Mr Justice Burton :
- This has been the hearing of three applications in proceedings brought in the Commercial Court by Deutsche Bank AG ("the Claimant") against three defendant companies, who are associated, and in relation to which there needs to be no differentiation in the course of this judgment so that I shall refer to them as "Highland". One application is by an associate company of the Claimant, Deutsche Bank Securities Inc ("DBSI") to be joined as a Claimant to the proceedings, one is for amendment of the Claim Form and the Particulars of Claim, largely but not wholly consequential upon such joinder if permitted, and one is by the Claimant and, if joined, by DBSI, for an anti-suit injunction against Highland in respect of proceedings commenced by Highland in the District Court of Dallas County, Texas, Cause No 08-13187 ("the Texas proceedings"). Both these proceedings and the Texas proceedings relate to, or arise out of, three Global Master Repurchase Agreements ("GMRAs"), pursuant to which, in these proceedings, the Claimants claim that Highland are indebted to them in a sum of more than $70m. I do not need to deal in this judgment at all with the details of these finance agreements. Written Notice of Margin Calls was given to Highland on 30 September 2008, and default and default valuation notices were served, respectively, on 1 and 8 October 2008, pursuant to which it was clear that proceedings would be issued by the Claimant to enforce Highland's indebtedness.
- The two relevant clauses in issue before me were as follows:
i) Each GMRA, signed, after some alterations and amendments, on 23 October 2007 by the Claimant, by the respective Highland company and by DBSI under the rubric "(as described in Annex I hereto)", contained a choice of law and jurisdiction clause by Paragraph 17 as follows:
"17. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of England. Buyer and Seller hereby irrevocably submit for all purposes of or in connection with this Agreement and each Transaction to the jurisdiction of the Courts of England.
Party A hereby appoints the person identified in Annex I hereto as its agent to receive on its behalf service of process in such courts. If such agent ceases to be its agent Party A shall promptly appoint, and notify Party B of the identify of, a new agent in England.
Party B hereby appoints the person identified in Annex I hereto as its agent to receive on its behalf service of process in such courts. If such agent ceases to be its agent, Party B shall promptly appoint, and notify Party A of the identity of, a new agent in England.
Each party shall deliver to the other, within 30 days of the date of this Agreement in the case of the appointment of a person identified in Annex I or of the date of the appointment of the relevant agent in any other case, evidence of the acceptance by the agent appointed by it pursuant to this paragraph of such appointment.
Nothing in this paragraph shall limit the right of any party to take proceedings in the courts of any other country of competent jurisdiction."
ii) Annex I to each GMRA, above referred to, was headed up as "Supplemental Terms or Conditions to the [GMRA]", and the relevant clause is at clause 5, namely as follows:
"5. The following additional supplemental terms and conditions shall apply to Transactions with respect to which Party B has dealt with an officer of … DBSI, an affiliate of Party A ("Applicable Transactions"):
(a) As a broker-dealer registered with the US Securities and Exchange Commission ("SEC"), DBSI, as agent, will be responsible for (a) effecting Applicable Transactions under the Agreement, (b) issuing all required confirmations and statements to Party A and Party B in connection with Applicable Transactions, and (c) maintaining books and records relating to Applicable Transactions as required by SEC regulations. Notwithstanding the foregoing, transfers of funds and securities in connection with Applicable Transactions shall be directly between party A and Party B (or their respective agents or custodians) and DBSI, as agent, will not be responsible for receiving, delivering and safeguarding funds and securities in connection with Applicable Transactions under this agreement.
(b) DBSI is acting in connection with Applicable Transactions solely in its capacity as agent pursuant to instructions from Party A and Party B. DBSI shall have no responsibility or liability to Party A or Party B arising from a failure by Party A or Party B to pay or perform any obligation under the Agreement, and is acting as guarantor of either Party A or Party B in connection with any obligation under the Agreement. Each of Party A and Party B agrees to proceed solely against the other to collect or recover any amounts owing to it or to enforce any of its rights in connection with or as a result of Applicable Transactions under the Agreement.
(c) Any and all notices, demands or communications of any kind relating to Applicable Transactions hereunder shall be transmitted exclusively through DBSI, notwithstanding anything to the contrary contained in Annex I, par.4 hereto …
- Paragraph 17 is, as can be seen, a non-exclusive jurisdiction clause. Clause 5 has been referred to as a "no action clause". There were further negotiations after the execution of the GMRAs, and the parties entered into Amendment Agreements on 15 August 2008, the purpose of which was to accommodate arguments that Highland had put forward in relation to the calculation of net asset value. In addition to that amendment, contained in clause 2 of each Amendment Agreement, again signed by the Claimant, the relevant Highland company and DBSI, there were the following clauses:
"4. No Modication
This Agreement is limited to the amendments to the GMRA set forth in [clause] 2 above and shall not constitute a medication, acceptance or waiver of any other provision of the GMRA.
