About Josephine Davies

Josephine has a wide-ranging practice in commercial and competition law. Disputes about jurisdiction and applicable law feature regularly in her work for clients worldwide. She also enjoys managing blogs on the subject! Find out more about Josephine.

No anti-suit although HK claims breach jurisdiction clause

Team Y&R Holdings v Ghossoub [2017] EWHC 2401 (Comm) is an interesting treatment of parallel proceedings. The exclusive jurisdiction clause was read to fulfil its purpose: the substance not the form of allegedly wrongful Hong Kong proceedings was important and third parties were not bound.  However, despite Mr Ghossoub being in breach of the jurisdiction clause, no anti-suit injunction was granted against him.  The decision should give parties pause for thought when drafting jurisdiction clauses and starting or resisting parallel proceedings. Chaos or at least inconvenience might be unavoidable without a clearly drafted jurisdiction clause. It also offers guidance on how to write a jurisdiction clause which bites on non-contracting parties.

The origin of the dispute

The case arose from a sale and purchase agreement (“SPA”) for the shares of Team Y&R Holdings (“TYRH”) and a service agreement (“SA”) between Mr Ghossoub and TYRH.  The SPA contained an exclusive jurisdiction clause as follows (the SA clause was less detailed).

“The English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with this agreement and the parties submit to the exclusive jurisdiction of the English Courts.” Continue reading

The power of domicile

This post looks at two cases which show the  importance of the Brussels I Regulation’s primary rule of jurisdiction – that defendants should be sued in the jurisdiction of their domicile.  Those cases are Aspen Underwriting v Kairos Shipping [2017] EWHC 1904 (Comm), Bestolov v Povarenkin [2017] EWHC 1968 (Comm).  It is the fifth of our “new term catch up series”.

Aspen Underwriting achieves a potentially unsatisfactory result with some claims being tried in England and others capable of resolution only in the Netherlands (the place of domicile).  On the other hand, in Bestolov v Povarenkin, jurisdiction was established on the basis of domicile under the Brussels Regulation when it would not have been asserted at common law. Continue reading

Merits of claim against anchor defendant matter (probably)

This second post in our “new term catch up series” looks at Sabbagh v Khoury [2017] EWCA Civ 1120, an important case about using an anchor defendant under the Brussels Regulation regime.

The use of anchor defendants in English proceedings is very common. Establishing a claim against an anchor defendant allows co-defendants to be sued in England when jurisdiction could not otherwise be established over them.  In Sabbagh v Khoury, the Court of Appeal considered whether, when the Brussels Regulation (or the Lugano Convention) applied, the claim against the anchor defendant had to be meritorious or whether even a hopeless claim against the anchor defendant would be enough to found jurisdiction.

Interestingly, but unhelpfully for litigants, the Court of Appeal judges disagreed with one another.  Patten and Beatson LJJ held that the claim against the anchor defendant must have a real prospect of success.  Gloster LJ considered that this was unnecessary although did agree that the anchor defendant regime cannot be invoked if the sole object of the claim is to oust the jurisdiction of the courts which would otherwise have jurisdiction over the non-anchor defendants.

There is also considerable scope for the issue to be re-argued because, in fact, the court’s decision on whether the claim against the anchor defendant needed to have a real prospect of success was obiter dictum. Continue reading

Italian law is no way out of swap liability for Prato

The Court of Appeal’s recent decision is another blow for litigants who hope that foreign law will allow them to escape from liability under English law contracts.  This case, Dexia Crediop SpA v Comune di Prato [2017] EWCA Civ 428 (15 June 2017) arose from a claim by Dexia (the Bank) for some EUR 6.5 million due under an interest rate swap.[1]  The contract was subject to English law and jurisdiction.

The defendant, an Italian local authority (Prato), sought to rely on various Italian law arguments.  Not one arrow in Prato’s “capacious quiver” [2] of defences struck home, however.  The result of Walker J’s judgments[3] was basically reversed.

The case demonstrates how hard it is to show that “mandatory” rules of foreign law should apply (due to Article 3(3) of the Rome Convention) where parties have expressly chosen English law.  The 2016 Banco Santander case[4] (discussed in my post on Blair J’s March judgment and the Court of Appeal’s December decision) covered similar ground but this case is more extreme.  Continue reading

Article 50 and the Brussels Regulation

With Article 50 now triggered, amongst many other negotiations, attention will turn to the Brussels I Regulation. Rather than setting alarm bells ringing, this article by Sara Masters QC and Belinda McRae sets out three steps, based on previous examples of EU negotiations, of how the UK Government should assuage fears of upheaval in the system of commercial dispute resolution following Brexit.

