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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Sebastian Holdings Inc v Deutsche Bank AG [2010] EWCA Civ 998 (20 August 2010) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2010/998.html Cite as: [2011] Bus LR D139, [2011] 1 Lloyd's Rep 106, [2010] EWCA Civ 998, [2010] ILPr 52, [2010] 2 CLC 300

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION COMMERCIAL COURT
MR JUSTICE WALKER

		Royal Courts of Justice Strand, London, WC2A 2LL
		20/08/2010

Lord Justice Thomas:

Introduction

1. The principal issue in this appeal is the construction of jurisdiction clauses in a series of agreements between a bank and its customer; most provided for the jurisdiction of the English courts; one provided for the jurisdiction of the courts of New York. The agreements related to trading in the financial markets made over a two year period. The trading ended in October 2008 when losses in the region of $750m were made by the appellant (Sebastian) in trading through the respondent (the Bank); the Bank claims unpaid debts due under two of the agreements and Sebastian claims damages in respect of the losses it has funded.
2. Sebastian wishes to pursue its claims in New York; accordingly in November 2008 it brought proceedings against the Bank in the Supreme Court of New York to recover approximately $750m as damages for breach of one of the agreements. The Bank wishes to pursue its claim in England; accordingly in January 2009, the Bank brought proceedings in the Commercial Court in London to recover approximately $250m which it contends Sebastian should have paid under two agreements each of which contained English jurisdiction clauses. Sebastian contends that the English Court does not have jurisdiction under the jurisdiction clauses in the agreements on the true construction of the series of agreements looked at together or that if it has, the claim should be stayed in favour of New York.
3. In the Commercial Court Walker J held on 14 August 2008 that the Bank was entitled to bring the claim under the jurisdiction clauses in the two agreements under which the outstanding sums were claimed by the Bank. On 1 December 2009 Burton J refused to stay the proceedings brought in the Commercial Court in favour of the New York proceedings. In New York, Kapnick J on 10 December 2009 refused the Bank's application to stay the proceedings in New York on the ground of forum non conveniens, but also refused Sebastian's application to restrain the proceedings in the Commercial Court. Kapnick J's decision has been appealed. Sebastian appeals by permission of Moore-Bick LJ against the decision of Walker J and applies for permission to appeal against the decision of Burton J.

The factual background

4. Before turning to the issues in more detail it is necessary to provide an outline of the agreements, the factual background and the issues, so far as they have emerged at this stage. The Bank, one of the world's largest banks, is incorporated in Germany and has offices throughout the world, including London, New York and Geneva. Sebastian, a company incorporated in the Turks and Caicos Islands, was wholly owned by Alexander Vik, a resident of Monte Carlo, Monaco. It was formed by him for the purpose of holding securities and dealing in the financial markets. In 2004 Sebastian became a customer of the Bank. In May 2006, November 2006 and January 2008 Sebastian entered into a series of agreements with the Bank for trading in the financial markets which are relevant to the claims made by both the Bank and Sebastian.

The May 2006 agreement

5. The first agreement was for trading in equities and was entered into in May 2006. It was a Master Agreement on the 1992 ISDA (International Swap Dealers Association) standard form of master agreement (the Equities ISDA Master Agreement). It provided a framework under which the Bank and Sebastian could enter into over the counter derivative contracts (derivative contracts which are privately negotiated and traded between counterparties rather than being traded through an exchange or an intermediary).
6. Part 4 of the schedule to the ISDA standard form (where matters particular to the agreement were set out) provided that it should be governed by English law and thus, in accordance with the terms of the jurisdiction clause in the standard form, subjected the agreement to the non-exclusive jurisdiction of the courts of England in the following terms:

"13(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement ("Proceedings"), each party irrevocably:-

i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and

ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction."

There was provision in the schedule for the nomination of an agent for the service of process on Sebastian, but none was specified.

The November 2006 agreements

7. Three agreements relating to foreign exchange (FX) trading were executed in November 2006. Although they bear different dates in November, they were plainly part of a series of agreements.
8. The first was described as the Prime Brokerage Agreement (the FX Prime Brokerage Agreement) setting out the framework under which the Bank and Sebastian agreed to engage in FX and related trading.

i) Sebastian, acting as the Bank's agent, was authorised to enter into FX and related transactions with 4 named financial institutions as counterparties. Clause 2 provided that the deal with each counterparty was to be set out in a FX Prime Brokerage Counterparty Agreement in the form of a template to be provided by the Bank; the agreement in the template made provision for that agreement to be governed by New York law and to be subject to the non-exclusive agreement of the New York courts.

ii) Each counterparty transaction entered into by Sebastian with a named counterparty was to give rise to an equal and offsetting transaction between the Bank and Sebastian which could be performed in one of two ways. However, only one was in the result used – namely an offsetting transaction, as follows:

"….. subject to and governed by, the applicable ISDA Master Agreement or other master agreement between [the Bank] and [Sebastian], including the Credit Support Annex which is part thereof (the "Agent Master Agreement"). [Sebastian] shall be required to post collateral with respect to its obligations under the Agent Master Agreement (including the Agent Transactions) in accordance with terms and provisions of the Credit Support Annex. [The Bank] and [Sebastian] agree that any breach of this Agreement by [Sebastian] shall constitute an Event of Default under the Agent Master Agreement"

The "Agent Master Agreement" is conveniently referred to as the FX Master Agent Agreement; it was the second of the agreements entered into in November 2006 – see paragraph 10 below. The FX Prime Brokerage Agreement contained detailed terms about the provision of information and monitoring by the Bank.

9. Clause 13 of the FX Prime Brokerage Agreement provided that it was governed by the law of the State of New York and Clause 14 provided that:

"Any action or proceeding relating in any way to this Agreement may be brought and enforced in the courts of the State of New York and the United States District Court, in each case located in the Borough of Manhattan, New York."

10. The second agreement was the FX Agent Master Agreement to be used for the FX offsetting transactions as I have explained at paragraph 8 above. It was also on the 1992 ISDA standard form. Part 4 of the schedule provided that it was governed by English law and thus the non-exclusive jurisdiction of the English courts by reason of the provisions of the jurisdiction clause set out at paragraph 6 above. Part 4 of the Schedule also provided that Sebastian appointed Clifford Chance at its office at 10 Upper Bank Street, London for service of process. This is one of the two agreements under which the Bank says sums are due and brings its claim relying on the English jurisdiction clause.
11. The third agreement related to the provision of security and was called a Pledge and Pledgeholder Agreement (the Swiss Pledge Agreement). The Bank (as Pledgee) its subsidiary, Deutsche Bank (Suisse) SA (as Pledgeholder) through its Geneva Office, and Sebastian (as Pledgor) were parties to that agreement. The governing law and jurisdiction provisions were contained in clause 21:

"This Pledge and Pledgeholder Agreement is governed by Swiss law. Place of performance, place of collection for Pledgors residing abroad and sole place of jurisdiction for all proceedings shall in each case be the place where the respective DBS office is located. For this purpose the Pledgor elects the respective office of DBS as the legal and special domicile. However, the Pledgee shall also have the right to bring an action against the Pledgor before the competent court at its place of residence or before any other competent court."

