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The test is whether a variation was of such magnitude that it created a new legal relationship between the parties
The Court of Appeal has dismissed a bank's challenge to the jurisdiction of the English courts under the consumer contract provisions of the Civil Jurisdiction and Judgments Act 1982 (CJJA). The court held that a wholesale update of banking terms amounted to the conclusion of a new contract, which meant that the contract was concluded at a time when the customer was domiciled in the UK and the bank was directing its commercial activities to the UK. This entitled the customer to bring proceedings in England: Sheikh Mohammed Omar Kassem Alesayi v Bank Audi SAL [2026] EWCA Civ 551.
The decision will be of practical interest to financial institutions that periodically update their standard terms under long-standing customer contracts, as it establishes the test to be applied in deciding whether such variations mean a new contract has been "concluded" for the purposes of the consumer jurisdiction provisions of the CJJA.
It was common ground between the parties that this was a question to be determined in accordance with autonomous EU law principles, not English law (because the relevant CJJA provisions were enacted in the context of Brexit and were intended to adopt and retain the equivalent EU provisions on jurisdiction for consumer contracts). The test is whether a variation was of such magnitude that it created a new legal relationship, rather than merely updating or amending the existing contract. This is a test of substance, not form, and does not require a formal novation.
The court noted that there had been some argument as to whether, conversely, the test would necessarily be met by what English law would regard as a novation, for example by an express agreement that the previous contract was to be extinguished and replaced. The court questioned whether it would necessarily follow that a new contract would be concluded for the purposes of the CJJA, but refrained from expressing a concluded view on the point.
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