Guernsey Legal Resources

This is an appeal from a decision of the Deputy Bailiff, sitting in the Royal Court, dated November 18th, 2008, granting the respondent an anti-suit injunction. The order was that the appellant cease prosecuting and withdraw, as soon as practicable, proceedings it had issued before the High Court in England.

2 The appellant, Winnetka Trading Corp. (“Winnetka”) is a Panamanian company beneficially owned by French nationals who are themselves

3 The respondent, Bank Julius Baer & Co. Ltd. (“BJB”) is a Swiss-registered company which carries on business as a bank through its branch in Guernsey and elsewhere. Unless I say otherwise, references in this judgment to “BJB” refer to its Guernsey branch.

4 Winnetka was introduced to BJB by a Mr. Darren Porter, an executive director and Head of Portfolio Development of Julius Baer Intl. Ltd. (“JBInt”). JBInt is a Swiss-registered company with offices in London. BJB and JBInt are sister companies, and both are wholly owned subsidiaries of the Julius Baer Group.

5 The formal relationship between Winnetka and BJB is set out in three documents. The first is a “bank account mandate for corporate clients” (“the bank account mandate”) executed by Winnetka on December 29th, 2005, the corporate directors of Winnetka having resolved on December 20th, 2005 to open the bank account and authorize two of the beneficial owners, Jacob Hazout and Jean-Marie Valicon, to operate the account.

6 The second agreement is a credit agreement, dated January 20th, 2006 (“the credit agreement”), whereby BJB offered credit facilities to Winnetka up to €12.5m., in accordance with the terms and conditions set out in a letter dated January 20th, 2006 and the standard credit conditions of the bank, a copy of which was attached to the letter. Acceptance of the credit facility was signified by the signature of two corporate directors endorsed on a copy of the letter.

7 The third is an “investment advisory and dealing services mandate” (“the investment agreement”), entered into on May 1st, 2006 by Winnetka, appointing BJB as an investment adviser. The investment agreement incorporated portfolio guidelines, terms and conditions, and a portfolio risk warning statement.

8 Each of the three agreements between BJB and Winnetka contains a governing law or jurisdiction clause, but each of the three clauses is different. Clause 26 of the general banking conditions attached to the bank account mandate provides:

“26. APPLICABLE LAW AND JURISDICTION

This mandate shall be governed by and construed in accordance with the laws of Guernsey and the parties hereby submit to the non-exclusive jurisdiction of the courts of Guernsey.” [Emphasis supplied.]

“15. APPLICABLE LAW

    15.1. The credit agreement shall be governed by and construed in accordance with the Laws of Guernsey. The client agrees that any legal action or proceedings arising out of or in connection with the credit agreement may be brought in the Royal Court of Guernsey and/or the High Court of Justice in England as the bank may determine, and the client irrevocably submits to the non-exclusive jurisdiction of those courts, provided, however, that nothing herein shall preclude the bank from instituting proceedings against the client in any other country or place which may have jurisdiction for the purpose of protecting and enforcing the bank’s rights under the credit agreement.

    15.2. The client hereby irrevocably waives any objection which the client may now or hereafter have to the venue of any suit, action or proceedings relating to the credit agreement and further irrevocably waives any claim that Guernsey is not a convenient forum for any suit, action or proceedings.” [Emphasis supplied.]

“15. GOVERNING LAW

The mandate between the client and the bank, including these terms and conditions, shall be governed by the laws of the Island of Guernsey and the client and the bank hereby agree to submit to the jurisdiction of the Royal Court of Guernsey.” [Emphasis supplied.]

(“The mandate” is defined in cl. 1 as being the investment agreement.)

11 Winnetka’s contentions before the Royal Court as respondent and renewed before us as appellant were, first, that the jurisdiction clauses were not incorporated into the retainer because of an oral representation made to Mr. Hazout by JBInt on behalf of BJB (“the incorporation issue”); and, secondly, that even if they were incorporated, on their proper construction Winnetka was not obliged to bring proceedings in Guernsey.

