Pan Ocean Co. Ltd v China-Base Group Co. Ltd & Anor [2019] EWHC 982 (Comm)

“70 An opportunity to clarify the test arose inGoldman Sachs. Lord Sumption (giving a judgment with which Lord Hodge, Lady Black, Lord Lloyd-Jones and Lord Mance agreed), essentially repeated his formulation inBrownlie. To the extent that there was disagreement inBrownlieabout the reformulation of theCanada Trusttest the Supreme Court has now spoken with a single voice and the route forward lies with that reformulation. In paragraph [9] Lord Sumption stated: "9. This is, accordingly, a case in which the fact on which jurisdiction depends is also likely to be decisive of the action itself if it proceeds. For the purpose of determining an issue about jurisdiction, the traditional test has been whether the claimant had "the better of the argument" on the facts going to jurisdiction. InBrownlie vFour SeasonsHoldings Inc [2018] 1 WLR 192, para 7, this court reformulated the effect of that test as follows: "… (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it." It is common ground that the test must be satisfied on the evidence relating to the position as at the date when the proceedings were commenced." 71 Any dispute about whether the three-limbed test is obiter has accordingly now vanished. The test has been endorsed by a unanimous Supreme Court. But the Court has not gone further than inBrownlieand has not expressly explained how the test works in practice nor as to what is meant by " plausible " nor how it relates to " good arguable case " nor how the various limbs interact with the relative test inCanadaTrust.”

“81 This case concerns whether AT1 and Ezion were party to an exclusive jurisdiction clause set out in terms and conditions attached to the Purchase Order. It is common ground thatArticle 25 of the Recast Brussels Regulation, on prorogation of jurisdiction, applies.1This provision, in its earlier incarnations,2did not apply unless at least one of the parties was domiciled in the EU. But it now applies regardless of the domicile of the parties. InBols(ibid) the Privy Council cited earlier case law of the Court of Justice3which held that the relevant provisions (nowArticle 25) imposed on the court the duty of examining " whether the clause conferring jurisdiction upon it was in fact the subject of a consensus between the parties " and this had to be " clearly and precisely demonstrated ". The purpose of the provisions was to ensure that the " consensus " between the parties was " in fact " established. The Court of Justice has however recognised that the manner of this proof is essentially an issue for the national laws of the Member States, subject to an overriding duty to ensure that those laws are consistent with the aims and objectives of the Regulation. 82 The Privy Council inBolsheld that the domestic good arguable case test had to be read in the light of the " clear and precise " evidence requirement and in this manner it was consistent with the purpose behind the EU Regulation. Mr Cooper QC relied upon this to support his argument that, howsoever one cast the test, it nonetheless was not the minimal test advanced by the appellant. He pointed out that inBrownliethe judgment inBolshad been cited with apparent approval (see paragraph [62] above). An obligation to adduce clear and precise evidence to show jurisdiction was a test importing weight and substance. It was not for instance a test to be equated with that for summary judgment (as the Judge seemed to conclude in paragraph [83] of his Judgment). Mr Nolan QC for the appellant in an attempt to side-line the clear and precise standard argued that it did not apply because the rationale behind it (as explained in the case law of the Court of Justice) was that exclusive jurisdiction agreements amounted to a derogation from the normal rules determining jurisdiction, such as a defendant's domicile, and as a derogation from a basic norm it had to be strictly construed. This was why the arguably high hurdle of clear and precise had been introduced. But that logic was, he said, no longer apposite since the Recast Brussels Regulation now applied irrespective of a defendant's domicile. Now that the rules had changed the logic behind the " clear and precise " rule no longer arose. Mr Cooper QC retorted that this was a distinction without a difference.Article 25did not (could not) apply two rules: one where the defendant was an EU company and one where it was not. There had to be a single test. 83 The Supreme Court inBrownlieand inGoldman Sachsseemingly approvedBolsbut did not address how the new three-limbed formulation took into account the provisions of the Recast Brussels Regulation, no doubt because it did not specifically arise on the facts of those cases. I agree with the analysis of Mr Cooper QC on this. I consider that in a case such as the present where the background legal context isArticle 25some regard must be paid to the fact that, as was held inBols, the " clear and precise " test must be taken into account as a component of the domestic test and the melding of the two is necessary to ensure that domestic law remains consistent with the Regulation. As with so much of the language used in this context, that which is " clear and precise " is not easy to define with precision. But I would rely upon it as providing at least an indication of the quality of the evidence required. It supports the conclusion that the prima facie test (in limbs (i) and (ii)) is a relative one; and in so far as the court cannot resolve outstanding material disputes (limb (iii)) it affords an indication as to the sort of evidence that a Court will seek. I would not go much beyond this though.”

