Deutsche Bank Ag v Sebastian Holdings Inc [2009] EWHC 3069 (Comm)

[2009] EWHC 3069 (Comm)Case No 2009 Folio 83
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 1 December 2009
Before
MR JUSTICE BURTON
Between
DEUTSCHE BANK AGClaimantSEBASTIAN HOLDINGS INCDefendant
Mr David Foxton QC (instructed by Freshfields Bruckhaus Deringer LLP) for ClaimantMr Tim Lord QC and Mr Jasbir Dhillon (instructed by Travers Smith LLP) for DefendantHearing Hearing dates: 17 and 18 November 2009
Judgment
[1]There are at present two pending proceedings between the same parties, the history and nature of which are fully described in the judgment of Walker J in the Commercial Court on 14 August 2009 after a hearing on 15 to 16 June 2009, to which I respectfully refer. There were before him two applications, brought by the Defendant in what he called the London claim, Sebastian Holdings Inc (“SHI”), a company incorporated under the laws of the Turks and Caicos Islands, of which the sole shareholder and director is Mr Alexander Vik, against the Claimant in the London claim, Deutsche Bank AG (“DB”), a global investment bank incorporated under the laws of Germany, with its headquarters in Frankfurt and substantial offices throughout the world including New York, London and Geneva.[2]Walker J dealt with the first of those two applications, being an application for a declaration that the English court has no jurisdiction to try the London claim. This application was resolved by Walker J, who concluded that the application failed, because there was such jurisdiction, by reference to the existence of jurisdiction clauses, to which I shall refer. Consideration of the second application, an alternative claim for a stay of the London claim on grounds of forum non conveniens and lis alibi pendens - by reference to the New York proceedings already instituted between the same parties, in which SHI is Claimant and DB Defendant, referred to by Walker J as the New York claim - was adjourned, to be dealt with once the Learned Judge had given his decision on the question as to whether the English court had jurisdiction, and it is that application which has now been restored before me.[3]As Walker J described, the New York claim was in fact commenced slightly under two months before the London claim, although at a time when the parties were already clearly in dispute. Walker J summarises the content of the two claims, respectively in paragraphs 37 to 38 of his judgment as to the New York claim and paragraph 39 in relation to the London claim, and no issue has been taken as to the accuracy of such summary. SHI issued the two applications to which I have referred, by an Application Notice in the Commercial Court dated 4 March 2009, which resulted in the hearing before Walker J on 15 to 16 June and his judgment on 14 August. The parallel motions in the New York proceedings were issued by the respective parties on 23 and 24 February 2009, on the part of SHI seeking an order from the New York court to restrain DB from continuing with the London claim, and on the part of DB seeking dismissal of the New York proceedings on various grounds, or a stay of the New York claim on the grounds of forum non conveniens and lis alibi pendens. I am informed that the New York court heard argument on the parties’ respective motions on 30 April 2009, and no decision or judgment has yet been forthcoming. I have heard argument on this stay application by SHI on 17 to 19 November 2009, and now give my decision.[4]Since 14 August 2009, SHI has made an application for permission to appeal Walker J’s judgment (after refusal by the Learned Judge) to the Court of Appeal. This was refused on paper, but with detailed reasons, by Sir Richard Buxton on 22 October 2009, and such application is to be renewed by way of an oral hearing before the Court of Appeal on 3 December 2009. The submissions before me have therefore been required to be upon the basis of an acceptance by SHI of Walker J’s conclusion that the entirety of the proceedings in the London claim falls within the jurisdiction of the Commercial Court. Mr David Foxton QC, who has appeared, before me, as he did before Walker J, on behalf of DB, pointed out, with some justification, that some at least of the submissions in the skeleton argument prepared for this application by Mr Tim Lord QC and Mr Jasbir Dhillon (who have similarly appeared before me, as before Walker J) could be said to have strayed outside that position (see in particular paragraph 12 of that skeleton). However the oral submissions before me were, on both sides, inevitably upon that basis, pending, and subject to the possibility of, a successful appeal by SHI if permission were to be granted. Similarly, I have had to decide this case upon the basis that, by virtue of the delay since 30 April 2009, it is not known whether the New York court will decide to stay the New York claim.[5]In SHI’s skeleton, to which I have referred, the case for a stay of the London claim was put upon two alternative bases. The first was the traditional basis that, notwithstanding the fact that the English court has jurisdiction, the New York court, in which proceedings have already been issued, is the clearly more appropriate forum. The second basis was by reference to a case that there should be a stay of some part of the London claim, if not of all of it, on what was called the ‘case management’ basis. This arises from a line of authority which appears to have commenced in Reichhold Norway ASA and another v Goldman Sachs International (a Firm) [2000] 1 WLR 173 CA and further discussed in National Westminster Bank v Utrecht-America Finance Company [2001] 3 AER 733 CA and CNA Insurance Co Ltd v Office Depot International (UK) Ltd [2007] Lloyd’s Rep IR 89. Its particular genesis was in paragraphs 79 of the judgment of Walker J, in which he left open the possibility of such case management considerations in this case.