Case Alert - [2016] EWHC 2110 (Comm)

Whether claimant had submitted to foreign proceedings

Jackson Parton for claimant, Holman Fenwick Willan for defendants

Insurers brought a subrogated claim against the Master of a vessel in Morocco. Three months later the vessel owner ("the claimant") commenced proceedings in England seeking an anti-suit injunction. The claimant then commenced arbitration proceedings in London against the insurers.

When insurers were awarded damages in Morocco, the claimant asked the English court to rule that the judgment should not be recognised here. The insurers argued that the judgment should be recognised here as the claimant had voluntarily submitted to the jurisdiction of the Moroccan courts by asking them to dismiss or stay the proceedings in favour of London arbitration.

The claimant sought to rely on section 33 of the Civil Jurisdiction and Judgments Act 1982 which provides that a person against whom judgment has been given shall not be regarded as having submitted to the jurisdiction of the court "by reason only of the fact the he appeared …in the proceedings…to ask the court to dismiss or stay the proceedings on the ground the dispute in question should be submitted to arbitration…."

However, the insurers raised the following objections:

(1) The claimant's defence in the Moroccan proceedings that the dispute should be arbitrated was a "procedural defence" rather than a jurisdictional challenge. Phillips J rejected that argument, finding that, as a matter of Moroccan law, the claimant had had no other option to challenge the proceedings:

"Throughout that course the claimant's objection based on the alleged incorporation of arbitration clauses was its primary contention, and was never abandoned". Furthermore, the question of whether a party has submitted to a foreign court is to be inferred from all the facts, and the court has no discretion to determine this issue. Although there is textbook commentary suggesting that a jurisdictional challenge must be "rational", the mere fact that a challenge may be obviously wrong, or even irrational, does not in itself justify a conclusion that the party has submitted (instead, an extreme case would be needed ie where a challenge is "so obviously absurd"). Nor is there any support for the contention "that a party may be held to have submitted in a foreign jurisdiction because of actions in this jurisdiction".

(2) It was also argued that the claimant had adopted an inconsistent stance in previously commencing English proceedings without arguing that the dispute should be referred to arbitration. This abuse of process argument was also rejected by the judge: "Whilst there is a degree of tension between the claimant's stance in these proceedings and its position in the Morocco proceedings, it is the type of situation which can arise where disputes are pursued in parallel proceedings in different jurisdictions and governed by different laws. It is certainly not the type of blatant inconsistency which would cause the court to prevent a party from relying on the position it has undoubtedly and properly adopted in foreign proceedings".

Accordingly, the Moroccan judgment was not entitled to recognition in England.