“[29]Article 17 of the Convention sets out to designate, clearly and precisely, a court in a Contracting State which is to have exclusive jurisdiction in accordance with the consensus formed between the parties, which is to be expressed in accordance with the strict requirements as to form laid down therein. The legal certainty which that provision seeks to secure could easily be jeopardised if one party to the contract could frustrate that rule of the Convention simply by claiming that the whole of the contract was void on grounds derived from the applicable substantive law. (my emphasis) [30] That solution is consistent not only with the approach taken by the Court in Effer v. Kanter , in which it ruled that the plaintiff may invoke the jurisdiction of the courts of the place of performance in accordance with Article 5(1) of the Convention even when the existence of the contract on which the claim is based is in dispute between the parties, but also with the judgment inCase 73/77, Sanders v. Van der Putte, in which the Court held, in connection with Article 16(1) of the Convention, that, in the matter of tenancies of immovable property, the courts of the State in which the immovable property is situated continue to have jurisdiction even where the dispute is concerned with the existence of the lease. [31] It must be added that, as the Court has held, it is for the national court to interpret the clause conferring jurisdiction invoked before it in order to determine which disputes fall within its scope(Case C-214/89, Powell Duffryn). Consequently, in the instant case it is for the national court to determine whether the clause invoked before it, which refers to “any dispute” relating to the interpretation, performance or “other aspects” of the contract, also covered any dispute relating to the validity of the contract. [32] The answer to the national court's third question must therefore be that the courts of a Contracting State which have been designated in a jurisdiction clause validly concluded under the first paragraph of Article 17 of the Convention also have exclusive jurisdiction where the action seeks in particular a declaration that the contract containing that clause is void.”

“Formal requirements 55 Even if the parties did agree to confer jurisdiction on the English Court, the defendants say that the requirements as to formality inart.23are not satisfied in this case. They contend that there is no agreement in writing or even evidenced in writing within art.23(a). They point out that the defendants did not produce any document indicating that they had agreed to confer jurisdiction on the English Courts and did not sign any such document produced by someone else. Moreover, they say that such documents which were produced by Marint, namely the recap and the pro forma TOWHIRE, were quickly challenged by the defendants on the basis that the documents sought to include terms which had not been agreed. 56 Under art.23(a) all that is required is that an oral the agreement be “ evidenced in writing ”

