1
EASTERN CARIBBEAN SUPREME COURT
IN THE COURT OF APPEAL
TERRITORY OF THE VIRGIN ISLANDS
BVIHCMAP2015/0012
BETWEEN:
SFC SWISS FORFAITING COMPANY LTD.
Appellant
and
SWISS FORFAITING LTD
Respondent
Before:
The Hon. Mde. Louise Esther Blenman Justice of Appeal
The Hon. Mr. Mario Michel Justice of Appeal
The Hon. Mr. Paul Webster Justice of Appeal [Ag.]
Appearances:
Mr. James Collins, QC, with him, Mr. Jonathan Addo for the Appellant
Mr. Charles Samek, QC, with him, Ms. Arabella di Iorio for the Respondent
_______________________________
2016: January 14;
July 4.
_______________________________
Stay of proceedings – Forum non conveniens – Whether judge ought to have applied the
“strong reasons” test –Whether judge failed to give reasons for decision – Whether judge
properly exercised discretion in granting stay on basis of forum non conveniens
The appellant, SFC Swiss Forfaiting Company Ltd (“SFC”), is a company incorporated and
domiciled in the Virgin Islands (“BVI”) and established as an investment company.
Independent Asset Management Company Limited (“IAMC”) was responsible for SFC’s
investment strategy and SFC entered into an investment management agreement with
IAMC for that purpose.
The respondent, Swiss Forfaiting Ltd (“the Fund”) is a company based in Switzerland and
provides forfaiting related services. The Fund commenced proceedings against SFC in
the Zurich Commercial Court (“the Swiss Proceedings”) alleging that SFC acted as its
agent pursuant to a Trust Agreement and owed it substantial sums of monies which it held
on trust. SFC did not challenge jurisdiction in the Swiss court and has defended the claim
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on its merits. SFC asserted that it is entitled to retain monies for services it provided to the
Fund, but that it is entitled to pursue a claim for monies against the Fund in the BVI. SFC
claims that the Fund owes it substantial sums of monies for services it provided to the
Fund pursuant to a Services Agreement that SFC entered into with IAMC. The Fund
disputes this agreement between SFC and IAMC and asserts that, in any event, it is not a
party to the Services Agreement.
SFC subsequently presented a statutory demand against the Fund and commenced a
claim in the BVI against the Fund for the monies which it alleged the Fund owed it under
the Services Agreement. There is a total overlap of the sums claimed in the BVI and in the
Swiss Proceedings as well as a number of connecting factors between the BVI claim and
the Swiss Proceedings. In the circumstances, the Fund applied to the BVI court for a stay
of the BVI proceedings on the basis of forum non conveniens.
In an extempore oral judgment, the learned Commercial Court judge granted the stay of
the BVI claim. SFC is aggrieved by the judge’s decision and has appealed on a number of
grounds, namely: the court applied the wrong test for a stay; if the court rejected the
argument that the claim was covered by a jurisdiction clause or rejected that, if covered by
the jurisdiction clause that the “strong reasons” test applied, it failed to give reasons for
doing do; the court erred by failing to apply the domiciliary presumption to which the Fund
is subject; the court erred by taking account and/or giving too much significance to the fact
that the claim arose out of the same business relationship; and the court failed to give
sufficient weight to the fact that the claim was governed by BVI law.
Held: dismissing the appeal, and awarding costs to the Fund to be assessed if not agreed
within 21 days, that:
1. As a general rule, where parties have bound themselves by an exclusive or nonexclusive
jurisdiction clause, effect should ordinarily be given to that obligation in
the absence of “strong reasons” for departing from it. Accordingly, in order to be
able pray in aid of not granting a stay on the basis that the “strong reasons” test
applies, there must be in existence between the parties an exclusive or nonexclusive
jurisdiction clause. In this case, SFC sought to rely on a services
agreement and a management agreement to show the existence of a jurisdiction
clause to which the Fund should be held. However, the Fund was not a party to
these agreements. Accordingly, there was no written agreement between the
Fund and SFC which SFC was able to point to, to form the basis on which the
court could apply the “strong reasons” test. In the circumstances, there was no
question of the “strong reasons” test being applicable in the absence of a written
agreement between the Fund and SFC.
Donohue v Armco Inc and others [2001] UKHL 64 applied.
2. Where there is an appeal based on the inadequacy of reasons, the appellate court
has to review the judgment in the context of the material evidence and
submissions to determine whether, when all of these are considered, it is the case
that the reason is apparent and that it is a valid basis for the judgment. In the
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present case, it is clear from a reading of the transcript that the learned judge
considered the “strong reasons” test as being inapplicable in the absence of a
written agreement between the Fund and SFC even though he did not say so
expressly. It is also clear that the Services Agreement and the Management
Agreement upon which SFC sought to rely could not avail as a basis for the
application of the “strong reasons” test since the Fund was not a party to the
agreements. In the circumstances, it cannot be said that SFC genuinely is
unaware of the reasons for the learned judge’s decision.
English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605 applied.
3. There is no domiciliary presumption in private international law in relation to
commercial law matters. Domicile is simply one of the connecting factors to be
considered by the court in the determination of the clearly appropriate forum. In
this case, it is trite law that the fact that the Fund is domiciled in the BVI founds
jurisdiction to the extent that the BVI court is an available forum. However, a court
that applies the test in Spiliada Maritime Corporation v Cansulex Ltd must go
on to determine in light of the other connecting factors, which forum is clearly or
distinctly the appropriate forum for the trial. In the circumstances, there was no
error on the part of the learned judge for not giving consideration to the domiciliary
presumption.
Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460 applied; Bitech
Downstream Limited v Rinex Capital Limited consolidated with Bitech
Downstream Limited v Woodbridge Trading Limited BVIHCV2002/0233 and
BVIHCV2003/0008 (delivered 12th June 2003, unreported) considered.
4. An application for a stay of proceedings on the basis of forum non conveniens is a
request that the court exercise its discretion not to hear the case before it on the
basis that there is clearly or distinctly a more appropriate foreign forum. The court
has to consider whether there is another available forum; whether that forum is
more appropriate than the local court and if so, whether justice would be served by
allowing prosecution of the action there. A party would have to demonstrate to the
court that the foreign jurisdiction is the natural forum in that it is the country with
which the action has the most real and substantial connection. A preponderance
of connecting factors may assist in identifying the connection. In essence, the
court must decide which forum comprises the centre of gravity of the dispute. In
the present case, there is no doubt that the learned judge assessed the
connecting factors and attached the relevant weight to them and came to the
conclusion that the SFC claim had the most real and substantial connection with
Switzerland.
Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460 applied.
5. An appellate court should only interfere with the judge’s exercise of discretion
where it is clear that an error of principle has been made or that the result falls
outside the range of potentially “right” answers and it should not reassess the
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weight to be given to the matters which the judge was entitled to take into account
in exercising his or her own discretion. In the case at bar, the judge made no error
of principle in granting the stay but rather exercised his discretion quite properly.
Cherney v Dempaska [2012] EWCA Civ 1235 applied; Dufour and Others v
Helenair Corporation Ltd and Others (1996) 52 WIR 188 applied.
JUDGMENT
Introduction
[1] BLENMAN JA: This is an appeal by SFC Swiss Forfaiting Company Ltd (“SFC”)
against the judgment of a learned judge of the Commercial Court in which he
granted a stay of proceedings that was brought by SFC. Indeed, SFC had
instituted proceedings in the Virgin Islands (“BVI”) against Swiss Forfaiting Limited
(“the Fund”) in circumstances where there already were ongoing and advanced
proceedings that were instituted by the Fund against SFC in Switzerland (“the
Swiss Proceedings”). The Fund therefore applied to the Commercial Court to stay
the BVI proceedings on the basis of forum non conveniens and the learned judge
granted the stay of proceedings. In addition, the learned judge made a number of
orders that are not pertinent to this appeal. SFC is dissatisfied with the learned
judge’s decision to stay its claim and has appealed on several grounds.
[2] I will now address the background in some detail in order to provide the necessary
context to the appeal.
Background
[3] The Fund is a company which is incorporated in the BVI. It is also domiciled in the
BVI and was established as an investment company. Responsibility for the
investment strategy was that of an investment manager, namely, a company
called Independent Asset Management Company Limited (“IAMC”). For that
purpose, the Fund and IAMC entered into an investment management agreement
(“IMA”).
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[4] SFC is a company that is based in Switzerland and it provides various forfaiting
related services. SFC was and is not a party to the agreement between IAMC and
the Fund.
[5] Subsequently, IAMC and SFC entered into a Brokerage Agreement to which the
Fund is not a party. Apart from a Trust Agreement, there is no written agreement
between the Fund and SFC. SFC claims that the Fund owes it substantial sums of
monies for services that it provided pursuant to a Services Agreement. It is
noteworthy that the Fund is not a party to the Services Agreement.
[6] The Fund was involved in forfaiting and has alleged that SFC acted as its agent
pursuant to the Trust Agreement. The Fund has alleged that SFC owed it
substantial sums of monies which it held on trust and seeks to recover these
monies. Towards this end, the Fund commenced proceedings against SFC in the
Zurich Commercial Court (“the Swiss Court”). SFC did not resist jurisdiction in the
Swiss Court and has defended the Fund’s claim on its merits and has filed what is
in effect a defence and a sort of counter claim. SFC’s assertion in the Swiss
proceedings is that it is entitled to retain monies for services it has provided to the
Fund, but asserts that it is entitled to pursue its counterclaim for the monies in the
BVI.
[7] SFC alleges that it entered into a Services Agreement with IAMC. This is disputed
by the Fund and in any event the Fund asserts that, here again, it is not a party to
the Services Agreement.
[8] Several months after the Fund had filed the Swiss proceedings, SFC presented a
statutory demand against the Fund. At the same time, it commenced a claim in
the BVI against the Fund for the monies which it alleged the Fund owed it on the
basis of the Services Agreement. There was and is a total overlap between the
monies claimed in the BVI and those claimed in the Swiss Proceedings. In
addition, there are overwhelming connecting factors between SFC’s claim in the
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BVI and the Fund’s claim in Switzerland. While there were few connecting factors
that pointed to the BVI as the appropriate forum, there are several connecting
factors that indicate that Switzerland is the centre of gravity in which SFC’s claim
should be resolved. It was against that background that the Fund applied and
obtained a stay of the BVI proceedings on the basis of forum non conveniens.