[6]In oral submissions however, Mr Lord QC did not pursue that alternative case at this stage, while reserving the argument that such a position might arise later in these proceedings if: i) no stay of the London claim were ordered on his main, forum non conveniens, ground; ii) there were no order in New York staying or dismissing the New York claim; iii) absent any such order, or any agreement between the parties otherwise, the two actions continued in parallel; and iv) aspects of the London claim could be severed and identified as being more conveniently tried in New York, if that were a feasible proposition: but he accepted that he was not in any position to suggest any such severance at this stage. Mr Foxton QC does not accept that any stay/severance on case management grounds would be arguable either in law (see for example CNA Insurance (supra) at paragraph 94) or on the facts in this case.[7]Walker J described, in paragraph 35 of his judgment, the seven agreements mainly in issue between the parties, four of them under the heading “Equities Agreements”, MNA, EPBA, EIMA and LFOA, and three of them under the heading “FX Agreements”, AMA, FXPBA and the FX Pledge Agreement. For the purposes of the argument before me, the last of those agreements has not been material.[8]This judgment is enabled to be considerably more concise than it would otherwise have been by virtue of my grateful adoption of the content of Walker J’s judgment, to which I refer. By reference to it, and to the submissions before me, it is apparent that there are, as between DB and SHI, three areas of dispute, all of which have been found by Walker J to fall within the jurisdiction of the English courts: i) As asserted by DB, a claim in respect of SHI’s trading in equities, as a client of DB London. This is governed by one or more of the four Equities Agreements described above, all of which are subject to English law. The equities trading was carried out in London. Mr Said, to whom specific reference is made in relation to the FX trading, had no involvement in equities trading. The account was handled in London, and the transactions were entered into, or, at any rate, recorded, in London. A claim is made by DB in the London proceedings in respect of the sum allegedly due on SHI’s equities account of US$125,523,086. Mr Lord was unable to submit that there are no disputes about the nature or content of the equities trading or as to the quantum of the sum claimed. ii) A dispute about SHI’s FX trading, as a client of DB New York. There are, as set out above, two relevant agreements relating to FX trading, which are described by Walker J in his judgment. The AMA (a close relative to the EIMA, because both of them substantially incorporate the terms of the Master Agreement of ISDA [the International Swap Dealers Association Inc]) is governed by English law, and the FXPBA is governed by New York law. The trading of the FX account was, as described by Walker J, carried out in New York, or at any rate in New Jersey, and on the instruction of Mr Said on behalf of SHI, who was based in Connecticut. Although the relevant trading was carried out or initiated in what Mr Lord has called the New York metropolitan area (so as to subsume the parts of the different states of New Jersey and Connecticut local to New York City into the same geographical area), the accounts were, as DB describes, kept and recorded by DB’s London office in London. DB claims, in the London proceedings, US$120,650,166, which is claimed to be the deficit on the FX account, said by DB to be arrived at in the manner described in the London claim, as summarised by Walker J, in particular at paragraphs 39(3) to (10) of his judgment. SHI does not presently identify any specific issues about the content of individual FX transactions (which DB in any event asserts to have been carried out under the terms of the AMA, not the FXPBA). Their complaints are substantial, and revolve around the case that, although Mr Said had some authority to carry out and instruct FX transactions, there was an express limit on the FX transactions by reference to an alleged oral agreement (evidenced in emails) that SHI’s maximum exposure in connection with the FX trading, to be conducted by Mr Said, was limited to US$35m (the “Collateral Limitation Agreement”). DB submits that the existence and validity of any such oral agreement must be tested against the clauses of the AMA (governed, as stated above, by English law) which included (by Clause 9(a) and (b)) an entire agreement clause and a no amendment or waiver clause. SHI asserts that the existence of the trading very substantially in excess of that US$35m exposure was deliberately disguised by the publication of false information on DB’s website. As I have indicated, the evidence is that FX accounts were recorded and kept in London: there is no evidence as to where the website is compiled. iii) There is then the concatenation of consequences of the alleged over-trading on the FX accounts, the alleged breach of the Collateral Limitation Agreement, and the alleged fraudulent concealment. They include the closing out of positions both in the equities and FX accounts, and the transfer of substantial sums from the equities account to cover the purported shortfall on the FX accounts. This is summarised in paragraph 37 of an affidavit sworn by Mr Vik in the New York proceedings on 19 February 2009 as follows:
“After the purported margin calls and the alleged deficiencies in mid October 2008 … the Bank engaged in activities which amount to nothing more than wrongfully converting assets of [SHI] in its accounts of the Bank in London and Geneva, closing trades and then still claiming that almost $250 million is owed by SHI to the Bank.”
