Yesterday’s Court of Appeal decision under the common law rules is a useful reminder that merely bringing a claim against an English domiciled defendant (who may unquestionably be sued in England) will not always be sufficient to persuade the court that it should exercise its jurisdiction over a foreign domiciled defendant in a related claim. This is particularly so where the foreign defendant and the claimant are party to an exclusive jurisdiction clause in favour of another court.
The courts were clearly influenced by the fact that the claim against the foreign defendant was “the most important of the claims” while “it is difficult to see what practical advantage Mrs Jong would gain by suing the two English … companies.” It is not hard to read between the lines and see that the courts felt the only real purpose of suing the English companies was to bring all the claims in England. The Court of Appeal (judgment by Lewison LJ) thus concluded that England was not the proper place for proceedings against HSBC Monaco.
Ms Jong was party to a contract with HSBC Monaco pursuant to which it placed foreign currency trades on her behalf. The contract contained an exclusive jurisdiction clause in favour of the Monaco courts. Ms Jong nevertheless attempted to sue HSBC Monaco in England relying particularly on proceedings she had issued against two other HSBC companies domiciled in England.
Ms Jong’s claim against HSBC Monaco was that they had placed trades that she had not authorised and, conversely, had failed to place others that she had requested. Her losses were claimed at over £20 million. Ms Jong’s claims against the English HSBC companies (added by amendment) were that they had negligently failed adequately to consider her complaints about HSBC Monaco so that she had continued to place trades through HSBC Monaco for longer than she would have absent the alleged negligence.
It was common ground that Ms Jong had satisfied one of the gateways for service out of the jurisdiction set out in paragraph 3.1 of Practice Direction 6B (service out of the jurisdiction where permission is required). The question was whether England was the proper place in which to bring the claim (the test under CPR 6.37(3)).
The English courts were obliged to hear the claims against the English HSBC companies following the CJEU’s decision in Case C-281/02 Owusu that the courts of a member state in which a defendant is domiciled do not have any discretion to decline jurisdiction to try the case, even if the court of a non-member state would be a more convenient forum. Those companies’ wiliness to be sued in Monaco did not alter this.
The existence of the claims against the English HSBC companies and the consequent risk of inconsistent judgments was the most significant reason why the claim against HSBC Monaco should be brought in England. Other factors, such as Ms Jong’s signature of the contract in England and residence in England, were of little significance in the discussion.
Weighed against this was the existence of the exclusive jurisdiction clause giving HSBC Monaco the contractual right not to be sued anywhere other than Monaco. The English courts will ordinarily take steps “to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum … can show strong reasons for suing in that forum” (Donohue v Armco Inc  UKHL 64 at ).
The judge had found that the two English defendants were “bit-part players having little, if anything, to add to the main claim against HSBC Monaco”. Although describing the judge’s language as colourful, the Court of Appeal agreed and considered that this was relevant. It accepted that parallel proceedings should usually be avoided but observed that the factual disputes in the claims were capable of severance. Further, the court noted that if judgment was given in favour of Ms Jong against HSBC Monaco and that judgment was satisfied, “it is difficult to see how the time and cost involved in continuing the claims against the English companies could be justified”.
The Court of Appeal also noted that if the jurisdiction clause had favoured a member state, pursuant to article 23 of Regulation 44/2001 (Brussels I) it would have had no discretion to permit proceedings against HSBC Monaco in England.
Finally the court agreed that the judge was correct to place little weight on criticisms of procedural shortcomings in Monaco because that was the jurisdiction chosen by the parties.
The Court of Appeal thus upheld the judge’s decision to set aside service on HSBC Monaco.