In this judgment both the insured and insurer were foreign peregrini, that is neither was resident nor domiciled in the Republic of South Africa. The insured was a resident of the Virgin British Islands and the insurer, Russia.
The policy provided that it was governed by the laws of the insured’s country of domicile, that is the Virgin British Islands, and that the parties submitted to the exclusive jurisdiction of the courts of the insured’s country of domicile for any dispute arising from the policy.
The insurer submitted that in the circumstances the Gauteng High Court dealing with the dispute did not have jurisdiction to determine the dispute.
Our Supreme Court of Appeal has already held that submission to the jurisdiction of a South African court by a foreign peregrinus defendant in an action for money brought by a plaintiff resident or domiciled in South Africa is of itself sufficient for the court to assume jurisdiction. There is no need for that plaintiff to attach the property of the foreign peregrinus defendant to found jurisdiction.
In the present matter both parties were foreign peregrini.
The court said that if a foreign peregrinus defendant submits to the jurisdiction of the court and a ground of jurisdiction is established that links the court to the subject matter of the litigation that will suffice to assume jurisdiction. There is then no need to attach the property of the defendant as well.
Once the foreign peregrinus defendant has submitted to jurisdiction an effective basis is established to enforce any judgment against that defendant. That follows because submission is universally recognised as the basis upon which the courts of one country recognise the judgments of another.
The court did not express a final view as to whether submission alone is sufficient for a court to assume jurisdiction (while expressing a view that there are forceful arguments for such a proposition).
The court said apart from the issue of submission, there was a ground of jurisdiction that linked the subject matter of the litigation to the high court. The insurance policy was concluded in Johannesburg within the area of the court’s jurisdiction.
The court said that the insurer had also submitted to the court’s jurisdiction. It had provided a domicilium for service of process in South Africa – on its representatives in Durban.
And it had also been involved in at least three substantive applications in the litigation in respect of the policy issue. In two of those it was the respondent and in one filed a counter-application to set aside the order authorising service on its representatives.
In none of those applications did the insurer object to jurisdiction of the court.
The court also considered of importance the business relationship between the parties and the convenience of a South African court hearing and determining the matter. The insured’s associated companies, who were the first and third respondents in the application, are domiciled in South Africa. Convenience and common sense are, among other things, valid considerations in determining whether a court has jurisdiction to hear a case.
It also bore considering whether a defendant generally desires a trial in the foreign country or is only seeking a procedural advantage. The court said that the insurer was definitely not raising the question of jurisdiction to have the matter decided in the Virgin British Isles.
In the circumstances the Supreme Court of Appeal confirmed that the court had jurisdiction to determine the disputes.
Foreign parties to any contract need to carefully consider the provisions of their contract insofar as those deal with dispute resolution and submission to the South African’s court’s jurisdiction, and their subsequent conduct once any dispute arises lest that constitute submission to jurisdiction.