The High Court has held that England was the proper forum to determine a dispute against an additional defendant, so as to avoid multiple proceedings and the risk of irreconcilable judgments. The defendant was a necessary or proper party to the claims made against the anchor defendants and the claimant had no real choice where to sue the anchor defendants as the claims against them came within English exclusive jurisdiction agreements: ED&F Man Capital Markets Ltd v Come Harvest Holdings Ltd and others [2019] EWHC 1661 (Comm).

The court rejected an argument, based on the Supreme Court decision in Lungowe v Vedanta plc [2019] UKSC 20, that the claimants could have sought to have all claims determined in Singapore, and therefore could not establish that the English court was the proper forum based on the risk of multiple proceedings and irreconcilable judgments. In Vedanta the court held that the risk of irreconcilable judgments was not a “trump card”, as the risk arose purely from the claimants’ choice to proceed against one defendant in England rather than, as was available to them, against both defendants in Zambia. This was particularly so in circumstances where the dispute was overwhelmingly Zambian in focus and nature.

The facts in ED&F differed substantially, as the claimant was bound to sue two of the defendants in England under exclusive jurisdiction clauses; there was no evidence to suggest that the anchor defendants would have been willing to give up those rights; and the concept of choice in Vedanta could not be stretched so as to require a party to act in breach of contractual promises as to jurisdiction and then seek to persuade the English court not to grant an anti-suit injunction restraining Singapore proceedings.

Overall, the High Court considered that the claims in this case required a single forum for their resolution and England was the only place where that could be achieved.

This case demonstrates that the risk of irreconcilable judgments, while not decisive post Vedanta, may still be a very important factor in determining the appropriate forum, particularly where the claimant has no real choice over where to sue the anchor defendant.

Background

The claimant, MCM, entered into Master Commodities Sale and Purchase Agreements with two Hong Kong companies, Come Harvest and Mega Wealth. The Master Agreements contained English exclusive jurisdiction agreements. Subsequent agreements were then entered into for the sale and purchase of nickel. The dispute between the parties turned on whether payments had been made by MCM to Come Harvest and Mega Wealth based on forged warehouse receipts. Those receipts had been issued by a warehouse operator, Access World, to the initial order, in most cases, of a Singaporean company, Straits.

In May 2017, MCM commenced pre-action disclosure proceedings in Singapore against Straits and in December 2017 it commenced English proceedings against Come Harvest and Mega Wealth. In September 2018 MCM sought to join Straits to the English proceedings and obtained an order granting permission to serve Straits out of the jurisdiction in Singapore. Straits challenged the jurisdiction of the English court.

Decision

The judge (Daniel Toledano QC sitting as a deputy High Court judge) dismissed the jurisdiction challenge.

He first had to deal with the consequences of MCM having wrongly used material disclosed pursuant to the pre-action disclosure proceedings in Singapore for the purposes of obtaining the order to serve Straits with the English proceedings out of the jurisdiction. He found that the use was the result of an inadvertent error and, if MCM was able to justify the order on the basis of the redacted materials now before the court, there would be no purpose in setting aside the previous order and granting a new one. The attack on the order as made therefore did not add anything to the jurisdiction challenge.

So far as the jurisdiction challenge was concerned, it was common ground that there was a serious issue to be tried on the merits and a good arguable case that the “necessary or proper party” gateway was met. The issue was whether England was clearly the proper forum.

Straits argued that England was not clearly the proper forum. MCM had exercised a choice to commence pre-action disclosure proceedings in Singapore and therefore intended that any substantive proceedings against Straits would be brought there too. MCM should be held to that choice. Straits also argued that MCM could have attempted to engineer a single composite forum for all claims against all parties in Singapore by requesting that Come Harvest and Mega Wealth did not insist on their rights under the English exclusive jurisdiction clauses. Alternatively it could have commenced Singapore proceedings in breach and then contended that strong reasons existed as to why the English court should not impose an anti-suit injunction against the continuation of those proceedings.

Straits sought to rely on the decision in Vedanta where the Supreme Court held that the risk of irreconcilable judgments was not a ‘trump card’ in circumstances where the risk arose purely from the claimants’ choice to proceed against one defendant in England rather than, as they could have done, against both defendants in Zambia. This meant that the claimants had failed in that case to demonstrate that England was the proper place for the trial of their claims against the second defendant, although ultimately the Supreme Court upheld the grant of permission to serve out of the jurisdiction on the basis that there was a real risk that substantial justice would not be obtainable in Zambia.

In the present case, the deputy judge rejected Straits’ arguments, finding there was a world of difference between the choice that the Supreme Court was considering in Vedanta and the choices Straits was complaining about in this case.

In Vedanta, leaving aside the substantial justice issue, the claimants had a straightforward choice between Zambia and England for all claims against all parties. The dispute was overwhelmingly Zambian in focus and nature, yet the claimants chose to pursue their claims in England. In the present case, MCM had never had a straightforward choice of this kind. It was bound by the exclusive jurisdiction agreements to sue Come Harvest and Mega Wealth in England. There was no evidence to suggest that those defendants would have been willing to give up their right to be sued here. The concept of choice could not be stretched so as to require a party to act in breach of contractual promises as to jurisdiction and then to fall on the mercy of the English court to avoid the grant of an anti-suit injunction. MCM was entitled to say that it had no choice but to sue Come Harvest and Mega Wealth in England. Having done so, there was real force in MCM’s submission that England was the proper place for all claims against all parties because it is the only jurisdiction where a single composite forum could be achieved.

It appeared to be the case that MCM initially intended to bring proceedings against Straits in Singapore, but had changed its mind due to the nature of the defence served by Come Harvest and Mega Wealth which appeared to point the finger at Straits. Whatever the reasons for the change of mind, however, the deputy judge could see no proper basis for saying MCM was stuck with its original choice.

Taken overall, the deputy judge considered that, in contrast to Vedanta, this was a case where the need to avoid multiplicity of proceedings and the risk of irreconcilable judgments should bear considerable weight in the evaluation of the proper forum. This was especially so where the nature of the claims made, in particular of a single overarching conspiracy, required a single forum for their resolution.

He then went on to consider other factors potentially relevant to forum, none of which had significant weight in his view. So far as governing law was concerned, this was unlikely to be a very significant factor as the dispute would likely turn on factual rather than legal issues. He considered however that English law in any event governed the claims for unlawful means conspiracy, knowing receipt as well as the equitable proprietary claims.