SHI would assert that there would be no liability on the equities account, because there should not have been a close out and transfer to meet alleged debts on the FX account. DB denies that there was any breach of contract or duty and asserts an entitlement to transfer sums from the equities account to the FX account pursuant to the terms of the EPBA, both governed by English law. The question is whether the whole English proceedings, embracing these three areas of dispute, should be stayed on the grounds that New York is a more convenient forum.[9]As described by Walker J, there are the following (material) jurisdiction provisions in the seven agreements referred to in paragraph 7 above: i) As to the equities agreements, EPBA has a provision for the exclusive jurisdiction of the English courts, as does MNA (which also includes a clause to the effect that the parties will not object to proceedings in the English courts on the basis that such court is an inconvenient forum, which I shall call an “FNC [forum non conveniens] waiver clause”. LFOA provides for the non-exclusive jurisdiction of the English courts and also an FNC waiver clause. EIMA also provides for the non-exclusive jurisdiction of the English courts, coupled with what Walker J referred to as an “other jurisdiction acceptance” clause, i.e. underlining the non-exclusive jurisdiction of the English courts by confirming the availability of other relevant jurisdictions – but of course the FNC waiver would not apply to any other jurisdiction than the English courts. ii) As to the FX agreements, the AMA provided for the non-exclusive jurisdiction of the English courts, with the FNC waiver clause, and, like the EIMA, included the other jurisdiction acceptance clause. The FXPBA provided for the non-exclusive jurisdiction of the courts of and in New York with no FNCwaiver clause, nor the other jurisdiction acceptance clause). There are thus, in the series of inter-related agreements governing the dealings between the parties, five jurisdiction clauses providing for the English courts (two exclusive, two non-exclusive with FNC waivers) and one (non-exclusive) jurisdiction clause providing for the New York courts.[10]As set out in paragraph 4 above, Walker J has concluded that all three aspects of the disputes between the parties, set out in paragraph 8 above, fall within the English jurisdiction clauses referred to above. So far as the New York courts are concerned, on the face of the present pleadings, only the second and third aspects of the disputes are presently included. Mr Lord submits, or asserts, that the first aspect, namely that any disputes as to the substantive content of the equities trading and (subject to resolution of the third aspect of the dispute) any balance due on the equities account, would also fall within the jurisdiction of the New York court, even if not within the terms of the FXPBA, but Mr Foxton does not accept this, and there is presently no evidence in this regard.[11]Mr Lord’s submissions in support of his stay application can be summarised as follows: i) The Court should not play the ‘numbers game’ in relation to counting up jurisdiction clauses. The substantial dispute is that of SHI, relating to FX trading and its handling, and can and should be resolved in the New York claim. The centre of gravity is in New York and revolves around the FXPBA, and even if the disputes relate to or fall to be decided under the AMA, the AMA provision is for non-exclusive jurisdiction of the London courts, and the New York proceedings, albeit stalled since 30 April 2009, have been commenced and, as a matter of fact, were commenced first. The balance of the disputes should and, he asserts, can, all be heard and dealt with in the New York proceedings. ii) Even if consideration must be given to the exclusive jurisdiction clauses within MNA and EPBA and the waiver of FNC in the EIMA, MNA and LFOA, there are nevertheless, by reference to the relevant authorities, to which I will turn, strong or exceptional or overwhelming reasons or grounds by reference to the interests of justice, namely the multiple and conflicting jurisdiction clauses, and, as above, the existence of the centre of gravity of the dispute in New York, where there is an existing lis. iii) New York is the clearly more appropriate forum, by reference to the location of the witnesses in relation to the FX dispute.[12]By virtue of the findings of Walker J, the matters in the London claim fall within a jurisdiction clause or jurisdiction clauses, which bring into play Article 23 of Council Regulations (EC) 44/2001 (“the Regulations”). There is a live dispute between the parties as to whether, in any event, a defendant has any entitlement to rely on an application based upon forum non conveniens to seek to persuade the English court to decline such jurisdiction. This argument arises by reference to the considerable judicial and academic discussion stemming from the decision of the European Court in Owusu v Jackson & Others [2005] ECR I-1383, [2005] QB 801, in which the European Court concluded that where a court - in that case England and Wales - had jurisdiction under Article 2 of the Regulations, by reference to the defendant’s domicile, there was no room for the application of the Anglo-Irish concept of stay on grounds of forum non conveniens, so that the English court could not divest itself of its jurisdiction.[13]The Owusu point is relied upon by Mr Foxton so as to preclude SHI from pursuing its stay application, even if it be otherwise well-founded. I shall address the Owusu point later.

