In Bitar v Banque Libano-Française S.A.L. [2021] EWHC 2787 (QB), the English High Court dismissed a Lebanese Bank’s application under CPR part 11 disputing the English Court’s jurisdiction to hear a UK domiciled consumer’s claim against it. Following the amendments to the Civil Jurisdiction Act 1982 effectively to replicate provisions contained in the Brussels I Regulation recast, the judgment provides helpful post-Brexit guidance on the requirements to bring a consumer contract with a foreign business that has no apparent connection to the UK under English jurisdiction. 

Bitar served a claim out of the jurisdiction on a Lebanese Bank. Mr Bitar, a British national domiciled in England, issued and served a claim against Banque Libano-Française S.A.L. (the “Bank”) in Lebanon for failing to repay the balance of his joint account with the Bank (US$4,245,829) on demand. The Bank instead sought to repay Mr Bitar by a special form of banker’s cheque issued by the Lebanese Central Bank in view of the country’s banking crisis, which would effectively trap Bitar’s money in the Lebanese banking system (such cheques are unable to be deposited into an account outside Lebanon). Bitar opened the joint account together with his parents and brother in Beirut in 2014 following an introduction through a subsidiary of the Bank in Paris where Bitar and his family held an account at the time. The banking agreement entered into in 2014 contained a jurisdiction clause in favour of the courts of Beirut. The Bank applied to challenge jurisdiction of Bitar’s claim, which was heard before Michael Kent QC on 21 September 2021.

The Judge was to decide whether Bitar was entitled to bring proceedings against the Bank in England by virtue of section 15B(2)(b) of the Civil Jurisdiction and Judgments Act 1982 (the “Act”). Sections 15A to 15E inclusive of the Act were inserted with effect from 31 December 2020 by the Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019. They override any exclusive jurisdiction clause in a “consumer contract” where the consumer is domiciled in the UK, giving UK domiciled consumers the right to bring proceedings against a trader it has contracted with in England. This section essentially reproduces as part of UK statute what was previously contained in the Brussels I Regulation recast.Section 15E(1)(c) of the Act provides that a “consumer contract” includes “a contract which has been concluded with a person who – (i) pursues commercial or professional activities in the part of the United Kingdom in which the consumer is domiciled, or (ii) by any means, directs such activities to that part or to other parts of the United Kingdom including that part, and which falls within the scope of such activities”. 

The Judge made an objective assessment on the material available as to whether the Bank’s conduct could be taken to manifest an intention to direct its relevant activities into the place where Bitar was domiciled. The Judge referred extensively to the Court of Justice’s decision in Pammer v Reederei Karl Schlüter GmbH & Co KG [2011] 2 All ER (Comm) 888, which was the first case to consider the concept of “directing” commercial or professional activities to the consumer’s state of domicile. The Judge noted however that this case was ambiguous as to whether the trader required a conscious decision to direct its business to the consumer’s domicile or whether an apparent (as manifested by its statements or conduct) would suffice.

The question of whether the test for “targeting” was objective or subjective was the subject of Merck KGaA v Merck Sharp & Dohme Corp & Or's [2017] EWCA Civ 1834. The Court of Appeal held that while evidence of “actual intention” may assist in resolving the question, it was not a necessary ingredient as the test is an objective one. Michael Kent QC agreed with the Court of Appeal noting at [26]: 

“There is every reason in the context of a provision designed to protect and assist consumers who enter into commercial arrangements with traders outside their country to read it in such a way that what matters is what the trader said or did or how it conducted itself which, objectively assessed, can be taken to manifest an intention to direct its relevant activities into the place where the particular consumer is domiciled”.

The Judge concluded that the Bank’s marketing materials on its website gave the impression to a fair-minded observer that the Bank was interested in obtaining custom from the expatriate Lebanese community in London. Bitar relied on, among other things, archived screen shots from the Bank’s website as was accessible from England in October 2014 and the Bank’s 2014 annual report. The Judge held that in isolation many of the points relied on by Bitar to support his case would not amount to evidence that the Bank was targeting or directing its commercial activities to England. While some points carried no weight at all (such as the fact the website provided international dialling codes and had a “.com” domain and that the Bank had established arrangements with corresponding banks in London, which said nothing about the location of its customers) others were more significant, including: (i) references to the Bank’s strategy to target Europe through the Bank’s French and Swiss subsidiaries; and (ii) the reference in the Bank’s 2014 Annual Report to its residential mortgage business with private banking clients in Paris and London (providing evidential value despite unlikely to have been read by customers). This evidence gave the Judge a strong impression that the Bank was interested in obtaining custom from the expatriate Lebanese community in whichever part of the world not insignificant numbers of those community gathered (including England). It was not relevant that the Bank did not intend to direct its business to the UK, which was particularly interested in the expatriate community in places where it had set up branches or representative offices. 

The Judge dismissed the application. Given that the Bank had directed its commercial activities to England where Bitar was domiciled, this entitled Bitar to bring proceedings against the Bank in the English Courts. This High Court judgment is likely to be of interest to foreign banks and financial institutions which do not have an established presence in the UK but offer services to customers domiciled in the UK. These entities should be aware of the risk of being pulled into litigation in England regardless of whatever has been contractually agreed between the parties as to jurisdiction.  

Katy Blake, Associate in London

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