In Highland Crusader Offshore Partners v Deutsche Bank AG ( EWCA Civ 725) the Court of Appeal considered the operation of a non-exclusive jurisdiction clause, whereby the parties submitted to English jurisdiction (but were not permitted from proceeding in another country of competent jurisdiction), against the background of proceedings in Texas and London.
Highland issued declaratory proceedings against Deutsche Bank in Texas, alleging that Deutsche Bank had induced Highland to buy a portfolio of securities through fraudulent misrepresentations. Texas was Highland's home jurisdiction, as well as the place the alleged misrepresentations were received and where the contract had been negotiated. Deutsche Bank filed an unsuccessful motion in Texas to dismiss the proceedings, citing forum non conveniens.
Deutsche Bank then applied to the Commercial Court for an anti-suit injunction, which was granted and Highland were ordered not to take any further steps in the Texas proceedings. Mr. Justice Burton explained that the law favoured the litigation of issues only once, in the most appropriate forum, and therefore the party which had commenced proceedings in the “non-contractual jurisdiction” must desist, on the basis of commercial good sense. Furthermore, unlike in Texas, the English courts did not attach significance to the "first filed rule" where there existed a jurisdiction clause. Mr. Justice Burton also held that, in the case of non-exclusive jurisdiction clauses, it would be "vexatious and oppressive" for parties to pursue parallel proceedings in a non-contractual jurisdiction, unless there were "exceptional reasons, unforeseeable at the time of contracting, for a party to do so".
Highland then appealed against the anti-suit injunction, and were supported by the Court of Appeal. Lord Justice Toulson did not agree that pursuing proceedings in an alternative jurisdiction constituted a breach of the contract. He also disputed the presumption that parallel proceedings in a non-selected forum were to be regarded as vexatious or oppressive. This presumption came close to treating a non-exclusive jurisdiction clause as an exclusive jurisdiction clause. Neither party had chosen to make the jurisdiction exclusive, and therefore no court was entitled to block proceedings in an alternative competent jurisdiction. In reaching their decision, the court adhered to the principles of comity, such that each court should be left to determine the suitability of the litigation before it, and interference with another court's decision should be avoided.
The decision demonstrates, once again, that parties should be careful to identify on what terms they wish to contract and to ensure that their agreement reflects this. The English Court cannot be relied upon to correct a bargain when one party acts in a way its counterparty finds to be inconvenient.