Stay at Common Law

[14]There have been so many authorities relating to the question of forum non conveniens in recent years (a positive bible of some 38 of the leading authorities has been put before me), that I do not consider that there is any need to recite them all, nor the propositions which arise or can be derived from them, once again in this judgment. I will limit myself to seeking to address (by reference to them) two questions (i) the hierarchy of jurisdiction clauses (ii) the import of the decision in the House of Lords in Donohue v Armco Inc and Others [2002] 1 Lloyd’s Rep 425 HL.[15]As to the ‘hierarchy’, it is clear that the most ‘stringent’ form of jurisdiction clause is the exclusive jurisdiction clause. This has a positive and a negative impact. It prescribes one jurisdiction (or sometimes one of two, dependent upon specified circumstances), in which the parties must then litigate, often providing for methods of service and even for specific courts within the jurisdiction. As to the negative impact, it renders it a breach of contract for a party to issue proceedings against the other in any other jurisdiction than the agreed exclusive jurisdiction.[16]The next most stringent clause is a non-exclusive jurisdiction clause with a waiver of FNC. This will normally provide for one (or possibly more than one) jurisdiction in which a party may be sued by the other party, and there is a waiver of FNC, which means that the non-exclusive jurisdiction so chosen is elevated above others, because, with regard to that jurisdiction, but not as to any others, the parties agree not to assert that to be sued there would be inconvenient, oppressive or expensive. If a party then issues proceedings in the chosen, but non-exclusive, jurisdiction, and the other party then asserts forum non conveniens, that party is in breach of contract in doing so.[17]The lowest in the hierarchy is the non-exclusive jurisdiction. This may be accompanied by an other jurisdiction acceptance clause. This addition would seem only to make explicit what would, in any event, be implicit from the very fact that the chosen jurisdiction is not exclusive (and there is no FNC waiver), namely that(i) proceedings may be issued by a party without being in breach of contract in another jurisdiction(ii) there may thus even be parallel proceedings, inconvenient, expensive and burdensome though that may be, and giving rise to a risk of inconsistent judgments. Bingham LJ in Du Pont v Agnew [1987] 2 Lloyd’s Rep 585 at 589 emphasised that the policy of the law must be to favour the litigation of issues once only. In TheEl Amria [1981] 2 Lloyd’s Rep 119 at 128-9, Brandon LJ referred to the need to keep in mind the “potential disaster” of the risk of inconsistent decisions on the same issues inherent in a multiplicity of proceedings. However, in Royal Bank of Canada v Coöperative Centrale Raiffeisen Boerenleenbank BA [2004] 2 AER (Comm) 847 at paragraph 21, Evans Lombe J, with whom Thorpe LJ agreed, referred to an other jurisdiction acceptance clause, as, in his view, showing that the parties “must have had in contemplation the possibility of virtually simultaneous trials, with all the additional burdens which the judge describes, since such is an obvious possible consequence of permitting parallel proceedings in the absence of provision in the jurisdiction clause, or elsewhere in the agreement, for the means of avoiding those consequences”. In Highland Crusader Offshore Partners LP and others v Deutsche Bank AG [2009] EWCA Civ 725 when overturning my grant of an injunction in the Commercial Court ([2009] 2 Lloyd’s Rep 61), Toulson LJ, with whom Carnwath and Goldring LJJ agreed, stated, in terms, in paragraph 64 of his judgment, that “a non-exclusive jurisdiction clause self-evidently leaves open the possibility that there may be another appropriate jurisdiction”. Gross J in Import Export Metro Ltd v CSAV [2003] 1 Lloyd’s Rep 405 at 412 stated that “while a multiplicity of proceedings is, in general, undesirable and very likely to some extent inconvenient, the gravity of the risks to which it gives rise and the weight to be given to this factor will turn on the facts of the individual case”.