“1. If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either: (a) in writing or evidenced in writing; or [(b) and (c) are omitted]” 37 The purpose ofArticle 23is to ensure that the parties have actually consented to the choice of jurisdiction. The decisions of the ECJ (now the CJEU) make it clear that, to be effective for the purpose ofArticle 23, an agreement to confer jurisdiction must establish consensus between the parties “clearly and precisely”:Case C-24/76 Estasis Salotti v RÜWA Polstereimaschinen GmbH [1977] 1 CMLR 345andcase C25/76 Galleries Segoura SPRL v Rahim Bonakdarain [1976] ECR 1851. 38 There is, however, a measure of flexibility. Although (seeCase C-313/85 Iveco Fiat SpA v Van Hool NV [1986] ECR 3337) the ECJstated that “the purpose of the formality requirement [inArticle 23] is to ensure that the consensus between the parties is in fact established”, an oral agreement conferring jurisdiction can suffice. This will be so where the oral agreement is later confirmed in writing by one party and the other party has raised no objection in sufficient time:Case C-221/84 Berghoefer GmbH v ASA SA [1986] 1 CMLR 13. Briggs on Civil Jurisdiction and Judgment (5th ed 2009, ed Rees) 178 states that the formal requirements “are a means to an end, and are not an end in themselves”, and “the only question, sight of which must not be lost, is that the formal requirements are there to ensure that there was consensus. If the consensus can be clearly and precisely established by other means, they serve no additional function, and there is no further need to consider them”. 39 Secondly, written consensus may exist in the absence of a binding contract: see Fentiman, International Commercial Litigation (2010) at 2.40, giving a non-binding memorandum and an unsigned version of a contract which requires a signature as examples. 40 Despite this measured flexibility, the jurisprudence of the ECJ regards the departures from the general rule of domicile-based jurisdiction, includingArticle 23, as derogations. In that sense they are regarded as exceptions to the general rule, although to regard jurisdiction based onArticle 23as exceptional may (see Fentiman, International Commercial Litigation (2010) 2.42) risk placing an obstacle to giving effect to party autonomy. 41 There are also statements that departures from the general rule of domicile-based jurisdiction should be strictly construed (seeCase C-24/76 Estasis Salotti v RÜWA [1977] 1 CMLR 345at [7] and Bank of Tokyo-Mitsubishi v Baskan Gida Sanayi Pazarlama [2004] EWHC 945 (Ch) at [191] per Lawrence Collins J, as he then was) and interpreted in “keeping with the spirit of certainty”

“7 There is no disagreement about the legal principles which govern the Owner's application for an anti-suit injunction and VSA's challenge to the court's jurisdiction. Taking the latter first, under the Lugano Convention VSA must be sued in Switzerland, where it is domiciled, unless the parties have made an agreement conferring jurisdiction on the English Court which satisfies the requirements of Article 23 of the Convention. Article 23(1) provides: “If the parties, one or more of whom is domiciled in a member state, have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise.

‘where a jurisdiction clause appears in the conditions printed on a bill of lading signed by the carrier, the requirement of an “agreement in writing” within the meaning of Article 17 of the Convention is satisfied only if the shipper has expressed in writing his consent to the conditions containing that clause, either in the document in question itself or in a separate document. It must be added that the mere printing of a jurisdiction clause on the reverse of the bill of lading does not satisfy the requirements of Article 17 of the Convention, since such a procedure gives no guarantee that the other party has actually consented to the clause derogating from the ordinary rules of the Convention.’ [4]In other words, the acceptance of the other party’s written jurisdiction provision had to be in writing or evidenced in writing. If, therefore, a party signs a document which refers plainly enough to trading conditions which themselves contain an agreement on jurisdiction, this should satisfy the requirements of the Article. This is entirely consistent with the contention above, that it is the consent to or acceptance of it by the party to be to bound it, rather than the statement (by the other party) that a court is to have jurisdiction, which is required to be in writing. Though a party may propose written terms to another, these including among them an agreement on jurisdiction, the crucial question is whether the party against whom that jurisdiction is to be asserted signified his acceptance in a form which complies with what is now Article 25(1). [5]However, for every case in which formality is insisted on, there will be another in which it is inappropriate to do so. In Berghöfer GmbH & Co KG v. ASA SA the Court accepted that an oral agreement, later confirmed in writing by one party and not apparently objected to by the other, could in principle be taken to satisfy what is now Article 25(1), even though there was no written consent from one of the parties. The basis for this result was thought to lie in the general principle of good faith: that it would in those circumstances be bad faith or bad form for the party seeking to take a point about the lack of formality to do so. In Iveco Fiat SpA v. Van Hool NV it was held that, where parties to a written contract which had contained an agreement on jurisdiction and by which is was clear that each was bound, continued to deal with each other without the written renewal which the contract provided for, the agreement on jurisdiction in the original contract continued to bind. The Court observed, in as clear a statement of principle as one may hope to find, that the ‘sole purpose of the formal requirement… is to ensure that the consensus between the parties is in fact established and it imposes on the national court the duty of examining whether the clause conferring jurisdiction upon it was in fact the subject of such a consensus, which must be clearly and precisely demonstrated’

“Mr. Ross-Munro put in the forefront of his submission that the question to be determined had to be decided not by reference to the law of Alberta but by reference to the English rules of conflict of laws. This submission, in our judgment, is plainly correct. Mr. Pain did not seek to contend otherwise. Accordingly, as Cairns L.J. pointed out at an early stage of the argument, the question which of the conflicting views as to the law of Alberta is correct is irrelevant. In any event, any conflict could not be satisfactorily resolved on the hearing of this appeal, even if we were minded to grant the plaintiff the extreme indulgence of adducing this further evidence at this late stage. It is not necessary, therefore, to say anything further on this issue.”