[9] The judge did not give a written judgment but provided an extempore oral
judgment.
[10] SFC is aggrieved with the judgment and has appealed on several grounds. For
the sake of convenience, I will utilise the grounds of appeal as agreed by the
parties.
Grounds of Appeal
[11] SFC has appealed on the following grounds:
(1) the court (sub silentio) erred in law and/or principle by applying the wrong
test for a stay;
(2) if the Court rejected (1) the argument that the claim was covered by the
jurisdiction clause; or (2) the argument that, if covered by the jurisdiction
clause, the “strong reasons” test applied, the court erred by failing to give
any reasons for doing so;
(3) whichever test was appropriate, the court erred in law and/or principle by
failing to apply the domiciliary presumption to which the respondent is
subject;
(4) in seeking to identify the “natural forum” and/or determining whether or not
Switzerland was “clearly or distinctly more appropriate” than the BVI, the
court erred by taking into account and/or giving too much significance to
the fact that the BVI claim arose out of the same business relationship as
the claim in the Swiss Proceedings;
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(5) in seeking to identify the “natural forum” and/or determining whether or not
Switzerland was “clearly or distinctively more appropriate” than the BVI,
the court erred by failing to give sufficient weight to the fact that the BVI
claim was governed by BVI law.
Appellant’s Submissions
Ground 1: The court erred in law and/or principle by applying the wrong test
for a stay
[12] Learned Queen’s Counsel, Mr. Collins, reminded this Court that the law draws a
clear distinction between cases where the claim is covered by a jurisdiction clause
agreement and cases where it is not. Mr. Collins, QC, told this Court that where
there is a jurisdiction agreement, a stay will not be granted unless there are
“strong reasons” for doing so. He referred to Donohue v Armco Inc and others1
in support of his argument. He quite correctly stated that for these purposes, it
makes no difference whether the jurisdiction clause is exclusive or non-exclusive.
Absent “strong reasons”, the BVI proceedings should not be stayed. In further
support of his arguments he referred to British Aerospace PLC v Dee Howard
Co, 2 Mercury Communications Ltd and another v Communication
Telesystems International, 3 and Import Export Metro Ltd and another v
Compania Sud Americana de Vapores S.A.4
[13] Next, Mr. Collins, QC, stated that on the other hand, where there is no jurisdiction
clause, the usual forum non conveniens test applies. He referred to the wellknown
case Spiliada Maritime Corporation v Cansulex Ltd 5 and IPOC
International Growth Fund Limited v LV Finance Group Limited et al.6 He
said that where the defendant is domiciled in the BVI:
1 [2001] UKHL 64.
2 [1993] 1 Lloyd’s Rep 368 at pp. 375-377 (Waller J).
3 [1999] 2 All ER (Comm) 33 at pp. 40-41 (Moore-Bick J).
4 [2003] 1 Lloyd’s Rep 405 at paras. 13-14 (Gross J).
5 [1987] AC 460.
6BVIHCVAP2003/0020 and 2004/0001 (delivered 19th September 2005, unreported).
8
“The burden resting on the defendant is not just to show that [the BVI] is
not the natural or appropriate forum for the trial, but to establish that there
is another available forum which is clearly or distinctly more appropriate
than the [BVI] forum. In this way, proper regard is paid to the fact that
jurisdiction has been founded in [the BVI] as of right”.7
[14] Mr. Collins, QC, in oral argument sought to rely on the Brokerage Agreement and
the Investment Management Agreement to bolster his argument that there exists a
jurisdiction clause to which the Fund should be held to. This is so even though his
oral arguments were at variance with his pleaded case. Mr. Collins said that
before the court of first instance, SFC argued that the “strong reasons” applied as
the claim was made under the Services Agreement, which included a BVI
jurisdiction clause. In his extempore judgment, the learned Commercial Court
judge appeared to accept that the jurisdiction clause applied. Mr. Collins argued
that the learned judge, having found that the jurisdiction clause applied, erred in
law by applying the usual forum non conveniens test rather than the “strong
reasons” test. Learned Queen’s Counsel, Mr. Collins urged the Court to allow the
appeal on this ground of appeal even though he conceded that the basis of the
jurisdiction clause was not clearly pleaded.
[15] Mr. Collins QC next turned his attention to the second ground of appeal.
Ground 2: If the Court rejected (1) The argument that claim was covered
by the jurisdiction clause; or (2) The argument that, if covered by the
jurisdiction clause, the “strong reasons” rest applied, the Court erred by
failing to give any reasons for doing so
[16] Mr. Collins, QC, said that it is trite law that judicial decisions must be reasoned.
He said that the reasoning need not be elaborate, but ‘justice will not be done if it
is not apparent to the parties why one has won and the other has lost’.8 He
argued that in the present case, it is wholly unclear why the judge applied the
usual forum non conveniens test rather than the “strong reasons” test. He said
that the point was argued and the judge appeared to accept that the jurisdiction
7 Spiliada Maritime Corporation v Cansulex Ltd[1987] AC 460 at p. 477 (Lord Goff).
8 English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 at para. 16 (Lord Phillips MR).
9
clause applied, but he then applied the wrong test. During his oral submissions,
Mr. Collins, QC, was not as forceful in advancing this point when confronted with
the transcript of the proceedings in relation to the reasons why the strong reasons
test was rejected. Nevertheless, Mr. Collins, QC, said that the appeal should be
allowed for failure to give reasons.
[17] Alternatively, Mr. Collins, QC, submitted that if allowed on this basis, the “strong
reasons” test should be applied in place of the usual test. He said that whilst there
is a dispute as to whether the Fund is bound by the Services Agreement, this is a
merits issue for trial. The fact that the Fund challenges the Services Agreement
does not prevent the application of the “strong reasons” test. Mr. Collins, QC,
reasoned that jurisdiction agreements are (like arbitration agreements) separable
from the agreement of which they form part. A challenge to the Services
Agreement does not impeach the jurisdiction agreement found within it. He
referred to Deutsche Bank AG and others v Asia Pacific Broadband Wireless
Communications Inc and another9 where Longmore LJ opined that:
“…disputes about the validity of the contract must, on the face of it, be
resolved pursuant to the terms of the clause and, indeed, the last
sentence of the clause expressly so provides. It is only if the jurisdiction
clause is itself under some specific attack that a question can arise
whether it is right to invoke the jurisdiction clause.”10
[18] In examining his pleaded case, Mr. Collins was forced to accept that the pleadings
were not clearly drafted and that they did not indicate that the Fund was a party to
the Services Agreement. Interestingly, this is the same position that he had taken
before the learned judge, yet up to the date of the appeal, no attempt was made to
amend the pleadings so as to indicate that the Fund was a party to the Services
Agreement. Much of Mr. Collins’ oral argument in relation to the Services
Agreement was not borne out by the pleadings that were before the judge. What
is interesting is as indicated earlier, much of his oral arguments were not under
guided by his pleaded case. In fact, Mr. Collins’ oral arguments were not
9 [2008] EWCA Civ. 1091.
10 At para. 24.
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supported by his pleadings.
[19] Mr. Collins, QC, submitted that where the jurisdiction agreement is itself disputed,
the burden on the claimant is not to conclusively prove that the jurisdiction
agreement is valid and binding on the defendant. He said that this is a matter for
trial. At the interlocutory stage, the task of the judge is to determine which party
has the better argument. In support of his contention, he referred this Court to the
treatise Private International Law in English Courts 11 by Adrian Briggs at
paragraph 4.425:
“However, in cases in which the court is asked to stay proceedings by
reference to an agreement on jurisdiction which is itself disputed, the
approach is to require the party who relies on the agreement to claim relief
to show that he has, in the light of these principles, the better of the
argument on the issue that there was, for good or ill, an agreement on
jurisdiction.”
[20] Mr. Collins, QC, opined that the judge appears to have determined that SFC did
have the better argument: he held that the jurisdiction clause was “a factor” in
favour of the BVI. However, whether he did or did not, SFC plainly had the better
argument. Mr. Collins maintained that SFC was appointed by the Fund to perform
various roles for the Fund, including (by way of illustration) acting as agent, broker
and custodian. This he stated is clear from the IMA (to which the Fund was party).
Clause 1.1(B) names SFC as the agent. The Fund’s witness, Mr. David Payne,
does not dispute that this was true. Mr. Collins, QC, referred this Court to Mr.
Payne’s evidence. He does not dispute that SFC did act as the Fund’s broker as
well as agent.
[21] Mr. Collins, QC, said that the preamble to the Services Agreement refers to
IAMC’s authority “to give third parties any instructions on behalf of the Fund …”
Clause 1 and exhibit A identified the services that were to be provided and the
fees that were to be paid; and clause 3(a) provided that the Fund was to be
invoiced directly. The instructions given by IAMC and accepted by SFC in the
11 (1st edn., Oxford University Press 2014) 345.
11
Services Agreement were given by IAMC “on behalf of the Fund” pursuant to
clause 3.4 of the IMA.12 Consequently, the Fund is bound by the terms on which
the instructions were given and accepted, which includes the BVI law and
jurisdiction clause. Furthermore, the jurisdiction clause (which covers “any
disputes that may arise”) is clearly broad enough to cover the dispute as to
whether or not the sums that have been invoiced are due. Mr. Collins, QC, argued
that this is another basis upon which the appeal should succeed.
[22] Next, Mr. Collins addressed ground 3.
Ground 3: Whichever test was appropriate, the court erred in law and/or
principle by failing to apply the domiciliary presumption to which the
respondent as a BVI person is subject
[23] Mr. Collins, QC, argued that since the Fund is domiciled in the BVI, this founds
jurisdiction in the BVI Court. The burden of proof is therefore on the Fund to show
why there should be a refusal by the court below to exercise that jurisdiction which
is founded as of right. He opined that this is a heavy burden and referred to
Banco Atlantico S.A. v The British Bank of the Middle East.13 Bingham LJ
said at page 510:
“It must be rare that a corporation resists suit in its domiciliary forum.
