H.H. Judge Keyser Q.C. :
Introduction
- The claimant ("DSL") is a company registered in England and Wales. The first defendant ("TMC") is a company registered in the Cayman Islands. The second defendant ("TMCSL") is a company registered in Sierra Leone. TMC is the sole shareholder of TMCSL. Both companies are part of a group ("the Timis Group") that is ultimately owned and controlled by Mr Frank Timis.
- In these proceedings, DSL claims against TMC and TMCSL in the alternative payment of approximately US$18 million for services provided in connection with the operation of Marampa Mine ("the Mine") in Sierra Leone. The defendants' case is that DSL's services were provided to, and pursuant to a contract with, TMCSL and not TMC, and that by reason of substantial pre-payments already made DSL owes TMCSL a substantial repayment.
- The contract between the parties—whoever the parties might be—provided that the courts of England and Wales should have non-exclusive jurisdiction. By the time DSL commenced the present proceedings, TMCSL had already commenced proceedings in Sierra Leone. The defendants have applied for an order that the present proceedings be set aside or stayed, on the ground that Sierra Leone is the convenient jurisdiction to determine the dispute. TMC goes further and seeks an order setting aside service of the claim form upon it, on the ground that this court has no jurisdiction over it. DSL resists those applications and itself applies for an injunction to restrain TMCSL from pursuing the proceedings in Sierra Leone.
- At the hearing the defendants relied principally on three witness statements from Christoph Erdin, who provides legal services to the Timis Group and was involved in the events giving rise to the relevant contract. They also relied on two short witness statements from Oliver Elgie and Onoriode Aziza, both of Herbert Smith Freehills LLP ("HSF"), who act for the defendants in this country. DSL relied on three witness statements of their solicitor, Hugh Hitchcock, of Douglas-Jones Mercer ("DJM").
- I am grateful to Mr Butler and to Mr Johnson, assisted by Ms Blanshard, for their helpful skeleton arguments and oral submissions.
- In the remainder of this judgment I shall set out the relevant sequence of events and then discuss in turn the issues arising on the three applications.
Narrative
- Until October 2014 DSL was providing services at the Mine to London Mining Company Ltd ("LMC"), which owned the Mine and held the Large-Scale Mining Licence in respect of its operations. LMC entered into administration in autumn 2014. With a view to the acquisition of LMC's assets, the Timis Group incorporated TMC on 10 October 2014 and TMCSL on 24 October 2014. Another company, Timis Mining Corporation (UK) Ltd, was incorporated in England and Wales at about the same time, though it appears that it never traded or carried on any business. After a period of negotiation, on or around 1 November 2014 TMCSL purchased some of LMC's assets, including the Mine, and took a transfer of the Large-Scale Mining Licence. It did not take an assignment of the benefit of, or enter into a novation of, the existing contract between LMC and DSL.
- By 20 October 2014 at the latest, DSL was aware that the Timis Group was in discussions with LMC's administrators, and it began communicating with Mr Timis, through his assistants, with a view to ensuring that an agreement would be made to enable DSL to continue providing services at the Mine. The evidence gives no reason to suppose that DSL either knew or particularly cared how Mr Timis was arranging his corporate affairs or precisely what corporate entities he intended to use for the purpose of acquiring the Mine.
- After the acquisition of the Mine, negotiations commenced in late October 2014 between Andy Peters of DSL and Victoria Sherwood of the Timis Group, both orally and by email. Ms Sherwood's emails described her as "Executive Director, Timis Mining Corp Limited". According to Mr Erdin she was in fact the Executive Director of TMCSL and had previously been working for another company, African Minerals Ltd, of which Mr Timis was chairman; she was therefore at the time working out of African Minerals Ltd's premises in London.
- In an attempt to conclude contractual arrangements between DSL and "the appropriate entity within the Timis Group" (particulars of claim, paragraph 7), on 31 October 2014 Mr Peters sent by email to Ms Sherwood a draft "Interim Operations Agreement", showing the date as 5 November 2014 and the parties as "Timis Corporation Limited, a company registered under the laws of [ ]" and DSL. The parties did not execute it or proceed on the basis of it. Discussions continued both by email and face to face.
- On 10 November 2014 Mr Erdin, who had formerly been Head of Legal at LMC and was now working for the Timis Group, sent to Ms Sherwood by email a draft of a Letter of Intent. Underneath his name at the end of the email appeared the words: "Timis Mining Corporation (SL) Limited is registered in Sierra Leone, company number 0000991, and has a registered office at 35 Liverpool Street, Freetown, Sierra Leone." On 11 November Ms Sherwood forwarded that email and the draft to Mr Peters, saying that she had not had a chance to read them and asking Mr Peters to do so.
- The draft Letter of Intent was marked "Subject to Contract—for discussion purposes only" and was on headed paper. At the top was the logo of a bull, which was the group logo of the Timis Group, and next to the logo was the name "Timis Mining Corporation Ltd". Underneath was an address: 56B Motor Main Road, Wilberforce, Freetown, Sierra Leone; this was the address at which LMC had carried on its business and the address at which the business at first continued to be carried on after acquisition by TMCSL. At the foot of the page were the words: "Registered address: 35 Liverpool Street, Freetown, Republic of Sierra Leone"; that is and was TMCSL's registered office. The draft Letter of Intent was addressed to DSL and contained the following relevant passages:
You were engaged by London Mining Company Limited ('LMC') pursuant to a certain contract mining agreement (the 'LMC Mining Contract') dated December 3rd 2012 between LMC and Dawnus Sierra Leone Ltd as Contractor and Dawnus Construction Limited as Guarantor. You have been notified on 3 November 2014 by Price Waterhouse Coopers ('PWC') that an administrator has been appointed for LMC by its board of directors and that the Large Scale Mining Licence No. ML02/09 was transferred to Timis Mining Company (SL) ('TMC' or 'the Company') effective 1st November 2014 by the Government of Sierra Leone ... The Company under this Letter of Intent owns the Site which includes the Marampa Mine ...
It is our intention to accept your offer to carry out the Services, subject to the negotiation and execution of a formal mining contract ('the Contract') ...
In order to continue the execution of the Service in advance of finalising the Contract ..., this will confirm the agreement between TMC and Dawnus ('Letter Agreement') that the Parties hereto have entered into business relationship whereby you would execute and deliver the Services.
Please take this Letter Agreement as our instruction (the 'Notice to Proceed') to commence the Services ...
A series of numbered clauses set out the parties' respective obligations under the Letter of Intent. By clause 1 the Company was to make the Mine available to DSL, and by clause 2 it was to provide certain plant and equipment and perform specified services. Clause 6 provided that the Company might by written notice to DSL vary the services to be provided by DSL as might reasonably be required. Clause 15 provided that the Letter Agreement should continue in force until the envisaged Contract had been finalised or, if earlier, until terminated in accordance with its terms; it provided that either party might terminate the Letter Agreement on ten days' written notice. Clauses 9 and 16 provided for payment: the gist was that DSL would be remunerated on a "cost plus" basis, for which it would receive advance payments, and that upon termination of the Letter Agreement there would be a resolution of moneys due. Clause 18 provided:
This Letter Agreement and the parties' respective rights and obligations including all non-contractual obligations arising under or in connection with this Letter Agreement shall be governed by, and construed in accordance with, the laws of England and Wales and the parties irrevocably submit to the non-exclusive jurisdiction of the courts of England and Wales in relation to any claim, dispute or difference which may arise out of or in connection with this Letter Agreement.