6. Governing Law
Paragraph 17 of the GMRA shall apply to this Agreement as if that paragraph were expressly set out herein."
- On 16 October 2008, eight days after service of the default valuation notices and at the same time as representatives of the Claimant were attempting to communicate by telephone and/or email with representatives of Highland, Highland issued the Original Petition in the Texas proceedings. In those proceedings Highland sued the Claimant and DBSI. The proceedings were largely, if not wholly, defensive, in that the first relief sought was a claim for a declaration of non-liability under the GMRAs. There was a subsidiary claim of fraudulent, alternatively negligent, misrepresentation by a Mr Newell on behalf of the Claimants and DBSI, said to have been made in writing, in an email by Mr Newell, in the course of negotiations for an extension of the financing in September 2008, which would mean that Highland would be entitled to some relief or set off in relation to the claims under the GMRAs.
- A Letter Before Action was sent to Highland's solicitors in the UK by the Claimant's solicitors on 22 October, which led to a Claim Form and Particulars of Claim filed by the Claimant on 7 November 2008, and served, in accordance with the provisions of Paragraph 17, on that day. Meanwhile the Original Petition in the Texas proceedings was served on DBSI, a Delaware Corporation, on 23 October; and on the same day Highland filed in those proceedings its First Amended Petition. This considerably expanded the case sought to be brought by Highland against the Claimant and DBSI. It now alleged a fraudulent misrepresentation by Mr Newell on behalf of the Claimants and DBSI, again said to be in writing and contained in emails, in October 2007, alleged to have fraudulently induced Highland to enter into the GMRAs, such that Highland was entitled to rescission of them: there were also pleas of other tortious claims relating to the GMRAs, a breach of the contract in relation to the alleged inadequacies of the Default Valuation Notices and a claim by Highland for unjust enrichment and promissory estoppel. This First Amended Petition was served on DBSI on 24 October 2008, and DBSI filed on 17 November a motion to dismiss, alternatively stay, for forum non conveniens: after the Claimant was served with the First Amended Petition on 23 December 2008, it joined with DBSI in an amended motion to dismiss or stay the Texas proceedings on 20 January 2009.
- Meanwhile in the Commercial Court proceedings, on 16 December 2008 Highland, after acknowledging service, on 21 November 2008, indicating an intention to dispute jurisdiction, issued an Application Notice on 16 December seeking an extension of time to challenge jurisdiction. That was heard and dismissed by Tomlinson J on 29 January 2009. He was satisfied that no ground had been shown for an extension of time. Further, and in any event, there was discussion before him as to what ground there would be for challenging the jurisdiction if an extension were granted. I have seen the transcript of the argument before him, and in particular where he said that he could not see how Highland could challenge the English jurisdiction (as opposed possibly to having some ground for a stay) a factor which, he said, would weigh in his discretion as to whether or not he thought that the application, if time were extended, would have any realistic prospect of success.
- In his judgment Tomlinson J said as follows:
"11. Although this is not an occasion upon which to consider the merits of any application to challenge the jurisdiction which might be made, or might be capable of being made, it is of course a relevant factor to be weighed when the court is considering its discretion. As it seems to me, there is no very credible basis upon which the jurisdiction of the English court can be challenged. The parties have entered into an agreement which contains a non-exclusive jurisdiction clause. Although the defendants wish to suggest that that agreement was procured by misrepresentation, they do not put forward, as I under it at any rate at this stage, any arguments as to the validity of the agreement to arbitrate which are anything other than simply parasitic upon their challenge to the agreement as a whole.
12. In accordance with the fairly recent decision of the House of Lords in the Fiona Shipping case it is clear that as a matter of English law, the English court would regard itself as having jurisdiction to decide whether or not the challenge by way of misrepresentation, and so forth, could be sustained. The only conceivable argument, as it seems to me, would be likely to be an argument as to whether or not the English court should decline to exercise the jurisdiction which clearly it has which would have to be put on some form of forum non conveniens grounds.
13. As at the time when it behoved the Defendants, under the rules, to issue their application seeking a stay on those grounds they had not even served Deutsche Bank, as opposed to DBSI, with the proceedings in Texas. I should indicate that Deutsche Bank was subsequently served with those proceedings on, I think, 24th December. In consequence Deutsche Bank, as I understand it, has subsequently joined in the forum non conveniens challenge which is made by DBSI in the Texas proceedings, as a result of which the determination of that challenge by the court in Texas has now been postponed beyond the time at which originally it might have been made.