12 On July 17th, 2008, proceedings (“the English proceedings”) were commenced by Winnetka in the High Court of Justice, Chancery Division against JBInt as first defendant and BJB as second defendant. In the English proceedings, Winnetka alleged that BJB and JBInt, as agent for

13 Paragraph 26 of the particulars of claim pleads the four express terms which Winnetka alleged were breached by BJB:

“By the retainer, the second defendant and the first defendant (as the second defendant’s agent) owed the claimant express duties as follows:

    (a) regularly to contact the claimant with advice on investments (Part 1—portfolio guidelines);

    (b) to effect transactions in investments when requested (Part 1—portfolio guidelines);

    (c) to execute correctly signed orders placed with it during business hours with requisite care (general banking conditions—cl. 16); and

    (d) to act as investment adviser of the claimant’s portfolio of securities, cash, other assets, liabilities etc. (investment advisory and dealing services mandate).”

14 The express duties pleaded at sub-paras. (a), (b) and (d) all arise under the investment agreement into which the portfolio guidelines are incorporated. The General Banking Conditions in para. 26(c) form part of the bank account mandate.

15 Paragraph 27 of the particulars of claim pleads three implied terms said to be required to give business efficacy and meaning to the retainer, namely—

    “(a) that the first and second defendants would act with all due skill, care and diligence in the execution of transactions undertaken;

    (b) that the first and second defendants would so organize and control their affairs as to provide proper risk management systems in the conduct of their business in relation to the claimant; and

    (c) that the first and second defendants would act in good faith in all transactions that they undertook for the claimant.”

16 The breach pleaded in para. 30 alleged a failure by BJB properly to carry out the instructions Winnetka had given BJB, namely, to purchase two tranches of shares in a pharmaceuticals company called Inyx, to a total value of $9.454m. Winnetka alleged that BJB paid out a total of $9.45m. Winnetka only received 1.8m. shares, but not a further 3,301,523 shares, which together would have constituted a full number, resulting in

17 By way of defence, BJB will apparently assert that it complied with the instructions of Winnetka and so would deny any liability to Winnetka.

18 On September 5th, 2008, BJB and JBInt lodged an application in the English proceedings, seeking a stay on the basis that the claim ought to have been brought in the Royal Court.

19 On September 9th, 2008, BJB and JBInt issued a claim in the Royal Court for an anti-suit injunction and damages for breach of contract as to jurisdiction and applied, by application of even date, for an anti-suit injunction.

20 The application in the Royal Court was heard on November 10th, 2008, and judgment was handed down in writing on November 18th, 2008.

21 On November 26th, 2008, Norris, J., sitting in the Chancery Division of the High Court, ordered a stay of the English proceedings but with permission to the claimant, Winnetka, to apply to restore the same in the event of:

    (a) a successful appeal against the decision of the Royal Court of Guernsey of November 18th, 2008; or

    (b) the determination by the Royal Court of Guernsey of a preliminary issue of whether cl. 15 of the investment advisory and dealing services mandate and/or cl. 26 of the bank account mandate were incorporated into the contract(s) between the claimant and defendant.

22 The incorporation issue is whether the jurisdiction clause was incorporated in the agreement between the parties. In my view, the burden of establishing incorporation rests on BJB (see Dicey, Morris & Collins, 1 The Conflict of Laws, 14th ed., para. 12–099, at 522–523 (2006)). BJB sufficiently discharged this burden by identifying the clause in the contract. It was then for Winnetka to displace the conclusion that the clause was so incorporated. This it seeks to do by relying on an alleged statement by Mr. Porter to the alleged effect that the clause would not be relied on.

23 Neither the Royal Court nor we received “live” evidence from any witnesses, so were absolved from forming a final view as to whether the jurisdiction clause was incorporated into the bank account mandate agreement.

24 Dicey, Morris & Collins states, however, that under the common law of England a preliminary decision can be taken as to incorporation of a jurisdiction clause, without deciding the issue. Specifically (op. cit., para. 12–090, at 517):

“[T]he difficulty arises in cases in which it is necessary to take a preliminary decision as to whether there is a jurisdiction clause in a contract in order to help identify the law which governs that contract. It has been held, and appears to be correct, that this preliminary assessment has to be undertaken by reference to English domestic law principles. But it should follow that once the law governing the contract has been identified by these means, it is that law which must be used to make the definitive assessment of whether the jurisdiction agreement in question is in fact one of the terms of the contract.”

In relation to the words “preliminary decision,” there is a footnote: “But, it is submitted, not to decide.” [Emphasis in original.]

25 I am satisfied that on this issue, Guernsey law would follow the English common law. I can see no principled basis for there to be a distinction as between English and Guernsey law in the approach to forming a preliminary view as to (or indeed deciding) whether a term to jurisdiction has or has not been incorporated into an agreement.

