Whether English court should stay proceedings where there are parallel proceedings and a non-exclusive jurisdiction clause
The claimant Italian company entered into a contract with the defendant US company which contained a nonexclusive jurisdiction clause in favour of the English courts. Following a dispute, it commenced proceedings in England. The defendant then issued proceedings in the US and sought a stay of the English proceedings.
In Owusu v Jackson , the ECJ held that a Member State court cannot stay its proceedings in favour of the courts of a non-Member State where the parties have agreed that it shall have jurisdiction. The precise scope of this decision has been the matter of some debate and the defendant sought to argue that it did not apply where there are parallel proceedings pending in the courts of a non-member State (relying on a matrimonial case - JKN v JCN ). However, Stuart-Smith J said that he did not need to decide the point, since even if he had a discretion to grant a stay, he would not have exercised that discretion. That was because:
- Where the parties have freely agreed that the English courts shall have jurisdiction, the fact that there are proceedings in another jurisdiction should be afforded little weight, since that state of affairs must have been within the reasonable contemplation of the parties (especially where (as here) a non-exclusive jurisdiction clause was agreed);
- It is harder to convince the English court to decline jurisdiction where the parties have agreed on a neutral forum with which neither are connected; and
- The fact that the foreign proceedings involve third parties is “considerably less potent” when the court is considering an application for a stay rather than an anti-suit injunction