14. Turning to the substance of the matter, what the Defendants say is that if Deutsche Bank prevail in their Texan application there will no lis alibi pendens and it would then be difficult to see on what basis the Defendants could pursue a jurisdiction application in England, by which I think is meant an application to the English court to decline jurisdiction as opposed to a challenge to the jurisdiction application properly so called. That is, of course, true in that if the Texan proceedings are for some reason, to use a neutral term, discontinued, then true it is that there would not appear to be an available alternative forum. But, that, as it seems to me, is no good reason why the Defendants should have delayed making any such application as they thought appropriate, beyond the generous period already afforded to them by the Commercial Court Guide over and above the time allowed by the Civil Procedure Rules …
15. It seems to me, with the greatest respect to Mr Young, who has argued the case for the Defendants, that the existence of the parallel proceedings in Texas would be unlikely in the present circumstances, where there was a non-exclusive English jurisdiction clause, to be a particularly strong factor in any application for a stay which might be brought. In any event, I can see no reason why the Defendants could have regarded themselves as justified in delaying making their application simply because there was a pending application in Texas which might have the result that in due course there would be no parallel proceedings."
- Briefs and memoranda were served in the Texas proceedings with a view to a hearing of the motion to dismiss, and it is plain that, as a result of the arguments put forward in those documents, Highland took the decision to file its Second Amended Petition in the Texas proceedings on 29 January 2009. This had the following significant amendments:
i) It joined Mr Newell, a resident of Illinois, said to do business in Texas such as to be sufficient to serve process upon him by serving the Texas Secretary of State in Austin, alleging against him, as against all the other Defendants, the commission of fraudulent alternatively negligent representation, and other tortious remedies, arising out of the communications previously relied on, when he was acting on behalf of the Claimant and DBSI in the negotiation and/or handling of the GMRA.
ii) Perhaps prompted by the words of Tomlinson J set out above, there was now, by amendment, a specific plea (in paragraph 59) that the "plaintiffs relied on [the] Defendants' misrepresentations by entering into the Repurchase Agreements, including [Paragraph] 17". The alleged fraudulent/negligent misrepresentations were said to be that the Claimants would be prepared to agree to adjustments of or amendments to the paperwork which Highland were being pressed to sign in October 2007. The amended pleading was supported by assertions by representatives of Highland that if they had been given more time and not been rushed into signing, they would certainly not have signed agreements containing Paragraph 17. Mr Dorenbaum said in an affidavit that Highland "would not have agreed to a forum selection clause mandating London". In response to this, Mr Handyside QC, who has appeared today for the Claimant and DBSI, has pointed to the surprising feature in those circumstances, that 10 months later the Amendment Agreements of August 2008 confirmed and affirmed the existence and incorporation of Paragraph 17.
- On 4 February 2009, Judge Molberg heard and denied the motions by the Claimant and DBSI to dismiss or stay the Texas proceedings. There is included in the papers a full transcript of the hearing, in which a number of arguments was canvassed. However, as is I understand the tradition in the District Court in Dallas, the Judge gave no reasons at all when he denied the motion.
- On 6 February 2009, Tomlinson J refused permission to appeal, but extended the time for service for Highland's Defence in the English proceedings until after the outcome of any application it might make to the Court of Appeal, which has had the effect of holding up the English proceedings. An application for permission to appeal to the Court of Appeal was filed by Highland on 20 February 2009, which was supported by a witness statement, or lengthy set of submissions, by Highland's solicitors: as the application to the Court of Appeal is ex parte, the Claimant's solicitors had not seen any of these documents, notwithstanding request, until they were produced in the course of the hearing before me. One of the grounds of challenge to Tomlinson J's judgment was that he was not entitled to conclude that there was no credible basis on which to pursue a CPR Part 11 challenge to the jurisdiction, and the following paragraph is set out in that document:
"57.1 The jurisdiction clause itself is impugned in this case. This is so notwithstanding the doctrine of separability. The reason is that the Defendants in this case allege inter alia that the Claimant misrepresented that it would not seek to hold the Defendants to and/or enforce any of the clauses in the GMRAs (see paragraphs 13 to 15 above). The Defendants therefore contend that the Claimant inter alia misrepresented that it would not hold the Defendants to and/or enforce the provisions of the jurisdiction clause."