26 Winnetka relied upon an alleged explicit representation that the jurisdiction clauses were to be disregarded. The basis for that reliance is an affidavit of Ian Gordon Park, sworn on October 1st, 2008. Mr. Park is an English solicitor, instructed by Winnetka. In his affidavit, Mr. Park described the introduction of Mr. Hazout, a computer engineer of Winnetka looking for a bank to transact business on Winnetka’s behalf, to Mr. Porter of JBInt, and he referred to a meeting at JBInt’s offices in London with Mr. Hazout and Mr. Valicon when the bank account mandate was completed.

“Mr. Porter produced this document [the bank account mandate]. Mr. Hazout said that he wanted to deal specifically with Mr. Porter at the London bank and that he did not wish to travel to Guernsey or to have anything to do with the Guernsey branch of Bank Julius Baer & Co. Ltd. . . . Mr. Porter replied: ‘Don’t worry, it is only a formality.’ Mr. Hazout and Mr. Valicon have a reasonable command of the English language, but their first language is French. All discussions, and all documents, were in English. Mr. Hazout and Mr. Valicon signed the documents, relying on Mr. Porter’s assurance that ‘it was only a formality.’”

“Further, Mr. Park then says that I said to Mr. Hazout, in relation to the mandate and Mr. Hazout’s supposed desire not to have anything to do with Guernsey, ‘don’t worry, it is only a formality.’ I have no recollection of having ever made such a statement, nor do I have any recollection of Mr. Hazout saying he wanted nothing to do with [BJB], as relayed by Mr. Park.”

29 In the following paragraph of the affidavit, Mr. Porter said, contrary to Mr. Park’s assertion (para. 27 above), that the bank account mandate was not produced by him at the meeting on December 29th, 2005. Instead, he had previously e-mailed it to a management company in Luxembourg called Overseas Management Co., and on December 29th Mr. Hazout delivered it duly signed. Further, Mr. Valicon was not present at the meeting, the only other attendee being Mr. Hazout’s brother-in-law. Mr. Porter exhibited a copy of his file note of that meeting which makes no reference to any discussion as to the jurisdiction governing the relationship. He also said that in his dealings with Mr. Hazout, the latter has always demonstrated a competent grasp of the English language.

30 Mr. Park swore a second affidavit on October 29th, 2008, in which he replied to a number of matters raised by Mr. Porter in his affidavit.

31 As Mr. Park was reporting the evidence of Mr. Hazout at second hand before the Deputy Bailiff, Advocate Dawes, for BJB, reasonably criticized the absence of any affidavit by Mr. Hazout himself. Advocate Hay, for Winnetka, said Mr. Hazout could not swear an affidavit during the time period allowed by the Royal Court because he was away. In the Deputy Bailiff’s view, Advocate Hay gave no adequate explanation as to why he could not have applied for extra time, or for leave to file an affidavit by Mr. Hazout out of time. This explanation or excuse offered to the Deputy Bailiff cannot prevail in the Court of Appeal: indeed, it is not relied on. Advocate Hay said that in his view, the Court of Appeal would not have admitted such evidence at this stage. Given that the proceedings were interlocutory, this view might have been overcautious; but, in any event, we have to deal with the evidence as it stands, not what might have been before us.

32 In my view, Winnetka has not discharged the evidential burden which lies upon it. First, Mr. Hazout’s evidence is hearsay. Hearsay evidence, in particular when contradicted by direct evidence, carries little weight.

33 Secondly, the evidence is, on its face, fragile. The hearsay statement makes no reference to the “jurisdiction” clause at all. The ambiguous phrase attributed to Mr. Porter, “it is only a formality,” would, if Winnetka’s argument were to succeed, need to have been attached to the jurisdiction clause: it was not. Further, the reference to formality prima facie could only apply to the bank mandate and not to an agreement, the investment agreement, which is still to be entered into. The natural

34 Thirdly, the inherent probabilities are inconsistent with Mr. Hazout’s version of events. I can discern no reason why the bank should voluntarily disclaim reliance on a standard form of jurisdiction clause at the behest of a single new customer, nor is it clear how Mr. Porter would have had authority to do so on BJB’s behalf.

35 In these circumstances, it is unnecessary for me to explore whether the Deputy Bailiff’s reliance on perceived inconsistencies, both in the evidence adduced on Winnetka’s behalf on the incorporation issue, and between that evidence and the pleaded case, was well founded.