[18]The ordinary rules at common law, where there is a straightforward clash of jurisdictions with no relevant jurisdiction clause affecting the issues, are found in the seminal decision of the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. On an application for a stay based upon forum non conveniens, the first and major test is, the burden being upon the defendant seeking the stay, to show that there is a clearly more appropriate forum. It is, however, clear that that position is fundamentally affected where there are jurisdiction clauses. It was perhaps in question prior to Donohue whether a stay application on grounds of forum non conveniens was ever appropriate by way of challenge to the jurisdiction of the English court, where that jurisdiction was based upon an exclusive jurisdiction clause, with the court enforcing that exclusive jurisdiction clause effectively as a matter of contract between the parties. The decision in Donohue however made it clear that there could be a stay in the interests of justice, and thus, in a given set of facts, no enforcement of the contractual obligation; but only where there were “strong reasons for not giving effect to the exclusive jurisdiction clause” (paragraphs 24, 36 of Lord Bingham’s speech at 433, 436): in that case Lord Scott found “very strong reasons indeed” (paragraph 75). The examples that are given by Lord Bingham, at paragraph 27, are “where the interests of parties other than the parties bound by the exclusive jurisdiction clause are involved, or grounds of claim not the subject of the clause are part of the relevant dispute so that there is a risk of parallel proceedings and inconsistent decisions”. See also the examples of ‘strong cause’, which include what might be termed (within Spiliada) juridical disadvantages, given by Brandon LJ in The El Amria at 123-124.[19]If even an exclusive jurisdiction clause will not trump a stay application, then at least a similar approach must follow in respect of a stay application brought on forum non conveniens grounds in breach of an FNC waiver clause. Lord Collins of Mapesbury in UBS AG v HSH Nordbank AG [2009] 2 Lloyd’s Rep 272 at paragraph 101 set out a brief history in this regard. He pointed out that:
“In National Westminster Bank plc v Utrecht-America FinanceCo[[2001] 3 AER 733] at paragraph 23, Clarke LJ thought [an FNC waiver clause] was “fatal” to any forum non conveniens case, whereas in Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan[[2003] 2 Lloyd’s Rep 571] at para 36 Waller LJ did not treat such an agreement as decisive, but thought that it underlined the point that the jurisdiction agreement would be overridden only in exceptional circumstances.”
[20]In Bank of New York Mellon v GV Films [2009] EWHC 2338 (Comm) Field J, dealing with an exclusive jurisdiction clause coupled with an FNC waiver clause, concluded that “especially strong reasons will be required before the exclusive jurisdiction clause can be departed from on grounds founded upon convenience”.[21]It is obvious therefore that if stays can be granted even where there is an exclusive jurisdiction or an FNC waiver clause, then an application for a stay can be considered in a non-exclusive jurisdiction case, where there is no FNC waiver clause. The significant factor is that there is no breach of contract involved in the party seeking to persuade the chosen court to decline jurisdiction. However in two recent and regularly quoted judgments in the Commercial Court conclusions have been reached, severally by Gross J in Import Export (supra) and by Gloster J in Antec International Ltd v Biosafety USA Inc [2006] EWHC 427 (Comm) that, by reference to cited authority, the test is or ought to be the same, and in effect equally difficult and exceptional, in relation to a stay sought where there is a non-exclusive jurisdiction clause. Gross J so concludes at paragraph 14(ii) of his judgment at 410, as does Gloster J, by reference to a number of earlier first instance judgments, in paragraph 7(ii) of her judgment.[22]It is plain that weight must be given to the fact that the parties have chosen and/or not objected to the jurisdiction at the time of entering into the contract. Gloster J, at paragraph 7, having recited that “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” (even in the case of a non-exclusive jurisdiction clause), continued:
“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”
. This emphasis that the matters relied upon by way of inconvenience must not have been foreseeable derives most obviously from the often quoted words of Waller J in British Aerospace plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368 at 376:
“… they must point to some factor which they could not have foreseen on which they can rely for displacing the bargain which they made, i.e. that they would not object to the jurisdiction of the English court.”