- The words "notwithstanding the doctrine of separability" are not explained. The fact is however that Mr Allen QC, who did not represent Highland before Tomlinson J nor in relation to Highland's application for permission to appeal, has, in my judgment rightly, accepted that what is there referred to without explanation as "the doctrine of separability" does indeed apply. He accepts that, notwithstanding an allegation that a contract containing a jurisdiction clause, and/or the jurisdiction clause itself, is said to have been induced by misrepresentation, nevertheless that very issue falls at English law to be resolved by the court selected by the jurisdiction clause, provided that such clause is, as this one was, wide enough to cover not only disputes under or pursuant to the agreement, but "in connection with" such agreement and/or the relevant transaction.
- He did not seek to challenge that the binding House of Lords' authority in relation to arbitration clauses, Fiona Trust and Holding Corporation v Privalov [2007] 4 All ER 951, as applied to jurisdiction clauses by the Court of Appeal in Deutsche Bank AG & Others v Asia Pacific Broadband Wireless Communications Inc and Another [Asia Pacific] [2008] 2 Lloyd's Rep 619 establishes this. Indeed his argument before me at this hearing was predicated on the basis that Paragraph 17 permits parallel proceedings, and thus implicitly that on the face of it there is jurisdiction both in this country and in Texas, which is of course inconsistent with any suggestion that there could be a proper challenge by Highland to the jurisdiction of this Court. This may well impact upon whether Highland's application for permission to appeal to the Court of Appeal, with its deadening effect on the progress of these proceedings, can still be pursued.
- On 27 February 2009 the Application Notice now before me was issued and served. In Texas, Mr Newell has entered a conditional appearance in the Texas proceedings and on 9 March 2009 he issued a motion, yet to be heard, challenging jurisdiction and seeking to dismiss the proceedings against him with prejudice. I asked Mr Allen QC at the outset of his submissions whether there was any substantive explanation, as opposed to one based upon tactics, for the joinder of Mr Newell as a personal defendant, whether by reference to any possibility of his being found liable if the Claimant or DBSI were not, or to any chance that he would prove a more solvent defendant than either of those companies, and he was unable to give any response to my question.
Application to join DBSI and to amend
- Highland's case is set out in a solicitors' letter dated 1 April 2009, which Mr Allen adopted as the basis for his opposition. Highland's case is, by reference to that letter, that:
i) No further steps should be taken to effect the English proceedings because "the Defendants are in the process of appealing the judgment of [Tomlinson J and] pending the outcome of that appeal, the Defendants' formal position remains that the English court does not have and/or should not exercise jurisdiction".
ii) DBSI's application is "brought belatedly in these proceedings and without any valid explanation for its delay … [and] is evidently tactical as it is motivated by a desire to support the Claimant's application for an anti-suit injunction rather than by any genuine desire to pursue a negative declaration … and your position takes no account of the fact that DBSI is not a party to the non-exclusive jurisdiction clause in the alleged GMRAs."
iii) The proposed amendment is in certain respects unparticularised.
- As to this:
i) Like Tomlinson J, and all the more so now in the light of Mr Allen's very proper stance described above, I do not consider that there is any realistic prospect of the Defendant's "formal" position that the English court does not have jurisdiction being pursued with success.
ii) I do not conclude that DBSI has delayed. In my judgment it was appropriate for DBSI first to have awaited the outcome of its application to dismiss the proceedings against it in Texas, success upon which would have avoided any need for it to claim a declaration of non-liability, before seeking to join into the English proceedings. Declarations of non-liability are always to an extent tactical, and indeed form the underlying basis of Highland's proceedings in Texas, at least prior to their amendment. However, given that Highland wishes to sue DBSI, a Delaware company, for fraudulent representation, if the English proceedings are to proceed, it will be convenient for Highland to have DBSI as party to these proceedings, so that a counterclaim can be brought against DBSI.
iii) The letter of 1 April 2009 asserts that DBSI is not a party to Paragraph 17. I consider the contrary, asserted by Mr Handyside QC, to be entirely arguable, given that DBSI executed the GMRAs, in which Paragraph 17 is contained, as a party, albeit limited to Annex I, but Annex I is then described, as set out above, as constituting or containing "Supplemental Terms or Conditions to" the GMRAs. But even if they were not, I conclude that it is not inappropriate for DBSI to be joined for the purpose of "supporting" the Claimant's application for an anti-suit injunction, indeed, once they become a party to the proceedings, then making that application themselves. I shall refer below to the impact on DBSI of the judgment of Morison J in Horn Linie Gmbh & Co v Americana Formas e Impresos SA & Another [The Hornbay] [2006] 2 Lloyd's Rep 44 and the conclusions to be drawn from that decision in relation to the appropriateness of an anti-suit injunction where a claim is made, in a non-contractual jurisdiction, against an agent of the contracting party: which conclusions Mr Allen QC expressly said he did not seek to challenge.
iv) The alleged lack of particularisation does not relate to any matter of primary importance in these proceedings, and can be dealt with by a request for further information in due course.
