Pierse Contracting Limited (Pierse Ireland), an Irish company, gave a guarantee for the debts of its English subsidiary (Pierse UK) to Commercial Marine Piling Limited (CMP), also an English company.  The guarantee was silent as to what law was to govern the contract or what courts were to have jurisdiction in enforcement proceedings.

A dispute arose between Pierse UK and CMP over sums due and CMP sought to enforce Pierse Ireland’s guarantee in the English courts.  Pierse Ireland challenged the jurisdiction of the English courts to hear the claim against it under the guarantee.

Under the relevant European rules Pierse Ireland would have to be sued in Ireland unless the place of performance of the obligations under the guarantee was England.  The place of performance of the guarantee (i.e. payment by Pierse Ireland) pointed to Ireland as the appropriate jurisdiction for enforcement proceedings.  However, in this case, the judge considered that the circumstances did connect more closely with England.  Accordingly, since English law requires a debtor to seek out its creditor, the judge decided the place of performance of the guarantee was England and that the English courts had jurisdiction.

Interestingly, the judge noted that the English courts would still have jurisdiction (in the absence of an express provision to the contrary) even if the guarantee had been governed by Irish law, on the basis that England was the place of performance of the contract.