Court of Appeal looks at approach to be adopted in appeal from a decision on jurisdiction
Clyde & Co for claimant
The first instance decision in this case was reported in Weekly Update 46/14. The claimant insurer began proceedings in England but its Italian broker argued that the dispute should be heard in an Italian arbitration rather than by the English courts and challenged the jurisdiction of the English courts. This in turn required an examination of the Terms of Business Agreement ("TOBA") entered into between the parties in 2010 and a Framework Agreement which they entered into in 2011. The TOBA provided that all disputes would be heard by the English courts and the Framework Agreement provided for Italian arbitration. At first instance, Blair J noted that where there are different jurisdiction clauses in agreements between the same parties, the "one-stop" presumption stated by Lord Hoffmann's dictum in Fiona Trust & Holding Corp v Privalov (see Weekly Update 40/07) is relevant. This is an assumption that the parties, as rational business people, are likely to have intended any dispute arising out of the relationship into which they have entered to be decided by the same tribunal. However, he held that it did not apply here because the TOBA and Framework Agreements were dealing with different subject matters and hence the claimants had a "good arguable case" that the English courts have jurisdiction. The broker appealed and the Court of Appeal has now dismissed that appeal.
In considering the case, the Court of Appeal examined the approach which an appellate court should adopt when hearing an appeal from a judge who has ruled at the interlocutory stage on a jurisdiction challenge. Although the courts are usually slow to interfere in such circumstances, it was noted that this case involved the construction of a contract – which has only one "right" answer and so does not involve an evaluative exercise by the judge. As a result there is more justification for interference by the appellate court. There was also more reason to interfere where a defendant who is not ordinarily resident here and who objects to English jurisdiction is being compulsorily brought here.
The Court of Appeal therefore concluded that in a case involving service out under a relevant gateway, the appellate courts should show less circumspection than to a first instance assessment that the English court is the appropriate forum.
Turning to the merits of the case itself, it was held that the one-stop presumption does not apply where the overall contractual arrangements contain two or more differently expressed choices of jurisdiction and/or law in respect of different agreements. Here, the claimants had a "good arguable case" (ie "a much better argument") that the Framework Agreement had not superseded the TOBA and that this dispute fell to be decided under the TOBA and was therefore subject to English law and jurisdiction.