available? Does the law of the foreign court differ from English law in fundamental respects? With what countries are the parties connected and how closely? Do the defendants genuinely desire the case to be held in the foreign court? Would the plaintiffs be prejudiced in the foreign court? Would the plaintiffs be deprived of security for their claim if the claim was heard in the foreign court? Would the plaintiffs be unable to enforce any judgement they may obtain in the foreign court? Would the plaintiffs face a time bar in the foreign jurisdiction which they would not face under English law? Would the plaintiffs for political, racial, religious or other reasons be unlikely to get a fair trial? In the The Eleftheria the judge ordered that the English action should cease, the determining factor being that on the matters in question, Greek law differed in fundamental respects from English law. The arrest in rem provides security for the plaintiff’s claim by ensuring that once judgement has been obtained there will actually be funds available (i.e. from the proceeds of sale of the vessel) from which the plaintiff’s claim may be satisfied.