Akai Pty. Ltd v People's Insurance Company Ltd

JurisdictionEngland & Wales
JudgeThomas J.
Judgment Date31 July 1997
Date31 July 1997
CourtQueen's Bench Division (Commercial Court)

Queen's Bench Division (Commercial Court).

Thomas J.

Akai Pty Ltd
and
People's Insurance Co Ltd

Stephen Morris and Sara Masters (instructed by Stephenson Harwood) for the plaintiffs.

Lawrence Collins QC and Terence Mehigan (Herbert Smith) for the defendants.

The following cases were referred to in the judgment:

Abidin Daver, TheELR [1984] AC 398.

Adams v Cape Industries plcELR [1990] Ch 433.

Aggeliki Charis Compania Maritima SA v Pagnan SpA (“The Angelic Grace”)UNK [1995] 1 Ll Rep 87.

Airbus Industrie GIE v Patel [1997] CLC 197.

Akai Pty Ltd v People's Insurance Co LtdUNK (1996) 141 ALR 374.

Amchem Products Inc v Workers' Compensation Board (1993) 102 DLR (4th) 96.

Aratra Potato Co Ltd v Egyptian Navigation Co (“The El Amria”)UNK [1981] 2 Ll Rep 119.

Atlantic Emperor, The (No. 2)UNK [1992] 1 Ll Rep 624.

Atlantic Star, TheELR [1974] AC 436.

Attock Cement Co Ltd v Romanian Bank for Foreign TradeWLR [1989] 1 WLR 1147.

Attorney-General v Arthur Andersen & Co (UK) [1989] ECC 224.

August Leonhardt, TheUNK [1985] 2 Ll Rep 28.

Camilla Cotton Oil Co v Granadex SAUNK [1976] 2 Ll Rep 10.

Chaparral, TheUNK [1968] 2 Ll Rep 158.

Citi-March Ltd v Neptune Orient Lines LtdWLR [1996] 1 WLR 1367.

Detker v VIO Sovracht (unreported, 16 December 1987, Phillips J).

Du Pont (EI) de Nemours & Co v AgnewUNK [1987] 2 Ll Rep 585.

Eastern Trader, TheUNK [1996] 2 Ll Rep 585.

Ellerman Lines Ltd v ReadELR [1928] 2 KB 144.

Family Housing Association (Manchester) Ltd v Michael Hyde & PartnersWLR [1993] 1 WLR 354.

Fehmarn, TheWLR [1958] 1 WLR 159.

First National Bank of Boston v Union Bank of SwitzerlandUNK [1990] 1 Ll Rep 32.

Golden Anne, TheUNK [1984] 2 Ll Rep 489.

Harris v TaylorELR [1915] 2 KB 580.

Henry v Geoprosco International LtdELR [1976] QB 726.

Hiscox v OuthwaiteELR [1992] 1 AC 562.

Hollandia, TheELR [1983] AC 565.

Ion, TheUNK [1980] 2 Ll Rep 245.

Kanchenjunga, TheUNK [1990] 1 Ll Rep 391.

Lisboa, TheUNK [1980] 2 Ll Rep 546.

Man (E D & F) (Sugar) Ltd v HaryantoUNK [1991] 1 Ll Rep 429.

Marazura Navegacion SA v Oceanus Mutual Underwriting (Bermuda) LtdUNK [1977] 1 Ll Rep 283.

Metal Scrap Trade Corp v Kate Shipping Co Ltd (“The Gladys”)WLR [1990] 1 WLR 115.

Missouri Steamship Co, ReELR (1889) 42 ChD 321.

New Hampshire Insurance Co v Philips Electronics North America Corp (unreported, 16 May 1997, CA).

Rein v Stein (1892) 66 LT 469.

Siebe Gorman & Co Ltd v Pneupac LtdWLR [1982] 1 WLR 185.

Sohio Supply Co v Gatoil (USA) IncUNK [1989] 1 Ll Rep 588.

Stolt Loyalty, TheUNK [1993] 2 Ll Rep 281.

Svendborg (A/S D/S) v Wansa [1996] 2XI Rep 559.

Toepfer (Alfred C) International GmbH v Molino Boschi SRL [1996] CLC 738.

Tracomin SA v Sudan Oil Seeds LtdWLR [1983] 1 WLR 1026.

Ultisol Transport Contractors Ltd v Bouygues Offshore SAUNK [1996] 2 Ll Rep 140.

Vita Food Products v Unus Shipping Co LtdELR [1939] AC 277.

Volvox Hollandia, TheUNK [1988] 2 Ll Rep 361.

Williams & Glyn's Bank plc v Astro Dinamico Compania NavieraWLR [1984] 1 WLR 438.

Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co LtdELR [1972] AC 741.

