Guernsey Law Reports 2007–08 GLR Note 29
BANK JULIUS BAER AND COMPANY LIMITED v. WINNETKA TRADING CORPORATION
ROYAL COURT (Collas, Deputy Bailiff): November 18th, 2008
Conflict of Laws—jurisdiction—exclusive jurisdiction clauses—anti-suit injunction against foreign proceedings
The applicant company, which carried on banking business in Guernsey, had investment contracts with the respondent corporation, a Panamanian company operating as an investment vehicle for French nationals resident in France. The formal relationship between the two entities was set out in three documents, a bank account mandate (which recorded that the respondent was opening a bank account with the applicant and authorized two of the beneficial owners to operate the account), a credit agreement (by which the applicant offered credit facilities to the respondent up to a specified figure) and an investment agreement (which appointed the applicant as the respondent’s investment adviser).
Each of these documents contained a governing law/jurisdiction clause, which were in different terms. The mandate stated that it was to be governed by Guernsey law and the parties submitted to the “non exclusive jurisdiction of the Courts of Guernsey”; the credit agreement stated that it was to be governed by Guernsey law and that proceedings arising out of it were to be subject to the “non-exclusive jurisdiction . . . [of] the Royal Court of Guernsey and/or the High Court of Justice in England”; and the investment agreement stated that it was governed by Guernsey law and the parties agreed “to submit to the jurisdiction of the Royal Court of Guernsey.”
The respondent brought proceedings against the applicant in the English High Court, Chancery Division, seeking damages for breach of contract and negligence arising out of the applicant’s alleged failure to purchase for it a specified number of shares in a named company, though it had expended the respondent’s funds. Its claims, as pleaded, alleged breaches principally of the investment agreement but also, in a formal way, of the bank account mandate. The applicant denied liability and submitted that the proceedings, under the terms of the controlling agreements, could only be commenced in Guernsey. It brought the present proceedings in Guernsey seeking an anti-suit injunction requiring the respondent to cease prosecuting and to withdraw the English proceedings.
Held: (1) Although there was affidavit evidence that a statement had been made on behalf of the respondent to the effect that the jurisdiction clause in the bank account mandate was intended to be a mere formality and should not be relied upon, the written words of the clause indicated that it was binding. The court was satisfied that the clause remained incorporated into the bank account mandate and had not been waived by any oral representation—making this determination as a preliminary matter under Guernsey law without proceeding to rule on the meaning of the clause (Dicey, Morris & Collins, 1 The Conflict of Laws, 14th ed., para. 12–090, at 517 (2006)).
(2) Although the respondent argued that the three agreements should be construed together, the court was not prepared to try to construct a common jurisdiction clause applicable to all three. The parties had selected different jurisdiction clauses to govern different aspects of their relationship and it would be wrong to ignore the fact that they had used different words in doing so. The change from giving “non-exclusive jurisdiction” in the first two agreements to giving “jurisdiction” in the third, suggested that a change was intended and, from the ordinary and natural meaning of the words, the court concluded that the jurisdiction clause in the investment agreement was intended to give “exclusive jurisdiction” to the Guernsey courts. It was clear that the word “exclusive” did not actually have to be used to restrict jurisdiction to the stated courts (Gee, Commercial Injunctions, 5th ed., para. 14.017, at 410 (2004)).
(3) The central issue in the English proceedings concerned the investment agreement (over which the Guernsey courts were to have exclusive jurisdiction) and the alleged breach of the bank account mandate added little or nothing to the substance of the claim—nor, indeed, did the alleged breaches of implied terms or the claim in negligence. The respondent had therefore failed to adduce “strong reasons for departing from” the exclusive jurisdiction clause (Donohue v. Armco Inc., [2002] 1 All E.R. 749, dicta of Lord Bingham of Cornhill applied) and, since the Royal Court unquestionably had jurisdiction to grant an anti-suit injunction (Ashton v. Ansol Ltd., C.A., January 10th, 2003, unreported, followed), it would grant one to the applicant in respect of the English High Court proceedings.
2009
Law Report
None
Guernsey Law Reports 2007–08 GLR Note 29