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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Standard Chartered Bank (Hong Kong) Ltd & Anor v Independent Power Tanzania Ltd & Ors  EWHC 1640 (Comm) (09 June 2015)
Cite as:  EWHC 1640 (Comm),  1 All ER (Comm) 233
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QUEEN'S BENCH DIVISION
Fetter Lane, London EC4A 1NL
B e f o r e :
| (1) STANDARD CHARTERED BANK (HONG KONG) LIMITED
(A company incorporated in Hong Kong)
(2) STANDARD CHARTERED BANK MALAYSIA BERHAD
(A company incorporated in Malaysia)
|- and -
|(1) INDEPENDENT POWER TANZANIA LIMITED
|(A company incorporated in Tanzania)
(2) VIP ENGINEERING AND MARKETING LIMITED
(A company incorporated in Tanzania)
(3) PAN AFRICAN POWER SOLUTIONS (T) LIMITED
(A company incorporated in Tanzania)
Mr Matthew Hardwick QC and Mr Ian Higgins (instructed by Hugh Cartwright & Amin) for the 1st and 3rd Defendants
Mr Richard Coleman QC and Mr Christopher Knowles (instructed by Charles Russell Speechlys) for the 2nd Defendant
Hearing dates: 21-23 and 27 April 2015
Crown Copyright ©
The Honourable Mr Justice Flaux:
"33 GOVERNING LAW AND JURISDICTION
(A) Governing law: This Agreement shall be governed by and construed in accordance with the laws of England.
(B) Courts of England and Malaysia: For the benefit of the Arranging Banks, the Facility Agent and each Bank, all parties irrevocably agree that the courts of England and Malaysia are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that, accordingly, any legal action or proceedings arising out of or in connection with this Agreement ("Proceedings") may be brought in those courts and each party irrevocably submits to the jurisdiction of those courts.
(C) Other Competent Jurisdiction: Nothing in this Clause 33 shall limit the right of any party to take Proceedings against any other party in any other court of competent jurisdiction nor shall the taking of Proceedings in one or more jurisdictions preclude a party from taking Proceedings in any other jurisdiction, whether concurrently or not."
(D) Venue: Each party irrevocably waives any objection which it may have to the laying of the venue of any Proceedings in any court referred to in this Clause 33 and any claim that any such Proceedings have been brought in an inconvenient forum.
(G) Service of Process: The Borrower irrevocably appoints Bank Bumiputra Malaysia Berhad, London Branch and its successors (now of 14 Cavendish Square, London W1M 0HA, England) and Mechmar and its successors (now of No.1, Jalan Perunding U1/17, Seksyen U1, Hicom-Glenmarie Industrial Park, 40150 Shah Alam, Selangor D.E., Malaysia) to receive, for it and on its behalf, service of process in any Proceedings in England and Malaysia respectively. Such service shall be deemed completed on delivery to the relevant process agent (whether or not it is forwarded to and received by the Borrower). If for any reason a process agent ceases to be able to act as such or no longer has an address in London or Malaysia, as the case may be, the Borrower irrevocably agrees to appoint a substitute process agent acceptable to the Security Agent, and to deliver to the Security Agent a copy of the new agent's acceptance of that appointment, within 30 days."
(1) An application by IPTL and PAP under CPR 11.1(1)(b) and (6)(d) for a stay of the English proceedings on the ground that Tanzania not England is clearly the most appropriate forum for the determination of the dispute between the parties, alternatively for a stay on case management grounds.
(2) An application by VIP to dismiss or set aside the English proceedings as an abuse of process, alternatively an application for a stay of the proceedings on the same grounds as put forward by IPTL and PAP.
The factual background
"…implicates [SCB] doing something as part of the investing process, either directly or through an agent or entity under the investor's direction. No such actions were performed…. [An] investment might be made indirectly, for example through an entity that serves to channel an investor's contribution into the host state. Special purpose vehicles have long facilitated cross-border investment. Such indirectly-made investments, however, would involve investing activity by a claimant, even if performed at the investor's direction or through an entity subject to the investor's control. Under the facts of the present case [SCB] made no contribution to any relevant loans, taking no action to constitute the making of an investment. Also [SCB] has neither exercised any control over any credit to the Tanzanian debtor nor provided any direction to [SCBHK] relating to the making of the Loans."
The significance of this Award and the contentions being advanced by SCB, particularly in the light of the submissions made by Mr Coleman QC on behalf of VIP about SCB's arguments in the New York proceedings, with which I will deal in detail below, is that SCB was not contending before ICSID that it was a party to the finance documents or that SCBHK had acted as its agent in purchasing the loan or otherwise.
"The High Court committed fatal irregularities in the conduct of the impugned proceedings. The revision inevitably dictates that all the proceedings in [Causes Nos. 49 of 2002 and 254 of 2003] as of 17/9/09 [the date the administration petition was issued by SCBHK] are a nullity. The rulings and orders made therein, including the winding up order of 15/07/2011 are accordingly revised, quashed and set aside."
