AMT Futures Ltd v Karim Boural
| Jurisdiction | England & Wales |
| Judge | Mr Salter |
| Judgment Date | 11 April 2018 |
| Neutral Citation | [2018] EWHC 750 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Claim No CL-2017-000440 |
| Date | 11 April 2018 |
[2018] EWHC 750 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice. Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Richard Salter QC
Sitting as a Deputy Judge of the High Court
Claim No CL-2017-000440
Mr Andrew Scott (instructed by Farrer & Co LLP) appeared for the Claimant
Mr Caley Wright (instructed by Zimmers) appeared for the First to Third Defendants
Hearing dates: 23 March 2018
Judgment Approved
Mr Salter QC:
Introduction
This is an application by the First to Third Defendants (“the Applicants”) for summary judgment under CPR 24.2 dismissing the claims against them on the basis that those claims are statute-barred under the Limitation Act 1980. It raises the issue of whether the cause of action for breach of the implied undertaking in an exclusive jurisdiction clause arises once and for all when proceedings are begun otherwise than in the agreed forum, or arises successively each time a step is taken in those proceedings, or arises continuously for so long as those proceedings are on foot.
Background
There was no dispute about the facts which form the background to this application. The Claimant (“AMTF”) is an English company. It has recently faced litigation in Germany brought by a number of its former clients, and has responded by taking proceedings in England against those former clients, claiming damages on the basis that the proceedings in Germany were in breach of a clause in AMTF's Terms of Business conferring exclusive jurisdiction on the courts of England and Wales.
AMTF also took similar proceedings in England against the German lawyers of those former clients. In AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH 1 the Supreme Court dismissed AMTF's appeal against the Court of Appeal's decision that the English courts did not have jurisdiction over those claims. Lord Hodge explained the broad background to that action, and to the actions against AMTF's former clients (including the one presently before me), as follows:
[2] AMTF is incorporated in the United Kingdom and is based in London. It provides services as a non-advisory, ‘execution only’, derivatives broker for clients who wish to trade in derivatives and who are referred to it by introducing brokers. Among AMTF's clients were people who were domiciled in Germany, Austria, Switzerland or Belgium (‘the former clients’) and who were introduced to AMTF by independent brokers based in Germany (‘the introducing brokers’). AMTF charged its clients commission for its service and paid commission to the introducing brokers.
[3] About 70 former clients, who were dissatisfied with the financial results of their transactions, commenced legal proceedings in Germany against both the introducing brokers and AMTF seeking damages under the German law of delict. The claim against the introducing brokers was that they had given bad investment advice or had failed to warn of the risks of the investments. The claim against
AMTF was based on a liability which was accessory to that of the brokers: it was alleged that AMTF had encouraged the brokers to behave as they did by paying them commission from the transaction accounts which it operated for its clients and that it owed and had breached a duty in delict (tort) to the clients to prevent any transactions being undertaken contrary to their interests. AMTF challenged the jurisdiction of the German court. But many of the former clients have recovered damages from AMTF by way of settlement. AMTF estimates that by August 2013 it had spent £2,191,881.68 on investigating the German claims, legal costs in Germany and England and settlement costs.[4] The agreements between AMTF and the former clients varied over time. But each contained clauses which provided (a) that English law would govern the rights and obligations of the contracting parties and the construction of their contract and (b) that the English courts would have exclusive jurisdiction in legal proceedings relating to the contract. AMTF asserts that the former clients have breached their contracts with it by raising legal proceedings against it in Germany and asserting rights under the German law of delict. AMTF has raised legal proceedings against many of the former clients seeking damages for breach of contract in the High Court in London.
The Defendants to the present action are among the former clients of AMTF who have taken proceedings in Germany. The German proceedings begun by the Applicants (“the German Claims”) were started on 27 May 2008, and are still continuing. A trial of the German Claims took place before the Landgericht Duisburg on 13 January 2014. This resulted in a judgment dated 21 May 2014, dismissing the German Claims, on the basis that the German court had no jurisdiction. That decision, however, was reversed on appeal by the Oberlandesgericht Düsseldorf, and a further trial on the merits of the German Claims is now once more pending before the Landgericht Duisburg.