12. In conjunction with those agreements Sebastian in a letter addressed to the Bank designated Mr Klaus Said as the agent to trade on its behalf under the FX dealings envisaged by the three agreements. A webpage was used to record the transactions.
13. Sebastian claimed in October 2008 that a further agreement was made orally between Mr Vik and the Bank limiting Sebastian's maximum exposure in connection with foreign exchange trading to $35m and that its obligation to provide collateral was limited to that amount. It is not entirely clear where Mr Vik alleges that that agreement was made, but has alleged in the New York proceedings it was made in New York by the Bank's New York Office. The Bank denies there was any such agreement and points to the fact that, unlike all the other arrangements, there is nothing at all in writing.

The January 2008 agreements

14. At the end of January 2008 four further agreements were made in respect of trading in equities, extending the types of transaction to include trading over an exchange or through an intermediary.
15. The first was an Equities Prime Brokerage Agreement for trading in equities. This was governed by English law. By clause 31, the parties agreed irrevocably to submit themselves to the exclusive jurisdiction of the English courts. Clifford Chance were appointed agents for the service of process on Sebastian.
16. The second was a Listed F&O Agreement under which the Bank agreed to provide services for listed futures, options and other derivative transactions. Clause 18.1 provided that the agreement was governed by English law, except that a transaction which was subject to the rules of an exchange would be governed by the law applicable to it under those rules; clause 18.2 provided for English jurisdiction and clause 18.4 for service of process against Sebastian on Clifford Chance.
17. The third agreement was an Overseas Securities Lender's Agreement between Sebastian and the Bank for lending and borrowing securities. Clause 23 subjected this agreement to London arbitration and clause 26 provided for English law.
18. The fourth was a Master Netting Agreement which provided for the ability to terminate the May 2006 Equities ISDA Master Agreement, the January 2008 Equities Prime Brokerage Agreement and the January 2008 Listed F&O agreement. The agreement provided that on termination net termination amounts would be payable. This was governed by English law and contained the following jurisdiction clause:

"12.1 The courts of England have exclusive jurisdiction to settle any dispute arising from or connected with this Agreement (a "Dispute").

12.2 The parties agree that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that they will not argue to the contrary."

Sebastian agreed that Clifford Chance was to be designated as the agent to receive service of process. This is the second of the two agreements under which the Bank says sums are due and brings its claim relying on the English jurisdiction clause.

The trading between the parties

19. The trading in equities was carried out in London.
20. There is a dispute between the parties as to the details of the way FX trading was conducted. It is sufficient to say that it was carried out by Mr Said who was based in Connecticut with the Bank's New Jersey office; agreements were made for the transactions in accordance with the arrangements agreed in November 2006. Collateral was provided by Sebastian. Some accounts into which the debit or credit entries were made were held and operated by the Bank in London.
21. The FX trading in 2007 was said by Sebastian to have been spot, forward and options trading resulting in profits to it. It was alleged by Sebastian that Mr Said in addition in 2007 began to enter into structured options and from early 2008 entered into pivot accrual structured options trades, but that the Bank never advised Sebastian that collateral was required in excess of the $35m it alleged it had agreed to provide.

October 2008: The dispute

22. In September 2008 the financial markets went into crisis, marked particularly by the collapse of Lehman Brothers and other Banks.
23. On 6 October 2008 the Bank informed Mr Said that it required additional collateral. It was asserted by Sebastian that until that time trades had been carried out and approved by the Bank without any request for further collateral; that as at 6 October 2008 the Bank's webpage used for Sebastian's FX trading inaccurately showed a net credit in favour of Sebastian in the FX trading of $27m, whereas the true position, unknown to Sebastian at that time, was that it had accumulated losses measured in hundreds of millions of dollars.
24. On or before 14 October 2008, Mr Vik asserted that an agreement had been made with the Bank that Sebastian's exposure on foreign exchange trading was limited to $35m, as I have mentioned at paragraph 13.
25. Between 14 and 21 October 2008 margin calls in respect of losses on foreign exchange trading amounting to approximately $436m were paid by Sebastian or realised by the Bank from the accounts Sebastian held at the Bank. Sebastian has asserted that this was all done on the basis of erroneous information and under duress. Sebastian has also asserted that thereafter, the Bank closed and liquidated positions that Sebastian had taken. The Bank asserted that Sebastian agreed to the close out of all positions governed by the FX Agent Master Agreement with assets held under the Swiss Pledge Agreement and other funds and securities held by the Bank.
26. On 22 October 2008 the representatives of the Bank in London spoke to Mr Vik. In a record of that conversation the representatives in London told Mr Vik that the fact that losses were being accumulated in foreign exchange trading was not known to the office of the Bank in London.
27. On the following day, 23 October 2008, the Bank sent Sebastian a notice informing it that the failure to provide cash or securities in accordance with the Equities Prime Brokerage Agreement of January 2008 was an event of default.
28. On the following day, 24 October 2008, the Bank terminated the FX Prime Brokerage Agreement of November 2006 with immediate effect.
29. On 4 December 2008:

i) The Bank demanded from Sebastian $120,650,166 under the FX Agent Master Agreement made in November 2006.

ii) The Bank sent a letter terminating the Equity Prime Brokerage Agreement made in January 2008 and informing Sebastian that 4 December 2008 would be the date for netting under the Master Netting Agreement of January 2008. Subsequently on 20 January 2009 the Bank notified Sebastian that the amount due under the Master Netting Agreement of January 2008 was $125,523,086.

The claims made in the New York Supreme Court and the Commercial Court

30. On 24 November 2008 Sebastian issued the claim in New York claiming damages of at least $750m; it was served on the Bank on 5 December 2008. The Complaint, served subsequently on 20 January 2009, set out Sebastian's case that the FX trading was limited to a maximum exposure of $35m and was entirely unrelated to the trading in equities; that Sebastian relied on the Bank's obligations under the FX Prime Brokerage Agreement, its twice daily reporting of the positions and the Bank's superior knowledge and expertise which enabled it in particular to provide calculations of the net exposure and report those to Sebastian; that the Bank had breached these agreements; that the margin calls had been paid by Sebastian as a result of erroneous information and under duress. Positions had been liquidated without its assent. It claimed damages for breach of the FX Prime Brokerage Agreement, the collateral agreements, breach of fiduciary duty, conversion, fraudulent concealment by failing to report the exposure until 6 October 2008, fraudulent misrepresentation and negligent misrepresentation and other claims. It also sought a declaratory judgment that it was not liable to the Bank.
31. On 21 January 2009 the Bank issued its claim in the Commercial Court, claiming under the three agreements subject to the jurisdiction of the English courts:

i) $125,523,086 and interest, as money due under the Master Netting Agreement (January 2008) and underlying agreements (comprising the Equities Prime Brokerage Agreement (January 2008), the Equities ISDA Master Agreement (May 2006) and Listed F&O Agreement (January 2008). It was contended by the Bank that these debts arose from over the counter trading under the Equities ISDA Master Agreement, the listed derivatives trading under the Listed F&O Agreement and prime brokerage services under the Equities Prime Brokerage Agreement; and

ii) $120,650,166, together with interest, being money due under the FX Agent Master Agreement of November 2006.

