In its recent decision in Koza Ltd v Akcil  EWCA Civ 1609, the Court of Appeal interpreted the scope of Article 24 (2) Brussels I Recast, which governs exclusive jurisdiction “in proceedings which have as their object the validity of the constitution, the nullity or dissolution of companies or other legal persons or associations of natural or legal persons, or the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat”.
The dispute concerned the control and management of the First Claimant, Koza Ltd, a company with its seat in England and Wales. The Second Claimant was a director of Koza Ltd. Koza Ltd was a wholly owned subsidiary of Koza Altin Isletmeleri AS. Both were members of the Koza Group. The Koza Group was accused by the Turkish authorities of financing of terrorism, and became embroiled in Turkish criminal proceedings. Koza Altin served notice requisitioning a general meeting of Koza Ltd with a view to passing resolution replacing its directors, including the Second Claimant, with the First, Second and Third Defendants. Koza Ltd would not voluntarily call the general meeting. Statutory procedure was sought to call the general meeting.
Koza Ltd sought relief on two grounds:
(i) the “English law company claim”, which alleged that the resolutions to which the notices related could not be passed without the consent of Mr Ipek, and he did not consent, and
(ii) “the authority claim”, which alleged on a variety of grounds that the Defendants had no authority to serve the notices served. Continue reading →
Team Y&R Holdings v Ghossoub  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 →
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  EWHC 1904 (Comm), Bestolov v Povarenkin  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 →
On 12 September 2017, the People’s Republic of China signed the Hague Convention of 30 June 2005 on Choice of Court Agreements (the Convention). This is an important development in the field of cross-border dispute resolution, which will enhance the effectiveness of exclusive choice of court agreements concluded in commercial transactions. This is the fourth in the blog’s “catch up for the new term” series.
This second post in our “new term catch up series” looks at Sabbagh v Khoury  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 →
As the new legal year starts in London, we’re running a short series of posts covering developments and cases you might have missed over the summer. This first post in the series looks at the UK and EU position papers on Judicial Cooperation in Civil and Commercial Matters.
Since the Brexit Referendum of June 2016, there has been uncertainty as to how the current conflict of laws regimes concerning civil and commercial matters will change. (Other civil matters are outside the scope of this brief note.)
Until recently, there had been no indication from governmental levels as to the proposals both for the wind-down of the current regime and for the future basis of judicial cooperation (if any) between the UK and EU Member States. This summer saw the publication of position papers by both the EU and the UK. On 12 July 2017, the EU published its Position Paper on Judicial Cooperation in Civil and Commercial Matters. On 22 August 2017, the UK published its paper entitled “Providing a cross-border civil judicial cooperation framework: a future partnership.”
Marashen Ltd v Kenvett Ltd  EWHC 1706 (Ch) (06 July 2017)
Foxton QC in the Chancery Division overturned an earlier order permitting service of third party costs order on a person resident in Russia by means of alternative service on his lawyers’ offices in London, on the basis that there was no pre-existing order for permission to serve out. A court must have already given permission to serve out of the jurisdiction, before the power to permit alternative service (under CPR 6.15) arises. Pre-existing permission to serve out must exist even for alternative service within the jurisdiction. The power to make alternative service within England and Wales on a defendant resident outside the jurisdiction derives from CPR 6.37(5)(b)(i). In Hague Service Convention cases, there must be “exceptional circumstances” to grant an order for alternative service, outside the terms of the Convention.
Exceptional circumstances is a test going beyond mere good reason. Mere delay or additional expense did not constitute exceptional circumstances. Article 15 of the Hague Service Convention itself offers comfort to a claimant in the case of excessive delay in that, in the event of a delay exceeding 6 months, this article would allow the claimant to continue on with proceedings despite a lack of formal confirmation of service.
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 Commercial Court finds that asymmetric jurisdiction clauses are valid exclusive jurisdiction clauses for the purposes of the Brussels Recast. Given their prevalence in financial contracts, a contrary decision could have produced significant instability.
Commerzbank Aktiengesellschaft v Pauline Shipping and Liquimar Tankers  EWHC 161Continue reading →
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 ( 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 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)