At the end of the Letter of Intent was provision for execution by signature. The parties were shown as DSL and "Timis Mining Corporation".
- On 14 November 2014 Mr Peters sent to Ms Sherwood a revised draft of the Letter of Intent ("the Revised Letter of Intent"), showing the proposed alterations by track changes. There were many such alterations, many of which concerned the financial arrangements under the Letter Agreement. However, none of the proposed changes had a bearing on the identity of the contracting parties, and the text of what had been clause 18 remained unaltered, although it was renumbered. Again, the Revised Letter of Intent was marked "Subject to Contract—for discussion purposes only".
- The Revised Letter of Intent was never executed; the parties appear to have diverted their attention to other matters after mid November 2014. However, it is common ground that thereafter DSL provided services at the Mine. Although there is a dispute between the parties as to whether the services were provided on the terms of the draft Letter of Intent sent to Mr Peters on 11 November 2014 or, rather, on those of the Revised Letter of Intent, it is common ground that the circumstances gave rise to a contract on terms that included the non-exclusive jurisdiction provision set out above.
- By the end of November 2014 the discussions regarding a long-term agreement were being conducted between Mr Peters and Daniel Pop. Mr Pop's emails described him as "Senior Executive – Sierra Leone"; in November the entity was shown on his emails as "Timis Corporation", but in December 2014 and January 2015 it was shown as "Timis Mining Corporation Limited" with an address at 56B Main Motor Road, Freetown. Mr Erdin's evidence is that Mr Pop was Senior Executive of TMCSL.
- The discussions regarding a long-term agreement did not come to fruition. Meanwhile, however, a series of payments was made to DSL for the services that it continued to provide at the Mine. DSL's Advices Message Report from its bank shows that the first payment, which was made on 5 November 2014 before the Letter of Intent was produced, was from "Timis Corporation" (reference "Operations Timis Mining Corporation"); it is unclear which corporate entity made the payment. The subsequent payments were all made by TMCSL.
- On 24 February 2015 Mr Pop sent a letter ("the Notice of Termination") to DSL, giving ten days' notice to terminate the Letter Agreement in accordance with clause 15. The letter was headed with the Timis logo and the name "Timis Mining Corporation Limited" and showed an address of 49J Spur Road, Wilberforce, Freetown; that was where the operation of the Mine was by then being run from, and Mr Erdin asserts: "As the claimant knows, that is the address for the TMCSL offices in Sierra Leone." The subject-matter of the letter was shown as "Timis Mining Corporation (SL) Limited[:] Notice of Termination of Mining Services", and the body of the letter purported to be notice given by TMCSL, which was thereafter referred to in the letter as "TMC". Mr Pop signed "for and on behalf of Timis Mining Corporation".
- Communications ensued in which the parties set out their competing positions regarding the monetary position as between them. By a letter dated 23 March 2015, in similar format to the Notice of Termination and purportedly sent on behalf of TMCSL, Mr Pop rejected DSL's final account and asserted a claim against DSL of US$4,123,776. By a further letter dated 25 March 2015, again in similar format, Mr Pop said:
To date we have not received a demobilisation plan which inter alia sets out your proposed schedule to remove Plant and Equipment from Site ... We hereby notify you to submit a detailed demobilisation plan by 30 March 2015[;] in the event that your Plant and Equipment is not fully demobilised from Site by 10 April 2015 TMC [which again expressly referred to TMCSL] shall commence charging you storage fees on a daily basis.
Furthermore, please be reminded that the Plant of Equipment (sic) which was imported under the TMC import duty concession regime as per the Mining Lease Agreement shall not be used on another project in Sierra Leone unless additional import duties arising (if applicable) are paid by Dawnus and approval has been given by TMC (which shall not be withheld unreasonably).
- On 18 May 2015 DJM sent a response to the letter of 23 March 2015 by way of a "pre-action protocol letter of claim" to TMC. The letter said:
The Proposed Defendant is Timis Corporation Limited ('TML') and its subsidiary companies involved in the ownership and operations at the Marampa Mine Sierra Leone including but not limited to (i) Timis Mining Corporation UK ... and/or (ii) Timis Mining Corporation (SL) Ltd and Timis Mining Corporation Ltd of stated address of 35 Liverpool Street, Freetown, Republic of Sierra Leone ('TMC').
The letter noted that the Notice of Termination had been given on behalf of TMCSL and continued:
In the circumstances [DSL] reserves its rights as to the validity of the notice, and indeed the identity of the correct contracting party, and we would welcome clarification of the position. In the remainder of this letter, we treat TMC as the contracting party.
The letter proceeded to deny the validity of the purported claim for $4,123,776 and to assert DSL's claim of $12,018,617. It continued:
One point that is clear is that both parties submitted to the laws of England and Wales and the non-exclusive jurisdiction of the courts of England and Wales. In the premises, and should payment not be forthcoming, we propose to issue proceedings in the courts of this jurisdiction.
- HSF replied on 1 June 2015. The body of the letter read as follows:
We refer to your letter dated 18 May 2015 to our client, Timis Mining Corporation Limited.
Our client denies your client's claim in its entirety. Further, for the reasons previously set out to your client, your client in fact owes our client in excess of US$4 million. Our client anticipates being in a position to provide full details of its claim against your client, as well as a full response to the issues raised by your letter dated 18 May 2015, in the course of the week commencing 29 June 2015.
Nothing in this letter should be taken as our client submitting to the jurisdiction of the courts of England & Wales.
- By a letter dated 4 June 2015 DJM acknowledged HSF's letter of 1 June, said that a response was expected by 3 July, and asked: "In the meantime would you kindly provide us with the address of your client's [scil. TMC's] registered office and confirm whether you are instructed to accept service."
- No reply to that request was received before HSF sent a substantive response on 17 July 2015. The letter was headed: "Timis Mining Corporation (SL) Limited ("TMC") / Dawnus Sierra Leone Limited ("DSL")". The body of the letter explained that Timis Mining Corporation UK Limited had no involvement with the Mine; otherwise it referred only to "TMC" (defined, of course, as TMCSL) and did not explain or advert to the distinction between the present defendants. It explained the case being advanced against DSL and concluded as follows:
We request that you provide full and transparent details of DSL's reasonably incurred costs by 4 pm on 21 August 2015, so that these can be agreed as between the parties and the balance of monies of account can then be transferred back to our client.
It may be that the parties are able to agree an amicable resolution to the present dispute without the need for formal litigation (in whatever forum has jurisdiction). However, we suggest that you respond substantively to our client's position before we explore these possibilities. If you fail to respond to this letter, our client may have little choice but to recover the monies that it is owed through litigation.
- DJM sent a provisional response on 23 July 2015, dealing specifically with the questions of the correct identity of the contracting party and the appropriate jurisdiction to determine the dispute. Noting that HSF's letter of 1 June had identified its client as TMC but that its letter of 17 July had without explanation referred to its client as TMCSL, DJM repeated their request to be informed of the address of TMC's registered office. They also asked HSF to "clarify [their] position on jurisdiction immediately."