Particulars of claim were served on that date.

32. Although the particulars of claim claimed the money under the FX Agent Master Agreement, the particulars also referred to the FX Prime Brokerage Agreement and the Swiss Pledge Agreement. It was averred at paragraph 30:

"[The Bank] and Sebastian did not at any time enter into an agreement that:

a) limited the exposure of Sebastian to [the Bank] under the FX Agreements or

b) otherwise varied the terms of the FX Agreements."

The court was told by the Bank that this plea was made as it was known that Sebastian had asserted, as I have set out at paragraph 24, that the Bank had agreed with Mr Vik that its exposure was limited to $35m.

33. That summary of the factual background and the issues (as far as are known) is sufficient to enable me to turn to the issues that arise on the appeal of the decision of Walker J holding that the Bank was entitled to bring its claim in England under jurisdiction clauses and the application for permission to appeal from the decision of Burton J refusing a stay of that claim.

THE ISSUE ON THE JURISDICTION CLAUSES

(i) The issue and the arguments

34. The jurisdiction of the English Court is governed by Article 23 of Council Regulation (EC) 44/2001 (the Brussels 1 Regulation). As the Bank is domiciled in Germany, the jurisdiction is established, if the disputes which have arisen fall within the clauses which confer jurisdiction on the English courts. The claim form contained, as required by CPR 6.19(1A), a statement that the claim was brought under the Judgments Regulation, that there were no pending claims in States party to that Regulation and that Sebastian was party to an agreement conferring jurisdiction under Article 23.
35. The issue as to whether the Bank is entitled to bring its claim is therefore one of construction of the jurisdiction clauses in the agreements. The debts claimed by the Bank are due under the Master Netting Agreement and the FX Master Agent Agreement, each of which has an English jurisdiction clause set out at paragraphs 18 and 10 above. It is contended, however, by Sebastian that if the nature of the claim and the dispute is analysed and the series of agreements properly construed, the claims made by the Bank under these agreements cannot be brought in England under those jurisdiction clauses. It is therefore necessary first to summarise that argument in a little more detail as follows:

i) Where commercial men enter into a series of agreements with conflicting jurisdiction clauses, commercial men are to be presumed to intend that if a claim or dispute arises that claim or dispute should be subject to a single jurisdiction. It made no difference that the jurisdiction clauses were not exclusive clauses, as the parties did not contemplate parallel proceedings.

ii) The jurisdiction clauses therefore should be construed so that parties were taken to have agreed to refer the claim or dispute to the jurisdiction provided for in the jurisdiction clause in the transaction that was at the commercial centre of the claim or the dispute.

iii) It was a question of fact to determine which contract was at the centre of the claim or dispute. In these transactions, there could be no doubt that the claims and the disputes all arose from FX trading; that was the centre of gravity of the dispute. The particulars of claim did not set out the true nature of the claim, as if the Bank had not entered into the FX trades and not wrongfully made the margin calls, then the Bank would not be entitled to claim under the agreements set out in the particulars of claim. The entire claim in truth arose under the FX Prime Brokerage Agreement and not the agreements upon which the Bank purported to claim. In those circumstances, the parties must be taken to have agreed that the Bank's claim would be allocated to the jurisdiction chosen under the FX Prime Brokerage Agreement made in November 2006 rather than the FX Agent Master Agreement (which was subordinate to it) or the Master Netting Agreement (where the debts were merely consequential).

iv) The claim by the Bank and the dispute had nothing to do with the agreements relating to equities, as the losses on those accounts had only arisen because of transfers to cover the FX positions.

v) As the FX Prime Brokerage Agreement provided for the jurisdiction of the court in New York, the claims and disputes under all the agreements should be resolved in that court, though the clause did not oblige the Bank to sue in NY.

vi) If the claims could be viewed as relating to the Master Netting Agreement and the FX Agent Master Agreement as well as the FX Prime Brokerage Agreement, then in the case of a conflict between standard forms drafted by the Bank, Sebastian should be entitled to exercise its rights to New York jurisdiction under the FX Prime Brokerage Agreement.

vii) Sebastian relied primarily on the decision of Rix J in Credit Suisse First Boston (Europe) Ltd v MLC Bermuda Ltd [1999] 1 Lloyd's Rep 767 and the judgment of Lord Collins of Mapesbury in the Court of Appeal in UBS AG v HSH NordBank AG [2009] EWCA Civ 585, [2009] 2 Lloyd's Rep 272.

viii) Although the judge had purported to apply the principles set out in UBS, he had wrongly concluded that there was no conflict between the clauses in holding that the clauses contemplated and enabled parallel proceedings.

36. The Bank's response was that the claims were brought for debts arising under the Master Netting Agreement and the FX Master Agent Agreement; those claims fell within the jurisdiction clause of each of those agreements.

i) The Master Netting Agreement had an exclusive English jurisdiction clause and all the underlying agreements relating to equity trading had English jurisdiction clauses.

ii) The debts to the Bank in respect of FX trading in fact arose under offsetting transactions made under the FX Master Agent Agreement; it had a non exclusive English jurisdiction clause.

iii) The Bank was making no claim in respect of the FX Prime Brokerage Agreement; it was Sebastian which was trying to bring the Bank's claims under the other agreements within the jurisdiction clause of that agreement.

iv) It mattered not that Sebastian in defence might wish to raise other issues, including issues under the FX Prime Brokerage Agreement, as it was an analysis of the claim that was the essential consideration. Nor did it matter that the Bank had referred to Sebastian's defence in its pleading, as the scope of a clause could not depend on the happenchance of whether the defendant had revealed all its defences at the time a claim was brought.

v) The agreements between the parties plainly contemplated that different jurisdiction clauses would apply to claims under the different agreements; in those circumstances multiplicity of proceedings was inevitable.

vi) The court should not re-write the agreements by making one jurisdiction clause override the other with the effect of allocating all disputes to the court it considered best suited to deal with the dispute.