Rarely would this court refuse jurisdiction in such a case…. very clear and
weighty grounds for doing so were not shown.”14
Also, he referred this Court to Bitech Downstream Ltd v Rinex Capital Inc.
consolidated with Bitech Downstream Limited v Woodbridge Trading
Limited.15 He posited that Rawlins J, at paragraph 28, said ‘…the fact that the
defendants were incorporated in this Territory [the BVI] is a factor that clearly
militates against their application for a stay on the ground of forum non
conveniens.’ Mr. Collins, QC, also referred to the decision of the Court of Appeal
12 For the avoidance of doubt, the Services Agreement was not a delegation by IAMC of its duties as Manager. These
duties are set out at clause 3 of the Investment Management Agreement (“IMA”) and do not include custody, brokerage
and agency services etc.. It is for that reason that the Fund, rather than IAMC, is liable.
13 [1990] 2 Lloyds’ Rep 504.
14 At p. 510.
15 BVIHCV2002/0233 and BVIHCV2003/0008 (delivered 12th June 2003, unreported).
12
in Imanagement Services Limited v Cukurova Holdings A.S. et al.16
[24] Though not pressing this point too much, Mr. Collins, QC, sought to extrapolate
from the above cases the fact that the Fund is domiciled in the BVI is not only
relevant to the test that is to be applied on the application for a stay, it is also a
strong connecting factor that must be weighed in the balance when applying that
test. Mr. Collins, QC, maintained that the judge erred in not giving any
consideration to this fundamental point. He said that the judge acknowledged that
“the Fund is domiciled in BVI” but only in the context of considering whether or not
a Swiss judgment would be enforceable (which he held was not an issue). He
said that the judge did not recognise that the Fund’s BVI domicile was itself a
weighty factor in favour of BVI jurisdiction, nor did the judge explain why he gave
this factor no weight. In doing so, he erred in principle by failing to take account of
a factor that he should properly have considered and attached weight to.
Accordingly, Mr. Collins, QC, urged this Court to set aside the stay on the basis
that the judge committed an error of principle in failing to pay regard to the
domiciliary presumption.
Ground 4: In seeking to identify the “natural forum” and/or determining
whether or not Switzerland was clearly or distinctly more appropriate than
the BVI, the Court erred by taking into account and/or giving too much
significance to the fact that the BVI claim arose out of the same business
relationship as the claim in the Swiss Proceedings
[25] Learned Queen’s Counsel, Mr. Collins, said that it is accepted that ‘[w]here a suit
about a particular subject matter between a plaintiff and a defendant is already
pending in a foreign court which is a natural and appropriate forum for the
resolution of the dispute between them, and the defendant in the foreign suit
seeks to institute as plaintiff an action in [the BVI] about the same matter’ then the
additional inconvenience and expense which must result from this is a factor – and
may be a powerful factor – in favour of a stay. He referred this Court to The
16 BVIHCVAP2007/0025 (delivered 6th October 2008, unreported).
13
Abidin Daver17 and Commercial Bank – Cameroun v Nixon Financial Group
Limited18 in support of this contention. He said that this principle is not an
exception to the approach to forum non conveniens, but rather it is an example of
its application. Also, he referred to De Dampierre v De Dampierre 19 and
Cukurova Holdings A.S. v Imanagement Services Ltd et al20 which address
connecting factors and the court’s approach.
[26] Mr. Collins, QC, said that, furthermore, it has no application where the “subject
matter” of the two claims is different. He maintained that the learned judge erred
in law by applying this principle to different claims, i.e. different subject matter, on
the basis that the claims arose out of the same business relationship. Mr. Collins
complained that in his judgment the learned judge said ‘the reason I think that
dominates the decision’ to grant the stay ‘is the fact that there is one business
relationship and despite the different aspects to it, it is logical, efficient and
sensible to use the concept that was discussed in The Abidin Daver’. Mr. Collins,
QC, argued that the fact that the claims in the Swiss Proceedings and the claims
in the BVI proceedings arose out of “one business relationship” is not sufficient to
trigger the application of the principle derived from The Abidin Daver. He argued
that the claim in the Swiss Proceedings was based on trust agreements governed
by Swiss law and subject to Zurich jurisdiction; but the BVI claim is a claim for nonpayment
for services provided by SFC to the Fund as inter alia agent pursuant to
the Services Agreement, which was expressly subject to BVI law and jurisdiction.
[27] Moving along, Mr. Collins, QC, maintained that the fact that the two claims arise
out of what can be loosely viewed as a single relationship – albeit one with many
facets – does not mean that the two distinct claims involve the “same subject
matter” which, he contended, they do not.
17 [1984] AC 398 at p. 411.
18 BVIHCVAP2011/0005 (delivered 6th June 2011, unreported) at para. 29.
19 [1988] AC 92 at p. 108B.
20 BVIHCV2006/0305 (delivered 17th July 2007, unreported).
14
[28] Mr. Collins, QC, posited that the only connection between the two claims arises
from the fact that, in the Swiss Proceedings, SFC has asserted a right of retention:
essentially a right to withhold the money held on trust until its fees are paid.
However, SFC is not seeking to have the merits of its claims against the Fund
determined in Zurich. In the Swiss Proceedings, SFC has (1) asserted a right of
retention pending payment of the sums due; (2) stated that it will commence
proceedings in the BVI for the sums that are due; and (3) reserved the right to set
off such sums against any liability to the Fund (as and when the amount of the setoff
is established by the BVI proceedings). Mr. Collins said that it is clear that SFC
is not seeking judgment on its claims. It is seeking to exercise ‘its statutory right of
retention until the plaintiff satisfies the claims of the defendant to pay for work
done and expenses’;21 and it is stating that ‘[SFC] will sue for its claims against
[the Fund] at its registered office in the BVI. It is asserting its retention right in the
present proceedings because [the Fund] is failing to comply with its obligations
…’22
[29] Learned Queen’s Counsel, Mr. Collins, accepted that in the Swiss Proceedings,
SFC has had to spell out and quantify its claims against the Fund in order to
establish its right and quantum of retention. But he said that it is abundantly clear
that SFC is not seeking to have its disputed claims resolved in that forum. He said
that furthermore, to the extent that the judge was entitled to take the Swiss
Proceedings into account, it is apparent from his judgment that he placed far too
much significance on them. The Swiss Proceedings would have been a weighty
factor if the same claims were to be litigated in each forum, but as the different
fora are being asked to determine different claims, the Swiss Proceedings are
virtually irrelevant. In placing so much weight on the Swiss Proceedings, the judge
did not balance the various factors fairly on the scale. Mr. Collins opined that this
is sufficient grounds for interfering with what was – at this stage of the analysis –
the exercise of a discretion. In support of his arguments, Mr. Collins purported to
21 See Defence filed in Swiss proceedings at para. 3.
22 Ibid.
15
rely on A.E.I. Rediffusion Music Ltd v Phonographic Performance Ltd.23 He
therefore urged this Court to set aside the stay.
Ground – 5: In seeking to identify the “natural forum” and/or determining
whether or not Switzerland was “clearly or distinctly more appropriate”
than the BVI, the Court erred by failing to give sufficient weight to the fact
that the BVI claim was governed by BVI law
[30] Mr. Collins, QC, opined that in his judgment the learned judge appeared to accept
the argument that SFC’s claim was governed by BVI law, but then dismissed it as
a factor. He said that the judge was wrong to do so. Although the Fund has not
yet had to plead its case, it has made it clear that it disputes all liability to SFC.
Mr. Collins said that in particular it does not accept that it is bound by the Services
Agreement. In these circumstances, it is clear that the forum determining the
dispute is going to have to apply BVI law to determine issues such as: (1) whether
there was any privity of contract between the Fund and SFC; and/or (2) the scope
of IAMC’s authority under the IMA (which was governed by BVI law) and/or (3)
whether SFC was bound by the terms of the Services Agreement. Mr. Collins said
that this is not just a factual dispute about how much SFC is owed.
[31] Mr. Collins, QC, asserted that courts have frequently accepted that in general, it is
more satisfactory for the laws of the courts of one country to be applied by the
courts of that country (rather than the courts of some other country). He referred
the Court to The Eleftheria24 in support of this point. He said that the weight
attached to this consideration depends on a number of matters. For example, if
the rival jurisdictions are both common law jurisdictions, each is less likely to have
difficulty applying the law of the other than would be the case if one was a
common law jurisdiction and the other a civil law jurisdiction. He said that even
where the legal systems are similar, the fact that the law is “foreign” will still be
relevant, as it may have an impact on the ability to appeal. In support of this
contention, Mr. Collins referred the Court to the following passage from The
23 [1999] 1 WLR 1507 at p. 1523.
24 [1969] 2 All ER 641 94 at p. 105.
16
Eleftheria:
“A question of foreign law decided by a court of the foreign country
concerned is appealable as such to the appropriate appellate court of that
country. But a question of foreign law decided by an English court on expert
evidence is treated as a question of fact for the purposes of appeal, with the
limitations in the scope of an appeal inherent in that categorisation. This
consideration seems to me to afford an added reason for saying that, in
general and other things being equal, it is more satisfactory for the law of a
foreign country to be decided by the courts of that country. Moreover, by
more satisfactory I mean more satisfactory from the point of view of
ensuring that justice is done”.25
Mr. Collins, QC, stated that by failing to give this factor any significant weight,
the learned judge erred to such an extent that he did not balance the various
factors fairly in the scale.
[32] Mr. Collins, QC, argued that for the reasons given above the appeal should be
allowed. The decision to stay the BVI proceedings should be set aside and the
costs order replaced by an order that the Fund pay the costs both of the appeal
and below.