Anti-suit injunction — Stay of proceedings — Submission to jurisdiction — Antienforcemen injunction — Time-bar — Insurer declined to pay claim under B Australian credit insurance — Insurance policy provided for English law and jurisdiction — Insured sued in England and Australia — Proceedings started out of time — Australian court held exclusive jurisdiction clause void under Australian statute — Time-bar defence unlikely to succeed in Australia — Whether insurer had submitted to Australian jurisdiction — Whether as a matter of comity English court should recognised Australian decision that jurisdiction clause was void — Whether court should stay English proceedings — Whether court should grant anti-suit C injunction restraining continuance of Australian proceedings — Whether court should grant anti-enforcement injunction — Whether insurer entitled to declaration that claim time-barred.

These were three applications relating to a dispute under a credit insurance policy issued by a Singapore insurer (“PIC”) to an Australian subsidiary of a multinational company (“Akai”).

The credit insurance specifically provided for English law and jurisdiction. Akai claimed on the policy when one of its largest debtors went into liquidation, PIC declined to pay. Akai took proceedings in the High Court and in New South Wales. PIC applied to stay the proceedings in Australia. The High Court of Australia refused a stay on the basis that the Australian Insurance Contracts Act of 1984 applied to the policy and that the clause providing for English law and jurisdiction was void under that Act. Shortly after that decision was given, PIC counterclaimed in the English proceedings and applied for summary judgment against Akai on the basis of a time-bar defence under the policy (a defence which was unlikely to succeed before the Australian courts under the Australian Insurance Contracts Act). Akai responded by the second application; that was for leave to discontinue and to have the defence and counterclaim struck out or stayed. PIC had obtained ex parte from the Singapore courts an anti-suit injunction against the continuation of the proceedings in Australia which was discharged shortly before the hearing of the application. PIC sought such an injunction by the third application.

The issues for the court were: (1) whether PIC had submitted to the jurisdiction of the courts of New South Wales with the consequence that the English court should recognise the decision of the High Court of Australia as finally deciding that the English law and jurisdiction clause in the policy is void and unenforceable; (2) whether the court, as a matter of comity, should give effect to Australian law and public policy by staying the English action; (3) whether agreements made between the parties' solicitors for an extension of time to serve the defence prevented PIC from continuing the English proceedings because there was an implied term or an estoppel to the effect that the English action would not continue if the Australian proceedings were not stayed; (4) whether the court should stay the proceedings as a matter of discretion; (5) whether the court should grant an anti-suit injunction in respect of the New South Wales proceedings or an anti-enforcement injunction against any judgment obtained in those proceedings; (6) whether PIC was entitled to judgment on its counterclaim for a declaration that the claim was time-barred. Akai accepted that the claim was time-barred under English law unless PIC had waived the right to raise that defence or was estopped from raising it.

Held, granting an injunction to PIC restraining further continuance of the proceedings in New South Wales:

1. PIC did not submit to the jurisdiction of the courts of New South Wales and therefore the judgment of the High Court of Australia did not give rise to a decision binding on PIC that the proper law and jurisdiction clause in the policy was void and unenforceable. Considered objectively and taking into account the procedures of the foreign court and the principles of English procedural law, it was clear from all the evidence that PIC never submitted to the jurisdiction of the New South Wales court; all PIC sought to do was to obtain a stay. PIC took the technical step of filing a notice of appearance, but that had to be seen in the context that there had been a hearing a few days earlier where PIC had made it clear it would apply for a stay and the judge had directed it to file a motion to stay. In the circumstances, the filing of the notice of appearance was not only necessary or useful if PIC was not objecting to the jurisdiction; viewed objectively it was not inconsistent with the challenge to the jurisdiction and the application for a stay. The actions of PIC's solicitor in attending court after the decision of the High Court of Australia did not amount to a submission: his actions were consistent with the continued challenge to the jurisdiction. (Williams & Glyn's Bank v Astro Dinamico Compania Naviera[1984] 1WLR 438applied.)

2. The court would give effect to the bargain of the parties and their freely negotiated choice of law and jurisdiction. It should not, as a matter of comity, give effect to the decision of the High Court of Australia which overrode that bargain and that choice. The parties to the insurance policy bargained for English law. The court should therefore give effect to that intention, unless it would be contrary to English public policy (which included international public policy) to give effect to the enforcement of the jurisdiction clause which was otherwise valid. In contracts of this kind between commercial enterprises, there was no such restriction in English law or Community law on the parties' choice of law. Nor were the provisions of Australian law which operated to restrict the parties' choice of law and jurisdiction of a character that bound the court. (Re Missouri Steamship CoELR(1889) 42 ChD 321 and Vita Food Products v Unus Shipping Co LtdELR[1939] AC 277applied.)

3. There was no agreed term (express or implied) that formed part of the agreements to extend time (or any collateral agreement to the same effect) and no estoppel on which Akai could rely so as to prevent the continuation of the proceedings. The extensions of time were made without prejudice to either party's rights in connection with the English proceedings; though the language differed on each occasion when that was agreed, there was no difference in the substance as to the agreement in that respect. It was difficult to see how the alleged implied term could exist consistently with that express term. There was no express or implied representation on the part of PIC's solicitors. In any event any such representation would have had to have been clear or unequivocal or one that was reasonably understood as clear or unequivocal.

4. The...

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