- The correspondence stood thus when on 10 August 2015 TMCSL issued a writ against DSL in Sierra Leone. The relief sought in the statement of claim included: an account of all moneys received by DSL from TMCSL, "which were received by [DSL] as constructive trustee for [TMCSL]"; an inquiry as to what moneys remained in DSL's hands; an order for payment of the entirety of the moneys paid in the total sum of US$27,210,526, less moneys reasonably spent and incurred as costs by DSL; an injunction restraining DSL from removing its plant and equipment that had been used at the Mine; and a declaration that TMCSL had a lien on that plant and machinery to the extent of the money found to be due and owing to it. The gist of the case advanced in the particulars of claim was that, pursuant to the interim arrangement provided for by the Letter of Intent, DSL was entitled to retain only such part of the moneys advanced to it as it could justify as reasonably incurred costs. Paragraphs 16, 17 and 18 of the particulars of claim stated:
The plaintiff avers that it has been informed by its servants, privies and agents working at its mining site, where most of the defendant's plant, equipment and machinery are located, that the defendant company intends to close down all its operations in Sierra Leone unbeknown to and without any agreement with the plaintiff. ... [T]he interim arrangement in accordance with the Letter of Intent aforesaid sets out that the plant, machinery and equipment will not be removed from the plaintiff's Marampa Site without the prior approval of the plaintiff. ... [I]n view of the averment made in paragraph 16 supra, the plaintiff states that unless restrained by this Honourable Court the defendant would carry out its demobilization plans and dispose of or remove all its [plant and equipment at the Mine] from Sierra Leone, thereby leaving the plaintiff without redress or recompense in the event that the plaintiff's claim succeeds in Court.
- Also on 10 August 2015 TMCSL took out a notice of motion for an injunction to restrain DSL from removing its plant and machinery. The supporting affidavit, from TMCSL's managing director, said that the payments on account had been made to DSL at DSL's request on account of its financial difficulties. Paragraph 10 said:
That the defendant company has in the meantime surreptitiously mapped an exit strategy from the territory of Sierra Leone, with its funds in tow. Information received by me from the plaintiff's employees at the mines, and which I verily believe, is that the defendant company is winding up its operations in Sierra Leone. Staff are being laid off, and plant, equipment and machinery are being moved away clandestinely from their previous locations, though quite a good few of them are still within the vicinity of the plaintiff's operational areas. The difficulty the plaintiff company faces is that it has no control over the movement of these items unless aided by this honourable Court. If the movement of the defendant's capital equipment is continued and monies due and owing by the said company to the plaintiff company remain in the defendant's coffers, the plaintiff company is unlikely to recover the difference in overpayment of monies due from the defendant company.
- An injunction was granted ex parte on 12 August 2015, with a return date for an inter partes hearing. On 19 August 2015 DSL filed an affidavit in response. The affidavit rebutted the contention that DSL was removing its plant and equipment in a clandestine manner, and it exhibited an email to show that TMCSL had given DSL three months to remove its equipment and assets from the Mine. It also denied that DSL was winding up its activities in Sierra Leone. It said that the application and the substantive action were "frivolous and vexatious and a preemptive strike by the plaintiff/applicant to forestall a pending action by the defendant/applicant (sic) against it". The affidavit did not raise any issue regarding jurisdiction or forum conveniens.
- After two adjournments the application was heard by Mr Justice Sengu M. Koroma on 31 August 2015. His judgment dated 14 September 2015 shows that the case was argued and decided by reference to the principles in American Cyanamid Co v Ethicon Ltd [1975] AC 396. It does not appear that any point regarding forum or jurisdiction was raised before him. The judge modified the injunction so as to prevent DSL from removing plant and equipment from the jurisdiction and ordered a speedy trial with an abridged period for filing pleadings.
- DSL filed a defence and counterclaim on 21 September 2015. The defence did not admit, but did not positively deny, that TMCSL was the party with which it had contracted. The counterclaim for payment was made against TMCSL only, although it ought no doubt to be read in the context of the defence. The defence and counterclaim did not raise any point concerning forum or jurisdiction.
- On 30 September 2015 DSL commenced these proceedings in the Technology and Construction Court, Cardiff District Registry. The particulars of claim dated 12 October 2015 state the primary case that the relevant contract (the Letter Agreement) was made with TMC; the alternative case was that it was made with TMCSL.
- On 13 October 2015 DSL filed an application notice seeking, first, an order pursuant to CPR r. 6.15(1) permitting it to serve the claim form and the particulars of claim upon TMC at an alternative place, namely the offices of its solicitors HSF, and, second, an order pursuant to CPR r. 6.36 for permission to serve TMCSL out of the jurisdiction. The application regarding TMC was made on the basis that DSL had been unable to ascertain its place of domicile. I made the orders sought on the same day. Service was duly effected in accordance with the orders.
- On 27 October 2015 DSL took out a notice of motion in the proceedings in Sierra Leone, seeking an order that those proceedings be stayed on the grounds that the parties had agreed to the jurisdiction of the English courts and that England was a more convenient forum in which to determine the dispute between the parties. The motion was heard by Mr Justice Sengu M. Koroma on 10 November 2015 and judgment was reserved.
- On 13 November 2015, TMC filed an application in this court for service of these proceedings upon it to be set aside. TMCSL filed a similar application on 23 November 2015.
- On 2 December 2015 Mr Justice Sengu M. Koroma gave judgment refusing DSL's application for a stay of the proceedings in Sierra Leone. His reasoning in short summary was as follows. The court was not bound to grant a stay but had a discretion whether to do so. The non-exclusive jurisdiction clause was a factor pointing in favour of a stay, but it was not determinative. The most important consideration was that of the most convenient and appropriate place for the determination of the dispute. The Sierra Leonean authority of A.P. Moller v Hadson Taylor and Co. CIV APP 10/88 established that the applicable principles were those stated by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. Applying those principles, Sierra Leone was the most appropriate venue in which to try the dispute.
- On 15 December 2015 DSL filed an appeal against the decision of Mr Justice Sengu M. Koroma. On 22 January 2016 the appeal was, so I am told, adjourned to await the hearing of an application by TMCSL for inspection of accounts and records. The information put before me is insufficient to enable me to understand precisely what has happened or why it might be that the hearing of the appeal is conveniently to be deferred until after the other application has been determined.
- In the light of the facts set out above, I turn to consider the three applications before me.
TMC's application
- There are two limbs to TMC's application. The second limb concerns the question whether these proceedings ought to be stayed or set aside by reason of the proceedings in Sierra Leone. I shall consider that question in connection with TMCSL's application. The primary limb of TMC's application concerns the question whether there were sufficient grounds for making an order for the service of these proceedings against it.
- The order for service of the claim form and particulars of claim on TMC was not in terms an order for service out of the jurisdiction but an order for service in accordance with CPR r. 6.15(1):
Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place.
The evidence in support of DSL's application for permission for alternative service, in the form of a witness statement from Hugh Hitchcock, a partner in DJM, was to the effect that DJM did not know where TMC was domiciled and had been unable to ascertain its registered address. The statement outlined enquiries made both by DJM and by tracing agents on its behalf. It also pointed out that HSF had three times been asked to provide details of TMC's address and had failed to respond on each occasion.
- On behalf of TMC, Mr Johnson submitted that, regardless of fundamental questions of jurisdiction, there was in truth no "good reason" to authorise alternative service, for two reasons. First, the evidence in Mr Erdin's third witness statement showed that TMC's address could have been ascertained by a search of the Companies Registry in Sierra Leone: a search of TMCSL's entry in the Registry would have turned up a share certificate, which showed TMC as the owner of all the issued shares in TMCSL and set out an address for TMC in the Cayman Islands. Second, in circumstances where the claim against TMC was clearly groundless—a contention that I consider below—it was not incumbent on TMC to co-operate with requests for its address for service.