Respondent’s Submissions
Ground 1: The Court erred in law and/or principle by applying the wrong
test for a stay
[33] Learned Queen’s Counsel, Mr. Samek, said that it is accepted that there is a
different test to be applied if the case is one where there is an agreement between
the parties that the courts of a particular place are to have exclusive or nonexclusive
jurisdiction to determine disputes between the parties. Mr. Samek, QC,
accepted that in such a case, whether the jurisdiction agreement is exclusive or
non-exclusive, a stay will not be granted unless there are “strong reasons” so to
do. Mr. Samek, QC, further stated that, in the case at bar, there was and is no
written agreement between the Fund and SFC, and thus no agreement that the
BVI courts should have jurisdiction to determine any disputes between them. This
25 Ibid at 649 – 650.
17
is acknowledged in SFC’s defence in the Swiss Proceedings. Mr. Samek, QC,
said that it is made clear in Donohue v Armco that there is a distinction to be
drawn between cases where litigants are contracting parties who have
indisputably agreed that their disputes should be determined in a particular
exclusive jurisdiction and cases where the litigants are not such contracting
parties. He referred to paragraphs 24 and 25 in Donohue v Armco (which also
refers to the British Aerospace case cited by SFC):
“[24]…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…
“[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. That was the result in …British Aerospace plc v Dee Howard Co
[1993] 1 Lloyd’s Rep 368…”
[34] Mr. Samek, QC, reminded this Court that in its submissions before the learned
judge, SFC acknowledged (correctly) that the “strong reasons” test would only
apply if “the jurisdiction clause applies.” Counsel for SFC continued (correctly) “I
mean if it [i.e. the jurisdiction clause] doesn’t apply, it [the “strong reasons” test]
doesn’t apply.” Mr. Samek, QC, was adamant that the learned judge was alive to
the point that for the purpose of determining the correct test, the jurisdiction clause
had relevance only if there was no dispute that it had been agreed between the
parties. Mr. Samek, QC, argued that SFC’s submission that the jurisdiction clause
applied so as to engage the “strong reasons” test was and is a bad point. That
was because there was so obviously a dispute as to whether the jurisdiction
clause applied and because SFC had in the Swiss proceedings expressly
disavowed reliance on any choice of law and necessarily, jurisdiction provision in
any of the written agreements. He reminded this Court that the juridical reason
why “strong reasons” are required in such a case is because it is the policy of the
common law to keep parties to their bargain. Mr. Samek, QC, said that in this
case, there is no written bargain between the Fund and SFC, let alone one which
contains a choice of law and jurisdiction clause. Mr. Samek, QC, was adamant
18
that it is quite wrong, as SFC submits, that “the Judge appeared to accept that the
jurisdiction clause applied.” Learned Queen’s Counsel, Mr. Samek, said that a fair
reading of the transcript as a whole shows quite clearly that the learned judge
(correctly) rejected the submission that the disputed jurisdiction clause mandated
that he should apply the “strong reasons” test, but (correctly) took account of it as
a factor in the exercise of his discretion. Accordingly, Mr. Samek, QC stated that
SFC’s submission was wrong: the learned judge did not find that the jurisdiction
clause applied in the context of determining the right test.
[35] Learned Queen’s Counsel, Mr. Samek, said that, furthermore, SFC’s criticism of
the learned judge that he applied the wrong test is hollow given that when SFC
sought permission to appeal from the learned judge at the end of the hearing, it
did not submit that he had applied the wrong test. On the contrary, the only
complaints ventilated were that the learned judge had been wrong to treat the
claims in the BVI and Swiss Proceedings as “one subject matter”, and that he had
gone wrong in the exercise of his discretion. Mr. Samek, QC, referred this Court
to the transcript of the chamber proceedings26 in which the judge had specifically
addressed this matter.
[36] Mr. Samek, QC, said that so far as SFC’s submissions (which are broadly to the
effect that the learned judge should have applied the “strong reasons” test
notwithstanding the dispute about the jurisdiction clause) as to SFC’s reference to
the Deutsche Bank case, he accepts that in general terms a challenge to the
validity of an agreement does not necessarily impeach a jurisdiction clause within
it. But that case has no application where a person (X) seeks to rely on a
jurisdiction clause in a contract to which the other person (B) is not (even
assuming the contract is valid) a party, let alone where X in related proceedings
submits a defence in which it advances the proposition that there is no relevant
contract between X and B. Mr. Samek, QC, said that this is not a case where the
26 Hearing bundle, volume 1, tab 2, at pp. 184-185.
19
Fund advances a “mere allegation” 27 that it is not a party to the Services
Agreement (or Brokerage Agreement). On the contrary, SFC even accepts (see
above), in the Swiss Proceedings, that the Fund is not a party to any written
agreement with it, with any express or implied choice of law and, by extension,
jurisdiction agreement between them.
[37] Turning next to SFC’s submission that it was for the Court to have determined who
had the better argument as to the applicability of the jurisdiction clause, Mr.
Samek, QC, pointed out that this was not a submission advanced by SFC to the
learned judge. Mr. Samek, QC, indicated that it is not therefore now open to SFC
to raise it on appeal. But in any event, if the learned judge (or this Court) did have
to determine which side had the better of the argument, it is plain that the Fund did
for the reasons referred to above. He said that it follows from the foregoing that it
is completely incorrect for SFC to submit that ‘the Judge appears to have
determined that SFC did have the better argument’. Mr. Samek, QC, maintained
that the learned judge’s reference to the jurisdiction clause was by way of his
identifying it as a factor of which to take account in the exercise of his discretion.
[38] In passing, Mr. Samek, QC, said that in relation to SFC’s argument28 that the Fund
is somehow bound by the BVI jurisdiction clause in the Services Agreement even
though it is not a party to it and even though SFC’s case in the Swiss Proceedings
is to the contrary; firstly, SFC adduced no evidence whatsoever to explain the
relationship between the parties. He said that all it did was to serve two affidavits
of a barrister employed by its lawyers (Ms. McFarlane) which were confined to
seeking permission to rely on expert evidence relating to Swiss legal procedure
and to exhibit (without more) the Services Agreement. Secondly, there is no
factual or legal basis whatsoever, let alone any identified in SFC’s argument, to
support the proposition advanced by SFC, namely, that the Fund is bound by the
BVI law and jurisdiction clause in the Services Agreement because IAM gave SFC
27 See Deutsche Bank at para. 17.
28 Which, Mr. Samek, QC, submitted, confusingly appears under ground 2, when on the face of it, its natural
home is under Ground I.
20
instructions pursuant to the Services Agreement. Thirdly, in its argument below,
SFC submitted that the “approach” would apply ‘if and insofar as the claims are
not made under the agreements containing BVI jurisdiction clauses.’29 But SFC’s
claims are not made under any of those agreements. He said that further, SFC’s
reliance on its pleaded case as set out in the particulars of claim was expressly
abandoned by counsel at the hearing.30 Finally, Mr. Samek, QC, said that the
upshot was that the learned judge was confronted by a party, SFC, which had
adduced no evidence of its contractual and legal version of events, let alone its
purported claims, and, had eschewed reliance on its pleaded case.31 Mr. Samek,
QC, was adamant that in the circumstances the learned judge applied the correct,
test. He submitted that ground 1 should be rejected.
Ground 2: Alternatively, if the court (sub silentio) rejected (1) the argument
that the claim was covered by the jurisdiction clause; or (2) the argument
that, if covered by the jurisdiction clause, the “strong reasons” test applied,
the court erred by failing to give any reasons for doing so
[39] Mr. Samek, QC, said that a fair reading of the transcript shows that the learned
judge did not reject SFC’s said submissions “sub silentio”. However, Mr. Samek,
QC, accepted that the judge did not expressly give his reasons in his ex tempore
judgment, but it was obvious to all that the judge had accepted the Fund’s
submission that there was nothing to displace the test given that it was not
“undisputedly” the case that the Fund and SFC had agreed that disputes between
them were to be determined in the BVI courts. Accordingly, it was apparent why
the “strong reasons” test had been rejected. Next, Mr. Samek, QC, argued that
the issue of the adequacy of a judge’s reasons depends on the nature of the case,
including whether it is a trial or an interlocutory hearing. He referred the Court to
29 Skeleton argument of SFC in the court below (dated. 2nd September 2015) at para. 21.
30 See transcript of chamber proceedings, record of appeal, tab 2, pp. 102 – 109 (internal pp. 98 – 105). For
example: “Well, I accept that the pleading is not a model of clarity. I might be somewhat understating it.”
(transcript internal p. 98, lines 15 – 17); “And it’s the next bit which I accept pleading is not very good.”
(transcript internal, p. 102 lines 16 – 17.); “The defect in the pleading is that it suggests that the agency
relationship was created by the [IMA]…” (transcript internal, p. 103 lines 18 – 20); “The defect in paragraph 4
on 719 is the identification of those clauses…” (transcript internal, p. 105 lines 6 – 7).
31 See also skeleton argument of the Fund at paras. 26-27 which set out its submissions as to the
hopelessness of SFC’s pleaded case.
21
English v Emery Reimbold & Strick Ltd at paragraph 17. Mr. Samek, QC,
submitted that it is not the law that the reasons for a decision, especially in an
interlocutory matter, are only to be found in the express words of the judgment, all
the more so when judgment is given extempore immediately following the hearing.
Mr. Samek, QC, advocated that context is everything and said that the Court of
Appeal in Emery Reimbold made clear that on any appeal based on inadequacy
of reasons, the appellate court had to review the judgment ‘in the context of the
material evidence and submissions’.32 If once ‘all of these are considered’ and it is
the case that ‘the reason is apparent and that it is a valid basis for the judgment’,33
an appeal based on inadequacy of reasons must fail.
[40] Learned Queen’s Counsel, Mr. Samek, said that if SFC had any doubt as to why
the “strong reasons” test had been rejected, then it was incumbent on it to have
raised the matter with the learned judge and referred the Court to paragraphs 24
to 25 of Emery Reimbold. He contended that the duty on SFC to raise the matter
with the learned judge was all the greater since the learned judge, in refusing
permission to appeal, stated:
“I think if I had found it necessary to apply different test or did apply
different test, again, it would be a question of whether I applied the right
test. In fact, I don’t think there is a question that I applied, I don’t think
either of you said that this is the wrong test to apply.”34
[41] Mr. Samek, QC, said that SFC did not so suggest, and it is to be inferred that it did
not do so because it perfectly well understood why the learned judge had adopted
the test, not least given the extensive submissions on that particular issue which
had been made. Mr. Samek, QC, referred this Court to paragraph 118 of Emery
Reimbold namely that:
“… an unsuccessful party should not seek to upset a judgment on the
ground of inadequacy of reasons unless, despite the advantage of
considering the judgment with knowledge of the evidence given and
32 At para. 26.
33 Ibid.
34 Transcript of chamber proceedings, hearing bundle, volume 1, tab 2, p. 186, internal page 182, lines 18-
23. Which was a recognition that SFC had not pressed the “strong reasons” test in circumstances where it
could not establish that the jurisdiction clause was indisputably agreed between the Fund and SFC.
