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)
20 Essex Street’s Andrew Fulton appeared for Deutsche Bank. Continue reading
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.
Today, the Hague Convention on Choice of Court Agreements of 30 June 2005 enters into force in EU countries. As its name suggests, the Choice of Court Convention is concerned with the effectiveness of jurisdiction clauses agreed by parties to international commercial transactions. It applies only to choice of court agreements in “civil or commercial matters”; it excludes consumer and employment contracts and certain specific subject matters.
In order to give effect to choice of court agreements, Article 5 of the Convention provides that the court chosen by the parties must in principle hear the case and, as a mirror image, Article 6 of the Convention provides that any court not chosen must in principle decline to hear the case. In addition, under Articles 8 and 9, the Convention provides for recognition and enforcement of judgments.