Having earlier accepted the submission of counsel for VIP that they were only dealing with legal points raised and that: "issues such as whether [SCBHK] has locus standi or is a creditor of IPTL or not, must first and foremost be taken up and resolved by the High Court" the CAT went on to order the hearing of the matter expeditiously before a judge of the High Court other than Kaijage J, including challenges to the competency of Cause No. 112 of 2009.
"Here, there are two alternative fora for resolution of this matter-the arbitration to which VIP long ago agreed to resolve its shareholder disputes or, at a minimum, the Tanzanian Proceedings which VIP has vigorously prosecuted and continues to do so. It would be most disingenuous for VIP to complain that its home jurisdiction of Tanzania is inadequate to address a matter the facts of which are so integral to that country. Indeed, in earlier court filings, VIP has claimed that the Tanzanian court is "the only court" that can resolve the parties' dispute."
"ORDERED that within ten days of the date of this Order defendant [SCB] shall submit to the Court a statement containing its agreement to consent to the jurisdiction of the appropriate court of the Republic of Tanzania for litigation of this matter, to accept service of process if sued by VIP in the Republic of Tanzania in connection with this action and not to assert any defense based on statute of limitation grounds that would not apply to bar the litigation if it were to proceed in this Court, and to comply with any final judgment rendered by the courts of the Republic of Tanzania with competent jurisdiction over the parties and the subject matter of this dispute."
"Because [SCB] previously informed the Court that Tanzania would be an adequate alternative forum, and thus at least implicitly that it would consent to Tanzanian jurisdiction, the doctrine of judicial estoppel bars [SCB] from withdrawing that consent. Judicial estoppel prevents a party from making a contradictory statement in a later stage of litigation based on the 'exigencies of the moment'…Permitting [SCB] to change its position on consent to Tanzanian jurisdiction after the Court had already announced its reliance on the prior representations would have an adverse impact on the integrity of the judicial process."
(1) That the monies were withdrawn without following the correct procedures and that Mr Sethi and then the Minister of Energy, the Attorney General and other high ranking government officials had incorrectly relied upon the 5 September 2013 Order.
(2) That contrary to its assertions, PAP did not own IPTL, since it could not have purchased Mechmar's shares in the company (which remained owned by Mechmar and charged to SCBHK). The report found that Mr Sethi: "intentionally and with the aim of receiving money cheated by submitting forged documents" in relation to the ownership of the Mechmar shares.
(3) That in September 2013 TANESCO had asked its lawyer and company secretary, Mr Godwin Ngwilimi, to go to Malaysia to carry out enquiries about PAP's purported ownership of IPTL. However, as the PAC Report records: "During that time TANESCO Board conducted 'supersonic speed' meetings which accepted that the ESCROW money should be given to PAP without waiting for the advice of their officer" and that when, in November 2013, Mr Ngwilimi raised concerns about PAP's alleged ownership of IPTL, "the TANESCO Board did not agree with that advice and finally fired Mr. Godwin Ngwilimi."
(4) That PAP was not entitled to any of the monies from the Escrow Account, that its receipt of the monies was illegal and that "the whole process of withdrawing money from the Tegeta Escrow Account was completely shrouded in fraud, corruption and gross negligence…". The PAC Report found that the Minister for Energy and Minerals, Sospeter Muhongo: "was a broker between Mr Harbinder Singh Sethi of IPTL [and PAP] and Mr Rugemalira of VIP"; and that he "did that brokering while he clearly knows that Mr Harbinder Singh Sethi has no legal rights to do business using the IPTL name." The Report recommended that Mr Sethi be arrested for theft. The Report concluded that the Government should seek a review of the 5 September 2013 Order of Utamwa J in order "to retract IPTL to its original state".
(5) That of the monies from the Escrow Account received by PAP, equivalent to some U.S. $125.7 million, U.S. $75 million was paid by PAP to VIP. Out of those monies, VIP made corrupt payments to a number of private individuals, including "political leaders… judges and other government officials". The PAC Report identified payments of the equivalent of U.S. $990,000 each to the Attorney-General and the Minister of Housing and of the equivalent of U.S. $25,000 each to two former Ministers of Energy and Minerals, two High Court judges (although neither of them has had any involvement in the various proceedings in Tanzania involving SCB and SCBHK) and Mr Saliboko, the Provisional Liquidator of IPTL. In addition, a TANESCO board member, Dr Bukuku, received the equivalent of U.S. $100,000. The Report went on to note that cash payments equivalent to approximately U.S. $47 million were made by VIP and PAP to other individuals whose names do not appear on bank statements.
FNC waivers-the law
"Therefore I conclude that this clause is not an exclusive jurisdiction clause. As I pointed out in Cannon Screen Entertainment Ltd. v. Handmade Films (1989), such a conclusion does not mean that the clause ceases to be relevant in relation to an application such as that which is being made by the defendants on this summons. If the contract says that the assured is entitled to sue the underwriter in the English Court, then it requires a strong case for the Courts of this country to say that that right should not be recognised and that he must sue elsewhere."