22
submissions made at the trial, that party is unable to understand why it is
that the judge has reached an adverse decision.”
Mr. Samek, QC, therefore submitted that ground 2 should be similarly be rejected
and turned his attention to ground 3.
Ground 3: Whichever test was appropriate, the court erred in law and/or
principle by failing to apply the domiciliary presumption to which the
respondent as a BVI person is subject
[42] Mr. Samek, QC, said that it is trite, and the learned judge knew, that the fact that
the Fund is domiciled in the BVI founds jurisdiction here, in the sense that it can be
sued here as of right. However, the fact that a defendant is sued in a jurisdiction
because it is domiciled there does not displace the application of the Spiliada test,
nor does it give rise to a “domiciliary presumption”. He referred the Court to
Imanagement Services Limited v Cukurova Holdings AS et al35 at paragraph
47 which makes clear, referring to the Bitech Downstream case, that domicile is
just one of a number of factors to be considered.36 Mr. Samek, QC, argued that
the Banco Atlantico case cited by SFC is not authority for any proposition that the
fact of the Fund’s domicile in the BVI displaces in some way the applicability of the
test or that it constitutes anything more than a factor (even if a “a strong pointer or
connecting factor”) to be considered in the exercise of the court’s discretion.
[43] Mr. Samek, QC, opined that in truth, this ground of appeal adds nothing since it is
accepted by the Fund that it had to establish that on the facts of this particular
case, Switzerland was the clearly or distinctly appropriate forum. Mr. Samek, QC
stated that the Fund accepts that the fact of the Fund’s domicile in the BVI is a
factor in favour of maintaining jurisdiction here. But, beyond that, it is not
understood (and SFC does not explain) how the Fund’s domicile is “relevant to the
test that is to be applied on the application for a stay”.
35 BVIHCVAP2007/0025 (delivered 6th October 208, unreported).
36 Citing with approval the dictum of Hariprashad-Charles J that “I do not think that the domicile of the
company is necessarily the quintessential connecting factor or that it should be so as a matter of public
policy. It is, like the law that governs the transaction or the issues for trial, a strong pointer or connecting
factor. Like these, it is to be considered with other connecting factors.” See also paragraph 51.
23
[44] Mr. Samek, QC, stated that SFC’s criticism of the learned judge for “not giving any
consideration to this fundamental points” is unjustified because the point is not, for
the reasons above, “fundamental” in the sense contended for by SFC, and also
because SFC made no such submission to the learned Judge, whether in written37
or oral submissions.
[45] According to Mr. Samek, QC, ground 3 should be rejected.
Ground 4: In seeking to identify the “natural forum” and/or determining
whether or not Switzerland was “clearly or distinctly” more appropriate than
the BVI, the court erred by taking into account and/or giving too much
significance (so that the various factors were not fairly balanced) to the fact
that the BVI claim arose out of the same business relationship as the claim
in the Swiss Proceedings
[46] Learned Queen’s Counsel, Mr. Samek, said that it is important to appreciate the
context in which the learned judge placed reliance on the fact that the BVI claim
arose out of the “same business relationship” as the claim in the Swiss
Proceedings. He reminded this Court that the Swiss Proceedings were already
underway and more advanced than the BVI proceedings – the extensive and
detailed pleadings (on both sides) with documentary evidence in support attached
in the Swiss Proceedings are testament to that. Mr. Samek, QC, said that in the
Swiss Proceedings, SFC raised claims against the Fund as part of its defence.
These claims were in support of SFC’s claim similar to a right of retention under
article 434 of the Swiss Code of Obligations (“Article 434”) of the monies which the
Fund claimed were being wrongly withheld from it. He posited that at an earlier
hearing before the learned judge on 22nd July 2015, SFC had accepted that its
claims in the BVI action (leaving aside the defects in the particulars of claim) were
also raised in the Swiss Proceedings. He referred the Court to the first affidavit of
Mr. David Payne sworn to on 11th May 2015 and his second affidavit sworn to on
19th June 2016. Mr. Samek, QC, maintained that there was a complete overlap
37 See skeleton argument of SFC in the court below (dated 2nd September 2015) under section D “forum non
conveniens”.
24
between SFC’s claims (or at least what SFC intended here to claim) in the two
sets of proceedings. The Swiss law experts were agreed that Article 434 conveys
a substantive right which might be invoked as a plea by SFC in the Swiss
proceedings. Those rights include a right of retention.
[47] Mr. Samek, QC, further asserted that it was the uncontested evidence of the
Fund’s independent Swiss law expert (in contrast to SFC’s expert who was its
lawyer), inter alia, that: if the Swiss court concludes the Fund’s claims exist, then it
will “have to assess whether SFC has the right to retain the sums” which SFC has
claimed to be entitled to retain.38 Prevailing Swiss legal doctrine is that the Swiss
court will at trial have to take into account both matters (i.e. the Article 434 plea
and the Fund’s claim). The Swiss court would do this by making a “Zug un Zug”
decision, in effect granting the Fund’s claim but making enforcement of it subject
to the Fund performing its obligations to SFC in respect of the matters (claims)
which are the subject of Article 434. In taking into account both matters, the Swiss
court will be required to make findings on the merits of SFC’s claims which ground
the Article 434 plea.
[48] Next, Mr. Samek, QC, said that the SFC’s lawyer’s (Dr. Naegeli) only response
was not to disagree with Mr. Hofmann, but only to state that the Swiss
Proceedings might be suspended by the Swiss court. This was noted by the
learned judge who put the matter to SFC’s counsel.39 The learned judge kept
pressing SFC’s counsel as to whether the Swiss courts would go into the merits of
SFC’s right of retention claim. The following exchange at the end of the
questioning is telling:
“THE COURT: No. no, don’t change the facts. The facts
are BVI claim proceeds. Swiss claim proceeds. Swiss claims gets
judgment. BVI is still carrying on. Right of retention is claimed. Does the
Swiss Court say, we don’t care if there is any merit in the right of retention
or not, we are going to hold up payment of the Swiss claim or do they look
at the right of retention at some stage to some degree?
38 Expert opinion of Dieter Hofmann, hearing bundle, volume 2, tab 26, at para 35.
39 See transcript of chamber proceedings, hearing bundle, volume 1, tab 2, pp. 149 – 151, internal pp. 145 –
147.
25
MR. COLLINS: The expert [SFC’s expert] doesn’t deal
with that specific question.”40
Mr. Samek, QC, said that SFC did not explain why its expert had not addressed
that issue, notwithstanding that the Fund’s independent expert had addressed it.
In these circumstances, Mr. Samek, QC, maintained that the learned judge was
fully justified in approaching the matter as he did, namely, on the basis that the
Swiss court would consider the merits of SFC’s claims which were part and parcel
of its Article 434 right of retention defence and which (on SFC’s own case)
duplicated the claims which (it believed) it was making in the BVI proceedings.
[49] Mr. Samek, QC, reminded the Court that in The Abidin Daver, at page 411H to
412A,41 Lord Diplock held that:
“Where a suit about a particular subject matter between a plaintiff and a
defendant is already pending in a foreign court which is a natural and
appropriate forum for the resolution of the dispute between them, and the
defendant in the foreign suit seeks to institute as plaintiff an action in England
about the same matter to which the person who is plaintiff in the foreign suit
is made defendant, then the additional inconvenience and expense which
must result from allowing two sets of legal proceedings to be pursued
concurrently in two different countries where the same facts will be in issue
and the testimony of the same witnesses required, can only be justified if the
would-be plaintiff can establish objectively by cogent evidence that there is
some personal or judicial advantage that would be available to him only in
the English action that is of such importance that it would cause injustice to
him to deprive him of it.”42
Mr. Samek, QC, said that Lord Diplock’s dictum was cited with approval by the
English Court of Appeal in Galaxy Special Maritime Enterprise v Prima Ceylon
Ltd (“The Olympic Galaxy”) 43 and by this Court in Commercial Bank –
Cameroun v Nixon Financial Group Limited.44
40 Ibid. at p. 151, internal p. 157.
41 To which the learned Judge correctly referred: see Transcript internal p. 172, lines 6 – 13.
42 Mr. Samek, QC, submitted that SFC adduced no such “cogent evidence”.
43 [2006] EWCA Civ 528, [2006] 2 All ER (Comm) 902 at paragraph 26: “Relying on Dicey and Morris,
Conflict of Laws (13th edn, 2000) vol 1, p 400 (para 12–030), Mr Flaux argued that the effect of Lord
Diplock’s speech in The Abidin Daver had been subsequently diluted by Spiliada…But as I read that passage
26
[50] Mr. Samek, QC, submitted that it is, as the learned judge correctly concluded,
vastly more desirable that the Swiss court should resolve all matters in dispute
between the parties in one integral set of proceedings. That would have the effect
of avoiding: (i) any risk of conflicting decisions or findings; (ii) any concerns which
one court may have about trespassing on issues which would or may be decided
in the other court;45 and (iii) fragmentation of the dispute with the parties having to
litigate in two separate jurisdictions with all the attendant expense and time. In
passing, Mr. Samek, QC, said that SFC criticises the learned judge for applying
Lord Diplock’s dictum in The Abidin Daver to “different claims – i.e. different
subject matter…” This, Mr. Samek, QC, argued, is yet further fallacious reasoning.
