Cadre Sa v Astra Asigurari Sa
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morison |
| Judgment Date | 22 November 2005 |
| Neutral Citation | [2005] EWHC 2626 (Comm) |
| Docket Number | Case No: 2004/1 030 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 22 November 2005 |
[2005] EWHC 2626 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
The Bon Mr Justice Morison
Case No: 2004/1 030
MR Y KULKARNI (instructed by THOMAS COOPER & STIBBARD) for the Claimant
MISS C BLANCHARD (instructed by STEPHENSON HARWOOD) for the Defendant
Hearing dates: 16/11/2005
Mr Justice Morison
This is an application for an anti suit injunction.
In late July 2005, the court was asked to rule on a challenge to the jurisdiction of this court by the defendant. The challenge was dismissed by the court. The facts giving rise to the challenge, the arguments advanced on behalf of the parties and the reasons for the decision are set out in the judgment delivered ex tempore.
I will not repeat in this Judgment the background to the dispute between the parties. Suffice it to say the court [Morison J.] concluded that England was the appropriate natural forum for the trial of the action. There was no appeal. After the judgment there was some discussion about what would happen to the proceedings commenced by Astra against Cadre in Romania and the position was left open pending instructions from Astra. In late October it became clear that Astra were determined, despite losing their jurisdictional challenge, to pursue the Romanian action. Accordingly, Cadre issued the present application. Initially, the application was due to be heard by Aikens J. on 9 November 2005. During the arguments of counsel he concluded that he could not fairly adjudicate on it without a sight of the approved judgment of the court given on 29 July 2005. Neither party had requisitioned an official transcript of the judgment. He adjourned the hearing and it came back before me by which time there was an approved version of the judgment, which is annexed hereto as Appendix A.
Both parties, through their counsel, lodged skeleton arguments with the Court, which have been a great help and I would like to thank them for that.
Mr Kulkarni, in an able and concise submission, on behalf of Cadre, submitted that there were five findings made by the court at the hearing on 29 July 2005, which were of importance to the present application:
(1) English Law was the law chosen as the governing law of the contract: paragraph 12.
(2) England is the appropriate and natural forum for the trial of the dispute: paragraphs 13 and 17.
(3) The defendants have indulged in forum shopping: paragraph 15.
(4) Cadre were entitled to be apprehensive about the outcome of the dispute were it to be tried in Romania and that stemmed largely from their belief that "they are going to be deprived of the benefit of having their contractual relations with Astra determined in the courts by the application of English law, that being the choice under the contract."
(5) The Judgment Regulations do not apply as Romania is not a member of the EU, although it is due to become one in January 2007.
In considering an application for an anti suit injunction, in essence, the court embarks on a two stage process: first, is England the appropriate and natural forum for the trial of the action, which was determined by the court on 29 July 2005, and to which the answer is 'yes'; and, second, whether "the ends of justice" require the grant of an injunction: see Airbus lndustrie GIE v Patel [1999] l AC at page 139 per Lord Goff; and Donohue v Armco [2002] 1 Lloyd's Reports 425 at paragraph 19, per Lord Bingham. This latter requirement is sometimes characterised as the Claimant having to show that it is unconscionable for the defendant to continue with the foreign proceedings. The claimant did not need to go so far as to show that it would be 'vexatious' for the foreign proceedings to continue.
Mr Kulkarni submitted that the following factors were significant:
(1) The defendant is persisting with the Romanian proceedings in utter disregard of a clear statement by the English court that it is the appropriate forum for the dispute. Such conduct is to be regarded as oppressive, vexatious or unconscionable.
(2) The continuation of the Romanian proceedings will create a multiplicity of proceedings with the attendant unnecessary costs and delay and the problems of having to call witnesses before more than one court, with the attendant risk of inconsistent results in different jurisdictions. This factor was regarded as important by the Privy Council and the House of Lords: see Societe Aerospatiale v Lee Kai Jak [1987] 1 AC page 871, per Lord Goff at pages 900G—902G. By proceeding in Texas, which was not the natural forum, the plaintiffs' conduct "should properly be described as oppressive".
In Donohue v Armco [2002] 1 Lloyd's Law Reports 202, the House was faced with an exclusive jurisdiction clause which bound Mr Donohue and three of the Armco companies but which, if enforced, would require the case to be tried in England, which was not the natural forum for the dispute, and would lead to a multiplicity of actions. Lord Bingham put it this way, at paragraph 34 of his judgment:
"It seems to me plain that in a situation of this kind the interests of justice are best served by the submission of the whole dispute to a single tribunal which is best fitted to make a reliable, comprehensive judgment on all matters in issue. A procedure which permitted the possibility of different conclusions by different tribunals, perhaps made on different evidence, would in my view run directly counter to the interests of justice."
(3) The manner in which the proceedings were commenced in Romania shows a clear attempt at a pre-emptive strike to prevent this court or the Turkish court from taking jurisdiction. And, further, in those proceedings Astra are endeavouring to persuade that court that the ITC conditions which were admittedly included in the contract did not "remove the application of Romanian law on the contractual issues". In other words, by maintaining the proceedings in Romania Astra are seeking to deprive Cadre of their right to have their dispute determined in accordance with the law of their agreement. Cadre are entitled to such indemnity under the contract as English law affords them. The position of Astra is quite inconsistent: in these proceedings they accept that English Law applies; yet in Romania their lawyers are saying something different.
(4) There is nothing in the contractual documents to suggest that the parties agreed to resolve their disputes in Romania. On the contrary, ITC Hull Clause 280, which was expressly incorporated into the contract, states that
"This insurance is subject to English law and practice."
Ms Blanchard, in a forceful and comprehensive submission on behalf of Astra, submitted that the 'touchstone' for the court's decision was 'caution'. This court should not interfere with the proper processes of foreign courts, even indirectly by making in personam orders against parties to proceedings in such courts. The fact that there are two sets of proceedings afoot does not of itself and necessarily lead to 'the conclusion that an injunction would be an appropriate remedy. Astra have done nothing wrongful or wrong by pursuing proceedings in Romania; they were entitled to start proceedings in the place where they conduct their business: their 'home' court. The way they have pursued those proceedings has not been unconscionable: the issues in the action will be familiar to the Commercial Court in England. Astra say that there was no binding agreement between the parties; pre-conditions to liability under the insurance were not met; premium had not been paid and the policy could not bite until after premium had been paid; and there was material non-disclosure. Further, the manner in which the court has exercised its jurisdiction cannot be criticised. If Cadre wish to stop the proceedings in Romania or to challenge the court's jurisdiction it should go to Romania and argue the matter before that court.
There is a distinction to be drawn between 'the natural forum' and 'the most natural forum'. The most natural forum would be Turkey where Cadre are based and where the vessel which sank was based.
In establishing unconscionability the burden of proof was upon the claimants. There is nothing unconscionable or improper in Astra asserting that Romanian Law applies and the pursuit of the action there is not in and of itself unconscionable. There is no evidence before the court to establish that Romanian Law is any different from English Law and therefore there is no evidence of prejudice. There were potential advantages in having the action tried in Romania: principal among these are that the costs would be lower and the language of documents and witnesses from Astra's side would not require translation. She also submitted that Cadre had been guilty of unacceptable delay in making this application.
Decision
The parties were in agreement about the legal principles which 1 must apply. Are the ends of justice to be met by the grant of an injunction and would it be unconscionable for Astra to continue the proceedings in Romania?
I agree with Ms Blanchard that the jurisdiction to grant an anti suit injunction must be exercised with caution [see the judgment of Lord Bingham in the Donohue case [at paragraph 19]:
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