- I grant the applications.
The application for an anti-suit injunction
- It is, as set out above, common ground by reference to Fiona Trust and Asia Pacific that Paragraph 17 is a widely drawn jurisdiction clause, such that all the claims made in the Texas proceedings, whether contractual, quasi-contractual or tortious, are claims "in connection with this Agreement and each Transaction". It is also plain that English law was chosen and that the English jurisdiction was carefully selected, together with the appointment of an identified agent by each party to receive service of English process.
- It is not however an exclusive jurisdiction clause. Mr Handyside QC referred me to passages in Chapter 4 of Professor Briggs' work Agreements on Jurisdiction and Choice of Law at 4.19 to 4.23, in which he suggests that "it would be beneficial to lay aside the unhelpful terminology of 'non-exclusive jurisdiction agreement', and to focus instead on precisely what obligations the parties wish to create and impose on each other."
- I do not find this entirely helpful, in the sense that it is important to focus, for the purpose of construction, on whether a jurisdiction clause is exclusive or non-exclusive, because each has different consequences in terms of the 'mandatoriness' of its provisions. However, once it is clear that the jurisdiction clause is exclusive rather than non-exclusive, it is certainly helpful that Professor Briggs should have pointed out in that work that there is a number of different ways in which the provisions of a non-exclusive jurisdiction clause can be expressed.
- The non-exclusive jurisdiction clause in the case upon which emphasis was placed by Mr Allen QC, Royal Bank of Canada v Cooperative Centrale Raiffeisen-Boerenleenbank BA ["Royal Bank of Canada"] [2004] 1 Lloyd's Rep 471 was somewhat unusual in its wording. The clause is set out at 474 and it includes the words "nor will the bringing of proceedings in any one or more jurisdictions preclude the bringing of proceedings in any other jurisdiction". This was, or could be interpreted as, a clause which sanctioned parallel proceedings in multiple jurisdictions. That is not the norm. Mr Allen QC helpfully produced for me a schedule of the clauses in issue in all, or most, of the authorities relied upon by the parties before me. In British Aerospace plc v Dee Howard & Co ["British Aerospace"] [1993] 1 Lloyd's 368 and Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan & Another ["Sabah"][2003] 2 Lloyd's Rep 571 there was an issue as to whether the clause in question was non-exclusive, and the courts resolved that they were. In the other authorities there is no doubt that the relevant clauses were non-exclusive.
- Mr Allen QC sought to submit that the effect of Paragraph 17 in this contract was in some way different from other non-exclusive jurisdiction clauses, because of the express words at the end of the paragraph "nothing in this paragraph shall limit the right of any party to take proceedings in the courts of any other country of competent jurisdiction". However, Mr Handyside QC pointed out that, without that sentence, the clause would otherwise have been an exclusive jurisdiction clause, so that, in his submission, it was simply the addition of those words which converted the clause into a non-exclusive jurisdiction clause. I have no doubt that there was nothing different in Paragraph 17 from the form of wording used in the clauses in Mercury Telecommunications Ltd v Communication Telesystems International ["Mercury"] [1999] 2 All ER (Comm) 33, BP plc v National Union Fire Insurance Co & Others ["BP"] [2004] EWHC 1132 (Comm), Antec International Ltd v Biosafety USA Inc ["Antec"] [2006] EWHC 47 (Comm) and HIT Entertainment Ltd & Others v Gaffney International Licensing Pty Ltd ["HIT"] [2007] EWHC 1282, namely:
"This agreement shall be governed by and construed in accordance with English law and the parties hereby submit to the non-exclusive jurisdiction of the English courts."
The sentence at the end of Paragraph 17 simply spells out what is otherwise shorthand in the words "non-exclusive jurisdiction".
- By virtue of the jurisdiction being non-exclusive, there is no breach of contract if either contracting party takes proceedings elsewhere. The question then arises as to what is to happen if that occurs, and there are proceedings in parallel, one in the selected jurisdiction and one in a non-contractual, but otherwise competent, jurisdiction. I have no doubt that the words of Bingham LJ, as he then was, in Du Pont v Agnew [1987] 2 Lloyd's Rep 585 at 589 are wholly apposite:
"The policy of the law must nonetheless be to favour the litigation of issues only once, in the most appropriate forum."