Just because (theoretically) there are different claims does not entail that the
subject-matter of those claims is different. For example, a group of persons
including bank employees may agree to rob a bank and then successfully put their
agreement into effect. The bank and the depositors may have many different
claims; claims in conspiracy; claims in wrongful interference with goods; claims in
trespass; claims in breach of employment contract and so on. Different claims, but
not different subject matter.
[51] Mr. Samek, QC, underscored the fact that SFC has submitted that the learned
judge was wrong to apply Lord Diplock’s dictum in The Abidin Daver to this case
in that he approached the issue of the “same subject matter” too broadly. Mr.
Samek, QC, submitted that SFC’s submission is wrong because it wrongly
engages in a narrow semantic interpretation of Lord Diplock’s use of the
expression “same matter”. All Lord Diplock is intending to refer to is the
desirability of avoiding “the additional inconvenience and expense which must
result from allowing two sets of legal proceedings to be pursued concurrently in
two different countries where the same facts will be in issue and the testimony of
any such dilution is confined to cases where foreign proceedings have not passed beyond the stage of being
initiated and have been started merely for the sake of demonstrating that a competing jurisdiction exists.”
44 At paras. 27 – 32.
45 Highlighted by the adjournment of the conciliation proceedings apparently because of the hearing before
the learned judge: see Harneys’ letter of 15th August 2015 to Homburger AG, its Swiss lawyers.
27
the same witnesses required”. Further, Lord Diplock did not state that the two
actions must be completely about the “same matter”, so that the principle has no
effect if other matters are raised which are not about the “same matter”. Mr.
Samek, QC, said that all that is required to engage the principle is “two sets of
legal proceedings [being] … pursued concurrently in two different countries where
the same facts will be in issue and the testimony of the same witnesses required”
with the result that “additional inconvenience and expense … must result”. Mr.
Samek, QC, pointed out that SFC submits that the “only connection between the
two claims” arises from SFC’s right of retention claimed in the Swiss Proceedings;
but to describe this as the “only” connection is a substantial understatement which
does not correspond to the reality. Furthermore, said Mr. Samek, QC, SFC’s
submission that it is not seeking to “have the merits of its claims against the Fund
determined” in the Swiss Proceedings fails to acknowledge that the Swiss court
will make findings on the merits (unless the Swiss proceedings were stayed);46
nor are “the different fora…being asked to determine different claims.”47 They are
being asked to determine the same claims, namely, SFC’s claim here and its
Swiss right of retention claim.
[52] Accordingly, Mr. Samek, QC, argued that SFC’s criticism that the learned judge
“did not balance the various factors fairly in the scale” is unjustified. On the
contrary, as is apparent from the judgment and a fair reading of the transcript, this
is precisely the task which the judge set himself and in which he engaged. He
therefore urged this Court that ground 4 should be rejected.
Ground 5: In seeking to identify the “natural forum” and/or determining
whether or not Switzerland was “clearly or distinctly more appropriate” than
the BVI, the court erred by failing to give sufficient weight to the fact that the
BVI claim was governed by BVI law
[53] On this ground of appeal, Mr. Samek, QC, said that contrary to SFC’s submission,
the learned judge did not “[appear] to accept the argument that SFC’s claim was
46 See paras. [47] to [48] above.
47 See skeleton argument of SFC at para. 40.
28
governed by BVI law”. This criticism is similar to that made by SFC in relation to
the BVI jurisdiction clause. He said that the Fund’s response is the same, namely,
that SFC is wrong. Rather, all that the learned judge was saying in his extempore
judgment was that he took into account the fact that BVI law might apply. He
rightly reasoned that, if it were to apply, it would not be a factor which would
displace the conclusion he had reached that Switzerland was the clearly or
distinctly more appropriate forum. Moreover, the judge in the judgment correctly
drew attention to the fact that evidence of foreign law (i.e. BVI law) could be given
in the Swiss proceedings, just as the reverse happens here.48
[54] Mr. Samek, QC, said that SFC’s reference to the old case of The Eleftheria is
misplaced because in that case (unlike in the case at bar) the contracting parties
had agreed to refer their disputes to a foreign court, thus, the English court was
addressing the issue of whether there were “strong reasons” to depart from the
parties’ jurisdiction agreement. Further, Mr. Samek, QC, stated the matters
mentioned in that case are commonplace considerations. Mr. Samek, QC, said
that the learned judge did consider the issue of BVI law and came to the decision
which he did, and to which he was entitled. Mr. Samek, QC, reminded the Court
that the fact that another judge or even this Court might come to a different view
does not entitle this Court, with respect, to disturb the learned judge’s exercise of
his discretion. Mr. Samek, QC, said that an appellate court should only interfere
where it is clear that an error of principle has been made or that the result falls
outside the range of potentially “right” answers, and it should not “re-assess the
weight to be given to the matters which the judge was entitled to take into account
in exercising his own discretion” and referred the Court to Cherney v Deripaska
(No 2).49 Mr. Samek, QC, said contrary to SFC’s submission, the learned judge
did not fail to “balance the various factors fairly in the scale”. Accordingly, he
submitted that ground 5 should be rejected.
48 Transcript of chamber proceedings, hearing bundle, volume 1, tab 2, p. 177, internal p. 173, lines 173 lines
18 – 25.
49 [2009] EWCA Civ 849; [2010] 2 All ER (Comm) 456 at para. 68
29
[55] In conclusion, Mr. Samek, QC, maintained that the learned judge was correct to
apply the Spiliada test. He said the judge exercised his discretion in accordance
with that test and there is no proper justification for interfering with or disturbing his
exercise of discretion and his evaluation of the evidence before him. The
suggestion that the learned judge failed to give adequate reasons should be
rejected. Accordingly, Mr. Samek, QC, submitted that the appeal should be
dismissed with costs to the Fund.
Analysis and Conclusion
[56] I have given deliberate consideration to the very helpful arguments that have been
advanced by both sides. I propose to address each ground of appeal as identified
by the parties and in the sequence in which the grounds have been argued.
Ground 1: The court erred in law and/or principle by applying the wrong test
for a stay
[57] The law is well settled in relation to jurisdiction clauses and the applicability of the
“strong reasons” test. In Donohue v Armco the House of Lords stated:
“[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 noncontractual
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
… 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…”
(My emphasis).
[58] In oral submissions, SFC sought to rely on a services agreement and a
management agreement to show the existence of a jurisdiction clause to which the
30
Fund should be held. However, the Fund is not a party to either agreement. It is
therefore clear to me that there is no written agreement between the Fund and
SFC on which SFC’s claim in the BVI is based.50 Mr. Collins, QC, in his opening
statement conceded this much; however, despite the valiant efforts of SFC to
show that there exists a written agreement, when pressed during the oral
submissions, learned Queen’s Counsel, Mr. Collins, was unable to point to any
document from which it could be said that a written agreement was in existence.
In fact, Mr. Collins, QC, conceded that the pleadings did not point to any specific
written agreement on which the BVI’s claim is based. I would have expected him
to have pointed the Court to a specific written agreement to which SFC and the
Fund are parties since it was seeking to rely on an alleged jurisdiction clause. It is
trite law that in order to be able to pray in aid of not granting a stay on the basis
that the “strong reasons” test applies, there must be in existence a written
agreement from which the Court can glean as to the existence of an exclusive or
non-exclusive jurisdiction clause. In so far as there was no written agreement
between the Fund and SFC on which the BVI claim is based, and to which Mr.
Collins was able to point to, quite apart from his circuitous attempt to point to
reference in a brokerage agreement and the management agreement which he
says indicates that the Fund was the principal, his argument rests on very shaky
grounds. I accept that the law is well settled and that the question of nonexclusive
or exclusive jurisdiction clause cannot arise. I agree with the arguments
that were advanced by Mr. Samek, QC, to the effect that there can be no question
of the “strong reasons” test being applicable in the absence of a written agreement
between the Fund and SFC. The whole basis of the strong reasons test is the
need for the courts to keep the parties to the choice of jurisdiction which they have
made unless there is some strong reason for not doing so. Mr. Collins, QC,
accepted that SFC’s pleaded case did not state that there was a written
agreement between SFC and the Fund, yet he argued for this orally. What is very
strange is the fact that even though SFC was forced to concede that its pleadings
50 It should be noted that the only agreement between SFC and the Fund is a Trust agreement which is the
basis of the Swiss Proceedings.
31
did not indicate that there was an agreement, no steps were taken to amend the
pleadings even though a considerable amount of time had elapsed before SFC
had advanced the same arguments before the court below and this Court –
namely SFC’s pleadings are not clearly drafted.
[59] Even before this Court, the arguments that were advanced on behalf of SFC fall
very short on meeting the threshold of establishing that there was a written
agreement between the Fund and SFC. I do not accept learned Queen’s Counsel,
Mr. Collins’ submission that the learned judge accepted that there was a written
agreement between the Fund and SFC. There is no indication that this is so. In
any event, the mere fact that SFC seemed to have been relying on a clause in the
Services Agreement could not have assisted SFC since the Fund was not a party
to that agreement. Critically, there is nothing in the extempore judgment from
which I can conclude that the judge held that there was in existence a written
agreement between SFC and the Fund. In any event, SFC’s pleadings, and
accepted by Mr. Collins, QC, were deficient in asserting that there was a written
agreement.
[60] By way of emphasis, I say that it is trite law that a party who wishes to rely on a
jurisdiction clause must do so on the basis of the existence of a written agreement
with clear terms to that effect. I agree with Mr. Samek, QC, that Donohue v
Armco is clearly distinguishable from the case at bar since in that case both
parties had signed the written agreement which contained the jurisdiction clause.
While I do not wish to pre-empt the second ground of appeal, it is pellucid to me
that the judge applied the Spiliada test in granting the stay and he said so in his
ex tempore judgment. It was done on the basis that there was no written
agreement between the parties. Accordingly, it would be illogical to speak about
reliance on a jurisdiction clause in the absence of a written agreement between
the Fund and SFC. I have no doubt that there simply could have been no bargain
to which the parties could have been held in relation to the forum in which to
litigate their dispute.
32
[61] Also, it is very interesting that as pointed out by Mr. Samek, QC SFC, in its
defence in the Swiss proceedings that were commenced by the Fund, had
asserted as follows:
“Since the parties have not agreed in the present on any express or
implied choice of law the applicable law must be determined by the
relevant Swiss Code.”
