On 13th July 2009, the Court of Appeal handed down judgment in Highland Crusader Offshore Partners v Deutsche Bank AG  EWCA Civ 725. The case is now the leading authority on anti-suit injunctions and parallel proceedings in circumstances where a contract contains a non-exclusive jurisdiction clause. Tim Saloman QC and Charles Holroyd (both from 7 King’s Bench Walk) acted for the Highland companies (“Highland”), who were the successful appellants.
The case arose out of a dispute between Highland and Deutsche Bank in relation to contracts, which contained a non-exclusive English jurisdiction clause. The clause provided that both parties submitted irrevocably to the English jurisdiction, and appointed agents for service there, but that nothing in the foregoing was to limit the right of either party to take proceedings in the courts of any other country of competent jurisdiction.
Highland sued Deustche Bank first in Texas, alleging that the contracts had been procured by fraudulent misrepresentations and seeking a declaration that no sums were due to Deutsche Bank under them. Texas was effectively Highland’s home jurisdiction, and was where the alleged misrepresentations had been received and acted upon, and where the contract had been negotiated on behalf of Highland. Shortly after, Deutsche sued Highland in the Commercial Court in London claiming payment of sums which it said were due under the contracts.
Deutsche initially applied in Texas for the dismissal of the action there on grounds of forum non conveniens or on account of the jurisdiction clause, but the application failed.
Deutsche then applied to the English Court for an anti-suit injunction prohibiting the continuation of the Texas proceedings. At first instance, Mr. Justice Burton granted the injunction, holding that there was binding authority (principally the Court of Appeal’s decision in Sabah Shipyard (Pakistan) v Islamic Republic of Pakistan  2 Lloyd’s Rep. 571) to the effect that where there was a non-exclusive jurisdiction clause, it was vexatious and oppressive to pursue parallel proceedings in the non-contractual jurisdiction, unless there were exceptional reasons, unforeseeable at the time of contracting, for a party to do so. The Judge viewed this approach as having been supported by numerous first instance decisions decided since Sabah.
Highland appealed, arguing that this was wrong both in respect of the particular non-exclusive jurisdiction clause in issue, and in respect of non-exclusive jurisdiction clauses in general. The Court of Appeal agreed. In a scholarly judgment with which the other members of the Court agreed, Lord Justice Toulson reviewed the authorities and set out the principles which were to be applied to the grant of anti-suit injunctions in this context.
Lord Justice Toulson held that a non-exclusive jurisdiction clause should generally be interpreted as meaning that the parties have anticipated and accepted the possibility of some parallel proceedings, and that it was wrong to start from a presumption that parallel proceedings in a non-selected forum are to be regarded as vexatious or oppressive unless they can be justified by exceptional circumstances. Such an approach came close to treating a non-exclusive clause as being exclusive, and was contrary to principles of comity.
So far as concerns the decision in Sabah, which Lord Justice Toulson noted “has given rise to a good deal of debate as to its interpretation”, the Court held that it was based on the finding that the Government of Pakistan was in breach of contract in taking proceedings in Pakistan. If that was wrong, then the decision was based on the particular facts of the case. On either approach, the case “needs to be seen in the context of its own particular facts”.
The Court held that any attempt to extrapolate a general rule from Sabah, as the Judge below had sought to do, was contrary to the weight of other appellate authorities. Insofar as later first instance authorities had treated Sabah as having established such a rule, they were wrong.
Given the prevalence of non-exclusive jurisdiction clauses in commercial life, and the uncertainty, which had been created by the decision in Sabah, this decision clarifies the law in an important area.