The Court of Appeal has considered the question of whether a single representative can bind a company is governed by the law of the place where the company is incorporated.
A supply contract between two Swiss oil trading companies was subject to English law and jurisdiction. The defendant argued that the contract was not binding because it bore only one of the two representatives’ signatures that are required by Swiss law. The Court held that common law conflicts principles determined which law governed this issue and according to those principles, the law of the place of incorporation (in this case Swiss law) applied.
The question did not depend on the rules about the law applicable to formal validity in the Rome 1 Regulation as it did not relate to the formal validity of the contract. Consequently, the Court agreed with the trial judge that the defence was bound to succeed on the evidence of available Swiss law, and therefore dismissed the claimant’s appeal.
It may seem unusual that the Court did not regard this single signature issue as a matter of formal validity, which would generally be governed by the governing law of the contract. It would be sensible for parties to transactions to check the requirements of the law of the place of a company’s incorporation regarding representation and signature to ensure the company is bound.
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