This information was drawn to the judge’s attention and I have no doubt that he
was alive to all of its implications when he rendered his judgment.
[62] It was clear that Mr. Collins, QC, in his oral arguments before this Court, had an
uphill if not an impossible task of pointing to the pleading which addressed the
existence of a written agreement between the Fund and SFC and which contained
a jurisdiction clause. He sought to explain this deficiency by saying it was bad
pleadings and that the pleadings should have indicated the different roles of the
Brokerage Agreement and the Investment Management Agreement which gave
rise to the agreement. I do not for one moment accept this since he had several
months to correct this. If it simply was a case of bad pleading, the question is why
has SFC not sought to correct the pleadings. In any event, Mr. Collins’ oral
arguments were unpersuasive and I cannot accept them. He was unable to point
to any document which allowed the SFC to sue the Fund for services and to which
SFC was a party and with the greatest of respect to Mr. Collins, QC, his
arguments were circuitous and unattractive. I cannot accept them.
[63] In all of the circumstances, and based on the transcript, I do not for one moment
accept that the judge must have concluded that the jurisdiction clause applied. It
is true as Mr. Samek, QC, conceded that the extempore judgment was not a
model of clarity and the judge did not expressly say so, but one thing that is certain
is that there is no basis for the conclusion that the judge accepted that the
jurisdiction clause in any agreement to which the Fund was not a party could have
bound the Fund. Accordingly, the learned judge, having concluded that the
“strong reasons” test did not apply, proceeded to consider the forum non
33
conveniens point. I am therefore not persuaded that the judge erred in applying
the Spiliada test for the stay in the absence of a jurisdiction clause. In view of the
totality of circumstances, SFC’s appeal on this ground fails.
[64] I now turn to ground 2.
Ground 2: If the court (sub silentio) rejected (a) the argument that the claim
was covered by the jurisdiction clause or (b) the argument that, if covered by
the jurisdiction clause the “strong reasons” test applied, the court erred by
failing to give any reasons for doing so
[65] In my view, this appeal presents a good opportunity to encourage judges to plainly
and clearly provide reasons for their decision. In this regard, I accept Mr. Samek,
QC’s, concession that judge did not expressly provide reasons for applying the
Spiliada test. However, it must be remembered that the judgment was extempore
and the learned judge did not seem to have prepared a written structured ruling
which would have been desirable to guide his thoughts. However, this is not the
end of the matter. I accept and I am guided by the helpful and well-known
principles that were enunciated in Emery Reimbold and can no more than apply
them. Further, I accept the principles that were enunciated in Emery Reimbold to
the effect that if a party to a judgment is unclear as to the reasons for the judge’s
decision, the party has an obligation to seek to ascertain from the judge the
reasons.
[66] It must also be borne in mind that the judge commenced hearing the application at
2:35 pm and sat until 6:30 pm and immediately gave his ruling at the invitation of
counsel. Perhaps unwisely so since his thoughts were not expressed in a very
structured and logical manner. This can be excused in all of the circumstances of
the case; however, the need for pre-writing at least the outline of the ruling is
underscored by what has transpired in the case at bar.
[67] Also, I accept and I am guided by the very helpful principles that were enunciated
in Emery Reimbold that:
34
“…an unsuccessful party should not seek to upset a judgment on the
ground of inadequacy of reasons unless, despite the advantage of
considering the judgment with knowledge of the evidence and the
submissions that were made at the trial, that party is unable to understand
why it is that the judge has reached an adverse decision.”51
It is indeed the law that where there is an appeal based on the inadequacy of
reasons, the appellate court has to review the judgment ‘in the context of the
material evidence and submissions’52 to determine whether, when all of these are
considered, it is the case that the reason is apparent and that it is a valid basis for
the judgment.53
[68] With those principles in mind, I have given deliberate consideration to the
pleadings and submissions that were before the judge, the exchanges between
the bench and Queen’s Counsel together with the extempore judgment. My
perusal of the judgment of the learned judge in the transcript indicates very clearly
that the judge rejected the “strong reasons” test as being inapplicable in the
absence of a written agreement between the Fund and SFC. While the judge did
not say that expressly, it is clear that a services agreement and management
agreement upon which SFC sought to rely could not avail as the basis for the
application of the strong reasons test since the Fund simply was not a party to any
written agreement on which the claim in BVI was based. Mr. Collins, QC, was
forced to concede during oral submissions that the pleadings needed to be
amended in order to allege the written agreement, if any. Accordingly, I am not
persuaded that SFC genuinely is unaware of the reasons for the judge’s decision.
It is clear to me that its complaint may well be in relation to the clarity of the
judgment, that is, it was not set out with the degree of clarity that is to be expected.
With respect to the judge, this is by no means a criticism of the judgment since it
must be borne in mind that it was an extempore judgment.
51 At para. 118.
52 English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605 at para. 26.
53 See also Flannery and another v Halifax Estate Agencies Ltd [1999] All ER (D) 159.
35
[69] It is passing strange that as was helpfully pointed out by Mr. Samek, QC, that in
refusing to give permission to appeal, the learned judge indicated that it was not a
case in which either party was saying that he had applied the wrong test and even
at that stage SFC did not indicate that it was unclear as to the reasons. In any
event, the exchanges between learned counsel and the judge as seen in the
transcript clearly indicate the reasons why the strong reason test was rejected
even though the judge did not state the reasons expressly.
[70] More recently, the Privy Council underscored the point that there is no need to
provide a written judgment if the reasons for the decision can be gleaned from the
extempore judgment. I can do no more than apply the very helpful approach that
was adopted in Nelson and Others v First Caribbean International Bank
(Barbados) Ltd.54 In Nelson, the Board accepted that there was no need for our
Court of Appeal to have provided a written reasoned judgment in circumstances
where an extempore judgment was given, the Court having read the submissions
before and engaged counsel during the appeal.
[71] In any event, the legal principles on forum conveniens are well known to both
sides and it is noteworthy that eminent Queen’s Counsel, Mr. Collins also
appeared for SFC before the court below. I therefore have no doubt that learned
Queen’s Counsel, Mr. Collins, being fully aware and knowledgeable of the
pleadings, the submissions that were advanced by both sides at some length and
having read the transcript of the application must be acutely aware of the reasons
for the judgment. The application was not complex and the principles are settled,
which I have already indicated, in relation to the first ground of appeal and will not
repeat.
[72] In my respectful opinion therefore that there is no force to this ground of appeal
that the learned judge failed to give reasons. Accordingly, this ground of appeal
also fails.
54 2014 UKPC 30 at para. 17.
36
Ground 3: Whichever test was appropriate, the court erred in law and/or
principle by failing to apply the domiciliary presumption to which the
respondent is subject
[73] There is no domiciliary presumption in private international law in relation to
commercial law matters. It is trite law that the fact that the Fund is domiciled in the
BVI founds jurisdiction in the sense that the BVI court is an available forum.
However, a court that applies the Spiliada case must go on to determine whether
in light of the other connecting factors, the forum is clearly or distinctly the
appropriate forum for the trial. Further, it is noteworthy that Bitech Downstream
Limited v Rinex Capital Inc is not authority for the proposition that was advanced
by Mr. Collins, QC, namely, that the domicile of a company in the forum places a
heavy burden on the defendant to show why the claim in the forum should be
stayed. In fact, to the contrary, Rawlins J quite correctly made it clear that
domicile is simply one of the connecting factors to be considered in the
determination of the clearly appropriate forum. Also, I agree with Mr. Samek, QC
when he argued that Banco Atlantico is not authority for any proposition that the
fact of the Fund’s domicile in the BVI displaces the applicability of the Spiliada test
or that it constitutes any more than a connecting factor to be considered by the
court in the exercise of its discretion. It is settled law that the private international
law domicile has more relevance in family law matters than in commercial law
matters. With greatest respect to the arguments advanced by SFC on this ground,
I have no doubt that there is nothing to this point. I therefore accept the
submissions that were made by Mr. Samek, QC, without repeating them and hold
that the judge did not err by not giving pre-eminence to the domicile of the Fund in
his determination of the clearly or distinctly appropriate forum.
[74] Accordingly, the appeal fails on this ground as well.
[75] I come now to the fourth ground of appeal.
37
Ground 4: In seeking to identify the “natural forum” and/or determining
whether or not Switzerland was clearly or distinctly more appropriate than
the BVI, the court erred by taking into account and/or giving too much
significance to the fact that the BVI claim arose out of the same business
relationship as the claim in the Swiss Proceedings
[76] Professor Winston Anderson, in the scholarly treatise, Caribbean Private
International Law,55 has quite helpfully provided much needed guidance on the
application of the principles in Spiliada and forum non conveniens. At paragraph
9-006 Professor Anderson stated as follows:
“With regard to the forum non conveniens enquiry, the basic principle is
that a stay will only be granted:
“where the court is satisfied that there is some other available forum,
having competent jurisdiction, which is the appropriate forum for the trial.”
Such a forum must be a court where the case may be tried more suitably
for the interests of all the parties and the ends of justice.”
[77] At page 208 Professor Anderson further explains that
“Caribbean Law affirms that a three-stage inquiry is mandated. The first is
concerned with whether there is another available foreign forum; the
second with whether that forum is more appropriate than the local court;
and if so, the third is whether justice would be served allowing the
prosecution of the action there.”
[78] It is indisputable that the Fund, in seeking a stay, had clearly to satisfy the learned
judge that there was another available forum. It is obvious that it did so since
Switzerland was so regarded and there is no complaint in relation to this aspect.
The gravamen of SFC’s complaint in this appeal is whether or not the learned
judge erred by accepting that the Fund had demonstrated that the other available
forum is clearly or distinctly more appropriate than the BVI forum. Here again, the
pronouncements of Professor Anderson are instructive. At paragraph 9-008, page
209 of the book, the learned Professor said:
“In practice the defendant discharges the burden of proof by establishing
that the foreign jurisdiction is the natural forum in the sense of being the
country with which the action that has the most real and substantial
55 (2nd edn., Sweet & Maxwell 2014) at p. 207.