". . . the fact that the parties have agreed in their contract that the English court shall have jurisdiction (albeit a non-exclusive jurisdiction) creates a strong prima facie case that that jurisdiction is an appropriate one; it should in principle be a jurisdiction to which neither party to the contract can object as inappropriate; they have both implicitly agreed that it is appropriate."
"I also remind myself of the language used by Mr. Justice Hobhouse in the Cannon Screen case:
'Those parties have agreed to submit to English jurisdiction; they cannot object to its accepting that jurisdiction.'
It seems to me on the language of the clause that I am considering here, it simply should not be open to DHC to start arguing about the relative merits of fighting an action in Texas as compared with fighting an action in London, where the factors relied on would have been eminently foreseeable at the time that they entered into the contract. Furthermore, to rely before the English Court on the factor that they have commenced proceedings in Texas and therefore that there will be two sets of proceedings unless the English Court stops the English action, should as I see it simply be impermissible, at least where jurisdiction in those proceedings has been immediately challenged. If the clause means what I suggest it means that they are not entitled to resist the English jurisdiction if an action is commenced in England, it is DHC who have brought upon themselves the risk of two sets of proceedings if as is likely to happen, BAe commence proceedings in England. Surely they must point to some factor which they could not have foreseen on which they can rely for displacing the bargain which they made i.e. that they would not object to the jurisdiction of the English Court.
Adopting that approach it seems to me that the inconvenience for witnesses, the location of documents, the timing of a trial, and all such like matters, are aspects which they are simply precluded from raising. Furthermore, commencing an action in Texas, albeit that may not be a breach of the clause, cannot give them a factor on which they can rely, unless of course that action has continued without protest from BAe. One can well imagine that if BAe had taken part in the proceedings in Texas without protest and if the proceedings had reached the stage at which enormous expenditure had been incurred by both sides and the matter was accordingly nearly ready for trial in Texas, that such factors would obviously lead the English Court to exercise its discretion in favour of setting aside service of proceedings. That is very far from being the situation in relation to the Texas proceedings so far commenced.
It is thus clear to me that the proper approach to a case of the sort that I am considering is to consider it as equivalent to proceedings commenced as of right, to apply the passage in Lord Goff's judgment in The Spiliada dealing with such actions, but to add the consideration which he did not have in mind as pointed out by Mr. Justice Hobhouse in Berisford, that there is a clause under which DHC had agreed not to object to the jurisdiction. That being the proper approach, and additionally, it being (as in my judgment it is) right only to consider the matters which would not have been foreseeable when that bargain was struck, I would dismiss both summonses of the defendants."
"If contracting parties agree to give a particular court exclusive jurisdiction to rule on claims between those parties, and a claim falling within the scope of the agreement is made in proceedings in a forum other than that which the parties have agreed, the English court will ordinarily exercise its discretion (whether by granting a stay of proceedings in England, or by restraining the prosecution of proceedings in the non-contractual forum abroad, or by such other procedural order as is appropriate in the circumstances) to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum (the burden being on him) can show strong reasons for suing in that forum. I use the word "ordinarily" to recognise that where an exercise of discretion is called for there can be no absolute or inflexible rule governing that exercise, and also that a party may lose his claim to equitable relief by dilatoriness or other unconscionable conduct. But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it. Whether a party can show strong reasons, sufficient to displace the other party's prima facie entitlement to enforce the contractual bargain, will depend on all the facts and circumstances of the particular case."
"It is clear from Utrecht's skeleton argument and indeed from Mr Brindle's oral submissions that the principal object of this appeal is to remove the injunction in order to enable Utrecht to continue its proceedings against NWB in California. The judge considered first Utrecht's application for a stay of this action before considering whether he should give summary judgment for NWB. He was in my judgment right to do so because, if it were appropriate to grant a stay, it would be wrong to consider the application for summary judgment since no question of giving judgment for NWB (whether summary or otherwise) would then arise. As already stated, the judge refused a stay. I do not understand Utrecht to be formally challenging that refusal on this appeal, but since the purpose of the appeal is to allow the Californian proceedings to continue to judgment ahead of the English action, it seems to me that logically the first question for consideration is indeed whether a stay should be granted or whether the English action should be allowed to proceed to judgment."
"The judge said that Mr Brindle did not press Utrecht's application for a stay on the ground of forum non conveniens because he recognised the force of the argument based on clauses 22.1 to 22.3 of the TOA. Mr Brindle did not seek a stay on that ground in this court either. He was in my judgment right not to do so because those clauses are fatal to any such case. Their effect is that each party submitted to the jurisdiction of the English courts, waived any objection it might otherwise have to the English courts on the ground of forum non conveniens or otherwise and agreed that any judgment or order of the English court in connection with the TOA would be conclusive and binding on it. Those clauses make any application for a stay on the ground of forum non conveniens unarguable."