[23]The “exceptional circumstances” to which Gloster J refers by way of an exception to this general rule appear to derive from the words of Rix LJ, giving the judgment of the Court of Appeal in Ace Insurance SA-NZ v Zurich Insurance Co [2001] 1 Lloyd’s Rep 618 at paragraph 62 of his judgment where, having referred to the words of Waller J and the need for unforeseeability, he seems to have in mind that a party to a non-exclusive jurisdiction clause could escape its effect not only by showing some unforeseeable matter but also by showing “some matter which lies beyond considerations of convenience and goes to a matter of justice”.[24]Mr Lord QC submits that, if a party is over the hump, or through the eye of the needle, or past the gateway of “interests of justice” or “a matter of justice”, then ordinary Spiliada principles apply. I do not accept this, and respectfully agree with Gloster J in the passage quoted above. It seems to me plain that, if there is to be an exceptional case, where forum non conveniens arguments are to prevail, a fortiori in an exclusive jurisdiction or FNC waiver case, but even in the case of non-exclusive jurisdiction, the burden on the applicant to establish such a case must be a heavier, perhaps, in exclusive jurisdiction cases, a much heavier, one than if there were no jurisdiction clause at all. If the matters were unforeseeable at the time of the contract, then the burden may be the more easily satisfied. If however the matters were foreseeable, for example if, as here, the parties entered into a series of interlinked agreements with different jurisdiction clauses, then it would not be possible to suggest – nor is it suggested here – that it was not foreseeable that a clash or contest of jurisdictions might not arise. In the absence of unforeseeability, and in this case in the absence of any impact on the parties, or on the issue of jurisdiction, of any third parties (such as featured considerably in Donohue), then the strong or very strong or exceptional grounds, said to engage the interests of justice and satisfy the necessary burden, must be all the more compelling.[25]What then are the matters relied upon by SHI? The starting point is SHI’s case that the issues primarily to be resolved in the proceedings relate to the FXPBA and to FX dealing in New York. Hence their contentions on Spiliada principles concentrate upon the geographical location of witnesses in the New York metropolitan area, Mr Said in Connecticut, the DB personnel in New Jersey, and the DB staff at the DB office in New York. But Mr Vik is based in Monaco and is plainly an international traveller, and it is far from clear (in the absence of any particularisation as yet in either the New York or London claims) that the parties to the alleged Collateral Limitation Agreement, or to any conversations or email or other correspondence which are said to evidence it, are, or are all, based in New York, as opposed to Geneva, London or Monaco. In any event, as is so often now said in commercial proceedings, international travel is not complex, and, given the fact that (as appears in paragraph 8(i) above) Mr Lord is unable to say that there are no disputes about the details of equities trading, it is far from clear that there may not need to be witnesses from London and/or Geneva in respect of the disputes identified in paragraph 8 above, particularly the allegedly fraudulent manipulation of the two accounts, and transfers between them, both physically kept in London, and the allegedly fraudulent information supplied on the website.[26]The Defendant plainly argued on their jurisdiction application (no doubt by reference to paragraphs 84 and 95 of UBS AG (supra)) that greater emphasis should be placed upon the jurisdiction clause in the FXPBA because that agreement was at the commercial centre and the parties must have intended it to apply to the claims and cross-claims now made or to be made (by way of defence to the alleged balances due on both accounts) in the London claim. In refusing permission to appeal to the Court of Appeal on paper, Sir Richard Buxton considered that “it is unreal, in the light of the total transactions between the parties, to contend … that the FXPBA had “primacy” to the exclusion of the implications as to the jurisdiction to be drawn from other agreements”. To similar effect, I am not persuaded that the geographical location of the disputes, the subject matter of these claims, is so clearly New York that the applicability of the New York jurisdiction clause to claims relating to the detail of FX trading (which may not in the event require examination – see paragraph 8(ii) above) should carry more weight.[27]The interests of justice are said to be engaged by virtue of the interlocking nature of the agreements and the multiplicity of jurisdiction clauses, so that the fact that by reference to one or more of them there is jurisdiction, even exclusive jurisdiction, in London, should be ousted by strong reasons, in the interests of justice, means that the dispute should be litigated in New York. There has been no close analysis before me of the facts, nor a detailed analysis of the contractual provisions, in particular of the FXPBA (subject to New York law) and the AMA (subject to English law), and their competing impacts upon the major complaint by SHI with regard to the exceeding of the exposure and the concealing of the true picture. In order for the pull of the New York claim to prevail over the proper and contractual location of proceedings in London pursuant to the English jurisdiction clauses (leaving aside the fact that they include exclusive jurisdiction and FNC waiver clauses), there must be powerfully persuasive arguments as to the inappropriateness of the English forum.