The High Court has interpreted a jurisdiction clause as granting exclusive jurisdiction to the English courts, despite the absence of the word "exclusive" in the clause in question: Global Maritime Investments Cyprus Limited v O.W. Supply & Trading A/S [2015] EWHC 2690 (Comm).

A well drafted jurisdiction clause should make clear that exclusive jurisdiction is granted to the courts of a particular country, where that is intended, but this case shows that the absence of the word "exclusive" need not be determinative.

In reaching its decision, the court followed the approach adopted by the High Court in BNP Paribas SA v Anchorage Capital Europe LLP and others [2013] EWHC 3073 (see post).

The relevant clause

The parties had entered into various derivatives transactions relating to energy commodities. The law and jurisdiction clause, contained in General Terms agreed between the parties, provided:

13.1 These general terms and conditions will be governed by and construed in accordance with English law.

13.2 With respect to any suit, action or proceedings relating to these general terms and conditions each party irrevocably submits to the jurisdiction of the English courts.

The claimant, GMI, argued that the clause prohibited the commencement of proceedings in any country other than England, ie that it was an exclusive jurisdiction clause. The defendant, OW, submitted that it meant neither party would object to English jurisdiction if the other invoked it, ie it was a non-exclusive clause.

Exclusive vs non-exclusive

The judge, Teare J, observed that, as with all questions of construction, the court's task is to identify the meaning which the jurisdiction clause would reasonably be understood to bear in its context. Regard should be had to the manner in which the court has approached this question in previous cases, but as they involve differently worded clauses they cannot determine the construction to be adopted. The factors identified in previous cases are therefore only signposts which may sometimes assist in determining the intention of the parties.

The judge concluded that the clause provided for exclusive jurisdiction. He took into account the choice of English law which immediately preceded the jurisdiction clause, from which he inferred that the parties saw there was good sense in linking the proper law of the transactions with the country chosen in the jurisdiction clause. He also took into account that the clause applied to all proceedings relating to the General Terms. In that context, he said, the obligation assumed by the parties to "submit to the jurisdiction of the English courts" would reasonably be understood as an obligation to submit all claims relating to the General Terms to the jurisdiction of the English courts.

He noted that the language of the clause was not transitive, as in "each party agrees to submit all claims" to the jurisdiction of the English courts, but he thought the notion that each party was free to submit a claim to the jurisdiction of a court other than the English court in circumstances where each party had "irrevocably" submitted to the jurisdiction of the English court was difficult.

In the alternative, even if the clause was not exclusive, given that GMI had already commenced English proceedings, OW was obliged to submit to the jurisdiction of the English court and could not commence parallel proceedings elsewhere.

Real and present dispute

Typically, questions as to the meaning and scope of a jurisdiction clause will arise in the context of an application for an anti-suit injunction (as in the BNP Paribas case) and the court will consider whether proceedings which have been commenced or threatened breach the clause. This case was unusual and of interest in that no such proceedings had been commenced or threatened. OW submitted that GMI's claim for a declaration as to the effect of the clause was therefore premature.

On the facts, however, the court considered there was "a real and present dispute" between the parties as to the effect of the jurisdiction clause. There was a useful purpose in resolving that dispute. It was likely that OW would commence proceedings in the future, and if those proceedings were commenced outside of England, the issue as to interpretation of the clause would have been resolved. In those circumstances, the dispute between the parties would have been narrowed to the question whether the proceedings "relate to the General Terms".

Comment

The construction of a jurisdiction clause, as with any contractual term, depends on the words used and the context in which they are used. This decision, along with the BNP decision, suggests however that the court will give little weight to whether the clause uses transitive ("submit all claims") or intransitive ("submit to the jurisdiction") phrasing.