"37 The position as I see it may be summarised in this way. Utrecht cannot obtain a stay of these proceedings because of its promise in clause 22.3 to waive objection to the English courts on grounds of forum non conveniens or otherwise. Further, given that clause, Utrecht cannot rely upon such grounds to resist the granting a permanent injunction once it is held that the foreign proceedings are being pursued in breach of contract, especially in the light of clause 22.3(b). It would no doubt have been inappropriate to grant an interlocutory injunction to restrain the Californian proceedings at a time when it was no more than arguable that they were brought in breach of contract because it could not be said that they were vexatious or oppressive, especially in the light of the many factors connecting the case with California and having regard to clause 22.4 of the TOA, which expressly permits a party to bring proceedings in connection with the TOA in any court other than England.
38 However, for the reasons I have given, the position is radically different once it is held that Utrecht are in breach of contract in pursuing their claim in California. It follows that the question whether the judge was right to hold that Utrecht were in breach of the TOA in that regard is crucial to the outcome of this appeal and that the judge was entirely justified in embarking on NWB's summary judgment application."
"In the instant case, on any view, the GOP agreed to submit to the jurisdiction of the English court. Furthermore, it appointed agents for the purpose of service in England, and it agreed to waive any objection that any action brought in England was being brought in an inconvenient forum. It seems to me that it cannot have been the intention of the parties that if proceedings were commenced in England, parallel proceedings could be pursued elsewhere unless there was some exceptional reason for doing so. It certainly cannot have been contemplated that convenience could count as a reason for pursuing proceedings in a country other than England. In particular, where England has been chosen as a neutral jurisdiction by an entity, Sabah a Pakistan company with Malaysian shareholders, and the State of Pakistan, it cannot have been contemplated that parallel proceedings would be pursued in the courts of Pakistan simply on the basis that that forum is a convenient forum."
"4 …gives express sanction to the determination of those issues in proceedings in a court other than the English court and also expressly contemplates that proceedings to determine those issues might be run in parallel and simultaneously in a number of jurisdictions in addition to that of the English court. It does not expressly deal with what should happen should parallel proceedings throw up the possibility of simultaneous trials in different jurisdictions where the issues to be tried were substantially the same.
21 I agree with the judge. I would only add that it seems to me that by entering into an agreement containing a jurisdiction clause with provisions similar to the final paragraph of the jurisdiction clause in issue in this case, the parties must have had in contemplation the possibility of virtually simultaneous trials with all the additional burdens which the judge describes since such is an obvious possible consequence of permitting parallel proceedings in the absence of provision in the jurisdiction clause, or elsewhere in the agreement, for the means of avoiding those consequences."
"On 3 July 2002 RBC moved for dismissal of the New York suit on the merits, at the same time as moving to stay on grounds of forum non conveniens. Extensive evidence and argument took place on the motion to dismiss, including evidence of English law from Professor Ewan McKendrick and Mr Robin Potts QC. The motions were denied on 31st January 2003 and RBC's appeal was dismissed on 26th June 2003. When the present English action was before Moore-Bick J in January 2003 on Rabobank's unsuccessful application for a stay (which was carefully put on the basis of case management, not forum conveniens, having regard to clause 13(b)), RBC also expressly contemplated during submissions that, unless the New York judge ordered a stay, the New York suit might go first to trial and give rise to "estoppel consequences" (Core C2 p.424F-G))."
"99 There are a number of formidable difficulties arising from the jurisdiction agreement, which on this part of the appeal must be taken to apply to part of the dispute, in the way of HSH establishing its case for a stay. It is true that HSH would have a very good prospect of showing that there is another court with competent jurisdiction (the New York court) which is clearly or distinctly more appropriate than England for the trial of the action: Spiliada Maritime Corp v Cansulex Ltd  AC 460…
100 But against that, it is most unusual for an English court to stay proceedings brought in England pursuant to an English jurisdiction agreement. In British Aerospace v Dee Howard  1 Lloyd's Rep. 368, at 376, Waller J. said (in the context of an exclusive English jurisdiction clause) that it should not be open to a party to start arguing about the relative merits of fighting an action in the foreign jurisdiction as compared with fighting an action in London, where the factors relied on would have been foreseeable at the time that they entered into the contract. That case involved an application to set aside service out of the jurisdiction. It has been approved in this court in the context of an application to stay English proceedings (Ace Insurance SA-NV v Zurich Insurance Co  EWCA Civ 173,  1 Lloyd's Rep 618, at , per Rix LJ) and of an application to restrain foreign proceedings in which the foreign court was asked to prevent a party suing in England pursuant to an English jurisdiction clause (Sabah Shipyard (Pakistan) Ltd. v Islamic Republic of Pakistan  EWCA Civ 1643,  2 Lloyd's Rep 571, at , per Waller LJ) and it has been applied in many decisions in the Commercial Court.
101 The next difficulty is that there is an express agreement in the jurisdiction clause the effect of which is that HSH irrevocably waived any claim that proceedings had been brought in an inconvenient forum. In National Westminster Bank v Utrecht-America Finance Co  EWCA Civ 658,  CLC 1372, at , Clarke LJ thought it was "fatal" to any forum non conveniens case, whereas in Sabah Shipyard (Pakistan) Ltd. v Islamic Republic of Pakistan, ante, at  Waller LJ did not treat such an agreement as decisive, but thought that it underlined the point that the jurisdiction agreement would be overridden only in exceptional circumstances."
