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In a recent
case the High Court ruled that a franchisor can
determine in the franchise agreement the location
of the court in which any dispute must be dealt
with.
In the case of Anthony
Snookes v Jani-King (GB) Limited: Stephen
Little v Jani-King (GB) Limited Swansea
District Registry upheld a jurisdiction clause
drafted by FFW pursuant to which the parties
agreed that any proceedings arising in connection
with the franchise agreement should be "brought in
a court of competent jurisdiction in
London".
Mr Snookes and Mr Little, ex
Jani-King franchisees, issued proceedings against
Jani-King in the Swansea District Registry.
Jani-King applied to strike out or stay their
claims on the grounds that Swansea District
Registry did not have jurisdiction to hear the
franchisees' claims due to the jurisdiction
clause.
The court held that the provisions
of the jurisdiction clause were mandatory
requiring any proceedings should be brought in a
court of competent jurisdiction in London, and not
any other location.
Conclusion
There
are often particular reasons why a franchisor
would want proceedings to be issued in a
particular area of a country, for example in the
local court of the franchisor or its solicitors.
This judgment shows that such clauses, if properly
drafted, are enforceable. Although such clauses
cannot prevent litigation, they can make
litigation more cost efficient and convenient for
a franchisor.
For further information,
please contact Mark Abell or
Victoria
Ford
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