Lupofresh Limited v Sapporo Breweries Limited

The Court of Appeal has confirmed that Article 8(2) of the Rome Convention relates only to the existence, and not the validity, of consent.  In a debt claim for just over €1 million brought by Sapporo against Lupofresh relating to the supply of hops, Lupofresh had maintained a series of counterclaims seeking damages and the setting aside of the underlying contract of sale on the bases of economic duress, intimidation, repudiatory breach of contract and misrepresentation. 

The High Court held that Japanese law applied to the counterclaims, and dismissed them.  On appeal, Lupofresh argued, inter alia, that English law should apply to its duress claims, even if Japanese law otherwise applied.  Lupofresh relied in that regard on Article 8(2) of the Rome Convention, which provides that “…a party may rely upon the law of the country in which he has his habitual residence to establish that he did not consent if it appears from the circumstances that it would not be reasonable to determine the effect of his conduct in accordance with…” the body of law which would otherwise apply. 

The Court of Appeal rejected this submission, resolving the point in line with the views of the authors of Dicey & Morris, by holding that “[t]he purpose of Article 8(2) is … to deal with special problems such as ensuring that a party is not found to have contracted by reason of his failure to appreciate that, under the putative proper law of the contract to which he is invited to adhere, consent may be inferred from silence.  It thus relates only to the existence and not to the validity of consent.”  The Court of Appeal dismissed the remainder of the appeal, including the Appellant’s invitation to the English Court of Appeal to develop Japanese law so as to recognise a doctrine of economic duress.

Andrew Green QC and James Segan, instructed by Baker & McKenzie, acted for the Applicants.