- Effectively, to usurp the words of George Orwell, 'one litigation good, two litigations bad'. Mr Handyside submits that there is an implied term in such a non-exclusive jurisdiction clause that, once there exist parallel proceedings, then (absent some special circumstances, to which I shall return) the party which has commenced in the non-contractual jurisdiction must desist, such implied term being imported by virtue of commercial good sense. Mr Allen QC submits that there is no such implied term. I am not persuaded that the matter turns on whether there is an implied such term. It seems to me that it is a matter for the courts. There might exceptionally be a situation in which it is not inappropriate or oppressive for there to be two sets of proceedings in respect of the same contract, perhaps, for example, if there are cross claims relating to different subject matters and involving different witnesses, but I must examine what the approach of the courts is in respect of the problem of parallel proceedings where there is a non-exclusive jurisdiction clause.
- It seems that the approach in Texas is by way of considerable emphasis on, if not conclusive significance of, what is called the "first filed rule" by reference to Perry v Del Rio 66 SW. 3d 239, at 252 (Tex.2001). That is certainly one approach, and it is no doubt the approach which many, if not most, jurisdictions would take in relation to parallel proceedings where there is no jurisdiction clause. That is however not the approach of the English courts, where there is a jurisdiction clause. It would pay no regard to the contractual arrangements made between the parties.
- The approach of the English courts is that an anti-suit injunction can be granted if required by the "ends of justice" (Donohue v Armco Inc & Others [2002] 1 Lloyd's Rep 425 at 431 per Lord Bingham). Although it is right that there are dicta, by Evans Lombe J, giving the approval of the Court of Appeal to submissions of Counsel in Royal Bank of Canada at 475, and by Rix J in the Commercial Court in Credit Suisse at 781, that the duplication of litigation does not in itself make it in the interests of justice to injunct foreign proceedings, and that the fact that there are concurrent proceedings does not in itself mean that the conduct of either party is vexatious or oppressive, the words of Bingham LJ in Du Pont at 589 remain important guidance. The clue is in the existence and interpretation of the guidelines of Societe Aerospatiale v Lee Kui Jak [1987] AC 871 at 896 per Lord Goff, namely that:
"Where a remedy for a particular wrong is available both in the English … court and in a foreign court, the English … court will, generally speaking, only restrain the plaintiff from pursuing proceedings in the foreign court if such pursuit would be vexatious or oppressive."
- Mr Allen QC, relying as he does upon Royal Bank of Canada, points to the words of Evans Lombe J in the Court of Appeal at 478 paragraph 25, whereby "Rabobank's pursuit of the New York proceedings to a hearing and judgment, being permitted by the terms of the agreement between the parties, cannot constitute a breach of contract by Rabobank nor vexatious or oppressive conduct." However, in my judgment, Royal Bank of Canada is not a safe basis for Mr Allen QC's submissions. It is, if it is to be relied upon for the purpose which Mr Allen requires, out of line with the earlier Court of Appeal decision of Sabah, cited in Royal Bank of Canada and not doubted, and a stream of persuasive first instance authorities which postdated and have followed Sabah. It is clear to me that the words of Evans Lombe J, which I have just quoted, are not, and cannot be intended to have been, a statement that no conduct which is not in breach of contract can be oppressive and vexatious. The matter must be examined against the background of the particular jurisdiction clause in that case, which I have set out above, and which appears expressly to permit multiple proceedings. Further, it is clear that, in that case, it was not argued that, as per Sabah, the test should be regarded as something other than the balancing of advantages between the two jurisdictions. As Evans Lombe J points out in paragraph 7(iii) at 474, the fact that Rabobank could "point to a legitimate juridical advantage in pursuing proceedings in New York" was not the subject of any appeal.
- The test which I am entirely satisfied is established in British Aerospace (per Waller J at 372, 376) and Mercury (per Moore-Bick J at 40G-J), and approved in Sabah by the Court of Appeal per Waller LJ at paragraphs 36-7, 42, and then further applied and followed in BP per Colman J at paragraph 51, in Antec per Gloster J at paragraph 7 and in HIT per Sir Donald Rattee at paragraph 18, makes absolute sense, applies to the full the fact that the parties have selected a contractual jurisdiction and pays due regard to it, and suitably reflects and applies the guidance in Donohue, Du Pont, and Societe Aerospatiale. Where there is a contractual non-exclusive jurisdiction clause, a party will ordinarily act vexatiously and oppressively in pursuing proceedings in the non-contractual jurisdiction in parallel with proceedings in the contractual jurisdiction, unless there are exceptional reasons, not foreseeable at the time when the contractual jurisdiction was agreed. It is also clear from binding authority that this question arises irrespective of which set of proceedings started first: see Du Pont per Bingham LJ at 593, Sabah per Waller LJ at 582 and in addition per Colman J in BP at para 51.
