04
Oct
21
Articles, Travel & Cross Border Claims
The Weekly Roundup: the Smug Edition

Regular readers will know that we at 1CL are never smug. Well, occasionally. And this is one of those occasions. The Legal 500 rankings for 2022 are now out, and, quite honestly, we’re chuffed with them. Fancy having ‘no weaknesses’, being ‘a tour de force’, and boasting a ‘superb intellect’, whilst also being ‘charming and impressive in court’ – and that’s just what they said about John Ross QC. The 1CL rankings are here, but just as importantly, we’re delighted to see so many of our good friends, both at the UK Bar and at law firms, listed across the rankings. Congratulations to all, and many heartfelt thanks for the glowing testimonials, although we felt the ‘perhaps’ in ‘perhaps the best travel law set’ was unnecessary. Still, we’re not ones to complain, as you know.

 

AIG Europe SA v John Wood Group plc [2021] EWHC 2567 (Comm): The English Torpedo

In AIG Europe SA v John Wood Group plc [2021] EWHC 2567 (Comm), the High Court continued anti-suit injunctions restraining the defendant from pursuing proceedings in Canada in breach of an exclusive jurisdiction clause and a valid arbitration agreement.

The background to the proceedings was the failure of a pipeline in Alberta, Canada which resulted in the leak of 5,000 cubic meters of bitumen into the environment. Wood Group incurred defence costs in respect of a damages claim brought against it as a result of the pipeline’s failure. In turn, Wood Group commenced proceedings in Canada in relation to its entitlement to an indemnity under its insurance policy for those defence costs.

Wood Groups insurer Chubb’s position was that the insurance policy contained an exclusive jurisdiction clause in favour of the English court and sought an injunction to prevent Wood Group commencing proceedings in Canada, which would breach that provision.

In finding for Chubb, the Judge considered that there was a high degree of probability that the policy did contain an exclusive jurisdiction clause in favour of the English court and that there had been no failure in its duty of full and frank disclosure when it initially obtained the injunction on an ex-parte basis.

The case is a useful reminder of the legal principles concerning the grant of anti-suit injunctions as those summarised in Catlin Syndicates Ltd v AMEC Foster Wheeler USA Corp [2020] EWHC 2530 (Comm):

(a)   The touchstone is what the ends of justice require;

(b)   The Court has the power to grant an interim injunction “in all cases in which it appears to the court to be just and convenient to do so”;

(d)   The jurisdiction to grant an anti-suit injunction must be exercised with caution;

(e)   As to the meaning of “caution” in this context, it has been described thus in The Angelic Grace [1995] 1 Lloyd’s Rep 87 at 92:1 per Leggatt LJ: “The exercise of caution does not involve that the Court refrains from taking the action sought, but merely that it does not do so except with circumspection.”;

(f)   The Claimant must therefore demonstrate such a negative right not to be sued. The standard of proof is “a high degree of probability that there is an arbitration agreement which governs the dispute in question”;

(g)   The Court will ordinarily exercise its discretion to restrain the pursuit of proceedings brought in breach of an arbitration clause unless the Defendant can show strong reasons to refuse the relief;

(h)   The Defendant bears the burden of proving that there are strong reasons to refuse the relief.

Whilst the case involved the restraint of potential proceedings in Canada, it comes at a time when the English courts may start to see wide use of such injunctions in respect of proceedings closer to home.

While the United Kingdom was a member of the European Union, the power of the English courts to grant anti-suit injunctions was considerably constrained by EU law. Now that the UK has left the EU, there is significant potential for anti-suit injunctions to become more common.

About the Author

Chris Pask was called in 2013. He undertakes work arising out of contractual disputes, including cases involving sale of goods and supply of services, and in particular claims raising issues of fundamental dishonesty. Chris accepts instructions by way of Direct Public Access.

 

PJSC Bank Finance and Credit v Zhevago [2021] EWHC 2522 (Ch): Unequivocal about unequivocal submission to jurisdiction

The claim arose out of allegations of fraud against the first defendant, a Ukrainian billionaire who was accused of extracting money from the first claimant, a now liquidated Ukrainian bank which is managed by the second claimant, using corporate entities. Two of these corporate entities were registered in England, and the fifth defendant, a British citizen resident in England, was the sole director of one of them.

On the same day the Claim Form was issued in England, the claimants issued an Application Notice seeking a Worldwide Freezing Injunction (“WFO”) against the defendants.

The defendants indicated an intention to challenge the jurisdiction of the English courts on the grounds of forum non conveniens. The first to fourth defendants issued an Application Notice seeking an order that the English court had no jurisdiction, and a stay of the claims. The fifth defendant issued an Application Notice seeking an order that:

  • the claim against him be stayed pursuant to Part 11(6)(d) on the grounds that it can more appropriately be heard with the other claims before the courts of the Ukraine; alternatively
  • that certain paragraphs of the Particulars of Claim setting out the claim against the fifth defendant be struck out under CPR Part 3.4(2)(a) as not disclosing a reasonable cause of action against the fifth defendant.

The claimants argued, and the question that came before the court was whether, in making this application, the fifth defendant had submitted to the jurisdiction of the English Court.

The claimants submitted that the test to apply was whether the fifth defendant had “taken some step which is only necessary or useful if” an objection to jurisdiction “has actually been waived, or if the objection has never been entertained at all”, as set out in Rubin v Eurofinance SA [2012] UKSC 46; [2013] 1 AC 236 at [159].

They said that, because the fifth defendant had applied to strike out proceedings without an express reservation objecting to jurisdiction, he had therefore submitted to the court’s jurisdiction. It did not matter that, at the same time, he had applied to stay the proceedings under CPR Part 11 because jurisdiction was challenged – an express reservation was required.

The fifth defendant submitted that the better formulation of the test was the one set out by Patten J in SMAY Investments v Sachdev [2003] EWHC 474 (Ch); [2003] 1 WLR 1973 at [41], which required conduct that was a “wholly unequivocal” submission to jurisdiction. It was also the fifth defendant’s position that, in applying that test, the Court was entitled to look at the entirety of the party’s conduct.

The Court roundly rejected the claimants’ arguments. It found that the test in Rubin requiring a step which is “only necessary or only useful if the objection has been waived”, and the test formulated by Patten J in SMAY Investments that the conduct must be a “wholly unequivocal” submission to the jurisdiction were the same test. Applying for strike out in the alternative to the objection to jurisdiction without an express reservation was, at best, equivocal. It was not possible to separate out parts of the application and assess them on their own. An express reservation was not needed to show a continuing objection to jurisdiction, because the application itself contained an objection.

About the Author

Kerry Nicholson is a probationary tenant. She undertook pupillage with the Government Legal Department and on secondment at Henderson Chambers and is looking forward to working within the team at 1CL on travel related and other claims.

 

…And Finally…

By popular demand, Ella Davis and Dominique Smith will be discussing beauty treatments, or rather claims involving them, in the 1CL webinar on 13th October. You can register here to join the conversation, but we understand it’s not for the faint-hearted.

Written by or involving: Christopher Pask

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