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

Permission to serve out required before alternative service order can be made

Marashen Ltd v Kenvett Ltd [2017] 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.

Domestic anti-suits and the 6BPD gateways: Fujifilm Kyowa Kirin Biologics Co Ltd v Abbvie Biotechnology Ltd

Fujifilm Kyowa Kirin Biologics Company Ltd v (1) Abbvie Biotechnology Ltd and (2) Abbvie Ltd [2016] EWHC 2204 (Pat)

Arnold J gave judgment today in this important case on jurisdiction.  Thomas Raphael QC and I acted for the claimant biotechnology company (“Fujifilm”) and successfully resisted a challenge from a Bermudan domiciled defendant to the English Court’s jurisdiction which had been founded by service out of the jurisdiction.  Alexander Layton QC, also from 20 Essex Street, acted for the defendants.

Whilst the issues in this case arose within the context of an intellectual property dispute, many aspects of Arnold J’s decision will have a broader relevance to commercial disputes that give rise to issues concerning the Court’s jurisdiction to serve out or domestic anti-suit relief. Continue reading

Some useful reminders as to service out in insolvency proceedings: Hosking v Apax Partners LLP [2016] EWHC 558 (Ch)

Practitioners regularly acting in insolvency proceedings were given a “refresher” on the matters to which they should have regard when seeking permission to serve a non-EU foreign defendant out of the jurisdiction in Hosking v Apax Partners LLP [2016] EWHC 558 (Ch). Continue reading