(ii) The decision of Walker J

37. Walker J rejected the argument put forward by Sebastian. A short summary cannot do justice to the careful and detailed analysis of the clauses and the decision in UBS, as set out at paragraphs 45-48 and 63-80 of his judgment.

i) The court had to begin by considering the development of the overall contractual relationship. In May 2006, the parties agreed by use of the ISDA clause as analysed in Royal Bank of Canada v Coöperatieve Centrale Raiffeisen-Boerenleenbank [2004] EWCA Civ 07 that if one party brought proceedings in the English courts, then the other was obliged to submit, but either party could bring proceedings in other courts and the bringing of proceedings in one would not preclude the bringing of proceedings in another.

ii) As regards the position at the end of November 2006, the use of the ISDA form and the specific choice of English jurisdiction in the FX Agent Master Agreement showed that the parties contemplated the same as regards that agreement; as to the FX Prime Brokerage Agreement, there was again consistency, as it contained a non exclusive New York jurisdiction clause:

"70. …The general approach to a non-exclusive jurisdiction clause would be that in the ordinary course the parties cannot have contemplated that if proceedings were commenced in the forum each had agreed as convenient parallel proceedings would still take place in another forum. However it seems to me clear that the overall relationship between the parties departed from that course in May 2006, and in relation to [the FX Agent Master Agreement] continued to depart from that course in November 2006. It is in my view impossible to read into [the FX Prime Brokerage Agreement] a ban on proceedings elsewhere once a New York claim was under way. It follows that the jurisdiction clause in [the FX Prime Brokerage Agreement] was not inconsistent with those in [the Equities ISDA Master Agreement of May 2006] and [the FX Agent Master Agreement]."

iii) After referring to the Swiss Pledge Agreement at paragraphs 71-73 with its provision for Swiss jurisdiction, he concluded as regards the position in November 2006:

"74. Thus it seems to me as a matter of contractual entitlement to sue in a particular jurisdiction, the position in November 2006 was that any Proceedings could be begun in England if relating to [the FX Agent Master Agreement] or [the Equities ISDA Master Agreement], and it would not matter so far as contractual entitlement was concerned that the claim also fell within the [FX Prime Brokerage Agreement] jurisdiction clause….No contractual primacy was afforded to any one jurisdiction clause."

iv) The position did not change as a result of the agreements in January 2008. The exclusive English jurisdiction clauses in the Master Netting Agreement and the Equity Prime Brokerage Agreement, although on the Bank's standard form, could not be seen as being concerned with technical banking disputes, as they were at the heart of the agreements for the extension of trading in equities. It was impossible to contend that businessmen would have agreed that the obligation as to where to sue for debts arising under those agreements would give way to the jurisdiction clause in the earlier agreement.

v) The Bank was correct in accepting that, although it could not bring a claim in London in relation to the operation of the FX Prime Brokerage Agreement, issues arising under it might become part of the proceedings if Sebastian chose to raise such issues by way of defence.

vi) The service of process provisions relied on by the Bank could not provide a different result to that achieved by a construction of the jurisdiction clauses.

38. It was contended by Mr Tim Lord QC on the appeal that the judge had fallen into error by not applying the general principle set out by Lord Collins in UBS; he had failed to give effect to the fact that the centre of gravity of the claims and the dispute related to FX trading governed by the FX Prime Brokerage Agreement and thus subject to New York jurisdiction.

(iii) The applicable principles

39. It is clear that in construing a jurisdiction clause, a broad and purposive construction must be followed: Donohue v Armco [2001] UKHL 64; Fiona Trust Holding Corporation v Privalov [2007] EWCA Civ 20 affirmed in sub nom Premium Nafta Products v Fili Shipping [2007] UKHL 40 where Lord Hoffmann observed at paragraph 7;

"If, as appears to be generally accepted, there is no rational basis upon which businessmen would be likely to wish to have questions of the validity or enforceability of the contract decided by one tribunal and questions about its performance decided by another, one would need to find very clear language before deciding that they must have had such an intention."

40. The Supreme Court emphasised in Re Sigma Finance Corporation [2009] UKSC 2 the need, when looking at a complex series of agreements, to construe an agreement which was part of a series of agreements by taking into account the overall scheme of the agreements and reading sentences and phrases in the context of that overall scheme.
41. It is generally to be assumed on these principles that just as parties to a single agreement do not intend as rational businessmen that disputes under the same agreement be determined by different tribunals, parties to an arrangement between them set out in multiple related agreements do not generally intend a dispute to be litigated in two different tribunals.
42. However, where there are multiple related agreements, the task of the court in determining whether a dispute falls within the jurisdiction clauses of one or more related agreements, depends upon the intention of the parties as revealed by the agreements against these general principles: see Collins LJ in Satyam Computer Services Ltd v Upaid Systems Ltd [2008] EWCA Civ 487 at para 93 and UBS at paragraph 83.
43. The considerations have been examined in particular by Rix J in Credit Suisse v MLC and by Lord Collins in UBS. It is necessary to refer to these in a little more detail. In the first of these cases, Credit Suisse, MLC, a hedge fund, had purchased bonds from Credit Suisse under two agreements made in March and May 1998 with exclusive English jurisdiction clauses. The parties had in April 1998 entered into a third agreement with the object of financing the purchase – the Global Master Repurchase Agreement (GMRA); this was governed by a non exclusive English jurisdiction clause which expressly acknowledged the right of each party to bring proceedings in a court of competent jurisdiction. When the hedge fund defaulted under the GMRA, Credit Suisse sued in England under the GMRA; it sought an anti-suit injunction restraining the hedge fund from pursuing proceedings (including claims for violations of US securities laws) the hedge fund had brought against Credit Suisse and two of its associated companies in New York. Credit Suisse asserted that there was a breach of the exclusive jurisdiction clauses in the purchase agreements, as the whole of the hedge fund's claims fell within the English jurisdiction clauses in those agreements. The hedge fund contended that there were significant aspects of the New York proceedings that did not relate to the purchase agreements. Rix J referred to the dispute being, on the one hand, one single narrative arising out of the purchase, but on the other,

"where different agreements are entered into for different aspects of an overall relationship, and those different agreements contain different terms as to jurisdiction, it would seem to be applying too broad and indiscriminate a brush simply to ignore the parties' careful selection of palette" (page 777)

44. Although he considered that the centre of gravity of the hedge fund's complaints was focused on the purchases, he was reluctant to hold that the complaints in New York which related to the GMRA arose out of the purchase agreements. He continued:

"If they arise out of or in connection with both the Purchase Agreements and the GMRA, then, where the jurisdiction clauses are in conflict, I do not see why the GMRA clause should not prevail: either on the basis that, in a case of conflict on standard forms plainly drafted by [Credit Suisse], [the hedge fund] should be entitled to exercise the broader rights; or on the basis that the clause in the contract which is closer to the claim and which is more specifically invoked in the claim should prevail over the clause which is only more distantly or collaterally involved."