- I reject Mr Johnson's submissions on this point. Mr Hitchcock's statement showed that considerable efforts had been made to discover TMC's address, including three direct requests to TMC's solicitors. The fact, if it be such, that the address would have been disclosed by a specific search that was not made does not seem to me to indicate that there was no good reason to authorise alternative service. A search for TMC in the Companies Register in Sierra Leone would of course be fruitless. A search of the documents under TMCSL's entry is ingenious but far from obvious; I agree with Mr Butler's submission that it should not be incumbent on a party in the position of DSL to have recourse to that level of research. There is also force in Mr Butler's observation that the enquiry would only have provided an address from November 2014 and not a current address in September 2015. Although TMC was under no duty to disclose its address, its failure to co-operate with requests from DJM is in my view a highly relevant factor in deciding whether there was a good reason for authorising alternative service: cf. Abela v Baadarani [2013] UKSC 44, [2013] 1 WLR 2043, per Lord Clarke of Stone-cum-Ebony JSC at para 39. Mr Johnson's response to this last point, namely that the claim against TMC was so clearly lacking in merit as to negative any weight that could be placed on the failure to co-operate, strikes me as singularly unimpressive, given the serious and detailed way in which DJM had set out its position regarding the uncertainties over the contracting parties. I also consider that, if HSF did consider it justifiable not to co-operate on the basis that the claim against TMC was devoid of arguable merit, they ought to have said so in terms. A repeated failure to give any response at all to polite requests by another solicitor is discourteous.
- However, the question of the propriety of service out of the jurisdiction cannot be avoided. Mr Butler submitted that the tests for alternative service and for service out of the jurisdiction were analytically distinct. That is correct but, in the present case, rather beside the point. If the conditions for service out of the jurisdiction would not be satisfied were the defendant's overseas address known, there can hardly (in my judgment) be good reason to authorise alternative service within the jurisdiction. At all events, Mr Butler accepted that DSL could not be in a better position as regards TMC by having used alternative service than it would have been in if it had served out of the jurisdiction.
- DSL's application of 13 October 2015 did not in terms address the criteria for service of the proceedings on TMC out of the jurisdiction, although it did address those criteria with respect to TMCSL. CPR r. 6.36 provides:
In any proceedings to which rule 6.32 or 6.33 does not apply, the claimant may serve a claim form out of the jurisdiction with the permission of the court if any of the grounds set out in paragraph 3.1 of Practice Direction 6B apply.
DSL relies on grounds (3), (6) and (7) in paragraph 3.1 of Practice Direction 6B:
The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where—
...
(3) A claim is made against a person ('the defendant') on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and—(a) there is between the claimant and the defendant a real issue which it is reasonable for the court to try; and (b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.
...
(6) A claim is made in respect of a contract where the contract— ... (c) is governed by English law; or (d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract.
(7) A claim is made in respect of a breach of contract committed within the jurisdiction.
- A claimant seeking permission to serve a defendant out of the jurisdiction must satisfy the court of three things: first, that as against that foreign defendant there is a serious question to be tried on the merits of the claim, in the sense that the claimant has a real, as opposed to a fanciful, prospect of success; second, that there is a good arguable case that the case falls within one of the classes of case specified in paragraph 3.1 of Practice Direction 6B, in the sense that the claimant has a much better argument than the foreign defendant; third, that England and Wales is clearly the appropriate forum for the determination of the dispute and that the court ought to exercise its discretion to permit service out of the jurisdiction. See the convenient summary in VTB Capital Plc v Nutriket International Corp and others [2012] EWCA Civ 808, [2012] 2 Lloyd's Rep 313, at paragraphs 99 and 100.
- Mr Johnson's submissions for TMC focused ostensibly on the second of the three matters mentioned above. He contended that DSL did not have a good arguable case against TMC, because its contention that the contract was made with TMC rather than TMCSL was weak. In agreement with Mr Butler's submission, I consider that the submission invites misapplication of the "good arguable case" test. The question arising under the second of the three matters mentioned above is not whether the claimant has a good arguable case on the merits but whether it has a good arguable case that the claim falls within one of the categories of claim that may be served out of the jurisdiction. In my judgment, in the present case that question must clearly be answered in the affirmative. Ground (6) clearly applies, as DSL sues on a contract that provides for the applicability of English law and the non-exclusive jurisdiction of the courts of England and Wales. It is therefore unnecessary to consider whether ground (3) or (7) properly applies.
- The real question for consideration is whether DSL has a real prospect of success against TMC; more specifically, whether it has a real prospect of establishing that TMC was privy to the Letter Agreement. This is the same question that would have to be considered if TMC had brought an application for Part 24 judgment against DSL. Most of the relevant facts have been set out above.
- Mr Johnson submitted that the Letter Agreement was clearly between DSL and TMCSL. The principal matters on which he relied were the following. (i) The Letter of Intent expressly identified the party owing obligations to DSL and owed obligations by DSL as "Timis Mining Corporation (SL)" (therein referred to as "TMC" or "the Company"). (ii) The Letter of Intent showed TMCSL's registered address in Sierra Leone; the reference could not be to a Cayman Islands company or, therefore, to TMC. (iii) The letter of Intent showed the trading address from which the operations of the Mine were carried on. Mr Erdin's evidence is that only TMCSL carried on the business of the Mine. (iv) The person negotiating the contract with Mr Peters was Ms Sherwood, who according to Mr Erdin's evidence was a director of TMCSL but not of TMC.
- In support of his submission that DSL has a real prospect of establishing that its contract was with TMC, Mr Butler made the following main points. (i) The Letter of Intent was on paper headed "Timis Mining Corporation Ltd". (ii) The signature strip showed the party simply as "Timis Mining Corporation". (iii) Although the Letter of Intent does indeed place obligations on TMCSL, it is ambiguous: in the context of the two matters already mentioned, references to "our instruction" and "our intention" are capable of indicating that TMC was privy to the Letter Agreement. (iv) Ms Sherwood's emails described her as "Executive Director, Timis Mining Corp Limited". (v) Discussions between DSL and the Timis Group about the continuing operations at the Mine had commenced before TMCSL was incorporated. (vi) The draft "Interim Operations Agreement" identified the proposed contracting party as "Timis Corporation Limited". (vii) Although the seven post-contractual payments to DSL were made by TMCSL, the one pre-contractual payment was made by "Timis Corporation" with a reference "Operations Timis Mining Corporation". And as regards post-contractual matters, one payment certificate identified the Employer as "Timis Mining Corporation Ltd", and Mr Pop's signature strip was more consistent with him acting for TMC than for TMCSL. (Mr Butler made clear that he did not seek to use post-contractual matters as an aid to construction but rather as some evidence of the realities of the situation.) (viii) The Letter of Intent does not make provision for "Withholding Tax", which according to Mr Hitchcock's evidence is payable only by parties domiciled in Sierra Leone and would have been payable by TMCSL but not by TMC; he says that the incidence of the tax would have made the Letter Agreement inherently unprofitable for DSL.
- In my judgment DSL does not have a real prospect of establishing that its contract was with TMC. My reasons for this conclusion are as follows.
47.1 DSL and the defendants all proceed on the common basis that a contract came into existence on the terms of the Letter of Intent, whether in its originally produced form or in the form of the Revised Letter of Intent.
