AIG Europe SA (formerly AIG Europe Ltd) v John Wood Group Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Males,Lord Justice Phillips,Lord Justice Stuart-Smith |
| Judgment Date | 10 June 2022 |
| Neutral Citation | [2022] EWCA Civ 781 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2021-000143 & CA-2021-000127 |
[2022] EWCA Civ 781
Lord Justice Males
Lord Justice Phillips
and
Lord Justice Stuart-Smith
Case No: CA-2021-000143 & CA-2021-000127
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice Jacobs
Royal Courts of Justice
Strand, London, WC2A 2LL
Roger Stewart QC and Saaman Pourghadiri (instructed by Pinsent Masons LLP) for the Appellants/Defendants
Ben Quiney QC and Nicola Atkins (instructed by DAC Beachcroft) for Chubb
David Scorey QC (instructed by Clyde & Co LLP) for AIG and Others
Hearing dates: 17 & 18 May 2022
Approved Judgment
This judgment will be handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10.30 a.m. on Friday 10 th June 2022.
Introduction
The issue in these appeals is whether Mr Justice Jacobs was right to grant an anti-suit injunction restraining the defendants from pursuing proceedings in the Court of Queen's Bench in Alberta, Canada under various policies of excess liability insurance. That depends on whether the policies provide for the exclusive jurisdiction of the English court, so that the pursuit of those proceedings would be a breach of contract by the defendants.
The terms of the various policies are not identical, but they have some features in common. Save where it is necessary to distinguish between them, I can refer to the respondents, who are the insurers under the various policies, as the claimants and to the appellants, who are the insureds, as the defendants.
The policies in issue form part of an “insurance tower”, comprising a primary liability policy, together with a number of excess layers. Each of the excess policies was in the form of the “Market Reform Contract”, which is now the standard form of agreement used in the London market. The Market Reform Contract consists of a series of sections, the first of which sets out the “Risk Details”. These include such matters as the unique market reference, the type of policy, the interest insured, the monetary limits and (importantly in this case) the parties' choice of law and jurisdiction. A later section of the policies sets out what appear to be standard terms and conditions.
In each of the excess policies in issue there were two relevant, and potentially conflicting, clauses. The choice of law and jurisdiction clause in the Risk Details provided for disputes to be subject to “the same law and the same jurisdiction as the primary policy”, although the primary policy itself did not contain any choice of law or jurisdiction clause. The standard terms and conditions in the later section of the excess policies contained a clause which provided for English law to apply and provided also (or in one case, allegedly provided) for the exclusive jurisdiction of the English court.
The claimants found their application for an anti-suit injunction on the exclusive jurisdiction clauses in the later section of the policies. The defendants, however, say that the applicable clause is that set out in the Risk Details, a clause referred to in these proceedings as the “primary policy jurisdiction clause” or “PPJC”, which does not provide for exclusive English jurisdiction, with the consequence that their pursuit of proceedings in Alberta is not a breach of any obligation owed to the claimants.
The judge held in each case that the policies did provide for English exclusive jurisdiction and therefore granted the injunctions sought. The defendants appeal. Accordingly we are concerned with questions of construction of the various policies. If the judge was right to conclude that, on their true construction, the policies provide for exclusive English jurisdiction, an injunction should be granted. If not, not.
In opening the appeal, Mr Roger Stewart QC for the defendants submitted (or came close to submitting) that the English court should not embark on this question of construction, but should leave it to be decided by the court in Alberta on an application by the claimants (the defendants in the Alberta case) for a stay of the proceedings against them there. This was said to be a matter of judicial comity. It was not a submission made to the judge below and did not feature in the defendants' appellants' notice. Accordingly it is not open to them in this court.
Nevertheless it may be helpful to say that when the parties have agreed an exclusive jurisdiction clause, the view taken in this jurisdiction is that judicial comity is best served by giving effect to their agreement and that the grant of an anti-suit injunction in an appropriate case is a proper means of doing so. This appears clearly from the decision of this court in OT Africa Line Ltd v Magic Sportswear Corporation [2005] EWCA Civ 710, [2005] 2 Lloyd's Rep 170, which followed and built on the decision of the Supreme Court of Canada in Amchem Products Inc v Workers Compensation Board [1993] 1 SCR 897. Lord Justice Longmore said:
“31. As a broad proposition of law, an anti-suit injunction may be granted where it is oppressive or vexatious for a defendant to bring proceedings in a foreign jurisdiction but Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 emphasised that the mere fact that the English court refused a stay of English proceedings on the ground of forum non conveniens did not itself justify the grant of an injunction to restrain foreign proceedings. The doctrine of comity requires restraint since (a) another jurisdiction may take the view that the courts of that jurisdiction are an equally (or even more) appropriate forum than the English court and (b) any anti-suit injunction can be perceived as an, at least indirect, interference with such foreign court. Even so an anti-suit injunction may be granted if the defendant's conduct is, in fact, oppressive or vexatious as the defendant's conduct was held to be in the Aerospatiale case itself.
32. In the case of exclusive jurisdiction clauses, however, comity has a smaller role. It goes without saying that any court should pay respect to another (foreign) court but, if the parties have actually agreed that a foreign court is to have sole jurisdiction over any dispute, the true role of comity is to ensure that the parties' agreement is respected. Whatever country it is to the courts of which the parties have agreed to submit their disputes is the country to which comity is due. It is not a matter of an English court seeking to uphold and enforce references to its own courts; an English court will uphold and enforce references to the courts of whichever country the parties agree for the resolution of their disputes. This is to uphold party autonomy not to uphold the courts of any particular country.
33. The corollary of this is that a party who initiates proceedings in a court other than the court, which has been agreed with the other party as the court for resolution of any dispute, is acting in breach of contract. The normal remedy for this breach of contract is the grant of an injunction to restrain the continuance of proceedings unless it can be shown that damages are an adequate remedy; but damages will not usually be an adequate remedy in fact, since damages will not be easily calculable and can indeed only be calculated by comparing the advantages and disadvantages of the respective fora. This is likely to involve an even graver breach of comity than the granting of an anti-suit injunction.”
This approach was developed further in Ecobank Transnational Inc v Tanoh [2015] EWCA Civ 1309, [2016] 1 WLR 2231. Lord Justice Christopher Clarke explained that comity may have a greater role to play, even in an exclusive jurisdiction clause case, if the anti-suit injunction applicant is guilty of delay, thereby causing time, effort and expense in the foreign proceedings to be wasted. However, no such considerations arise in the present case.
Ultimately Mr Stewart did not press the submission that this court should not determine the true construction of the policies. Instead he submitted that, before granting an anti-suit injunction, the English court should be satisfied to a high standard (“a high degree of probability”) that pursuit of the Alberta proceedings would be a breach of an English exclusive jurisdiction clause. This was the test which the judge applied. In fact, the principles applicable to the grant of anti-suit injunctions founded on breach of an arbitration or exclusive jurisdiction clause were not in dispute before the judge. He set them out at [58] of his judgment. For present purposes it is sufficient to set out principles (c), (f) and (g):
“(c) The Court has jurisdiction under s.37(1) [of the Senior Courts Act 1981] to restrain foreign proceedings when brought or threatened to be brought in breach of a binding agreement to refer disputes to arbitration: Ust-Kamenogorsk Hydropower Plant JSC v AES Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC). …
(f) The Claimant must therefore demonstrate such a negative right not to be sued. The...
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