45. For those two reasons, he decided that the hedge fund's claims in New York were preferably to be viewed as claims under the GMRA rather than under the purchase agreement. If he was wrong about the claims being claims under the GMRA, then the New York court was better placed to analyse the complaint in the proceedings to decide whether claims in the complaint should be stayed in favour of English jurisdiction. He therefore refused to grant an injunction to Credit Suisse restraining the hedge fund continuing in New York with its claims under the GMRA, undesirable though it was in principle to have claims in two jurisdictions.
46. Before turning to UBS, it is convenient to note Lord Collins' comment at paragraph 94 of his judgment in UBS:

"The essence of Rix J's first reason is that under the contra proferentem principle, the intention must be taken to have been that, where a dispute fell within the wording of both jurisdiction agreements, it was the GMRA which was to be taken as the agreed position. The second reason, which he must have meant as a matter of construction, was that the parties must be taken to have intended that, where a dispute fell within both sets of agreements, it should be governed by the jurisdiction clause in the contract which was closer to the claim."

47. In UBS, UBS had entered into a complex set of agreements with HSH, a German bank, in connection with the issue of securities under a Collateralised Debt Obligation transaction. The overall structure of the transaction was set out in a letter agreement of 23 January 2002 governed by the law of New York. The transaction was then effected by a series of agreements dated 5 March 2002; two of the agreements (An Offering Circular embodied in the Indenture and the Reference Pool Side Agreement) were governed by New York law and had non-exclusive New York jurisdiction clauses; three (the Credit Swap, the Dealer's Confirmation and Pricing Supplement) were governed by English law with English jurisdiction clauses. When there were defaults in the underlying securities, the German bank brought proceedings in New York alleging mis-selling and mismanagement under the Reference Pool Side Agreement. UBS sought to bring an action in England for a declaration that it was not liable, relying upon the jurisdiction clause in the Dealers Confirmation; the sole point in invoking the jurisdiction of the English court was to pre-empt the proceedings in New York. The issue was whether the claims within the English action fell within the jurisdiction clause of the Dealer's Confirmation (see paragraph 50). Walker J held that they did not and his decision was upheld on appeal. Lord Collins considered that the issue turned on whether, in the light of the complex documentation as a whole, the parties should have been taken objectively to have intended by the jurisdiction clause in the Dealer's Confirmation that claims in respect of misrepresentation in relation to the notes should be subject to the exclusive jurisdiction of the English Court, whilst claims in respect of other agreements should be subject to the jurisdiction of the New York courts, observing at paragraph 84:

"Plainly the parties did not actually contemplate at the time of the conclusion of the contracts that there would be litigation in two countries involving allegations of misrepresentation in the inception and performance of the agreements. But in my judgment sensible business people would not have intended that a dispute of this kind would have been within the scope of two inconsistent jurisdiction agreements. The agreements were all connected and part of one package, and it seems to me plain that the result for which UBS contends would be a wholly uncommercial result and one that sensible business people cannot have intended."

48. After examining the claims in the particulars of claim in the English proceedings and the role of the Dealer's Confirmation in the scheme of the transaction as a whole, he concluded that the parties cannot have objectively been taken to have intended that the clause in that agreement would govern every claim for misrepresentation. After referring to the judgment of Rix J in Credit Suisse and to paragraph 94 from which I quoted in paragraph 46 above, he concluded:

"95. In this case it is not necessary to go so far. Whether a jurisdiction clause applies to a dispute is a question of construction. Where there are numerous jurisdiction agreements which may overlap, the parties must be presumed to be acting commercially, and not to intend that similar claims should be the subject of inconsistent jurisdiction clauses. The jurisdiction clause in the Dealer's Confirmation is a "boiler plate" bond issue jurisdiction clause, and is primarily intended to deal with technical banking disputes. Where the parties have entered into a complex transaction it is the jurisdiction clauses in the agreements which are at the commercial centre of the transaction which the parties must have intended to apply to such claims as are made in the New York complaint and reflected in the draft particulars of claim in England."

49. The decisions in Credit Suisse and UBS are both examples of the process of construction that has to be undertaken, using the well recognised general principles and tools of contractual construction in the context of the principles relating to different jurisdiction clauses in related agreements. The overall task of the court is summarised in the 2010 supplement to Dicey, Morris and Collins at paragraph 12-094:

"But the decision in Fiona Trust has limited application to the questions which arise where parties are bound by several contracts which contain jurisdiction agreements for different countries. There is no presumption that a jurisdiction (or arbitration) agreement in contract A, even if expressed in wide language, was intended to capture disputes under contract B; the question is entirely one of construction …. The same approach to the construction of potentially-overlapping agreements on jurisdiction (but there will, in this respect, be no difference between the construction of agreements on jurisdiction, arbitration agreements and service of suit clauses) was taken in [UBS]… In the final analysis, the question simply requires the careful and commercially-minded construction of the various agreements providing for the resolution of disputes, the point of departure being that agreements which appear to have been deliberately and professionally drafted are to be given effect so far as it is possible and commercially rational to do so, even where this may result in a degree of fragmentation in the resolution of disputes. It may be necessary to enquire under which of a number of inter-related contractual agreements a dispute actually arises; this may be answered by seeking to locate its centre of gravity.

The same approach, namely to focus on the commercially-rational construction, governs the interpretation of agreements on jurisdiction as exclusive or non-exclusive, and of agreements which specifically provide that the parties will not take objection to the bringing of proceedings if proceedings are brought in more courts than one." (omitting the citation of the authorities)

(iv) The general approach in this case

50. I therefore turn to the construction of the agreements in issue focusing on finding the commercially rational construction and giving effect to clear agreements, even if this may result in a degree of fragmentation in the resolution of disputes between parties to the series of agreements.
51. It is first important to begin by setting out what Sebastian accepted as a matter of construction of the agreements:

i) The Bank's claims could be brought in the English Courts on the ordinary construction of each of the jurisdiction clauses in the Master Netting Agreement and the FX Agent Master Agreement, if they had stood alone without the FX Prime Brokerage Agreement. That was because the claims are claims brought for debts due under each of those agreements.

ii) As was accepted in the course of argument, if, prior to the issue of proceedings by the Bank, Sebastian had not said anything in relation to its denial of liability for the debts due under the FX Agent Master Agreement and the Master Netting Agreement being based in part on breaches of the FX Prime Brokerage Agreement, then the Bank would have been entitled to bring its claim in England under each of those agreements, relying on the jurisdiction clauses in those agreements.

It follows from the above, that it was not disputed that the clear language of the jurisdiction clauses in each of the two agreements permitted the Bank ordinarily to bring its claims for debts due under the two agreements in the jurisdiction specified in the jurisdiction clauses.