- The principle is most clearly set out by Waller LJ in Sabah, as follows:
"36. In the instant case, on any view, the GOP agreed to submit to the jurisdiction of the English Court. Furthermore, it appointed agents for the purpose of service in England, and it agreed to waive any objection that any action brought in England was being brought in an inconvenient forum. It seems to me that it cannot have been the intention of the parties that if proceedings were commenced in England, parallel proceedings could be pursued elsewhere unless there was some exceptional reason for doing so. It certainly cannot have been contemplated that convenience could count as a reason for pursing proceedings in a country other than England. In particular, where England has been chosen as a neutral jurisdiction by an entity, Sabah, a Pakistan company with Malaysian shareholders, and the state of Pakistan, it cannot have been contemplated that parallel proceedings would be pursued in the Courts of Pakistan simply on the basis that that forum is a convenient forum.
37. It was thus in my view clearly a breach of contract to seek to prevent Sabah commencing proceedings in the agreed jurisdiction. Furthermore, if Sabah had already commenced proceedings in England before commencement of the proceedings in Pakistan, it would in the context of this particular clause clearly have been vexatious for those proceedings in Pakistan to have been commenced if the only basis for bringing the same was on the ground of forum conveniens. It also seems to me that if proceedings ere commenced in Pakistan simply to attempt to frustrate the jurisdiction clause, such conduct would be contrary to the spirit of the jurisdiction clause and vexatious.
…
42. As already indicated, it seems to me that if proceedings had been commenced in England before the GOP commenced their proceedings in Pakistan, then the commencement of such proceedings in Pakistan would be vexatious and oppressive unless the GOP could show some exceptional reason why parallel proceedings were justified. The GOP could not show any exceptional reasons. They rely simply on matters of convenience, all of which would have been in the contemplation of the parties when they agreed the clause that they did. To have sought an injunction to seek to prevent English proceedings being the parallel proceedings in those circumstances would have demonstrated even more clearly that the GOP's conduct was oppressive and vexatious. Does the fact that the GOP commenced their proceedings first change the position? In my view it does not. The proceedings were commenced, it is plain, a pre-emptive strike, and in the hope of preventing Sabah starting proceedings in the country to which both parties had agreed. The only basis for suggesting that the proceedings should be allowed to continue is that Pakistan is a convenient forum. It simply cannot have been contemplated that if proceedings were commenced in the forum each had agreed as convenient, parallel proceedings would still take place in Pakistan."
- The consequence of this is set out by Gloster J at paragraph 7(iii) in her judgment in Antec.
"7(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 relive 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 …"
- The issue then for me to decide is whether, on the facts of this case, to leave both sets of proceedings running in parallel, or to enjoin Highland from continuing with the Texas proceedings on the basis that it would be vexatious and oppressive for them to do so in accordance with these authorities. Mr Handyside QC submits that there is evidence that Highland has acted vexatiously and oppressively quite apart from the conclusions to be drawn from these authorities:
i) He submits that it is plain that Highland in October 2008, knowing of the impending issue of proceedings in accordance with the contractual terms in London, raced off to Texas in order to seek to take advantage of the Texas 'first filed rule'.
ii) He submits that the joinder of DBSI in the Texas proceedings was purely tactical, in order to bring in a party not otherwise relevant and only playing the express role of agent for the Claimant at all times, in order to seek to get round the jurisdiction clause. He asserts that there is a breach of the no action clause, clause 5 referred to above, in that regard. Mr Allen QC denies that there is a breach of clause 5: he does not admit that clause 5 applies because, he submits, Mr Newell was not an officer of DBSI for the purpose of clause 5, even though it was he (as Managing Director, Structured Product Sales) who acted as agent for DBSI, and for the Claimant, in negotiating and agreeing the GMRAs, when indeed it is suggested to be through him that the various fraudulent/negligent misrepresentations have been made, and Mr Allen QC also submits that the no action clause would not extend to fraud, although Mr Handyside QC submits the contrary, by referencing to National Westminster Bank plc v Rabobank Nederland [2007] EWHC 1056 (Comm). Whether or not the pursuit of DBSI amounts to a breach of clause 5, it does seem at the very least arguable that the principles of The Hornbay, to which I referred above, and whose applicability, as I have indicated, Mr Allen QC did not challenge, apply. In that case an anti-suit injunction was granted by Morison J, in circumstances in which the defendants unsuccessfully resisted a claim by shipowners in London, the contractual forum, for an anti-suit injunction, when, in order to seek to avoid the consequences of a jurisdiction clause, their claim in Colombia, which related to the contract, was brought in proceedings, not against the shipowners, but against the shipowners' agents.
iii) Mr Handyside QC further relied as evidence of vexation and oppression upon the joinder of Mr Newell in Texas as a defendant to be made personally liable in respect of alleged misrepresentations plainly made by him, if made at all, as agent for two perfectly solvent parties already the subject of suit.