"In my judgment, where a party has expressly agreed not to rely on convenience arguments in resisting the jurisdiction of the nominated court, that is a matter of very considerable significance, and in such a case especially strong grounds will be required before the exclusive jurisdiction clause can be departed from on grounds founded on convenience. The strong reasons relied on by Mr. Gruder are essentially three." [The judge then dealt with those reasons and held that they were not strong reasons for not enforcing the clause and refused the application for a stay.]
15 As to the 'hierarchy', it is clear that the most 'stringent' form of jurisdiction clause is the exclusive jurisdiction clause. This has a positive and a negative impact. It prescribes one jurisdiction (or sometimes one of two, dependent upon specified circumstances), in which the parties must then litigate, often providing for methods of service and even for specific courts within the jurisdiction. As to the negative impact, it renders it a breach of contract for a party to issue proceedings against the other in any other jurisdiction than the agreed exclusive jurisdiction.
16 The next most stringent clause is a non-exclusive jurisdiction clause with a waiver of FNC. This will normally provide for one (or possibly more than one) jurisdiction in which a party may be sued by the other party, and there is a waiver of FNC, which means that the non-exclusive jurisdiction so chosen is elevated above others, because, with regard to that jurisdiction, but not as to any others, the parties agree not to assert that to be sued there would be inconvenient, oppressive or expensive. If a party then issues proceedings in the chosen, but non-exclusive, jurisdiction, and the other party then asserts forum non conveniens, that party is in breach of contract in doing so.
17 The lowest in the hierarchy is the non-exclusive jurisdiction. This may be accompanied by an other jurisdiction acceptance clause. This addition would seem only to make explicit what would, in any event, be implicit from the very fact that the chosen jurisdiction is not exclusive (and there is no FNC waiver), namely that (i) proceedings may be issued by a party without being in breach of contract in another jurisdiction (ii) there may thus even be parallel proceedings, inconvenient, expensive and burdensome though that may be, and giving rise to a risk of inconsistent judgments. Bingham LJ in Du Pont v Agnew  2 Lloyd's Rep 585 at 589 emphasised that the policy of the law must be to favour the litigation of issues once only. In The El Amria  2 Lloyd's Rep 119 at 128-9, Brandon LJ referred to the need to keep in mind the "potential disaster" of the risk of inconsistent decisions on the same issues inherent in a multiplicity of proceedings. However, in Royal Bank of Canada v Coöperative Centrale Raiffeisen Boerenleenbank BA  2 AER (Comm) 847 at paragraph 21, Evans Lombe J, with whom Thorpe LJ agreed, referred to an other jurisdiction acceptance clause, as, in his view, showing that the parties "must have had in contemplation the possibility of virtually simultaneous trials, with all the additional burdens which the judge describes, since such is an obvious possible consequence of permitting parallel proceedings in the absence of provision in the jurisdiction clause, or elsewhere in the agreement, for the means of avoiding those consequences". In Highland Crusader Offshore Partners LP and others v Deutsche Bank AG  EWCA Civ 725 when overturning my grant of an injunction in the Commercial Court ( 2 Lloyd's Rep 61), Toulson LJ, with whom Carnwath and Goldring LJJ agreed, stated, in terms, in paragraph 64 of his judgment, that "a non-exclusive jurisdiction clause self-evidently leaves open the possibility that there may be another appropriate jurisdiction". Gross J in Import Export Metro Ltd v CSAV  1 Lloyd's Rep 405 at 412 stated that "while a multiplicity of proceedings is, in general, undesirable and very likely to some extent inconvenient, the gravity of the risks to which it gives rise and the weight to be given to this factor will turn on the facts of the individual case".
"It seems to me plain that, if there is to be an exceptional case, where forum non conveniens arguments are to prevail, a fortiori in an exclusive jurisdiction or FNC waiver case, but even in the case of non-exclusive jurisdiction, the burden on the applicant to establish such a case must be a heavier, perhaps, in exclusive jurisdiction cases, a much heavier, one than if there were no jurisdiction clause at all. If the matters were unforeseeable at the time of the contract, then the burden may be the more easily satisfied. If however the matters were foreseeable, for example if, as here, the parties entered into a series of interlinked agreements with different jurisdiction clauses, then it would not be possible to suggest – nor is it suggested here – that it was not foreseeable that a clash or contest of jurisdictions might not arise. In the absence of unforeseeability, and in this case in the absence of any impact on the parties, or on the issue of jurisdiction, of any third parties (such as featured considerably in Donohue), then the strong or very strong or exceptional grounds, said to engage the interests of justice and satisfy the necessary burden, must be all the more compelling."