The full article is here.

Court agrees with Deutsche Bank – Singapore is not more convenient

An alleged fraud (relating to a sale of Indian cotton) between an Indian, a Malaysian and a Hong Kong company has generated multiple claims in Singapore and one in London, Detusche Bank AG v CIMB Bank Berhad.  These arise from the typical web of letters of credit, finance facilities and guarantees found in international commodities finance.   In London, Deutsche Bank (DB) claim reimbursement from CIMB (a Malaysian bank) of sums paid out under letters of credit issued by CIMB.

Of interest for this blog is the Commercial Court’s decision last week ([2017] EWHC 81 (Comm)) refusing to grant CIMB a stay of the London proceedings on the basis of forum non conveniens.  Teare J’s judgment is a pithy demonstration of the English court’s approach to such arguments applying the Spiliada[1] principles (discussed below).

A key point to note is that the mere risk of inconsistent decisions on a factual point and the duplication of costs was not enough to justify a stay of English proceedings.  The case also should give parties pause to consider before beginning parallel proceedings in another jurisdiction (see my final thoughts on tactics)

20 Essex Street’s Andrew Fulton appeared for Deutsche Bank. Continue reading

Court of Appeal confirms that Portuguese “mandatory” law is no defence to swaps liability

Earlier this year (see my March post), Blair J held that Lisbon based transport companies could not use “mandatory” provisions of Portuguese law to defeat a multi-million Euro claim by Santander under interest rate swaps contracts.  The Court of Appeal has now upheld this decision in Banco Santander Totta SA v Cia Carris de Ferro de Lisboa SA [2016] EWCA Civ 1267 (main judgment, Sir Terrance Etherton MR).

In short, under article 3(3) of the Rome Convention, a “mandatory” provision of national law could only displace the parties’ express choice of law in a contract if the situation is truly domestic – an “international situation” (even if not pointing to a specific other country) is sufficient to prevent article 3(3) applying. Continue reading

Hague Convention on Choice of Court Agreements is in force in Singapore from tomorrow

A year after it entered into force in EU countries, the Hague Convention on Choice of Court Agreements of 30 June 2005 will enter into force in Singapore tomorrow (1 October 2016).

I covered the basics of the Convention in my post last year.  Since then, the the UK has voted for Brexit.  This could add to the Convention’s importance. Post Brexit, the UK could sign up to the Hague Convention in its own right (not as part of the EU).  This would make sure that, in other Convention States (1) jurisdiction clauses in favour of the English courts and (2) recognition and enforcement of English judgments, would continue to be effective.

It is important to remember, though, that the Convention applies only to choice of court agreements in “civil or commercial matters” (subject to certain exclusions, e.g. consumer and employment contracts).

Finally, the Convention may be spreading.  In the last year, the Ukraine has signed the Convention (on 21 March 2016) but not ratified it.

Territorial limits on the application of EU competition law

In Iiyama Benelux BV v Schott AG [2016] EWHC 1207 (Ch) (23 May 2016), Mann J struck out competition law damages claims for around 1 billion euros because, among other things, he found that the claims brought were outside the territorial limits of EU competition law.

This judgment indicates that, having regard to the requirements of international law and comity, the English courts will adopt a cautious approach to asserted competition law damages claims where there is only a relatively slight connection to the EU/EEA (see a similar approach, for different reasons, by the Court of Appeal in the Air Cargo case). Continue reading

Raphael QC on Petter v EMC: anti-suit injunctions and comity

Readers may be interested in a recent article on anti-suit injunctions written by 20 Essex Street’s Thomas Raphael QC.   The article, published in the LMCLQ, comments on the Court of Appeal’s controversial decision in Petter v EMC [2015] EWCA Civ 828, [2016] lLPr 6.

As the article exposes, the English court’s case law on anti-suit injunctions has become inconsistent and is in danger of failing to respect comity. The article stands back and takes a high level view of the fundamental principles which are necessary to give international legitimacy to the remedy.

The article makes for interesting reading and is highly recommended.   It has already been cited before the courts on three occasions.

The reference for the full text of the article, based on and developed from Tom’s lecture to Combar in December 2015, is [2016] LMCLQ 256.  Tom is also the author of the standard work on anti-suit injunctions: “The Anti-Suit Injunction” published by OUP.