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05 Jan 2023

Tick-box jurisdiction clause good enough for anti-suit relief

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In Ebury Partners Belgium SA/NV v (1) Technical Touch BV & (2) Jan Berthels [2022] EWHC 2927 (Comm),1 the Commercial Court granted an anti-suit injunction ("ASI") restraining proceedings in Belgium brought in breach of an exclusive English jurisdiction agreement. The case is important because it considers:

  1. the applicable law governing the question of whether a jurisdiction clause exists (by incorporation into the contract);

  2. which law applies to the question of consent to a choice of law clause; and

  3. what constitutes the 'high degree of probability' required to determine these questions and grant an anti-suit injunction.

The judgment is also significant because it confirms that, even in cases in which the Hague Choice of Court Convention 2005 applies, the English courts will still grant anti-suit injunctions, providing the relevant criteria are satisfied.

Key points

  • The court emphasised that whilst pre-Brexit such anti-suit relief would not have been possible, the principles determining this were now well settled, as set out in QBE Europe SA/NV v Generali Espana de Seguros y Reaseguros,2 namely:

    • the English court has the jurisdiction to grant ASIs in restraint of foreign proceedings and will exercise its discretion where it is "just and convenient" to do so;
    • the applicant must demonstrate with a "high degree of probability" that there is an arbitration or jurisdiction agreement that governs the relevant dispute; and
    • the burden is on the Defendant to show "strong reasons" to refuse the relief.
  • The law governing the question of whether a jurisdiction clause has been incorporated into a contract will be the law which is considered to apply to the contract.
  • The law governing questions of consent to a choice of law clause will also be the law considered to apply to the contract, unless it would be unreasonable to apply that law (this being the result of Articles 3(5) and 10(2) of Rome I3).
  • The bar is set high for a defendant to establish 'strong reasons' why anti-suit relief should not be granted. Despite the existence of 9 points in support of the defendants' application, the court determined none of the reasons were sufficiently strong.

Background

The claimant ("Ebury") was incorporated in Belgium, with its parent companies incorporated in England. The First Defendant ("TT") was a Belgian company, whose CEO (the Second Defendant, Mr Berthels) resided in Belgium.

Via Ebury's website, the parties entered into an agreement for the provision of foreign exchange services. In entering into the agreement, Mr Berthels (on behalf of TT) ticked the box confirming that he agreed with Ebury's terms and conditions, which were provided by way of a hyperlink next to the consent box, and which contained an English law and exclusive jurisdiction clause. A signed personal guarantee was later provided by Mr Berthels which also contained an English governing law and English exclusive jurisdiction clause.

TT subsequently failed to satisfy Ebury's margin call and a dispute arose. TT issued proceedings in Belgium seeking declarations of non-liability and to challenge the validity of the above two agreements. Ebury responded by commencing English proceedings, serving proceedings out of the jurisdiction pursuant to CPR 6.33,4 and applying for an ASI. In response, TT and Mr Berthels sought negative declarations seeking refusal of the ASI and a stay or dismissal of the English proceedings until the conclusion of the Belgian proceedings.

Analysis

Incorporation and consent

The questions of incorporation and consent for the law and jurisdiction clause were determined by reference to Articles 3(5), 10(1) and 10(2) of Rome I, it being common ground that this remained retained EU law.

The parties also agreed that unless Article 10(2) of Rome I applied (resulting in Belgian law applying), the question of incorporation was to be considered under English law, the putative law of the contract.

Pursuant to English law, the court determined that the requisite 'high degree of probability' existed that the law and jurisdiction clause had been incorporated into the contract. The parties also agreed that in order to rely on Article 10(2) of Rome I, the defendants would need to prove that it would be 'unreasonable' to apply English law. The court held it would not be unreasonable to apply English law merely because: i) the country of both parties' incorporation and the language in which discussions occurred was that of Belgium; and ii) the person consenting to the relevant clause had not in fact read it. The court held that a director negotiating a contract on behalf of a company should be taken to have read the relevant contractual terms, including the law and jurisdiction clause. It also held that there was no evidence that, had those terms been read, they would have been disputed in any event.5

Interestingly, neither the parties nor the court appear to have considered (in relation to the question of incorporation of the jurisdiction clause) the fact that under Article 1(2)(e), Rome I expressly excludes choice of jurisdiction clauses from its scope. It remains to be seen whether, applying English conflict of law rules (instead of the provisions of Rome I), the conclusion on incorporation (and therefore the ability to grant the anti-suit injunction) would have been different.

Strong reasons to refuse anti-suit relief

The majority of the arguments raised to support the refusal of anti-suit relief were dismissed as forum conveniens considerations, which would have been objectively foreseeable by the parties at the time of entering into the contract. The court was unimpressed by the arguments that the documents were in Dutch and best considered by a Belgian court, and that the parties' close connection to Belgium and the location of witnesses all pointed towards Belgium being a more appropriate forum. The defendants' argument regarding the potential ineffectiveness of the ASI was also dismissed on the basis that (i) there was no evidence the order would be disobeyed, and (ii) should the ASI be disobeyed, effective sanctions could be deployed against the parties as required.

Further, the court held that the argument that the Belgian courts might apply mandatory provisions of Belgian law, was a strong reason why injunctive relief should be granted 'to protect the integrity of the parties' bargain'.

Commentary

Prior to Brexit, there was much discussion over the potential return of anti-suit injunctions. Some commentators speculated that in situations where the Hague Choice of Court Convention 2005 applied, similar considerations of comity and respect to those operating in relation to Brussels Recast would mean that anti-suit injunctions would not be routinely granted.

However, in this case, the court appeared to have no such concern. While not needing to express a view on whether or not the Hague Choice of Court Convention applied (as service out of the jurisdiction was granted pursuant to CPR 6.33(2B)(b), on the grounds of a contract containing an English jurisdiction clause), the court noted that the parties addressed the potential application of the 2005 Convention 'in great detail'.

The court deemed its only relevance, however, would be to mandate the acceptance of jurisdiction by the English courts, rather than allow a discretion to stay or set aside jurisdiction on forum non conveniens grounds.

No consideration was given to the question of 'comity' at all and it now appears clear that anti-suit injunctions are re-appearing as a powerful weapon for litigants in the English courts.

1 Judgment handed down 18 November 2022

2 [2022] EWHC 2062 (Comm) (paragraph 10)

3 Article 3(5) Rome I provides: The existence and validity of the consent of the parties as to the choice of the applicable law shall be determined in accordance with the provisions of Articles 10, 11 and 13. Article 10 Rome I provides: (1) The existence and validity of a contract, or of any term of a contract, shall be determined by the law which would govern it under this Regulation if the contract or term were valid; and (2) Nevertheless, a party, in order to establish that he did not consent, may rely upon the law of the country in which he has his habitual residence if it appears from the circumstances that it would not be reasonable to determine the effect of his conduct in accordance with the law specified in paragraph 1.

4 paragraph 2B I.e. out of the jurisdiction without obtaining permission of the court further to the exclusive jurisdiction clause

5 The issue of incorporation did not arise in the context of the Guarantee, which had been signed by Mr Berthels. The Defendants' argument was that the primary agreement was that between Ebury and TT, not the Guarantee. Accordingly, it was only for this primary agreement that Ebury were required to establish the requisite high degree of probability as regards the relevant jurisdiction agreement; "in other words, the tail of the Guarantee should not be allowed to wag the RA dog". Paragraph 25

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Jo Jones

Jo Jones
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