36 I note that in any event, Winnetka may apply to have the question of incorporation taken as a preliminary issue, if it considers that to be an appropriate and cost-effective manner to proceed and the Royal Court agrees. BJB and JBInt have undertaken not to oppose such an application to the Royal Court if the litigation proceeds in Guernsey (see the judgment of Norris, J. in Winnetka Trading Corp. v. Julius Baer Intl. Ltd. (13), [2008] EWHC 3146 (Ch), at para. 32). The existence or relevance of such inconsistencies could be revisited at that juncture.

37 I therefore proceed on the basis that the jurisdiction clause was incorporated in the agreement, and I now consider its meaning and effect.

38 Before doing so, I set out the legal backcloth. The power to grant an anti-suit injunction is an aspect of the power to grant injunctions. In the courts of England and Wales, this derives from s.37(1) of the Supreme Court Act 1981 (“SCA”), which recognizes in statutory form the inherent power of the court to grant injunctive relief. In Australia, this derives from the inherent power of the court to restrain abuse of process (Gee, Commercial Injunctions, 5th ed., at 395 (2004)).

39 In Guernsey, there is no express statutory power to grant injunctions, but the existence of such a common law power is recognized in the statutory power to grant interim injunctions contained in the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987, s.1(1):

“If proceedings have been or are to be instituted before the Court, the Court may by order, at any time before it makes a final judgment in

Whether or not that power should in Guernsey be limited to discrete categories of case or be the servant of justice in the widest sense has not been finally decided (see United Capital Corp. v. Bender (12), 2006 JLR 269, at paras. 15–17), but the existence of the specific power to grant an anti-suit injunction was recognized by this court in a composition of three distinguished commercial lawyers in Ashton v. Ansol Ltd. (2).

40 It is common ground (and I shall assume) that in respect of this case, the Brussels Convention does not apply to Guernsey, a jurisdiction outwith its reach. It is therefore necessary to consider the court’s approach to the grant of such injunctions without reference to that Convention and the copious jurisprudence which interprets it. It is also common ground that England was a forum in which, ignoring the jurisdiction clause, Winnetka had a right to bring its claim.

41 A useful summary of the principles applied by the courts of England and Wales is to be found in the judgment of Teare, J. in Standard Bank v. Agrinvest Intl. Inc. (11) ([2008] 1 Lloyd’s Rep. 532, at para. 25), which I would endorse as representing the law of Guernsey:

“The relevant principles for the grant of an anti-suit injunction are set out in Société Nationale Industrielle Aerospatiale v. Lee Kui Jack [1987] A.C. 871 and Turner v. Grovit [2002] 1 W.L.R. 107. They have been summarised by Cooke, J. in Trafigura Beheer BV v. Kookmin Bank Co. [2005] EWHC 2350 (Comm) at para. 42 (and adopted by Field, J. in his decision in the same case [2007] 1 Lloyd’s Rep. 669 at para. 44) as follows:

(i) The court will grant an injunction where the pursuit of the foreign proceedings is ‘unconscionable,’ as is made clear by the House of Lords in Turner v. Grovit [2002] 1 W.L.R. 107 at paras. 22–29, per Lord Hobhouse. The injunction is a personal remedy for the wrongful conduct of another party—a fault based remedial concept, in respect of conduct which the court may describe as ‘vexatious’ or ‘oppressive,’ but deriving from ‘the basic principle of justice.’

(ii) The court will readily grant an injunction to restrain proceedings which are brought in breach of an exclusive jurisdiction clause save in circumstances where the Brussels Regulation

(iii) Absent an agreement to the exclusive jurisdiction of the English court, or some other special factor, a person has no right not to be sued in a particular forum. Where suit is brought in a foreign forum, the question whether or not that forum is an appropriate forum is a factor in assessing the conduct of the party suing there, for the purposes of considering whether to grant a restraining injunction, but if it is the only factor, it is easily overridden by other considerations (per Lord Hobhouse at para. 25 of Turner (ibid.)).

(iv) To grant an injunction, the English court must have a sufficient legitimate interest in the foreign proceedings, which means that if there is no contractual reason to prevent suit there, there must be proceedings in this country which require protection (per Lord Hobhouse at para. 27 of Turner (ibid.), by reference to the House of Lords’ decision in Airbus Industries GIE v. Patel [1999] 1 A.C. 119).

(v) English law attaches a high importance to international comity and the perception of the foreign court of an interference in its proceedings, albeit indirect. There must therefore be a clear need for protection of the English proceedings (per Lord Hobhouse at para. 29 of Turner (ibid.)) if an injunction is to be granted.