47.2 Mr Butler rightly accepted that the Letter of Intent "does (on a careful reading) place liabilities on TMCSL".
47.3 The suggestion that the terms of the Letter of Intent, read in the light of the surrounding circumstances, show that TMC "is to be bound instead/as well" is entirely unpersuasive. It involves reading the Letter of Intent in such a way as to distinguish between the "we" that addresses the letter to DSL and "the Company". That is a highly strained reading of the document. The drafting is in part that of a letter addressed by one party to another party, but it cannot reasonably be taken to distinguish between "we" and "the Company". So, for example, although Mr Butler relies on the words, "Please take this Letter Agreement as our instruction ... to commence the Services", the context is the previous paragraph: "... this will confirm the agreement between TMC [i.e. TMCSL] and Dawnus ("Letter Agreement") that the Parties hereto have entered into a business relationship ..." The operative parts of the Letter Agreement envisage only two parties, namely "the Company" and DSL (referred to in the Revised Letter of Intent as "the Contractor"). Only two parties to the contract were envisaged, as seen not only by the failure to identify any third party but by the provision, for example, for termination on written notice "by either party". The party identified by the signature strip at the end of the document ("Timis Mining Corporation") cannot possibly be the only counter-party in exclusion of TMCSL, because TMCSL is expressly privy to the agreement. Thus for example clause 8 of the Revised Letter of Intent (a revised version of clause 10 of the earlier draft) provided: "In exchange for the performance of the Services by the Contractor hereunder, ...the Company agrees to reimburse ... the Contractor ..."
47.4 The Letter Agreement states two particular things about the party with which DSL was intending to contract. First, it was the owner of the Mine and the transferee of the Large Scale Mining Licence. Second, it was a company registered in Sierra Leone. The evidence adduced on these applications indicates that TMCSL, not TMC, was the owner of the Mine and holder of the relevant licence. There is no doubt but that TMCSL was registered in Sierra Leone and TMC was not.
47.5 There is nothing at all in the evidence to suggest that DSL thought that it was contracting with TMC. The evidence does no more than suggest that DSL intended to contract with "the appropriate entity within the Timis Group" (cf. particulars of claim, paragraph 7). When Mr Peters produced the draft Interim Operations Agreement, DSL believed that the name of the company that had acquired the assets of LMC was "Timis Corporation Limited" (cf. particulars of claim, paragraph 8). Later it may well have believed that the name of the company was "Timis Mining Corporation Limited", on account of the use of that style on emails and in particular on the letterhead of the Letter of Intent. However, that is no reason to say that its contract was with TMC, a holding company registered in the Cayman Islands. It is clear that DSL intended to contract with the owner and the operator of the Mine, which according both to the Letter of Agreement and the evidence on the point was a company registered in Sierra Leone, namely TMCSL.
47.6 The contention that DSL specifically intended to contract with a company registered outside Sierra Leone and that the drafting of the payment provisions in the Letter Agreement reflected this does not advance the matter. First, it is a matter of mere assertion in the first statement of Mr Hitchcock, unsupported by any substantial evidence. Second, it appears to be incorrect even as a matter of drafting; this may be why the contention did not feature in Mr Butler's oral submissions. Third, the Letter of Intent stated clearly a registered address in Sierra Leone.
47.7 The evidence adduced by the defendants is that those acting in the making of the arrangements with DSL did so on behalf of TMCSL, not TMC. For all that can be said about the job descriptions on the emails, there is nothing of substance to gainsay that evidence.
47.8 In conclusion, the real question is simply whether the Letter Agreement was made with TMC or with TMCSL. DSL has not demonstrated any real prospect of establishing that it was made with TMC. It is clear, in my judgment, that it was made with TMCSL.
- In the circumstances, service of the proceedings on TMC will be set aside.
TMCSL's application
- TMCSL contends that, by reason both of the overlap between these proceedings and the proceedings in Sierra Leone and of the manner in which DSL has conducted the proceedings in Sierra Leone, these proceedings ought to be set aside or stayed, notwithstanding the non-exclusive jurisdiction clause.
- In Antec International Ltd v Biosafety USA Inc [2006] EWHC 47 (Comm), Gloster J identified the following principles (paragraph 7):
(i) The fact that the parties have freely negotiated a contract providing for the non-exclusive jurisdiction of the English courts and English law creates a strong prima facie case that the English jurisdiction is the correct one. In such circumstances it is appropriate to approach the matter as though the claimant has founded jurisdiction here as of right, even though the clause is non-exclusive ...
(ii) Although, in the exercise of its discretion, the court is entitled to have regard to all the circumstances of the case, the general rule is that the parties will be held to their contractual choice of English jurisdiction unless there are overwhelming, or at least very strong, reasons for departing from this rule ...
(iii) 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 ... In particular, the fact that the defendant has, or is about, to institute proceedings in another jurisdiction, not contemplated by the non-exclusive jurisdiction clause, is not a strong or compelling reason to relieve a party from his bargain, notwithstanding the undesirability of parallel proceedings. Otherwise a party to a non-exclusive jurisdiction clause could avoid its agreement at will by commencing proceedings in another jurisdiction ...
See also the discussion of these principles by Stuart-Smith J in Cuccolini SRL v Elcan Industries Inc [2013] EWHC 2994 (QB), at paragraphs 18 to 22.
- Mr Johnson relied on dicta in two cases in support of his submission that the existence of the Sierra Leone proceedings was a reason for this court to decline jurisdiction. In Bas Capital Funding Corpn and others v Medfinco Ltd and others [2003] EWHC 1798 (Ch), [2004] 1 Lloyd's Rep 652, Lawrence Collins J said:
192. I am satisfied that it would require very strong grounds to override a choice of English jurisdiction, and that the normal forum conveniens factors have little or no role to play, especially where it could be inferred from the lack of other connections with England that the parties had chosen the English forum as a neutral forum. In some cases the fact that the clause was non-exclusive might make it easier to displace the strong presumption in favour of upholding the choice, particularly where more than one jurisdiction was chosen, but that would depend on the circumstances.
193. It would not be useful to speculate on what exceptional circumstances would justify the court in not accepting jurisdiction where the parties had conferred non-exclusive jurisdiction on the English court, but I accept that one feature which may be highly relevant is whether there are already proceedings in a foreign country which involve overlapping issues, especially if they have been commenced by the party which subsequently seeks to sue in England.
In BP International Ltd v Energy Infrastructure Group Ltd [2003] EWHC 2924 (Comm), [2004] 1 CLC 539, Morison J stated this principle at paragraph 21:
(1) A non-exclusive jurisdiction clause in an agreement gives the parties a right to commence proceedings in this jurisdiction as to their respective rights and duties under the contract. The right to commence proceedings is not absolute. The Court retains a discretion, and a significant factor in the balance is the existence of other proceedings in another jurisdiction, where there is a risk that those proceedings will overlap and potentially conflict with the proceedings in this country. There is a distinction, clearly, between an exclusive and a non-exclusive jurisdiction clause.
- Mr Johnson submits that DSL's right to proceed in this court ought to be curtailed, for the following reasons. First, there is a very large overlap between these proceedings and the proceedings in Sierra Leone; the issues in the two sets of proceedings are essentially the same. Second, although it is true that DSL did not commence the proceedings in Sierra Leone, it did bring a counterclaim, which, as Mr Justice Sengu M. Koroma pointed out, is deemed to constitute a separate action and to have commenced on the same date as the original action. Third, by the manner in which it responded to the application for an injunction and by filing a defence and counterclaim, DSL has submitted to the jurisdiction of the High Court of Sierra Leone. Fourth, general factors regarding forum conveniens, such as the place with which the dispute has a connection and the whereabouts of witnesses, show that, apart from the non-exclusive jurisdiction clause, Sierra Leone is at least a convenient jurisdiction. Although that does not by itself suffice to override the jurisdiction of this court, it does at least weigh in the balance with the other factors when considering the exercise of discretion. Fifth, it would be highly inconvenient to have two sets of proceedings in different jurisdictions concerning the same dispute.
