Lisa Lacob succeeds on application to set aside order for service out of the jurisdiction on US record labels

Lisa Lacob (instructed by Keystone Law) acted for Drive-Thru Records and War Road Music, California-based record labels, on an application to set aside an order for service out of the jurisdiction of a claim brought against them by Ditto Music, a digital distributor of music to online stores such as iTunes and Spotify. Ditto alleges that the labels breached the implied terms of a digital music licensing agreement, including by failing to provide certain of their master recordings to Ditto and using advances provided by Ditto otherwise than for reasonable and necessary expenditure on band promotion activities. The labels have issued a claim against Ditto in New York alleging failure to pay advances due under the Agreement.

The application raised novel issues concerning three of the PD 6B jurisdictional gateways for service out ((i) claims in relation to contracts (ii) claims in tort and (iii) claims concerning property within the jurisdiction). In particular, in respect of the contract gateway, the Court applied Mann J’s reasoning in Apple Corps Ltd v Apple Computer Inc [2004] EWHC 768 (Ch); [2004] 2 CLC 720 and found that the traditional offer and acceptance analysis in Entores Ltd v Miles Far East Corpn [1955] 2 QB 327 for determining the place the contract was made was not appropriate in this case and that the better view was that the agreement was made in two jurisdictions at the same time.

There was also a topical dispute as to the extent to which the location of witnesses and documents still matter in a world of remote hearings.  The Court’s view on this issue was that “the location of witnesses more generally no longer has the importance it may previously have been ascribed now that it is routine as a result of the pandemic for witness to attend trial for examination remotely; as a result I afford this consideration only limited weight”. Ultimately, the Court held that the respondent had not shown that England is clearly and distinctly the appropriate forum for the trial of the dispute between the parties.

A copy of the judgment which was handed down on 20 July 2021 can be found here.

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