Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
A jurisdiction clause is normally enforced: sue elsewhere and you will be stayed. This case supplies the one recorded exception in this course — a change in the legal order of the chosen country after the contract was made.
Facts
The contract contained a clause submitting disputes to the courts of a named country. Revolution then made that country independent, and the law applied by the chosen court changed after the contract was made. Suit was nonetheless brought in England.
Held
The English court refused a stay.
Reasoning
Step one — state the ordinary rule. Where a contract provides that disputes shall be subject to the jurisdiction of a foreign court and suit is brought in England, the English courts have jurisdiction to stay such suits, and the presumption favours the clause: a stay will be granted unless it is shown just and proper to allow the plaintiff to continue in England, the burden lying on the plaintiff to show that to get justice it is necessary to bring the action in England.
Step two — identify what the parties agreed to. They chose a forum, and with it, in substance, the legal order that forum administered.
Step three — ask whether that is what they would now get. Where revolution has changed the constitutional order and the chosen court now applies a different law, sending the plaintiff there is not holding him to his bargain; it is imposing a different bargain.
Step four — hence the refusal. The reason for enforcing the clause fails, and the clause yields.
Exam use
It opens: To what extent are jurisdiction clauses enforced? — state the presumption, the burden, and then this exception.
Distinguish the two discretionary doctrines clearly. Under forum non conveniens the plaintiff has the advantage: a mere balance of convenience will not displace his chosen forum, and the defendant must show oppression to himself and no injustice to the plaintiff — Maharani of Baroda v. Wildenstein. Under a jurisdiction clause the burden is reversed and lies on the plaintiff. Identifying which of the two a problem raises is the first step in the answer.
Add the third head, lis alibi pendens. The court may stay its own action or restrain foreign proceedings to prevent simultaneous litigation, but only with extreme caution: double proceedings are not prima facie vexatious, since a prudent claimant may have a remedy against property in one country and a personal remedy in another, so vexation in point of fact must be proved; and where the party resisting controls only one of the actions, a stay requires that the foreign action be not merely oppressive but calculated to cause serious, if not irreparable, damage.
It does not decide that a change in the chosen country's law always defeats the clause; it is the change of legal order following revolution that this course records.