The Claim Form in the present action was issued on 11 July 2017, more than 9 years after the German Claims were begun. The Fourth and Fifth Defendants have ignored the present action. As a result, default judgments for damages to be assessed have been entered against them by the order dated 30 November 2017 of Popplewell J and by the order dated 12 January 2018 of Teare J. The Applicants, however, have participated in the present action and have served a Defence. In that Defence, the Applicants assert ( inter alia) that the claims against the Applicants for breach of contract are statute-barred, having arisen more than six years before the action was brought.
The present application (“the Summary Judgment Application”) was issued on 8 December 2017, supported by the witness statement (also dated 8 December 2017) of the Applicants' solicitor, Mr Stylianou. AMTF responded by issuing its own application dated 13 December 2017 (“the Amendment Application”) for permission to amend its Claim Form and Particulars of Claim by deleting various references to the commencement of the German Claims. That application was supported by the first witness statement (dated 13 December 2017) of AMTF's solicitor, Mr Connell.
Both applications came before Picken J on 19 January 2018. There was insufficient time to hear both applications: but Picken J heard and granted the Amendment Application, expressly without prejudice to the outcome of the Summary Judgment Application. Mr Connell then made a second witness statement (dated 15 March 2018) in opposition to the Summary Judgment Application.
The statements of case
CPR 16PD 13.1 requires that, in the Defence, a defendant must “give details of the expiry of any relevant limitation period relied on”. In the present case, the defence that these claims are all statute-barred is raised in paragraph 7 of the Defence of the First to Third Defendants, which avers that:
The allegations against each of the First to Third Defendants are that they acted in breach of contract by commencing and pursuing litigation in Germany in breach of contract. On the Claimant's own case those proceedings commenced, in the case of each of the First to Third Defendants, on 27 May 2008. The claim form was filed on 11 July 2017. Accordingly, the Claimant's claims were commenced over 6 years after the alleged breach of contract and so are time-barred.
As HHJ Havelock-Allen QC noted in MAC Hotels Limited v Rider Levett Bucknall UK Limited 2, once a defence of limitation has been pleaded, the burden then shifts to the claimant to establish that the cause of action relied upon occurred within the relevant period of limitation, and so is not statute-barred. Where it can reasonably be expected that a defence that the claim is statute-barred will be raised (or where, as in the present case, such a plea has already been advanced when Particulars of Claim come to be amended), the Particulars of Claim should therefore plead the facts which give rise to the relevant cause of action in such a way as to show so far as possible when (on the Claimant's case) the cause of action is said to have arisen 3.
In the present case, in paragraph 11 of the Amended Particulars of Claim AMTF relies (in particular) upon two terms which it alleges formed part of the client agreements between it and each of the Applicants. Those terms are as follows:
Clause 29: Liability and Indemnity:
29.3 You shall indemnify us against any costs, claims (including third-party claims), losses, liabilities, expenses, actions or demands whatsoever which we may suffer or incur directly or indirectly in connection with or as a result of any service provided or not provided or action taken or not taken under this Agreement except to the extent that such are due directly to our negligence, wilful default, or fraud, or our failure to comply with relevant SFA Rules.
Clause 33: Law and Disputes
33.1 This Agreement and all rights and obligations arising in respect of your Account shall be governed by, performed and construed in accordance with the laws of England and (except for matters concerning specific Transactions which require to be submitted to arbitration in accordance with applicable Market Rules) you irrevocably submit to the exclusive jurisdiction of the English Courts in relation to such disputes, without prejudice to our right to seek enforcement of any arbitration award or judgment in any other jurisdiction.
AMTF then pleads its claims against the First Defendant in paragraphs 16 to 18 of the Amended Particulars of Claim. After alleging in paragraph 16 that the First Defendant is bound by the contractual terms...
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