- These features are on any basis arguable as indications of vexatious or oppressive conduct. However, I do not need to rest my decision upon them. I am satisfied to comply with authority binding upon me, which I have summarised above. There is a contractual but non-exclusive jurisdiction in the English courts. There are parallel proceedings. This Court does not accept that a 'first filed rule' is appropriate in the context of a contractual non-exclusive jurisdiction, but in any event the principles guiding this Court are not the same as those applied in Texas.
- The problem on any basis has to be resolved by virtue of the existence and intended pursuit of two parallel proceedings. The test is not the question of the balance of convenience or the availability of juridical advantages. Highland suggested in evidence that a trial might get on faster in Texas than here. Of course at present the English proceedings have been stalled pending the outstanding application for leave to appeal to the Court of Appeal. In the light of what I have set out above, I am far from of the view that there is or remains merit in that application, but in any event it is a self-inflicted delay on the part of Highland. But for such delay, neither Counsel demurred from the suggestion that the Commercial Court is well able to deal with this case in at least as short a timescale as that suggested in Texas. In any event, none of the other juridical advantages, such as the availability of jury trial or punitive damages, weigh in the balance, in the light of my conclusion that the correct test is that enunciated in Sabah and followed in so many other decisions. Mr Handyside QC accepted that there could be circumstances not foreseeable at the time of the contract which might justify proceedings in a different forum from the contractually selected one. For example, a proposed defendant might unforeseeably, and subsequent to the contract, have transferred its business and/or assets to a jurisdiction not amenable to enforceability of an English judgment. But absent some unforeseeable change since the contract, none of which is suggested here, in my judgment, when it comes to deciding whether it is vexatious or oppressive to continue two sets of proceedings in parallel, it is vexatious and oppressive, in the absence of any such exceptional unforeseeable circumstances, for a party to pursue proceedings in the non-contractual forum.
- I am urged to consider, and I do, questions of comity. It is plain that Judge Molberg was told that this application would be made. It is suggested that the learned Judge has resolved in Highland's favour one or more of the arguments being addressed before me, but of course he will have resolved those matters by reference to Texas law, and in any event, as I do not have any reasons for the judgment, it is difficult for any question of issue estoppel to arise. I have no doubt however, by reference to British Aerospace at 372 and Sabah at 581 that, particularly where the tests being applied are different, there is no derogation from comity by virtue of my granting this anti-suit injunction against Highland.
- The question then arises as to whether such injunction should extend to continuation of the Texas proceedings, or whether such injunction should be limited to pursuit of the Claimant in the Texas proceedings. I conclude it to be at least strongly arguable, as set out above, that DBSI are engaged by the non-exclusive jurisdiction clause and became a party to it. However, quite apart from that, I am satisfied that the principles in The Hornbay entitle me to conclude that, in practice, the action in Texas, so far as it concerns joinder of agents or servants of the Claimant for the purpose of enforcing relief in connection with the contract, all of which would be justiciable in the United Kingdom, that the injunction should relate also to suit against DBSI. The same principle would apply to Mr Newell as a servant or agent. No substantive ground has been put forward as to why or whether there is any claim against him which is not in reality one made against his principals/employers and in connection with the Agreements and Transactions, and in the light of The Hornbay I grant an injunction in favour of the Claimant and DBSI in relation to pursuit of Mr Newell also.
- Mr Allen QC made submissions in relation to delay by the Claimant and/or in the bringing of this anti-suit injunction. I have already indicated that I do not see anything inappropriate in the decision to seek first the resolution in the Texas proceedings before bringing the anti-suit injunction in the subsequently issued proceedings in the Commercial Court. In so far as Highland will have failed in its attempt to avoid the consequences of the non-exclusive jurisdiction clause once the London proceedings commenced, costs, which appear to have been substantial, will have been wasted by them in Texas. However, there may well be some costs which, although expended in the Texas proceedings, may be of use in relation to the merits of the case now to proceed in London. I do not know what provision would be available for arguments as to costs in Texas. I conclude, after hearing both Counsel, that the sensible course for me would be to preserve the possibility of some argument as to costs in the Texas proceedings, dependent on the outcome on the merits in the London proceedings. The consequence would be that the order I make is in terms of subparagraphs (a) and (b) of the anti-suit injunction, but so far as concerns the mandatory injunction relating to steps to be taken by Highland in relation to the Texas proceedings, rather than order that they must take steps to terminate or discontinue them, I propose to order that they should take steps to have those proceedings stayed until after the outcome of the proceedings in the Commercial Court. At that stage the impact, if any, as to costs, can be further considered.