- I am not persuaded by Mr Johnson's submissions. In my judgment, it is inappropriate for this court to decline jurisdiction in respect of the dispute between DSL and TMCSL on account of the proceedings in Sierra Leone.
- The starting-point is that TMCSL has bound itself contractually to submit to the jurisdiction of this court. To be released from that obligation it must demonstrate a very strong reason, which cannot relate to factors of convenience that were foreseeable when the contract was made.
- The mere existence of proceedings in Sierra Leone does not itself constitute a compelling reason for this court to decline jurisdiction, for the reason identified by Gloster J.
- The course that the proceedings in Sierra Leone have taken and the conduct of DSL with regard to those proceedings may in principle be capable of amounting to a compelling reason for this court to decline jurisdiction. That is indicated by the dicta of Lawrence Collins J and Morison J cited above. The point is not, however, concerned with any automatic consequence of a supposed "submission to jurisdiction"; as Mr Butler pointed out, there has already been a contractual submission to the jurisdiction of this court by TMCSL. Rather it is a matter to be weighed in the exercise of the court's discretion. In British Aerospace Plc v Dee Howard Co [1993] 1 Lloyd's Rep 368, and with reference to the facts of that case, Waller J said at 376:
[I]t seems to me that the inconvenience for witnesses, the location of documents, the timing of a trial, and all such like matters, are aspects which [Dee Howard Co] are simply precluded from raising. Furthermore, commencing an action in Texas, albeit that may not be a breach of the clause, cannot give them a factor on which they can rely, unless of course that action has continued without protest from BAe. One can well imagine that if BAe had taken part in the proceedings in Texas without protest and if the proceedings had reached the stage at which enormous expenditure had been incurred by both sides and the matter was accordingly nearly ready for trial in Texas, that such factors would obviously lead the English Court to exercise its discretion in favour of setting aside service of proceedings. That is very far from being the situation in relation to the Texas proceedings so far commenced.
Similarly, in Mercury Communications Ltd v Communication Telesystems International [1999] 2 All ER (Comm) 33, Moore-Bick J said at p. 43:
If CTS is to obtain a stay of these proceedings, therefore, it can only be on the grounds that there are concurrent proceedings in California in which the same issues will be litigated. Mr. Ivory submitted that that is a powerful factor of itself and one which is "neutral" in the sense that CTS cannot be criticised for having begun proceedings there. However, there would be more force in the argument if CTS had not expressly agreed to submit to the jurisdiction of the courts of this country. As Waller J pointed out in British Aerospace v Dee Howard Co, it is the defendant, in this case CTS, who has brought upon itself the risk of two sets of proceedings since it must have been aware when it started its own action that Mercury might well bring proceedings here to recover the amounts which it alleged still to be outstanding. If the court were generally to stay proceedings here simply on the grounds that the defendant had already commenced proceedings in another jurisdiction, it would effectively deny the plaintiff the benefit of the defendant's submission to the jurisdiction and encourage other parties who have had second thoughts about their contracts to rush to begin proceedings in another forum. The proceedings in California are still in their early stages and Mercury has not acquiesced in their continuation. The fact that its challenge to the jurisdiction has now been heard and dismissed does not seem to me to take the matter any further since whenever this application was heard the court would have had to take account of the possibility that the proceedings there would continue. In the circumstances of the present case I do not think that the existence of those proceedings provides sufficient grounds for staying this action.
- The points made by TMCSL are not without force. When the proceedings in Sierra Leone were commenced, DSL did not raise jurisdiction as an issue when resisting the injunction or when filing a defence and counterclaim. Its counterclaim can legitimately be seen as an attempt to vindicate rights in the High Court of Sierra Leone. There was then a delay of some six weeks before the challenge to jurisdiction was brought—and that, in circumstances where the court had ordered a speedy trial. However, if those points are viewed in context they become less compelling. The provision for non-exclusive jurisdiction was not the result of the unthinking adoption of a standard-form contract but was specifically adopted by the parties. DSL initiated the pre-action protocol procedure in May 2015 and specifically adverted to the non-exclusive jurisdiction clause. The substantive response from HSF on behalf of the defendants in mid July 2015 encouraged pursuit of negotiations in the hope that litigation could be avoided. TMCSL commenced the proceedings in Sierra Leone without any warning that, despite the previous correspondence, it intended to do so and without providing any response to DJM's request that it make clear its stance on jurisdiction. Although reasons of convenience for proceeding in Sierra Leone have been proposed, in particular in connection with DSL's application for a stay of those proceedings, no very impressive reason has been shown for commencing proceedings outside England and Wales. Nor in my view can it be said that TMCSL's evidence in support of its application for an injunction demonstrates any compelling reason why proceedings were commenced so suddenly in August 2015; that evidence is at best in tension with the stance manifest in Mr Pop's letter of 25 March 2015.
- DSL can be criticised for its slowness in making a jurisdictional challenge. But its conduct has to be seen in the context, first, of its unequivocal position regarding jurisdiction as set out in pre-action correspondence and, second, of the fact that it found itself responding to an ex parte injunction purporting to restrict its ability to move its plant and equipment. When the judge gave his ruling on 14 September 2015, DSL had a very short space of time within which to respond to a very large claim against it. Although the counterclaim strictly counts as a fresh action, it is artificial to consider it in isolation from the response to a claim that had been made against it in that jurisdiction. Proceedings in this court were commenced only nine days after the defence and counterclaim were filed. The application for a stay of the proceedings in Sierra Leone was made a fortnight after the application to this court for permission to serve the defendants. Although an earlier application for a stay might have been possible, there is some force in Mr Butler's contention that the application got its teeth from the existence of proceedings in England and Wales. This case is very far from the situation where a party has gone along with proceedings in another jurisdiction without demur, allowing lengthy and expensive procedural stages to be gone through until the case is at an advanced stage, before taking a jurisdictional point. It is true that the proceedings in Sierra Leone have been made subject to an expedited process, but that is not of DSL's making and there is little evidence before me either as to what has been done in those proceedings or as to the procedural stage that the case has reached.
- In the circumstances, I see no compelling reason for not holding TMCSL to its contract and requiring it to submit to the jurisdiction of this court. I shall dismiss TMCSL's application. The result will be that, unless the proceedings in Sierra Leone are stayed on appeal or I grant an injunction to prevent TMCSL from pursuing them, there will be two sets of parallel proceedings. That would no doubt be an unhappy state of affairs. But the risk of that eventuality is inherent in the use of non-exclusive jurisdiction clauses, and the state of affairs would be one that TMCSL had brought on itself.
DSL's application for an anti-suit injunction
- The remaining question is whether an injunction ought to be granted to restrain TMCSL from pursuing the proceedings in Sierra Leone.
- In Deutsche Bank AG v Highland Crusader Partners LP [2009] EWCA Civ 725, [2010] 1 WLR 1023, Toulson LJ stated the relevant principles in a series of propositions at paragraph 50:
1. Under English law the court may restrain a defendant over whom it has personal jurisdiction from instituting or continuing proceedings in a foreign court when it is necessary in the interests of justice to do.
