In Middle Eastern Oil v National Bank of Abu Dhabi – Lawtel 4.12.08 the Applicant applied for an order staying the proceedings brought against it by the Respondent. The Respondent was a company incorporated in Dubai in the UAE. The Applicant was a bank incorporated in Abu Dhabi in the UAE. It had a branch in Dubai where the Respondent held a US dollar bank account. The proper law of the contractual banking relationship between the parties was that of the UAE. The contract provided that the parties submitted to the jurisdiction of the civil courts of the UAE but without prejudice to the Applicant's general right to take proceedings, where necessary, in any court wheresoever. The Respondent claimed that the Applicant had failed or refused to comply with its instructions to transfer a sum of US$1.6m from its account in Dubai to an account in London. The Respondent claimed to have suffered loss in the meantime because non-payment of the sum had led to the transferee's liquidation. The causes of action relied on by the Respondent were in contract and in tort. It had served proceedings on the Applicant in England where the Applicant carried on business through a branch.
The Applicant submitted that (1) the jurisdiction clause was an exclusive jurisdiction clause so far as the Respondent was concerned, obliging the Respondent to sue in the courts of the UAE, and there was no strong reason for not enforcing that contract; (2) the UAE was clearly and distinctly the more appropriate forum for the determination of the claim and justice did not require that the court should refuse to grant a stay.
The Commercial Court held that the wording of the jurisdiction clause indicated that the draftsman had addressed the question of proceedings concerning the banking relationship being brought in jurisdictions other than the UAE and had expressly provided that the Applicant might do so. No mention was made of the Respondent being able to do so. The obvious inference to be drawn from that omission was that, properly construed, the jurisdiction clause was intended to oblige the Respondent to commence proceedings concerning its banking relationship in the courts of the UAE, but not to oblige the Applicant to do so. That being so the burden lay upon the Respondent to show that there was a strong reason for not enforcing the exclusive jurisdiction clause by granting a stay.
The Respondent’s loss was sustained in England but that connecting factor was not a strong reason for not enforcing the jurisdiction clause since the prospect that loss might be sustained outside the UAE could have been foreseen when the parties entered into their banking relationship. The loss in England was the only significant connecting factor with England, and the most significant element or elements of the events constituting the tort occurred in the UAE for the purposes of s.11(2)(c) Private International Law (Miscellaneous Provisions) Act 1995. Therefore the applicable law of the alleged tort was that of the UAE. The Respondent’s submissions about the quality of justice and the likelihood of a fair trial in the UAE were rejected. It followed that there were no strong reasons for not giving effect to the exclusive jurisdiction clause by granting a stay.
If that was wrong, the courts of the UAE were clearly and distinctly the more appropriate forum for the determination of the Respondent's claims. The Respondent failed to show that there were circumstances by reason of which justice required that a stay should nevertheless be refused.