(vi) An injunction should not be granted if its effect would be to deprive the claimant in the foreign action of an advantage in that forum of which it would be unjust to deprive him (Société Nationale Industrielle Aerospatiale v. Lee Kui Jak (ibid.) at p. 896).”

42 The presence of a jurisdiction clause is a basis, but not the only basis, for grant of an anti-suit injunction. No previous Guernsey case has considered the impact of such a clause in this context.

43 A distinction—the dimensions of which will require consideration—arises between the impact of an exclusive and that of a non-exclusive jurisdiction clause. If it is an exclusive jurisdiction clause, it requires strong reasons, which I infer to be rooted in a public policy to ensure justice, to displace it. This appears from Donohue v. Armco Inc. (6), where Lord Bingham of Cornhill said ([2002] 1 All E.R. 749, at paras. [24]–[25]):

“[24] If contracting parties agree to give a particular court exclusive jurisdiction to rule on claims between those parties, and a claim falling within the scope of the agreement is made in proceedings in a forum other than that which the parties have agreed, the English court will ordinarily exercise its discretion (whether by granting a stay of proceedings in England, or by restraining the prosecution of proceedings in the non-contractual forum abroad, or by such other procedural order as is appropriate in the circumstances) to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum (the burden being on him) can show strong reasons for suing in that forum. I use the word ‘ordinarily’ to recognise that where an exercise of discretion is called for there can be no absolute or inflexible rule governing that exercise, and also that a party may lose his claim to equitable relief by dilatoriness or other unconscionable conduct. But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it. Whether a party can show strong reasons, sufficient to displace the other party’s prima facie entitlement to enforce the contractual bargain, will depend on all the facts and circumstances of the particular case. In the course of his judgment in The Eleftheria [1969] 2 All E.R. 641 at 645–646, [1970] P. 94 at 99–100, Brandon, J. helpfully listed some of the matters which might properly be regarded by the court when exercising its discretion, and his judgment has been repeatedly cited and applied. Brandon, J. did not intend his list to be comprehensive, but mentioned a number of matters, including the law governing the contract, which may in some cases be material. (I am mindful that the principles governing the grant of injunctions and stays are not the same: see the SNI Aerospatiale case [1987] 3 All E.R. 510 at 522, [1987] A.C. 871 at 896. Considerations of comity arise in the one case but not in the other. These differences need not, however, be explored in this case.)

[25] Where the dispute is between two contracting parties, A and B, and A sues B in a non-contractual forum, and A’s claims fall within the scope of the exclusive jurisdiction clause in their contract, and the interests of other parties are not involved, effect will in all probability be given to the clause.”

Advocate Hay for Winnetka did not suggest the existence of any such strong reasons in the present case: he pinned his appeal to the proposition that the clause was not such a clause.

44 It follows that the first question which we have to decide under this head is whether the clause relied on is an exclusive jurisdiction clause or not. While Winnetka’s pleaded case refers to all of the agreements as

45 The rules of construction which apply to such clauses are those which apply to any contractual provision. As stated by Hobhouse, J. in S. & W. Berisford Plc. v. New Hampshire Ins. Co. (3) ([1990] 2 Q.B. at 637): “It is a matter of construing the words used in accordance with their natural meaning and in the light of the surrounding circumstances in which the contract was made.” Reference to other cases, unless they contain identical phrases which have received a consistent interpretation by courts whose judgments are of compelling or persuasive authority, unaffected by the particular contractual contexts, is of secondary, if any, assistance.

46 It is not disputed that the clause was to be “interpreted according to Guernsey law”: the parties had chosen that law as of general application to the mutual obligations of the parties under the agreement (Dicey, Morris & Collins, op. cit., para. 12–092, at 518–519).

47 Advocate Dawes contended that the relevant clause, properly interpreted, meant that Guernsey was the only forum in which disputes between the parties could be litigated. He argued that—

    (i) the mutual agreement to submit to Guernsey jurisdiction meant mutual agreement to submit all disputes only to Guernsey jurisdiction;

    (ii) this interpretation was fortified by the unambiguous choice of Guernsey law, which, presumably, could best be decided by Guernsey judges rather than by judges elsewhere with the assistance of experts on Guernsey law; and

    (iii) since Guernsey law was an available jurisdiction, the parties must have intended to add something by a specific reference to it.