2. It is too narrow to say that such an injunction may be granted only on grounds of vexation or oppression, but, where a matter is justiciable in an English and a foreign court, the party seeking an anti-suit injunction must generally show that proceeding before the foreign court is or would be vexatious or oppressive.
3. The courts have refrained from attempting a comprehensive definition of vexation or oppression, but in order to establish that proceeding in a foreign court is or would be vexatious or oppressive on grounds of forum non conveniens, it is generally necessary to show that (a) England is clearly the more appropriate forum ("the natural forum"), and (b) justice requires that the claimant in the foreign court should be restrained from proceeding there.
4. If the English court considers England to be the natural forum and can see no legitimate personal or juridical advantage in the claimant in the foreign proceedings being allowed to pursue them, it does not automatically follow that an anti-suit injunction should be granted. For that would be to overlook the important restraining influence of considerations of comity.
5. An anti-suit injunction always requires caution because by definition it involves interference with the process or potential process of a foreign court. An injunction to enforce an exclusive jurisdiction clause governed by English law is not regarded as a breach of comity, because it merely requires a party to honour his contract. In other cases, the principle of comity requires the court to recognise that, in deciding questions of weight to be attached to different factors, different judges operating under different legal systems with different legal polices may legitimately arrive at different answers, without occasioning a breach of customary international law or manifest injustice, and that in such circumstances it is not for an English court to arrogate to itself the decision how a foreign court should determine the matter. The stronger the connection of the foreign court with the parties and the subject matter of the dispute, the stronger the argument against intervention.
6. The prosecution of parallel proceedings in different jurisdictions is undesirable but not necessarily vexatious or oppressive.
7. A non-exclusive jurisdiction agreement precludes either party from later arguing that the forum identified is not an appropriate forum on grounds foreseeable at the time of the agreement, for the parties must be taken to have been aware of such matters at the time of the agreement. For that reason an application to stay on forum non conveniens grounds an action brought in England pursuant to an English non-exclusive jurisdiction clause will ordinarily fail unless the factors relied upon were unforeseeable at the time of the agreement. It does not follow that an alternative forum is necessarily inappropriate or inferior. (I will come to the question whether there is a presumption that parallel proceedings in an alternative jurisdiction are vexatious or oppressive).
8. The decision whether or not to grant an anti-suit injunction involves an exercise of discretion and the principles governing it contain an element of flexibility.
- Toulson LJ proceeded to consider the authorities for and ramifications of the propositions at some length. At paragraph 63 he commented on the sixth proposition:
It is perfectly possible to envisage a scenario in which there are parallel proceedings and each court considers itself to be clearly the more appropriate forum, the difference of opinion arising from the courts taking different views of the weight of the relevant connecting factors. This scenario was envisaged by Hoffmann J in Re Maxwell. It is unfortunate if this should arise, but the possibility is inevitable. If in that situation the English court were to decide to impose its view on the foreign court by granting an anti-suit injunction, and the foreign court for the same reason decided to impose its view on the English court by an anti-suit injunction, the parties would then find themselves subject to mutual anti-suit injunctions. This would not solve the problem; it would add a further dimension, and it would run counter to the principle of comity. Hence the reason for an English court not ordinarily granting an anti-suit injunction in such circumstances, although there may be exceptions in circumstances such as those considered by Hoffmann J and by Sopinka J and Judge Wilkey in the judgments referred to by Lord Goff in Airbus."
He then considered the very few authorities concerning applications for an anti-suit injunction where the parties were bound by a non-exclusive jurisdiction clause. As his conclusions are directly in point, I set them out at length (I shall give the references to the cited cases in footnotes).
105. The starting point for considering the effect of a non-exclusive jurisdiction clause must be the wording of the clause. In terms of contract law, I cannot see how a party could ordinarily be said to be in breach of a contract containing a non-exclusive jurisdiction clause merely by pursuing proceedings in an alternative jurisdiction. It is conceivable that a jurisdiction clause which is not fully exclusive may nevertheless be drafted in such a way as to have the effect of barring parallel proceedings in certain circumstances, but that is a matter of individual contractual interpretation. Looking at the matter in general terms, I agree with Raphael's suggestion in The Anti-Suit Injunction at para 9.12 that: "where a non-exclusive jurisdiction clause does not clearly indicate whether prior or subsequent parallel proceedings in a non-selected forum are permitted or prohibited, the best interpretation will usually be that, by contracting for non-exclusive jurisdiction, the parties have anticipated and accepted the possibility of some parallel proceedings, and as a result, only foreign proceedings which are vexatious and oppressive for some reason independent of the mere presence of the non-exclusive clause will be restrained by injunction.
106. Consistently with that approach, when it comes to the question whether the interests of justice require that an anti-suit injunction should be granted, I do not consider that it would be right to start with a general presumption that parallel proceedings in a non-selected forum are to be regarded as vexatious or oppressive and that there is a burden on the party responsible for prosecuting them to make out a strong case to justify them on grounds of matters unforeseeable at the time of the contract or other exceptional circumstances. My reasons are based on principle, practice and authority.
107. In principle, there are a number of reasons why I do not think that it would be right to adopt such a presumption. First, it is equivalent or at least comes close to treating a non-exclusive clause as an exclusive jurisdiction clause once proceedings are commenced under it, whereas there is an important difference. An exclusive jurisdiction clause creates a contractual right not to be sued elsewhere, although the court has a discretion whether to enforce it (and may refuse as in Donohue v Armco[1]). In the case of a non-exclusive clause, either party is prima facie entitled to bring proceedings in a court of competent jurisdiction. Duplication of litigation through parallel proceedings is undesirable, but it is an inherent risk where the parties use a non-exclusive jurisdiction clause.
108. Secondly, I see no cogent reason why it should automatically be assumed that nomination of a non-exclusive forum should give priority or dominance to that forum over any other. It ignores all variables. The non-exclusive jurisdiction clause may in one case represent the result of specific negotiations; in another it may result from the use of a standard form of contract. In one case there may be another forum which is obviously appropriate applying the normal factors; in another case there may not be.
109. Thirdly, there is the important factor of comity to consider. If the English court and the foreign court take different views about the weight to be attached to a non-exclusive jurisdiction clause, I do not see that as a sufficient reason for departing from the principle that each court should ordinarily be left to determine the suitability of the litigation before it and should be chary of attempting to interfere with the other court's decision. (See Du Pont (No 2)[2], Re Maxwell[3] and Airbus[4].)
110. The argument for saying that where proceedings are brought in England pursuant to a non-exclusive English jurisdiction clause it will be vexatious and oppressive for either party to pursue parallel proceedings in a foreign court, unless there is an exceptional reason for doing so, is premised on the reasoning that such parallel proceedings cannot have been within the parties' contemplation, that the exposure to the costs and risks of inconsistent judgments resulting from parallel proceedings is oppressive, and that justice therefore requires that the foreign proceedings should be barred (since there can be no objection to the English proceedings in the light of the agreed submission to English jurisdiction). For reasons already set out, I am not persuaded by the premises which underlie the argument. As to the first, if on the proper interpretation of the clause its effect was to bar parallel proceedings, then the party suing in England would have a contractual right to enforce the bar, subject to the court's residual discretion in matters of procedure. But if that is not the effect of the clause, then the clause does leave open the foreseeable possibility of parallel proceedings. As to the second, it does not follow that because parallel proceedings are undesirable they are necessarily oppressive. If they are improperly brought they are oppressive, but here the argument becomes circular.
