The decision was made against the backdrop of proceedings initiated by a third party in
The more usual route by which the English court will police its own jurisdiction is by issuing an anti-suit injunction against a party that brings or threatens foreign proceedings in breach of an English jurisdiction clause. But there was no question of that here, presumably because the English court had no basis for exercising jurisdiction over the party that brought the Indian proceedings (as it was not party to the counter-guarantees and the underlying contract to which it was party was subject to ICC arbitration).
The present decision illustrates another potential route: the English court may be willing to grant a declaration as to its own jurisdiction over an English law governed contract, where it considers that such a declaration may have some effect on the relevant foreign court and can be granted consistently with the principle of comity.
The decision is also of interest for the court's view that the plain and ordinary meaning of a clause providing that a contract shall be "subject to" an identified court's jurisdiction is that such jurisdiction will be exclusive, even where that word is not used. This is consistent with previous decisions which suggest that an English court will likely find that a jurisdiction clause is exclusive unless it is explicitly stated to be non-exclusive, particularly if there is also a choice of English law (see for example
Background
An Indian company,
The counter-guarantees, which were of a combined value of a little over
"This counter-guarantee shall be governed by and construed in accordance with the English laws and shall be subject to the jurisdiction of the courts of
As a result of the
In
In
Decision
The court clarified at the outset that the question of whether the
Insofar as concerns the declaratory reliefs sought by the claimant, the
However, the meaning and effect of the jurisdiction provisions in the counter-guarantees was not common ground, and therefore was a matter in dispute, even though the defendant had acknowledged that it could not advance any serious argument against the proposition that the jurisdiction clause was exclusive. It could therefore properly be the subject matter of an adjudicatory exercise. Moreover, according to the claimant's Indian law expert evidence, a declaration that the English courts had exclusive jurisdiction would, if granted, have some utility in that it would assist the Indian court in determining whether or not it had jurisdiction over the counter-guarantees. The court was also persuaded that it was not an infringement on the principle of comity between courts for it to grant declaratory relief as to the meaning and effect of provision(s) of a contract which was governed by English law and was between parties before the court.
The court went on to consider the interpretation of the jurisdiction provisions of the counter-guarantees between the parties, which as shown above did not use the term "exclusive". The court noted that it was not necessary to use the word "exclusive" to qualify the term "jurisdiction" so as to confer exclusive jurisdiction. What mattered was not which word(s) the parties had chosen to use to express the obligation to have disputes determined by a particular court or jurisdiction, but that they had used language that has that effect - as distinct from language that merely provides for the availability but non-exclusivity of a particular jurisdiction.
Relying on the decision of the
Accordingly, the court granted limited declaratory relief to the claimant in relation to the exclusivity of the court's jurisdiction. In its wider aspects the claim failed and was dismissed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Mr
Exchange House
EC2A 2HS
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