"Without limiting or paraphrasing these statements of principle, I note three points. First, while recognising that both "overwhelming" and "very strong" are elastic terms, I respectfully agree with and adopt Gloster J's use of those words in formulating the test that Elcan must satisfy. Second, I respectfully agree with and adopt Moore-Bick J's clear explanation why "particular weight should … attach to the fact that the defendant has freely agreed as part of his bargain to submit to the jurisdiction", which justifies the principled conclusion that he should be held to his bargain unless there are overwhelming reasons to the contrary. Third, I respectfully agree with and adopt the observations of Waller J and Moore-Bick J about the weight to be attached to the existence of proceedings brought in another jurisdiction. For the reasons they gave it seems to me that, where a party has freely agreed that the English Courts shall have jurisdiction, the fact that there are proceedings in another jurisdiction should of itself be afforded little weight since that state of affairs must have been within the reasonable contemplation of the contracting parties when they entered into their agreement, particularly where the agreement was that the English courts should have non-exclusive jurisdiction."
"…in practice there seems to be little difference between an agreement such as the present which expressly recognises the right of the parties to bring proceedings in other courts having jurisdiction and an agreement which merely vests the English courts with non-exclusive jurisdiction. In either event, the possibility of proceedings in other jurisdictions must have been in the parties' reasonable contemplation when making their agreement, and they have vested the English courts with jurisdiction in that knowledge and contemplation."
"It follows that it was foreseeable that an acrimonious termination might lead to disputes involving third parties and the making of allegations of conspiracy of the type that are now made by Elcan in the New York proceedings against Cuccolini, Peters and Mr Ramsay. I reject the submission that any greater level of specificity was required in what was foreseeable as being quite unrealistic; but I am satisfied that the facts alleged against Cuccolini, Peters and Mr Ramsay fall within the limits of what was foreseeable at the time of the conclusion of the contract."
Are there very strong or exceptional grounds for granting a stay?
"But the crucial point, in the judge's view, was the Cambridgeshire factor. This was regarded, certainly by Neill L.J., as relevant; and in this I find myself to be in agreement. The criticism of the judge's view of this factor goes, therefore, to its weight, as Neill L.J. indicated when he said that it seemed to him that the judge attached far too much importance to this factor. With all respect, however, when I read the judgments of both the Lords Justices, I consider that they underrated it. I believe that anyone who has been involved, as counsel, in very heavy litigation of this kind, with a number of experts on both sides and difficult scientific questions involved, knows only too well what the learning curve is like; how much information and knowledge has to be, and is, absorbed, not only by the lawyers but really by the whole team, including both lawyers and experts, as they learn about the interrelation of law, fact and scientific knowledge, having regard to the contentions advanced by both sides in the case, and identify in their minds the crucial matters on which attention has to be focussed, why these are the crucial matters, and how they are to be assessed. The judge in the present case has considerable experience of litigation of this kind, and is well aware of what is involved. He was, in my judgment, entitled to take the view (as he did) that this matter was not merely of advantage to the shipowners, but also constituted an advantage which was not balanced by a countervailing equal disadvantage to Cansulex; and (more pertinently) further to take the view that having experienced teams of lawyers and experts available on both sides of the litigation, who had prepared for and fought a substantial part of the Cambridgeshire action for Cansulex (among others) on one side and the relevant owners on the other, would contribute to efficiency, expedition and economy - and he could have added, in my opinion, both to assisting the court to reach a just resolution, and to promoting a possibility of settlement, in the present case. This is not simply a matter, as Oliver L.J. suggested, of financial advantage to the shipowners; it is a matter which can, and should, properly be taken into account, in a case of this kind, in the objective interests of justice."
Stay on case management grounds
"Granting the general desirability of guarding against the risk of conflicting judgments from courts in different jurisdictions, such considerations are decisively outweighed in this case by the scheme of the TOA which points overwhelmingly against the grant of a stay. Accordingly, while accepting that the court has in general the inherent jurisdiction to order a stay of proceedings and assuming that that jurisdiction has not been displaced by the terms of the TOA, in my discretion I dismiss the application."
"The judge accepted that there was jurisdiction to grant a stay on that basis but rejected the submission that the action should be stayed, essentially because of the express terms of cl. 22 of the TOA. He said that, looked at overall, the scheme of cl. 22 tells overwhelmingly against a stay of the English proceedings so as to await the outcome of and effectively to grant precedence to proceedings elsewhere. In short, he said, such a stay would not reflect the bargain made by the parties.
25 I entirely agree with the conclusions of the judge in this regard and it was no doubt because of their undoubted force that Mr Brindle did not submit before us that the judge should have stayed the action."
Abuse of process
"This is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power."
"Privity for this purpose is not established merely by having "some interest in the outcome of litigation." So far as they go, I think these authorities go some way towards supporting the contention of Mr. Jacob that the doctrine of privity for these purposes is somewhat narrow, and has to be considered in relation to the fundamental principle nemo debet bis vexari pro eadem causa.