48 The second and third submissions were, to an extent, supported by dicta of Waller, J. in British Aerospace Plc. v. Dee Howard Co. (4) ([1993] 1 Lloyd’s Rep. at 373–374) and Rix, J. in Sinochem Intl. Oil (London) Co. Ltd. v. Mobil Sales & Supply Corp. (No. 2) (9). Rix, J. said ([2000] 1 Lloyd’s Rep. at 676):

“The test which has been developed for distinguishing an exclusive from a non-exclusive jurisdiction clause is whether on its proper construction the clause obliges the parties to resort to the relevant jurisdiction, irrespective of whether the word ‘exclusive’ is used . . . or to put the issue in another way: is the obligation contained in the clause the intransitive one to submit to a jurisdiction if it is chosen by the other contracting party or is it the transitive one to submit all disputes to the chosen jurisdiction?”

As that quotation recognizes, conceptually there are at least two possibilities as to the nature of the obligations imposed by a jurisdiction clause which identifies a particular jurisdiction. One is that a party agrees, if sued by the other party, to submit to that jurisdiction if and when chosen by that other party as a forum for its litigation. Another is that a party agrees that it and the other party can only sue in that jurisdiction. (The distinction has been captured in a vocabulary which is accurate, if opaque, by reference to the intransitive and transitive uses of the word “submit.”)

49 The verb “submit” has a different meaning according to which use is engaged. When used transitively, it means “refer”: so, an obligation to submit disputes for resolution by a defined court, i.e. an obligation to refer disputes to that court. When used intransitively, however, it means “yield,” i.e. an obligation to submit to a defined jurisdiction is an obligation to yield to that jurisdiction. An agreement to refer disputes to an identified court ordinarily gives that court exclusive jurisdiction: the parties are not at liberty to take their disputes elsewhere. An agreement to yield to the jurisdiction of an identified court only comes into play if that court asserts jurisdiction over the dispute; absent that, there is nothing to yield to and the parties are at liberty to litigate in any other suitable forum. Such agreements therefore are normally to be construed as conferring non-exclusive jurisdiction on the nominated court. To transpose the language of Hobhouse, J. in S. & W. Berisford Plc. v. New Hampshire Ins. Co. Ltd. (3) ([1990] 2 Q.B. at 638):

“Such a clause, even though creating no obligation to sue only in [Guernsey] is a contractual acknowledgment of the jurisdiction of [the Guernsey courts] and a contractual agreement to the invocation of that jurisdiction.”

50 Advocate Dawes’ repeated mantra that the purpose of engaging a jurisdiction is to submit disputes to it is true only so far as it goes; it ignores the fundamental difference between submitting disputes to the jurisdiction and submitting oneself to the jurisdiction.

51 Advocate Hay points out that in the cases where an obligation to submit all disputes to a particular jurisdiction has been held to flow from true construction of the operative words, express reference has been made to submission of disputes or some similar words; and that, absent such words, the courts have preferred a construction that recognizes the lesser or contingent obligation: see, e.g., Waller, J. in British Aerospace (4).

52 I am, in the event, persuaded that we should follow the thrust of the English case law. I accept, of course, that the absence of the word “exclusive” is not dispositive (Gee, op. cit., at 410 and cases there cited). But to exclude a party’s option to sue in an otherwise competent jurisdiction would require, in my view, clearer words than are here to be found. Any ambiguity in the concept of submission ought to be construed

53 The force of the argument that both the choice of Guernsey law and the reference to an already available jurisdiction point to exclusivity is extinguished when it is noted that in the jurisdiction clause of the bank account mandate both factors happily co-exist within a provision where only non-exclusive jurisdiction is conferred on Guernsey.

54 There is no relevant matrix here engaged (as to what constitutes matrix, see Chartbrook Ltd. v. Persimmon Homes Ltd. (5)). The three agreements appear to have to be disconnected. Each has its own origins and purpose. It is adventitious that all were involved in constituting the relationship between these parties. No one, in my view, assisted in the construction of another, save in the elementary sense already alluded to as illustrating that different words can be used to achieve different ends. Nor can any particular circumstances of this particular relationship be used to modify the meaning of what are standard clauses applicable equally to a whole range of potential clients of BJB.