52. Furthermore construing the agreements contra proferentem would not assist in arriving at their meaning or effect, as it may have done in Credit Suisse. The language of the agreements looked at as a whole is too clear. It must therefore follow, if the contention advanced by Sebastian is correct, that as a matter of construction, the language of the two agreements looked at as part of a series does not on its ordinary reading produce a commercially rational result and therefore must be construed in a commercially rational way to arrive at the meaning put forward by Sebastian; that the parties, as rational businessmen, must have intended the agreements to be read as a whole in such a way as at least not to permit the claims for debts due under the FX Master Agent Agreement and the Master Netting Agreement being brought in London under the clauses in those agreements; that the agreements had also to be read so, whatever the nature of the claims, disputes in relation to the claims had to be heard in a single forum; that the probable effect was that, as a matter of construction, claims brought by the Bank had also to be brought by the Bank in a single forum.
53. The foundation of Sebastian's contention to that effect was that the parties must have intended claims to be brought in the forum specified in the agreement from which the claim had its cause or origin or the agreement which was at the commercial centre of the dispute. The contention can be formulated more fully as follows:

i) As the Bank had accepted in this case that, as matter of calculation, if there had been no losses on FX trading there would have been no loss on the equities account, the origin or cause of the claim was the FX trading which was regulated by the FX Prime Brokerage Agreement. As the Bank knew this, their claim was not in fact a claim for debts under the agreements on which the Bank was suing but was a claim which has its origin or cause in or arose out of the FX Prime Brokerage Agreement. The Bank therefore had no claim under the agreements on which it had brought proceedings and therefore could not bring itself within the Judgments Regulation, as it had no claim under the two agreements; in other words, the centre of gravity of the claim was under the FX Prime Brokerage Agreement and not for debts due under the other two agreements. The claims could not therefore be brought in London and probably should be brought in New York.

ii) Alternatively, Sebastian's defence to the claims under the two agreements was that the debts were the result of prior breaches of the FX Prime Brokerage Agreement. As the losses would not have occurred but for the FX trading, the dispute related to FX trading and it was that trading that was the centre of gravity of the dispute. As FX trading related primarily to the FX Prime Brokerage Agreement, the dispute was a dispute under that agreement and not under the other two agreements under which the debts in fact arose. The claim by Sebastian in respect of those breaches was therefore not only a defence to the obligations under the other agreements, but, as a matter of construction of the agreements as a whole, had the consequence that the Bank no longer had any entitlement to bring its claims under the other agreements in the forum specified in those other agreements.

54. The breadth of this argument can be illustrated by the following:

i) This is not a case where the Bank was seeking a negative declaration in respect of its liabilities under the FX Prime Brokerage Agreement with its New York jurisdiction clause. It is a case where the Bank is seeking to bring very substantial claims for disputed debts which, if due at all, would only be due under two agreements with English jurisdiction clauses and are specifically claimed under those agreements.

ii) It is not a case where the Bank is seeking to bring claims which more properly relate to another agreement, as was the case in UBS. In that case UBS was not attempting to use the jurisdiction clause in one contract, the Dealer's Confirmation, to obtain performance of that agreement, but to seek a declaration that they were not liable under other agreements.

iii) It is a case where, if Sebastian is right, the Bank cannot bring its claim under two agreements governed by English law for debts that are due under those agreements in the forum chosen in those contracts, England.

55. I have reached the clear conclusion that the Bank is entitled to bring its claims in the English courts and the arguments advanced by Sebastian cannot as a matter of construction disentitle the Bank from bringing claims under the two agreements.

(v) The effect of the nature of the claim brought by the Bank

56. First I will consider the argument that the Bank could not bring its claim under the two agreements on the basis that the debts under those agreements have their cause or origin in losses brought about by breaches of the FX Prime Brokerage Agreement and are therefore in truth not claims under the agreements which contain English jurisdiction clauses, but are claims which arise out of the FX Prime Brokerage Agreement. This argument is necessarily premised upon parties to a series of related agreements having, as commercially rational businessmen, agreed as a matter of the construction of the agreements in the series that the underlying basis of the claim would be analysed in the light of all the information that a party had before that party issued proceedings. Such an analysis would be necessary so that the proceedings were brought under the jurisdiction clause in the agreement which might be the cause or origin of the claim, even though the claim was for monies clearly due under another agreement and the claim was actually made under that other agreement with a different jurisdiction clause.
57. Jurisdiction clauses are rarely the subject of detailed negotiation and there is nothing to suggest that in these transactions any detailed attention was paid in the negotiations to the jurisdiction clauses; in most transactions in the financial markets this is the case as little attention seems to be paid to this element of risk management discussed by Richard Fentiman in "International Commercial Litigation" (2010). There are, however, three factors which can objectively be seen as important when considering the construction of these clauses:

i) The clauses in all the agreements where Sebastian undertook direct financial obligations to the Bank contained clauses which gave the Bank the right to bring proceedings against Sebastian under that agreement in a named forum (in most cases London) and in some of the agreements the express right to bring claims in any other forum where jurisdiction might be obtained.

ii) Although it is common ground that dealing in equities was all to be carried out in London, it is equally important that agreements did not provide that the FX dealings were, as asserted by Sebastian, entirely to be carried on in the United States. The obligations in the FX dealings incurred by Sebastian to the Bank were under the offsetting transactions to be made under the FX Agent Master Agreement; these were expressly governed by English law with its English jurisdiction clause, in contradistinction to the Bank's obligations to the named counterparties which were governed by New York law and had a New York jurisdiction clause.

iii) The agreements were entered into over a two year period. This is not the case of financial transactions closely related in time such as where conflicting clauses might be found within the agreements contained in the transaction bible or are different agreements which are part of one package (as in UBS).

58. Against that background, it is, in my view, impossible to see how it can be said that the Bank and Sebastian were to be taken to have agreed that the Bank would analyse its claim and ascertain under which agreement the cause or origins of the debts arose before issuing its proceedings. The agreements under which debts or other obligations to the Bank would actually become due (whatever its origins) gave the Bank the express right to bring proceedings for debts due under those agreements in named jurisdictions; not only was that right to bring proceedings for debts arising under each agreement in its chosen forum inconsistent with the suggested construction put forward by Sebastian, but contrary to what those engaged in commercial dealings of this kind would expect as rational businessmen. Rational businessmen entering into agreements relating to different aspects of trading in the financial markets would understand that the Bank would wish to be entitled to bring proceedings to enforce payment of debts under each agreement which gave rise to the specific debt. In this particular case, it is clear from the language of the agreements looked at as a series that both the Bank and Sebastian intended this result in the agreements; each had specific obligations that debts under those specific contracts, including debts under the FX Agent Master Agreement, could be enforced by the Bank in its chosen forum. In some agreements that was supplemented with the right to bring proceedings in other jurisdictions where Sebastian might have assets, though it is not necessary to analyse the circumstances in which that right could be exercised in addition to the right to bring proceedings in a named forum (cf the observations of Mance LJ in Royal Bank of Canada at paragraph 35). Far from being commercially irrational, it was what those doing this type of business with a bank would anticipate as a means of providing a bank with further rights, in addition to the provision of collateral, to secure its position.
59. There are moreover good commercial reasons why the Bank might have chosen England as a forum in which to bring proceedings under the contracts under which specific sums might become due. It is the case that a bank may need to enforce the judgment outside the jurisdiction; a judgment in England has the advantage of enforcement under the Judgments Regulation and the Lugano Convention. It is difficult to see how a court could say rational businessmen did not intend to give that further advantage to the Bank.
60. Furthermore the difficulty of Sebastian's contention based on the need to analyse the nature of the claim is demonstrated by the dilemma that faced Sebastian in asserting that the claims could not be brought under the two agreements in England. It had to face the question as to where the Bank, on the proper construction of the agreements, was entitled to bring its claim.