I turn from the negative to the positive. In Zeiss No. 2  1 A.C. 853, 911, 912, Lord Reid suggested that if a plaintiff sued X and established some right in that action, a servant or third party employed by X to infringe the right and so raise the whole question again should be regarded as being a privy of X's in subsequent proceedings, for it would be X who would be "the real defendant." Lord Reid agreed with a statement which applied the rules of res judicata to subsequent proceedings brought or defended "by another on his account," that is, on X's account.
This is difficult territory: but I have to do the best I can in the absence of any clear statement of principle. First, I do not think that in the phrase "privity of interest" the word "interest" can be used in the sense of mere curiosity or concern. Many matters that are litigated are of concern to many other persons than the parties to the litigation, in that the result of a case will at least suggest that the position of others in like case is as good or as bad as, or better or worse than, they believed it to be. Furthermore, it is a commonplace for litigation to require decisions to be made about the propriety or otherwise of acts done by those who are not litigants. Many a witness feels aggrieved by a decision in a case to which he is not party without it being suggested that the decision is binding upon him.
Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase "privity of interest." Thus in relation to trust property I think there will normally be a sufficient privity between the trustees and their beneficiaries to make a decision that is binding on the trustees also binding on the beneficiaries, and vice versa.
Third, in the present case, I think that the matter may be tested by a question that I put to Mr. Skone James in opening. Suppose that in the Denne action the plaintiff, Miss Gleeson, had succeeded, instead of failing. Would the decision in that action that Wippell had indirectly copied the Gleeson drawings be binding on Wippell, so that if sued by Miss Gleeson, Wippell would be estopped by the Denne decision from denying liability? Mr. Skone James felt constrained to answer Yes to that question. I say "constrained" because it appears that for privity with a party to the proceedings to take effect, it must take effect whether that party wins or loses. As was said by Buckley J. in Zeiss No. 3  Ch. 506, 541 (where the question was rather different) 'The relationship cannot be conditional upon the character of the decision.'"
"The conclusions which I draw from this survey of the authorities are as follows:
i) The test for privity of interest is whether, having due regard to the subject of the matter of the dispute, there is a sufficient degree of identification between the relevant persons to make it just to hold that the decision to which one is party should be binding in the proceedings to which the other is party: Gleeson v Wippell approved in Johnson v Gore Wood.
ii) Where someone who has knowledge of the earlier proceedings and a legal interest in their outcome sits backs and allows another person with the same legal interest in the outcome to fight his battle, he will be a privy with the other person: House of Spring Gardens. But this is a narrow exception to the general rule that a person will not be bound by the outcome of proceedings to which he is not a party: Skyparks v Marks, Powell v Wiltshire, Seven Arts v Content.
iii) A direct commercial interest in the outcome of the litigation is insufficient to make someone a privy: Kirin-Amgen v Boehringer Mannheim.
iv) Whether members of the same group of companies are privies or not depends on the facts: Special Effects."
"31 It is not necessary for the purposes of this appeal to seek to define precisely what interest in the subject matter of the previous litigation is required. The sort of interest dismissed by Sir Robert Megarry in Gleeson in his first principle is clearly inadequate. There are passages in the judgment of Aldous L.J. in Kirin-Amgen Inc v Boehringer Mannheim GmbH  FSR 289 which suggest that a legal interest may be necessary in the subject matter of the previous action as opposed to a commercial interest: see pp.307–309. I have not found that a particularly helpful criterion in the present case which is solely concerned with successive revocation actions. At one level Arrow and Resolution had the same legal interest in the revocation of the Patent, but that was a legal interest which they shared with all the world. If Resolution is to be bound, it must I think be possible to identify some more concrete consequence for its business which revocation of the Patent would have achieved. Unless that is so, although it can be said that Resolution could have joined the 2005 proceedings, there is no reason to hold that they should.
32 Drawing this together, in my judgment a court which has the task of assessing whether there is privity of interest between a new party and a party to previous proceedings needs to examine (a) the extent to which the new party had an interest in the subject matter of the previous action; (b) the extent to which the new party can be said to be, in reality, the party to the original proceedings by reason of his relationship with that party, and (c) against this background to ask whether it is just that the new party should be bound by the outcome of the previous litigation."
"Particular care, however, needs to be taken where the plaintiff in the second action is not the same as the plaintiff in the first, but his privy. Such situations are many and various, and it would be unwise to lay down any general rule. The principle is, no doubt, capable in theory of applying to a privy; but it is likely in practice to be easier for him to rebut the charge that his proceedings are oppressive or constitute an abuse of process than it would be for the original plaintiff to do so."
In my judgment, that need for caution is all the greater where the claimant in the second action, here SCBHK, is not only a different party to SCB but SCB was involuntarily involved in the first action in New York as a defendant, not as a claimant. Furthermore, if that caution needs to be exercised even where the claimant in the second action is the privy of the party in the first action, the need for caution is all the greater where there is no question of privity of interest.