55 As to perceived commercial purpose, a useful aid to construction (see, again, Hobhouse, J. in Berisford (3)), BJB could (for example, by use of the word “exclusive”) have ensured that, whether as claimant or respondent, it would find itself in the Guernsey courts. However, there is no reason why it should not have chosen to ensure that result if it were claimant, e.g. for unpaid fees, but to have (while indicating the availability of Guernsey jurisdiction) allowed an international clientèle a freer choice. I deem it unlikely that Guernsey law, being a particular law of a small jurisdiction, or Guernsey courts, also enjoying the latter quality, would have been included as a perceived bonus for such a clientèle, which could be excused lack of knowledge of its virtues (see the reasoning of Staughton, L.J. in Sohio Supply Co. v. Gatoil (USA) Inc. (10) on the reason for their choosing England as an available forum for dispute resolution).

56 Sohio Supply Co. v. Gatoil is indeed the case most helpful to Advocate Dawes in the sense that no express use of a transitive verb was to be found, but nevertheless the clause was held to confer exclusive jurisdiction on the English court. I would however make the following observations. First, the words used (“the agreement shall be governed by the laws of England under the jurisdiction of the English courts, without resort to arbitration”) were significantly different from those in the clause we have to construe. Secondly, the use of the passive tense did not admit immediate translation into either transitive or intransitive, but its notional conversion into an active tense shows that the obligation fell on the transitive side of the boundary. Thirdly, the clause was the product of negotiation between two major commercial entities. Fourthly, the perceived commercial purpose cannot be read across into the clause we have to construe.

57 Advocate Dawes had, however, a second string to his bow. He suggested that the difference in consequence between an exclusive and non-exclusive jurisdiction clause is narrowing. He relied on dicta to this effect in Berisford (3), per Hobhouse, J.; British Aerospace (4), per Waller, J.; Antec Intl. Ltd. v. Biosafety USA Inc. (1), per Gloster, J., and in the English application of Winnetka (13), per Norris, J., where he observed ([2008] EWHC 3146 (Ch), at para. 18):

“In short, the difference between an exclusive jurisdiction clause and a nonexclusive jurisdiction clause is much narrower than it once might have appeared to be. The present rules appear to be that the fact the parties have freely negotiated a contract providing for the non-exclusive jurisdiction of a particular court creates a strong prima facie case that that court is the correct one in which to conduct disputes.”

“Where the court finds that the agreement confers non-exclusive jurisdiction on the designated court (whether England or a foreign court), it is more difficult to argue that the institution of proceedings is a breach of contract; and on that footing, an application for a stay of proceedings in favour of that foreign court will be determined on the basis of Spiliada Maritime Corp. v. Cansulex Ltd. But the fact that a court was contractually chosen by the parties will be taken as clear evidence that it is an available forum, and that, in principle at least, it is not open to either party to object to the exercise of its jurisdiction at least on grounds which should have been foreseeable when the agreement was made. However, the position is sometimes more complex. It may be that, on its true construction, though the court was given non-exclusive jurisdiction, the parties agreed that if either were to invoke it, the other would submit to the jurisdiction of the named court for the sole determination of the dispute. It would follow that proceedings taken in a foreign court would breach such a jurisdiction agreement if they sought to prevent the other party from invoking the jurisdiction agreement, or if they aimed to frustrate or prevent the other party having recourse to it. The question is therefore whether the effect of instituting proceedings in the foreign court, or doing so and refusing to appear to defend the claim made in England, may, on a true construction of the jurisdiction agreement, be seen as a breach of it. Certainly the question of exclusivity or non-exclusivity is a guide to the answer, but it is not always definitive.” [Emphasis supplied.]

59 I am unpersuaded that the dicta in the various judgments cited should be interpreted in the way that Advocate Dawes submits. In both an

60 Dicey, Morris & Collins contemplates only that the same principle would be extended to where choice of another jurisdiction is intended to frustrate the other party in exercise of its choice of the jurisdiction referred to in the relevant clause; but, in the present case, BJB had no claim arising out of the present dispute which it either had or would seek to institute in Guernsey.

61 The apparent alignment in the courts of England and Wales by puisne judges of the two types of clause is not justified and is contradicted by the essential contractual difference between these clauses. Those English judges may have had in mind that when a single jurisdiction (and a single law) was specified, albeit not exclusively, this indicated a mutually preferred choice, and that presumptive effect should be given to that choice in the absence of countervailing factors. This, I accept, would explain the elastic language used in the dicta: see, e.g. Gloster, J. in Antec Intl. Ltd. v. Biosafety USA Inc. (1) ([2006] EWHC 47 (Comm), at para. 7):

“The fact that the parties have freely negotiated a contract providing for the non-exclusive jurisdiction of the English courts and English law, creates a strong prima facie case that the English jurisdiction is the correct one . . . [T]he 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 . . .”