“The argument to the contrary which was accepted by Bingham J. was that, if the court were to entertain the application for a stay, it would be assuming that it had jurisdiction to entertain the action. With the greatest respect to the learned judge, I agree with Robert Goff L.J. in the Court of Appeal that that view is mistaken. The fallacy is in confusing two different kinds of jurisdiction; the first is jurisdiction to decide the action on its merits, and the second is jurisdiction to decide whether the court has jurisdiction of the former kind. The distinction was explained inWilkinson v.Barking Corporation [1948] 1 K.B. 721, 725 by Asquith L.J. who said: “The argument we are here rejecting seems to be based on a confusion between two distinct kinds of jurisdiction: the Supreme Court may, by statute, lack jurisdiction to deal with a particular matter — in this case matters including superannuation claims under section 8 — but it has jurisdiction to decide whether or not it has jurisdiction to deal with such matters. By entering an unconditional appearance, a litigant submits to the second of these jurisdictions (which exists), but not to the first (which does not).”

“In Henry v Geoprosco International [1976] QB 726 the Court of Appeal decided that, as a matter of authority (in particular Harris v Taylor [1915] 2 KB 580 CA), a defendant was to be taken to have submitted to the jurisdiction of a foreign court if he voluntarily appeared to invite that court in its discretion not to exercise jurisdiction it had under its own local law (p.747A). The Court of Appeal further determined that there was a voluntary appearance if the defendant protested against the jurisdiction of the foreign court, but that protest took the form of a conditional appearance which was converted automatically by operation of law into an unconditional appearance if the decision on jurisdiction went against the defendant (p.748G). The court left open the question whether an appearance solely to protest against the jurisdiction of the foreign court would be a voluntary submission to that court (p.747E).”

“In my judgment, where an injunction is sought to restrain a party from proceeding in a foreign Court in breach of an arbitration agreement governed by English law, the English Court need feel no diffidence in granting the injunction, provided that it is sought promptly and before the foreign proceedings are too far advanced. I see no difference in principle between an injunction to restrain proceedings in breach of an arbitration clause and one to restrain proceedings in breach of an exclusive jurisdiction clause as in Continental Bank N.A. v. AeakosCompania Naviera S.A., [1994] 1 W.L.R. 588. The justification for the grant of the injunction in either case is that without it the plaintiff will be deprived of its contractual rights in a situation in which damages are manifestly an inadequate remedy. The jurisdiction is, of course, discretionary and is not exercised as a matter of course, but good reason needs to be shown why it should not be exercised in any given case.”

“both general discretionary considerations and the need for comity required that an application for an anti-suit injunction had to be made at an early stage; that the longer an action continued without any attempt to restrain it the less likely a court was to grant an injunction; that an applicant who did not apply for an injunction until after judgment was given in the foreign proceedings was unlikely to succeed unless he could not have sought relief before the judgment was given, either because the relevant agreement was reached post-judgment or because he had no means of knowing that the judgment was being sought until it was served on him; that when considering whether to grant an anti-enforcement injunction the court would have regard to all relevant considerations, including the extent to which the respondent had incurred expense prior to any application being made, the interests of third parties, including in particular the foreign court, and the effect of granting an anti-enforcement order; that time during which the foreign jurisdiction was challenged fell to be taken into accont when considering delay; that it was not a precondition to the refusal of an injunction that the respondent should establish detrimental reliance; and that, in the circumstances, it had been open to the judge to hold that in the light of the claimant's delay injunctive relief should be refused”