[28]In the end, Mr Lord’s submission really came down to his emphasis that all proceedings should be resolved in the same place, and that that place should be New York and that the existence of parallel proceedings is inappropriate and indeed a potential disaster (see paragraph 17 above). However: i) The existence of another lis is not enough of itself. Even Gross J in Import Export, after emphasising the undesirability of multiplicity of proceedings, did not, on the facts of that case, regard it as sufficient to grant a stay (paragraph 24(iv)). Similarly the existence of proceedings in Florida was not regarded by Patten J in Breams Trustees Ltd v Upstream Downstream Simulation Services Inc and others [2004] EWHC 211 (Ch) as sufficient of itself to grant a stay, particularly where those proceedings were subject to an outstanding jurisdictional challenge (paragraphs 27-28 of his judgment) – as in this case. Patten J stated, at paragraph 27, that “… strong reasons do not include the mere existence of lis alibi pendens between the parties in a foreign court. If that were so, a party to a non-exclusive jurisdiction clause could avoid its agreement at will by commencing proceedings in another jurisdiction of its choice. Something more is needed”. It might be different if, as Waller J pointed out in British Aerospace (supra) at 376, the party resisting the stay had taken part in the foreign proceedings without protest, and if proceedings had reached the stage at which enormous expenditure had been incurred by both sides and the matter was accordingly nearly ready for trial. Bingham LJ in Du Pont (supra) at 593 made it clear that the outcome should not be affected by which proceeding came first, which might well be little more than an accident of timing: Toulson LJ (echoing words of Lord Brandon in The Abidin Daver [1984] AC 398 at 423G) points out in Highland Crusader at paragraph 118 that “the natural consequence of treating [which action started first] as an important factor would be to encourage parties to rush to fire the first shot”. ii) Plainly it is desirable to have all the disputes heard in one place. But it is far from clear that, if a stay is refused, that place may not be London. The English court is the first court to decide the issue of stay. The New York court may, when it publishes its judgment, come to a decision to the same effect, on the contested motions before it. In any event, as I have set out in paragraph 10 above, it is not on the evidence before me clear that, whereas all the issues can be resolved in London, as a result of the conclusion of Walker J, such is necessarily the case in New York (a factor considered material in Donohue – see paragraph 18 above).[29]I am not therefore satisfied that New York is clearly and distinctly the appropriate forum for the trial of the disputes set out in paragraph 8 above, and certainly not satisfied that there are exceptional circumstances, or strong or very strong reasons, why New York is the clearly more appropriate forum or why, exceptionally, the parties should not be kept to their bargain for English jurisdiction in relation to the four equities agreements and the AMA. I would therefore refuse this application for a stay at common law.

Owusu

[30]Argument was however addressed to me in respect of the Owusu point, to which I have referred in paragraphs 12 and 13 above. The issue is whether that decision constrains the English court from declining jurisdiction once vested in it, pursuant to Article 23 of the Regulations, in respect of a claim brought by a party itself domiciled in another Member State, but against a party that is not domiciled in a Member State, in favour of the jurisdiction of a non-Member State, itself derived from a jurisdiction clause, and said to be a more convenient forum.[31]In her judgment in Antec, Gloster J said, at paragraph 24:
“It is clearly a moot point as to whether the ECJ’s decision in Owusu predicates that a jurisdiction clause falling within Article 23 has mandatory effect, so that, once a court of a Member State is seised as a result of the invocation of such a clause, the Regulation requires the relevant court to take jurisdiction, so as to exclude any application of the forum non conveniens doctrine, even where the potential alternative jurisdiction involved is not a Member State. It could be argued that different considerations apply in relation to Article 23, which is not expressed in the mandatory terms of Article 2; and that Article 23 does not impose any requirement upon the court which is identified in the non-exclusive jurisdiction clause, to exercise such jurisdiction. It could further be argued that Article 23 preserves the concept of party autonomy in choice of court and, accordingly, the application of the forum non conveniens rule, where appropriate.”