i) If, as Sebastian appears at one stage of the oral argument to have accepted, the Bank could bring its claims against Sebastian in another competent jurisdiction (such as the state of its domicile or incorporation – the Turks and Caicos Islands), then the courts of that state were merely substituted as another forum in place of England. There would be multiplicity of proceedings, but the intention to avoid multiplicity of proceedings was the primary reason for contending that the parties must have agreed on the true construction of the agreements that the express clauses conferring jurisdiction on England were not to take effect.

ii) If Sebastian contended that the Bank's claims had to be made under the jurisdiction clause of the FX Prime Brokerage Agreement, then the logic of Sebastian's argument meant that what was agreed to be a non exclusive jurisdiction clause in that agreement had to be construed as an exclusive jurisdiction clause with the effect of depriving the Bank of its right to bring proceedings to enforce debts in jurisdictions such as England where the judgment could be easily enforced elsewhere or in jurisdictions where Sebastian might have assets.

(vi) The effect of the nature of the defence.

61. I turn next to the analysis premised on the parties having agreed that they would allocate jurisdiction to the contract which was the centre of gravity of the dispute. This is a different analysis, as it focuses not on the underlying nature of the Bank's claim but on the dispute between the parties. It involves the acceptance that, although the Bank was ordinarily entitled to claim under the agreements under which the debt arose and to rely on the jurisdiction clauses in those agreements, the parties intended that there would be circumstances where the Bank did not have that right on the true construction of the series of agreements taken as a whole. For example, if prior to the issue of proceedings a defence to the payment of a debt was known to arise under one of the other agreements, the parties must be taken to have agreed in such circumstances that the claim could not be brought under the agreement under which the debt was owed, but would have to be brought in the forum specified in the agreement by reference to which, on an analysis of the dispute as a whole, the dispute had its centre of gravity.
62. Again I cannot see how rational businessmen could have agreed this in the face of the clear language of the agreements. First, the question as to whether a claim falls within the jurisdiction clause is an issue that has to be determined at the time the proceedings are issued. In most cases, it is likely to be relatively simple to determine whether a claim is made under a specified agreement and therefore whether jurisdiction is founded. That is certainly so in a case such as the present where there is a debt claimed under a contract.
63. Businessmen agreeing to different jurisdiction clauses in a series of related contracts cannot have been taken to have intended that the entitlement to bring that claim in the chosen forum in respect of one contract should depend on whether a defence had been raised prior to the bringing of the claim and that the defence to that claim might place the centre of gravity of the dispute as being related to a different contract with a different jurisdiction clause. Not only would it give rise to a complete lack of certainty, but could seriously prejudice an institution such as a bank bringing a claim, if there was a limitation period about to expire or there was otherwise a need to bring a claim urgently.
64. This part of Sebastian's argument was rightly characterised by the Bank as seeking to persuade a court to engage in case management under the guise of contractual interpretation. It is not possible to treat all the claims between the Bank and Sebastian and the defences to those claims as if they gave rise to a single dispute which must be allocated to a single contract. No doubt a complex clause could be devised to provide for this, but I doubt if any rational businessman would ever accede to such a clause, as it would cause too much uncertainty for financial institutions. There is, however, no need to consider whether they would do so, for there was no such language in these agreements and the agreements cannot rationally be read in that way.

(vii) Conclusion

65. I have sought to analyse the argument put by Sebastian in terms first of examining whether the parties intended jurisdiction to be determined by ascertaining the underlying origins of the claim in this series of agreements before the issue of proceedings or second by an examination of the basis of what was known as to the dispute. Neither of these bases provides any commercial rationality for construing the agreements differently from what is apparent from their clear language. On the contrary, application of the wording of the clauses in the agreements shows that the parties plainly intended the Bank to be able to bring a claim under an agreement under which a debt was due in the jurisdiction provided for in that agreement. Although in one sense the clauses in the agreements might be said to conflict, as disputes which are related or overlap might arise under different agreements in the series, the clauses do not in fact conflict, as they envisage claims being brought under the different agreements for monies owed under each agreement, even if the defences may overlap. The language of the agreements plainly envisages this and for the reasons I have given it is entirely rational for businessmen to agree to this. The construction advanced by Sebastian faces the difficulty that it not only requires the court to rewrite the agreements, but on analysis, would impose a regime that would not have been commercially rational.
66. This conclusion is underlined by the fact that the FX Master Agent Agreement contains in clause 13 a promise not to challenge the English jurisdiction and the Master Netting Agreement has an exclusive jurisdiction clause. It is difficult to understand how as a matter of construction those particular provisions can be overridden so that proceedings brought to recover debts due under those contracts cannot be brought in accordance with those provisions.
67. In short, to construe the agreements in the way suggested by Sebastian far from giving effect to the intention of the parties would frustrate it. I gratefully adopt this phraseology which was used by Flaux J in Satyam Computer Services Ltd v Upaid Systems Ltd [2008] EWHC 31 (Comm) at paragraph 88 where he expressed his conclusion on construction in that case – the decision upheld on appeal and to which I referred at paragraph 42 above.
68. Although I have reached this conclusion by a route that had not involved an examination of the chronology of the agreements undertaken by Walker J, the broad thrust of that analysis arrives at exactly the same conclusion. Although I would not be prepared to agree without further argument that part of it which relates to the decision in Royal Bank of Canada to which I referred at paragraph 37.i) above, that part was not necessary to the judge's clear and careful conclusion.

THE ISSUE ON STAY

69. As I have set out at 3 paragraph above, Burton J, in a judgment dated 1 December 2009, refused Sebastian's application for a stay made on the basis of common law principles as set out in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460.

(i) The nature of the issue

70. In the written argument before Burton J, two bases for a stay were put forward. The first was the argument, based on the principles set out in Spiliada, that the New York court was the more appropriate forum; the second was that some, if not all, of the claim in England should be stayed on a "case management basis". The second basis was not pursued in oral argument before Burton J though the position was reserved for the future. It is not necessary for me to say anything further about that second basis.

