''Red Sea Insurance Co Ltd v Bouygues SA''
995
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* 3 June: Fujiwara no Michikane gain ...
1 AC 190 is a judicial decision of the
Privy Council relating to
choice of law
Choice of law is a procedural stage in the litigation of a case involving the conflict of laws when it is necessary to reconcile the differences between the laws of different legal jurisdictions, such as sovereign states, federated states (as in t ...
in
tort
A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...
.
The case was an appeal from the decision of the
Court of Appeal of Hong Kong, but as the case was decided in Hong Kong pursuant to the English Law Ordinance, section 3(1), it is also taken to be an authoritative statement of
English law.
Facts
Bouygues SA together with nine other co-plaintiffs made a claim under a policy of insurance against Red Sea Insurance Co Ltd. Red Sea Insurance was an insurance company incorporated in Hong Kong, but with its head office located in Saudi Arabia. In its counterclaim Red Sea Insurance alleged that one of the co-plaintiffs, PCG, negligently supplied faulty pre-cast concrete building units, and that if it was liable at all, Red Sea Insurance would be
subrogated to the claims of the other co-plaintiffs against PCG. PCG applied to strike out that counterclaim.
Red Sea then amended its pleading and claimed that the
proper law
The doctrine of the proper law is applied in the choice of law stage of a lawsuit involving the conflict of laws.
Explanation
When the jurisdiction is in dispute, one or more state laws will be relevant to the decision-making process. If the law ...
governing the relations between Red Sea and PCG was the law of Saudi Arabia, and that under Saudi Arabian law, Red Sea had a direct right of action against PCG.
Those claims failed at first instance and in the Court of Appeal because:
* under Hong Kong law the right of action could only arise by way of subrogation once the claim had been paid under the policy of insurance;
* in order succeed in their amended counterclaim Red Sea needed to establish that they had a right of action under both Saudi Arabian law and Hong Kong law to satisfy the
double actionability Double actionability is a doctrine of private international law which holds that an action for an alleged tort committed in a foreign jurisdiction can be successful in a domestic court only if it would be actionable under both the laws of the home j ...
test;
* even though they had a good arguable case that there was a cause of action in tort under Saudi law, because they claim failed under Hong Kong law, it failed the dual actionability test, and therefore the claim was struck out.
Red Sea appealed to the Privy Council.
Decision
Lord Slynn of Hadley
Gordon Slynn, Baron Slynn of Hadley (17 February 1930 – 7 April 2009) was a British judge and Advocate General of the European Court of Justice. He particularly specialised in European law. He was a Lord of Appeal in Ordinary.
Early life
...
gave the decision of the board.
After reviewing the relevant authorities Lord Slynn held that the "flexible exception" to the double actionability requirement which had been created by the
House of Lords
The House of Lords, also known as the House of Peers, is the upper house of the Parliament of the United Kingdom. Membership is by appointment, heredity or official function. Like the House of Commons, it meets in the Palace of Westminste ...
in ''
Boys v Chaplin''
971
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AC 356 could apply in favour of not only the forum (the ''
lex fori In conflict of laws, the term ''lex loci'' (Latin for "the law of the place") is a shorthand version of the choice of law rules that determine the '' lex causae'' (the laws chosen to decide a case).''Black's Law Dictionary'' abridged Sixth Edition ( ...
'') but also in favour of the law of the place where the tort occurred (the ''
lex loci delicti commissi''). In this case the facts were overwhelmingly connected with Saudi Arabia, and so Saudi Arabian law only should be applied to the relevant issue.
Lord Slynn further held that although ''Boys v Chaplin'' was predicated on a single issue (heads of loss) being subject to the flexible exception, it was possible that an entire claim could be subject to the exception. He stated: "The present appeal is not based on an isolated issue (as was the case in ''Boys v Chaplin''). The contention put forward is that the whole case be decided according to the lex loci delictii. Although the cases may be rare where the exception should be applied the whole case, their Lordships do not consider that to apply the exception to the whole case is in principle necessarily excluded. In their Lordship's view the exception is not limited to specific isolated issues but may apply to the whole claim".
Authority
In England the decision was followed by the
Court of Appeal in ''Pearce v Ove Arup Partnership Ltd''
000
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Ch 403, it has now largely been superseded by the
Private International Law (Miscellaneous Provisions) Act 1995. However, it remains good law in other
common law jurisdictions
In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...
, and in England for claims relating to
defamation.
In Canada, the double actionability rule itself was reversed by the
Supreme Court of Canada in ''
Tolofson v Jensen ''Tolofson v Jensen'', 9943 S.C.R. 1022 is a landmark decision of the Supreme Court of Canada on conflict of laws in tort. The Court held that the primary determiner in selecting a country's law in tort should be the '' lex loci'' (the location whe ...
''
994
Year 994 ( CMXCIV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* September 15 – Battle of the Orontes: Fatimid forces, under Turkish gener ...
3 SCR 1022, although the Supreme Court retained the concept of a flexible exception.
Similarly, in Australia the double actionability rule was abrogated by the
High Court of Australia in ''
John Pfieffer Pty Ltd v Rogerson'' (2000) 203 CLR 503. But similarly, a broad public policy style flexible exception similar to that in ''Red Sea Insurance v Bouygues SA'' was retained.
Footnotes
{{DEFAULTSORT:Red Sea Insurance Co Ltd v Bouygues SA
Conflict of laws case law
Judicial Committee of the Privy Council cases on appeal from Hong Kong
1994 in British law
1994 in case law