[32]She did not need to decide the point, and therefore did not express a conclusion, as similarly did not Sir Donald Rattee in HIT Entertainment Ltd v Gaffney International Licensing Pty Ltd and another [2007] EWHC 1282 (Ch) in which again the Owusu point was raised.[33]At first instance, it has been found, or assumed, that Owusu applied so as to prevent an application for a stay on the grounds of forum non conveniens, in CNA (supra) per Langley J, in Gomez v Gomez-Monche Vives [2008] 1 AER (Comm) 973 (in relation to Article 5(6) not Article 23) per Morgan J, in Equitas Ltd v Allstate Insurance Co [2008] EWHC 1671 (Comm) per Beatson J and in Catalyst Investment Ltd v Lewinsohn [2009] EWHC 1969 (Ch) per Barling J.[34]In Winnetka Trading Corp v Julius Baer International Ltd and another [2008] EWHC 3146 (Ch), however, Norris J did not consider that Owusu prevented reliance on a stay in an Article 23 case (at paragraphs 23-25), primarily by reference to a paragraph (2.102) in Briggs and Rees Civil Jurisdiction and Judgments (4th Ed).[35]In Masri v Consolidated Contractors International (UK) Ltd and others [2009] QB 485, at paragraphs 125-6 Lawrence Collins LJ obiter, by reference to the decision of Colman J in Konkola Copper Mines plc v Coromin [2005] 2 Lloyd’s Rep 585, considered that it would be “odd” if the Regulations did not permit the English court to stay its proceedings, where an action was brought in England in breach of a jurisdiction agreement providing for jurisdiction in the courts of a non-Regulation state, but, as Lord Collins, in UBS at paragraph 103, he later recorded that it was the “prevailing view” that there is no scope for the application of forum non conveniens to remove a case from a court which has jurisdiction under the Regulation, even as regards a defendant who is not domiciled in a Member State.[36]His reference in UBS, so far as academic works are concerned, is to a work by Professor Briggs, and to various paragraphs of Dicey, Morris and Collinson theConflict of Laws (14th Ed). I have already referred to a paragraph of Briggs and Rees, which was relied upon by Norris J for the opposite conclusion, whereas, in paragraph 2.2 to 2.3 of the same work, the Editors refer to Owusu and conclude that it is “dispiriting that the significant arguments against [the conclusion that there was no power to stay the proceedings on the grounds of forum non conveniens], put to the court in Owusu, did not receive any sensible evaluation by the court”.[37]Similarly, while paragraph 12-124 of Dicey, Morris and Collins, referred to in UBS, recites that a court chosen under Article 23 has no discretion to decline jurisdiction, in another paragraph, 12-021, the Editors speculate that a stay should be permissible, at least where there is a contract containing a jurisdiction agreement for a non-Regulation state or which is already the subject of proceedings before the courts of a non-Regulation state. This speculation arises because, the Editors point out, the European Court in Owusu did not answer the second of the two questions posed to it; had it done so we would have had the answer to whether it is “inconsistent in all circumstances, or only in some and if so which”, for a court to decline to hear proceedings brought against a person domiciled in that state in favour of the courts of a non-contracting state. On any basis, suggests Barling J in Catalyst (supra) at paragraph 100, there should be a common law power to stay on grounds of abuse (e.g. in a case such as that postulated by Waller J in British Aerospace – see paragraph 28(i) above).[38]I heard argument, both by reference to those authorities, academic and judicial, and to the speech of the Advocate General in Owusu, which is submitted by Mr Lord to have gone further than, and thus not been wholly adopted by, the judgment of the European Court, not least in the circumstances that the Court declined to answer the second question, and competing submissions on certainty, discretion and party autonomy, both by reference to the Recitals to the Regulations, and to the different wording of Articles 2 and 23, and otherwise. As it happens, I too have concluded that the Owusu point does not arise as necessary for me to resolve in order to reach a conclusion on this application, because I have decided that the stay application should, in any event, fail on its own merits at common law, as explained above. Any temptation that I might have had to reach a conclusion on the Owusu point, particularly after such full argument, has been alleviated by the recent decision of the Court of Appeal in Chaitan Choudhary and others v Damodar Prasad Bhatter and others [2009] EWCA Civ 1176, which has been supplied to me by Counsel for SHI since the hearing. In that case, Sir John Chadwick, with whom the rest of the Court agreed, resolved the case without reference to the Owusu point, which was argued before the Court, and then concluded, at paragraph 54:
“The question whether there is any room at all for a Court having exclusive jurisdiction under the Judgments Regulation to stay proceedings on forum non conveniens grounds, even in a case where that jurisdiction arises in respect of a person who is not domiciled in a Member State, is a matter of controversy. It may be that the Court of Justice will take the opportunity to resolve that question on the reference which I understand to have been made by the Supreme Court of Ireland in GoshawkDedicated Receivables Ltd v Life Receivables (Ireland) Ltd [2009] IESC 7 [2009] ILPr 26. Given the conclusions I have reached on questions (ii) and (iii), it is unnecessary to resolve that question in these proceedings. I prefer to express no view. It would, I think, be inappropriate to do so.”
[39]Guided by those words, I conclude that it is inappropriate for me to do so either.

Conclusion

[40]The application is accordingly dismissed.

Cited in 11 later judgments

and 2 more of the most senior