(ii) The decision in Owusu and the reflexive effect of the Judgments Regulation

71. Before turning to the details of the argument based on Spiliada principles, it is necessary to refer briefly to a point raised before Burton J and which was raised again in this court. The Bank asserted that by reference to the decision of the ECJ in Owusu v Jackson & Others [2005] ECR I-1383, [2005] QB 801, if a court had jurisdiction under the Judgments Regulation, then the court could not divest itself of jurisdiction by reason of the traditional common law stay on the grounds of forum non conveniens. Although Burton J heard full argument on the issue, he decided that he would not express a view on this issue which had been considered in a number of first instance decisions in England and Wales, in the light of his decision that the application for a stay failed in any event and the observations of Sir John Chadwick in this Court in Chaitan Choudhary v Damodar Prasad Bhatter [2009] EWCA Civ 1176 at paragraph 54.
72. In the course of argument on the second day of the appeal, Sebastian raised a new submission on what is described as the reflexive effect of the lis alibi pendens provisions of the Judgments Regulation (Articles 27 and 28), namely whether those provisions should be applied when the prior court was a non Member State court. It was suggested that they should be and on that basis, as the New York proceedings had commenced first, then the London proceedings must be stayed. Sebastian contended that this was an issue that should be referred to the Court of Justice of the European Union and for that purpose relied on the decision of the Irish Supreme Court in Goshawk Dedicated Ltd v Life Receivables [2009] IESC 7 to refer such an issue, though in the event the reference was not determined. The Bank objected to the point being raised at so late a stage. In the event, Sebastian rightly decided not to pursue the new submission. It is therefore not necessary to deal with the issue further and I can deal simply with the argument based on the principles in Spiliada.

(iii) Burton J's decision

73. The argument advanced on behalf of Sebastian based on the principles in Spiliada can be summarised:

i) The substantial dispute between the Bank and Sebastian related to the FX Prime Brokerage Agreement and FX trading which was substantially carried on between Mr Said and the Bank in the United States.

ii) There were strong or exceptional overwhelming reasons why in the interests of justice the dispute should be heard in New York, as that is where its centre of gravity lay.

iii) New York was more convenient as there were more witnesses there in relation to the FX dispute.

74. Burton J, after a careful review of authorities which have considered the application of the principles in Spiliada in the context of exclusive jurisdiction clauses, non-exclusive jurisdiction clauses and clauses where the parties agreed not to object to proceedings on the basis that it was an inconvenient forum, concluded that he should follow the decisions of Gross J in Import Export Metro Ltd v CSAV [2003] 1 Lloyd Rep 405 and Gloster J in Antec International Ltd v Biosafety USA Inc [2006] EWHC 47 (Comm) that parties will be held to their contractual choice of English jurisdiction, unless there were overwhelming, or at least very strong, reasons for departing from the rule. He considered that Gloster J had stated the principle correctly in these terms:

"Such overwhelming or very strong reasons do not include factors of convenience that were foreseeable at the time that the contract was entered into (save in exceptional circumstances involving the interests of justice); and it is not appropriate to embark upon a standard Spiliada balancing exercise. The defendant has to point to some factor which it could not have foreseen at the time the contract was concluded. Even if there is an unforeseeable factor, or a party can point to some other reason, which, in the interests of justice, points to another forum, this does not automatically lead to the conclusion that the court should exercise its discretion to release a party from its contractual bargain."

He considered that this passage correctly summarises the law being derived from British Aerospace v Dee Howard [1993] 1 Lloyds Rep 368 at 376 and Ace Insurance SA-NZ v Zurich Insurance Co [2001] 1 Lloyds Rep 618.

75. Although it was desirable to have all the disputes heard in one place, it was far from clear that that place was not to be London. Applying the principles in Spiliada without reference to the presence of jurisdiction and waiver clauses, he was not satisfied that New York was clearly the more appropriate forum. At paragraphs 24-27 he considered the location of witnesses, the location of the FX trading, the fact that there might be disputes as to the agreements relating to equities and the fact that accounts were kept in London. Although it was desirable to have all disputes heard in one place, it was far from clear that place was not London.
76. He then applied the more stringent test to an application where as in the Master Netting Agreement there was an exclusive jurisdiction clause and where as in the case of the FX Master Agent Agreement the ISDA clause set out at paragraph 6 above expressly waived its objection on that basis, he was certainly not satisfied that there were exceptional circumstances or strong reasons why New York was clearly the more appropriate forum or why exceptionally the parties should not be kept to their bargain for English jurisdiction under those agreements.

(iv) Sebastian's argument

77. In the argument presented to us on behalf of Sebastian, it was accepted that Burton J's summary of the law was broadly correct. It was, however, submitted that the position was different in this court because (1) disputes under the FX Prime Brokerage Agreement were not within any of the English jurisdiction clauses and (2) the New York court had decided that all the issues in dispute could be determined in New York. Moreover, it was clear, as the Bank accepted, that all the losses that had occurred had arisen out of FX Trading. New York was plainly the appropriate forum for the resolution of that dispute as the trading had been carried on in New York. Furthermore, the New York proceedings were up and running and it was New York law that governed the Prime Brokerage Agreement.

(v) My conclusion

78. It was not necessary to review the authorities in argument in view of Sebastian's acceptance that Burton J had correctly summarised the law. I am therefore content for the purposes of this appeal to adopt the approach of Gross J and Gloster J in the cases to which I have referred in paragraph 74.
79. I cannot, however, accept Sebastian's submissions that Burton J was wrong in the exercise of the discretion to the extent that this court should interfere. First of all, with respect to the argument advanced on behalf of Sebastian, it appears that there has been a confusion of claims and defences. It has never been an issue, if Sebastian's argument on construction was rejected, that the claims being made by the Bank fall within the plain wording of the jurisdiction clauses of the Master Netting Agreement and the FX Agent Master Agreement. The additional issues which Sebastian wishes to raise in the proceedings brought by the Bank are raised as defences to claims. It is without doubt the case that the defences that Sebastian wishes to raise under the FX Prime Brokerage Agreement plainly can be brought within the action in England as defences to the claims. There is no new point; they can be litigated in England, as Burton J held.
80. In the second place, the fact that the New York Court held it had jurisdiction to deal with all matters does not take the matter any further. Third, it is not in dispute that the judge applied the correct principles. In applying those principles, he first decided that, without taking into consideration the effect of jurisdiction clauses, Sebastian had failed to satisfy him there should be a stay. He then went on to hold that applying the more stringent test in the case of jurisdiction clauses (whether exclusive or non-exclusive or whether there was a waiver clause) Sebastian had failed to show exceptional circumstances or strong reasons why the parties should not be held to their bargain. As is clear from the long line of authority, the issue for this court in such circumstances is whether the judge's exercise of his discretion, given the fact that he had acted in accordance with correct principles, is one where this court should interfere.
81. In my judgement the decision of the judge, based as it was on the correct application of principle, was well within the discretion open to him. He carefully reviewed the availability of witnesses, the prior existing proceedings in New York, its ability to deal with the issues, the scope of the action in England and all relevant matters. The decision that he made was in my judgement one with which this court should not on well established principles interfere.

Conclusion

82. I would therefore dismiss the appeal from Walker J on the issue of construction of the jurisdiction clauses. Although I consider that the decision of Burton J was plainly one open to him, in all the circumstances I would grant permission to appeal, but dismiss the appeal.

Lord Justice Pitchford:

83. I agree.

Lord Justice Mummery:

84. I also agree.