111. As a matter of practice non-exclusive jurisdiction clauses are commonplace but, as noted, there appear to have been only three known previous cases where the English court has granted an anti-suit injunction to restrain the foreign proceedings. They are Cannon Screen[5], Amoco v TGTL[6] and Sabah[7]. Those cases were in different ways exceptional. The anti-suit injunction in Cannon Screen was not based on any broad proposition that the Californian proceedings were presumptively vexatious and oppressive in the light of the English non-exclusive jurisdiction clause. It was based on a combination of factors which led the judge to describe the action brought against Cannon UK in California as a crude form of oppression. Amoco v TGTL concerned the institution of what seem to have been effectively ancillary proceedings in a foreign court for the purpose of obtaining documents for use in an English action.
112. Sabah has given rise to a good deal of debate as to its interpretation. I agree with Andrew Smith J in Evialis[8] and Raphael that the decision is best understood to have been based on the finding that the GOP acted in breach of its contract with Sabah by bringing proceedings in Islamabad in which it claimed an injunction to prevent Sabah from enforcing its rights against the GOP in England pursuant to the English non-exclusive jurisdiction clause. (This view is supported by Waller LJ's statement in para 44 that the injunction "is being granted by the Court to which both parties have agreed to give effect to the bargain they made".) If I am wrong, and the injunction was granted not in support of a legal right but under the court's power to protect Sabah from vexatious and oppressive litigation, for reasons already discussed the conduct of the GOP was certainly vexatious and oppressive on the particular facts of the case. On either approach, the case needs to be seen in the context of its own particular facts. It would be wrong in my view to extrapolate from it a rule of law that the prosecution of foreign litigation in parallel with litigation in England pursuant to a non-exclusive jurisdiction clause is per se vexatious and oppressive unless exceptional circumstances can be shown to justify it. Such a rule would be inconsistent with the weight of other appellate authorities from Du Pont (No 2) to RBC v Rabobank[9]. It follows that in so far as later first instance judgments have treated Sabah as establishing such a rule, they are in my view wrong (although I am not suggesting that the decisions made in those cases, concerning applications to stay English proceedings or to set aside service of English proceedings out of the jurisdiction, were wrong).
- Mr Butler relied on two broad matters as showing that the continuation of the proceedings in Sierra Leone would be vexatious and oppressive: first, the real risk of injustice to DSL on account of the procedure of the Sierra Leonean court; second, the bad faith of TMCSL in instituting the proceedings.
- In my judgment, neither of these matters demonstrates proper grounds for granting an anti-suit injunction.
- Mr Butler's remarks about the procedure in Sierra Leone were made with appropriate diffidence. In summary, the concerns he expressed were to this effect. First, the interim injunction was granted despite (a) the lapse of time since TMCSL had actually demanded the removal of the plant and equipment, (b) the lack of solid evidence to show how the urgent need for the injunction had arisen, (c) the lack of proper evidence to show that TMCSL could satisfy any order made on its undertaking as to damages, and (d) the peculiarities of the case advanced in the particulars of claim, especially the claims by TMCSL to have a proprietary interest in the plant and equipment and to be entitled to the return of all moneys advanced unless DSL could justify their retention. Second, despite these peculiarities and the size of the claim, the court had placed the case in the fast track with directions for a speedy trial and an abridged procedure—apparently dispensing with disclosure and witness statements—and had not expressed any concerns about the manner in which the case was advanced: the trial was "just hurtling towards trial in an informal way" and was being dealt with "far too laxly". Third, the court in Sierra Leone had shown "no inclination" to involve experts in English law, even though that is the governing law of the contract. Fourth, the manner in which the court disposed of DSL's application for a stay, and in particular its "cursory treatment" of the non-exclusive jurisdiction clause, gave rise to legitimate concerns on DSL's part.
- In a consideration of this submission, particular importance attaches to the fifth proposition stated by Toulson LJ in Deutsche Bank AG v Highland Crusader Partners LP. Although an anti-suit injunction would operate in personam on TMCSL, it would inevitably involve interference with the process of the court of Sierra Leone. The fact that the first-instance decision on DSL's application for a stay of the proceedings in Sierra Leone attached less weight to the non-exclusive jurisdiction provision than might be expected in the courts of this jurisdiction does not justify this court arrogating to itself the decision how that application ought to be decided; as Toulson LJ said at paragraph 109, "the principle [is] that each court should ordinarily be left to determine the suitability of the litigation before it and should be chary of attempting to interfere with the other court's decision". What Mr Butler's first ground amounts to, however it may be dressed up, is the submission that the quality of justice to be expected from the High Court of Sierra Leone is sufficiently sub-standard as to be an exceptional reason for crossing the normal bounds of comity. There is no proper basis on which I could accede to that submission. There is little information before me as to the manner in which the injunction application was argued, and it cannot reasonably be said that the judgment granting an injunction in carefully varied terms gives grounds for doubting the ability of the High Court to determine the dispute. It is clearly not for this court to say that the proceedings in Sierra Leone ought not to continue on the ground that the Sierra Leonean court ought to have declined jurisdiction: as Toulson LJ said, that was a matter for the court hearing the application. Peculiarities in the way the case is advanced in the High Court of Sierra Leone are not to be laid at the door of that court. As for the process in the fast track of the Commercial Court of Sierra Leone, Mr Johnson correctly submits that a procedure is not improper or unjust simply because it is not the procedure of the courts of England and Wales. Further, neither party was able to enlighten me greatly as to how the fast track process operates or as to what has actually been going on in the Sierra Leonean litigation. As to the particular concern regarding the lack of a request by the court for expert assistance in the law of England and Wales, it might be noted that in this jurisdiction there is a default presumption that foreign law is the same as English law; it is to be expected that parties who feel the need to adduce evidence on foreign law will make any necessary applications.
- Mr Butler's complaints about TMCSL's "bad faith" relate to Toulson LJ's acknowledgment that, if parallel proceedings are improperly brought, they are oppressive (paragraph 110). He submits that the inevitable inference is that the institution of proceedings in Sierra Leone was simply a case of tactical manoeuvring. DSL was following the protocol procedure in England and Wales and had made its position on jurisdiction very clear. TMCSL did not give any response to the jurisdiction point and, by HSF's letter of 17 July 2015, led DSL to believe that it was desirous of engaging in continuing discussions with a view to avoiding litigation. Yet there is nothing in the evidence to demonstrate that an urgent need to commence proceedings arose between the sending of that letter and 10 August 2015; the proper inference is that TMCSL was planning tactical proceedings in Sierra Leone. The pretext for the commencement of proceedings, namely the need for an interim injunction, is implausible, because the evidence in support of the application failed to show the sources of information or when the information was received or why circumstances had changed since TMCSL's letter of 25 March 2015.
- This second basis of the application has more weight than the first. Nevertheless, it does not justify the grant of an injunction. It is not a breach of contract to bring proceedings in a foreign court if the contract contains only a non-exclusive jurisdiction clause; such a clause naturally gives rise to the possibility of parallel proceedings. It was open to TMCSL, as it is open to all litigants who are not subject to a specific legal prohibition, to seek to litigate in the manner that suited its interests. The short answer to the complaint that TMCSL has stolen a march is, as Mr Johnson submits, that the relevant matter is the existence of two sets of parallel proceedings, not the order in which they were commenced. The existence of the Sierra Leonean proceedings is not itself vexatious or oppressive.
- For these reasons I shall dismiss DSL's application for an anti-suit injunction.
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