38
connection. The locale with the preponderance of connecting factors may
assist in identifying the natural and appropriate forum in that they indicate
the place where justice can be done at “substantially less inconvenience
or expense”.”
[79] Professor Anderson further enunciates that:
“The real assignment is to isolate that forum which, from a quantitative
and qualitative assessment, comprises the “center of gravity” of the
dispute. The whole factual and legal nature of the case must then be
considered.”
[80] With those principles as they relate to the application of forum conveniens clearly
in mind, I will move on to examine whether the criticisms that are made of the
judge’s approach on his determination of the clearly or distinctly appropriate forum
have any merit. It is trite law that on an application for a stay of jurisdiction on the
basis of forum non conveniens, it is usual for the judge to examine the connecting
factors in seeking to arrive at a decision. It is unfortunate that the learned judge
seemed not to be inclined to use the forensic language one would have expected
to have seen in an application of this nature. Here again the circumstances in
which the extempore judgment was given is brought into focus. The learned judge
did make reference to the “one business relationship” and despite the different
aspects to it, it is logical, efficient and sensible to use the concept that was
discussed in Abdin Daver.
[81] I accept Mr. Collins, QC’s, observation that the Abidin Daver is an application of
the principles in Spiliada and not an exception. This however does not assist
Mr. Collins, QC’s position in so far as the judge referred to Abidin Daver. There is
no doubt in my mind that the language the judge used as referred to was a bit
unfortunate. However, I accept Mr. Samek, QC’s, submission that given the
context in which the judge made those observations which is revealed from the
transcript, the pleadings and the helpful submissions from both sides, it is clear
that there was no dispute before the judge, that: there were ongoing Swiss
Proceedings that were very advanced between the same parties; in the Swiss
39
Proceedings SFC had raised claims against the Fund as part of the defence; the
claims were in support of SFC’s claim to a right of retention under article 434 of
the Swiss Code of Obligations of monies which the Fund claimed were being
wrongly withheld from it; SFC had accepted before the judge that its claims in the
BVI action were also raised in the Swiss Proceedings; there was an overlap of the
issues between the Swiss proceedings and the BVI claim.
[82] In my mind it would have been more desirable if the judge had referred and relied
on the helpful principles that were enunciated in Spiliada and specifically identify
the connecting factors in detail but I am unable to conclude that the principles that
were enunciated by Lord Diplock in Abidin Daver are inapplicable. I agree with
Mr. Samek, QC that SFC in criticizing the judge gives a too narrow interpretation
of Lord Diplock’s use of the expression “same matter”. I have no doubt that as
urged by Mr. Samek, QC, that all that Lord Diplock intended was to refer to the
desirability to avoid ‘the additional inconvenience and expense which must result
from allowing two sets of legal proceedings from being pursued concurrently in two
different countries where the same facts will be in issue and the testimony of the
same witnesses required.’56 I also agree with Mr. Samek, QC that Lord Diplock
did not intend that the two actions must be completely about the same matter.
Neither does the jurisprudence that has developed in relation to the stay of
proceedings require that the subject matter in the two sets of proceedings should
be the same. I totally accept Mr. Samek, QC’s, view on this point. In fact,
contemporary application of the doctrine of forum non conveniens seeks to ensure
litigation is resolved in the country with which it is most closely connected. What is
required is that there be a close connection between both sets of litigation,
namely, the local and the foreign claim – this much was present in the case at bar.
[83] I am reluctant to criticize the learned judge’s use of the language “same business
relationship” since Mr. Collins, QC, and Mr. Samek, QC, also used this language
in the court below; therefore, this seemed to be the approach of both sides in
56 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at pp. 470 – 471.
40
addressing the connecting factors. It must be remembered that at the heart of an
application for the stay of proceedings on the basis of forum non conveniens is a
request that the court exercises its discretion to not hear the case before it on the
basis that there is clearly or distinctly a more appropriate foreign forum. My review
of the detailed submissions and the pleadings that were placed before the learned
judge for the exercise of his discretion does not reveal that he attached a lot of
weight to the fact that the BVI claim arose out of the same business relationship as
the claim in the Swiss proceedings. I have no doubt that the learned judge was
fully alive to the connecting factors that were present in the case and addressed
them in his exchanges with both sides. There is no doubt in my mind that given
the totality of the circumstances there is no basis upon which it could properly be
said that the judge attached too much weight to what he loosely referred to as the
“same business relationship” in exercising his discretion to grant the stay of the
proceedings. There is no concept of same business relationship that can be
utilized in a vacuum. However, when I look at the transcript in the round, it is clear
to me that both the judge and counsel when they used that concept were
addressing the connecting factors relevant to the two claims that are closely
related.
[84] I accept Mr. Samek, QC’s submissions and I have no doubt that the judge was
alive to the fact that he had to undertake a balancing of quantitative and qualitative
factors in order to determine the forum that was most appropriate for the litigation
of the dispute. I agree with Mr. Samek, QC, that even though the judge spoke
about “same business relationship” he did so against the backdrop of carrying out
the requisite task of determining clearly or distinctly the appropriate forum in which
SFC’s claim should have been litigated. The judge spoke about the scale tilting
which showed that he was balancing the factors.
[85] In so far as this appeal challenges the judge’s exercise of discretion, the law is
well settled as to when an appellate court will interfere with the judge’s exercise of
discretion. I can do no more than refer to the helpful pronouncements of
41
Sir Vincent Floissac in Dufour and Others and Others v Helenair Corporation
Ltd and Others57 where he said:
“We are thus here concerned with an appeal against a judgment given by
a trial judge in the exercise of a judicial discretion. Such an appeal will not
be allowed unless the appellate court is satisfied (1) that in exercising his
or her judicial discretion, the judge erred in principle either by failing to
take into account or giving too little or too much weight to relevant factors
and considerations, or by taking into account or being influenced by
irrelevant factors and considerations; and (2) that, as a result of the error
or the degree of the error, in principle the trial judge’s decision exceeded
the generous ambit within which reasonable disagreement is possible and
may therefore be said to be clearly or blatantly wrong.”58
[86] In exercising his discretion one way or the other, it is open to the judge to
determine the weight to be attached to the various connecting factors on either
side’s case. The modern jurisprudence does not tell the judge the amount of
weight that should be attached to the connecting factors and there is very good
reason for this. This is unsurprising, for to do otherwise would be to improperly
fetter the judge’s discretion. A close reading of the transcript of the proceedings
below reveals that the learned judge spent a considerable amount of time
examining and balancing the connecting factors and discussing them with both
Queen’s Counsel. Indeed, chief among the factors that point to the BVI that were
present in the case are follows:
(a) the documents are in English;
(b) SFC is domiciled in BVI – SFC has filed a claim in BVI;
(c) the SFC claim is based on a Services Agreement. (It must be borne in
mind that the Fund is not a party to the Services Agreement on which
the BVI claim is based).
[87] The other connecting factors which point to Switzerland are as follows:
(a) there is a credit Swiss account in Switzerland;
57 (1996) 52 WIR 188.
58 At pp. 189 – 190.
42
(b) the Fund is a Swiss Company, pleadings are in German, the case is
far advanced in the Swiss proceedings and is based on the Trust
Agreement;
(c) SFC submitted to Swiss jurisdiction and has filed a retention claim
which is a part of the defence and counterclaim in Swiss Proceedings;
(d) the Swiss Court will have to assess the SFC claim (serious overlap;
possibility of obtaining conflicting judgments);
(e) it was accepted that a lot of Swiss speak good English;
(f) in the Swiss Proceedings SFC’s defence raises similar issues as a
counter claim;59
(g) SFC, if it wished, could have counterclaimed fully for said sums in the
Swiss Proceeding but has specifically indicated that it does not intend
to do so;
(h) The Court was addressed on the issue that the burden was on the
defendant to establish that the foreign court was clearly the more
appropriate forum;
[88] I have no doubt from reading the transcript of the proceedings that the learned
judge assessed the connecting factors and attached the relevant weight to them
and came to the conclusion that the SFC claim had the most real and substantial
connection with Switzerland or to put it another way, Switzerland was clearly or
distinctly the more appropriate forum. Even though the judge did not express
himself in that way, it is clear from the overwhelming quantitative and qualitative
connecting factors which point to Switzerland as the forum that is clearly and
distinctly more appropriate.
[89] I also accept the very helpful principle that was stated in Cherney v Dempaska,60
namely, that an appellate court should only interfere with the judge’s exercise of
59 This may well raise the issue of impermissible forum shopping.
43
discretion where it is clear that an error of principle has been made or that the
result falls outside the range of potentially “right” answers and it should not
reassess the weight to be given to the matters which the judge was entitled to take
into account in exercising his own discretion.
[90] It is not open to this Court to simply seek to impose any view that it may have for
that of the proper exercise of the judge’s discretion. In addition, I am guided by
and apply the helpful principles that were enunciated by Sir Vincent Floissac in
Dufour v Helenair. Accordingly, I have no doubt that the learned judge
committed no error of principle in granting the stay but rather exercised his
discretion quite properly.
[91] In view of the totality of circumstances, this ground of appeal also fails.
[92] This brings me now to ground 5.
Ground 5: In seeking to identify the “natural forum” and/or determining
whether or not Switzerland was “clearly or distinctively more appropriate”
than the BVI, the court erred by failing to give sufficient weight to the fact
that the BVI claim was governed by BVI law
[93] In view of everything that I have indicated in relation to grounds 3, and 4, ground 5
has become otiose. It is therefore unnecessary to address this issue.
Conclusion
[94] SFC has not prevailed in its challenge to the judge’s decision in which the stay of
its proceedings was granted on the basis of forum non conveniens. Its appeal is
therefore dismissed.
60 [2012] EWCA Civ 1235.
44
Costs
[95] The Fund has succeeded in the appeal and is entitled to its costs to be assessed,
if not agreed within 21 days of this order.
[96] I gratefully acknowledge the assistance from all learned counsel.
Louise Esther Blenman
Justice of Appeal
I concur.
Mario Michel
Justice of Appeal
I concur.
Paul Webster
Justice of Appeal [Ag.]