Johannesburg Municipal Council v. D. Stewart & Co. (1902), Ltd, and Others [1909] ScotLR 657 (19 March 1909)

Johannesburg Municipal Council v. D. Stewart & Co. (1902), Ltd, and Others [1909] ScotLR 657 (19 March 1909)

The Scottish courts' jurisdiction is not excluded by the contract; the arbitration clauses must be construed and their scope determined according to English law; the action against the sureties is premature and must be dismissed; the proper course is to state a case for the English courts to determine whether the arbitration clauses are valid and cover the dispute.

Citation
[1909] ScotLR 657
Parties
Pursuer: Johannesburg Municipal Council; Defender: D. Stewart & Company (1902), Limited; Defender: William Beardmore; Defender: Mrs Beardmore
Jurisdiction
Scotland
Judgment Date
19 March 1909
Procedural Posture
Civil (contract, Damages, Arbitration, Surety) / Inner House, First Division, Reclaiming Note (appeal) Against Interlocutor of Lord Ordinary
Outcome
Action against sureties dismissed as premature; arrestments against sureties recalled; case stated for English courts on arbitration clause validity and scope; leave to appeal granted.
Legal Topics
Jurisdiction Clauses, Arbitration Clauses, Choice of Law, Repudiation and Rescission, Damages for Breach of Contract, Competency of Action Against Surety, Forum Non Conveniens, Ascertainment of Foreign Law
Contract Law Private International Law Arbitration Suretyship Jurisdiction Clauses Arbitration Clauses Choice of Law Repudiation and Rescission +4 more

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Parties

Johannesburg Municipal Council

Pursuer

D. Stewart & Company (1902), Limited

Defender

William Beardmore

Defender

Mrs Beardmore

Defender

Procedural Posture

Civil (contract, Damages, Arbitration, Surety) / Inner House, First Division, Reclaiming Note (appeal) Against Interlocutor of Lord Ordinary

Legal Issues

  1. 1 Whether Scottish courts have jurisdiction despite contract stipulating English law and jurisdiction
  2. 2 Whether arbitration clauses in the contracts are valid and cover the disputes
  3. 3 Whether the action against sureties (guarantors) is competent before liability of principal is established

Ratio Decidendi

The Scottish courts' jurisdiction is not excluded by the contract; the arbitration clauses must be construed and their scope determined according to English law; the action against the sureties is premature and must be dismissed; the proper course is to state a case for the English courts to determine whether the arbitration clauses are valid and cover the dispute.

Court Disposition

Action against sureties dismissed as premature; arrestments against sureties recalled; case stated for English courts on arbitration clause validity and scope; leave to appeal granted.

Orders

  • Recall Lord Ordinary's interlocutor
  • Sustain third plea-in-law for defenders and dismiss action against Mrs Beardmore