I find the principled basis for such an approach elusive and would reject it as inapplicable in Guernsey. For breach of a jurisdiction clause to be the trigger for an anti-suit injunction, some form of obligation has to be identified as arising from the clause. There can be no breach of the “spirit” of a clause.

62 I am comforted by the fact that the most recent learning is consistent with my approach. In Highland Crusader Offshore Partners L.P. v. Deutsche Bank AG (8), the English Court of Appeal held that in determining an application for an anti-suit injunction, there was no general presumption that where there was a contractual, non-exclusive jurisdiction

63 Advocate Hay also contended that the claim in tort in any event did not engage the jurisdiction clause at all. That submission, in the event unnecessary to Winnetka’s appeal, I reject.

64 There is no doubt that English law recognizes “the possibility of concurrent claims arising from breach of duty under the two rubrics of the law,” i.e. contract and tort (Henderson v. Merrett Syndicates Ltd. (No. 1) (7)). It is (I shall assume) a moot point as to whether Guernsey would, on this issue, follow English law or civil law, which is to contrary effect. However, the issue before us is not whether such claims can exist side by side, but whether the jurisdiction clause, whatever its intrinsic nature (exclusive or not), applies to claims in tort as well as to claims in contract arising out of the retainer. In my view, it does—it would be extraordinary if the parties had opted for Guernsey jurisdiction, whether in any event or only if BJB sued in Guernsey, for claims in contract, but not those in tort which arise out of essentially the same facts, involve the same parties, and when the alleged duty of care arose out of the relationship constituted by the agreements.

“[T]he court may presume the agreement was intended to apply to all disputes arising between the parties and which are connected with the contract in which the agreement was contained. Accordingly, if the claimant seeks to frame his claim in tort, or in equity, and contends that the jurisdiction agreement does not extend to non-contractual claims, he will need to persuade the court that the parties intended to permit the claimant to frame a claim to fall outside the jurisdiction agreement: in the absence of a sensible commercial justification for such an intention (which would pave the way for the possibility of inconsistent judgments), the court is likely to interpret the dispute as one falling within the scope of the agreement.” [Emphasis supplied.]

66 BJB founded its initial case on the exclusive nature of the jurisdiction clause and pleads breach in its summons. Even in its proposed amendment, i.e. that a breach would arise in any event once BJB had signalled its objection to proceedings in another court, it had to seek to identify an obligation, of which, in this instance, the continuation—as distinct from the institution—of proceedings would involve a breach, relied on in the

67 In those circumstances, the plea that an injunction should be granted on forum non conveniens grounds without reference to the jurisdiction clause, even if permissible, was unpromising.

68 Advocate Dawes argued that there are no good reasons for favouring England on conventional forum conveniens grounds for a number of reasons:

    (i) Winnetka is a Panamanian company with no place of business in England and Wales;

    (ii) the individuals behind Winnetka are not English and are not resident or domiciled there, nor are any likely witnesses for Winnetka;

    (iii) there is no dispute but that Guernsey law is the governing law;

    (iv) the relevant branch of BJB is located in Guernsey;

    (v) a number of witnesses are resident in Guernsey;

    (vi) JBInt will submit to Guernsey jurisdiction and give an address for service in Guernsey; and

    (vii) the claim against JBInt is not a reason for permitting Winnetka to litigate in England.

These arguments fall far short of satisfying the tests for restraining proceedings which Winnetka is otherwise entitled to institute in England. There are potent factors of convenience in favour of the case being heard in London. As Mr. Park says in his affidavit, “the transactions were carried out in London and the negligence alleged by Winnetka took place in London.” He adds:

“The respondent asserts that without doubt London is the most convenient forum in which to conduct the proceedings. All transactions took place in London and all material witnesses, other than Mr. Hazout, are based in London. All of the documents can be found in London. Mr. Hazout, as the representative of the respondent, is resident in France but finds it cheaper and more cost-effective to travel to London. Mr. Hazout has other business reasons to travel to London; he has no other business reason to travel to Guernsey.

The cost of conducting the proceedings in Guernsey will exceed the cost of conducting the proceedings in London.”

69 Advocate Dawes faintly argued that notwithstanding the order of the Royal Court, Winnetka has not discontinued the English proceedings and is in contempt of the Royal Court. While it would have been prudent for Winnetka to have applied for a stay of the injunction pending its appeal,