"It was established by a majority of the House of Lords in Carl Zeiss Stiftung v Rayner & Keeler Ltd (No.2)http://login.westlaw.co.uk/maf/wluk/app/document?&srguid=ia744d0640000014db36704216c02b052&docguid=IEE0F368056C611DC9088AD3B8D6ED6B4&rank=1&spos=1&epos=1&td=1&crumb-action=append&context=2&resolvein=true - v1_14-032.fn132#v1_14-032.fn132  1 AC 853, 917, 925, 967, that a foreign judgment could give rise to an issue estoppel, i.e. prevent a party from denying any matter of fact or law necessarily decided by the foreign court. For there to be such an issue estoppel, three requirements must be satisfied: first, the judgment of the foreign court must be (a) of a court of competent jurisdiction in relation to the party who is to be estopped, (b) final and conclusive and (c) on the merits; secondly, the parties to the English litigation must be the same parties (or their privies) as in the foreign litigation; and, thirdly, the issues raised must be identical."
"…in order to create an estoppel of that kind, three requirements have to be satisfied. The first requirement is that the judgment in the earlier action relied on as creating an estoppel must be (a) of a court of competent Jurisdiction, (b) final and conclusive and (c) on the merits. The second requirement is that the parties (or privies) in the earlier action relied on as creating an estoppel, and those in the later action in which that estoppel is raised as a bar, must be the same. The third requirement is that the issue in the later action, in which the estoppel is raised as a bar, must be the same issue as that decided by the judgment in the earlier action."
"(i) the decision, whether domestic or foreign, was judicial in the relevant sense;
(ii) it was in fact pronounced;
(iii) the tribunal had jurisdiction over the parties and the subject matter;
(iv) the decision was –
on the merits;
(v) it determined a question raised in the later litigation; and
(vi) the parties are the same or their privies, or the earlier decision was in rem."
"…if these solicitors were bringing this action on account of or for the benefit of the council of Gera, I would hold that res judicata could be pleaded against them."
"If the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of the process of the court to challenge the factual findings and conclusions of the judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (ii) to permit such relitigation would bring the administration of justice into disrepute."
Is there a real risk of injustice if the proceedings go ahead in Tanzania?
"The better view is that, depending on the circumstances as a whole, the burden can be satisfied by showing that there is a real risk that justice will not be obtained in the foreign court by reason of incompetence or lack of independence or corruption. Of course, if it can be shown that justice "will not" be obtained that will weigh more heavily in the exercise of the discretion in the light of all other circumstances."
"Comity requires that the court be extremely cautious before deciding that there is a risk that justice will not be done in the foreign country by the foreign court, and that is why cogent evidence is required."
Observations on the independence of the judiciary are mixed. While the Bertelsmann Foundation (2014) notes that the judiciary generally functions relatively independently, Freedom House (2013) views it as under political influence. Many experts do perceive the judiciary to be largely inefficient, underfunded and susceptible to corruption (Bertelsmann Foundation 2014, Freedom House 2013, Business Anti-Corruption Portal 2013). In line with this assessment, executives surveyed in the Global Competitiveness Report gave judicial independence in Tanzania a 3.2 in a score of 1 (judiciary is heavily influenced) to 7 (judiciary is entirely independent), and an average of 3.9 of all measured countries (World Economic Forum 2013).
As a result, corrupt officeholders are reportedly not adequately prosecuted (Legal and Human Rights Centre 2013). Officeholders may be asked to resign or may be dismissed but beyond that, officials rarely suffer other punishment (Bertelsmann Foundation 2014). In particular, any potential wealth accrued from the alleged activities is retained by the corrupt officeholder (Bertelsmann Foundation 2014).
GCB data confirms that citizens perceive the judiciary as one of the most corrupt institutions. Of respondents in the GCB 2013, 86% state that the judiciary is corrupt, with 52% also reporting having paid a bribe when accessing judicial services (Transparency International 2013b). Through its Legal Sector Reform Programme, the government of Tanzania aims to strengthen the capacity of its legal staff. In 2006-2008, with the support of USAID, the government initiated an anti-corruption training programme that would strengthen the judiciary's ability to investigate and prosecute corruption cases".
"e. Denial of Fair Public Trial
The constitution provides for an independent judiciary, but the judiciary remained underfunded, corrupt (see section 4), inefficient (especially in the lower courts), and subject to executive influence. Court clerks reportedly continued to take bribes to decide whether to open cases and to hide or misdirect the files of those accused of crimes. According to news reports, magistrates of lower courts occasionally accepted bribes to determine the outcome of cases."
Alleged failure in the duty of disclosure
"In exercising that discretion, the overriding question for the Court is what is in the interests of justice. This is very clear from all three judgments in the Court of Appeal in Brink's Mat. Ralph Gibson LJ was prepared to continue the order on the basis that he had no doubt that even if the additional information had been disclosed, the judge at the ex parte hearing would have made the same order on the same terms. Balcombe LJ at 1358E said this:
"Nevertheless, this judge made rule cannot be allowed itself to become an instrument of injustice. It is for this reason that there must be a discretion in the court to continue the injunction, or to grant a fresh injunction in its place, notwithstanding that there may have been non-disclosure when the original ex parte injunction was obtained.""