Clifford Chance LLP v Société Générale S.A.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henshaw |
| Judgment Date | 27 October 2023 |
| Neutral Citation | [2023] EWHC 2682 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2022-000274 |
[2023] EWHC 2682 (Comm)
THE HONOURABLE Mr Justice Henshaw
Case No: CL-2022-000274
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Andrew Onslow KC and James McWilliams (instructed by Reed Smith LLP) for the Claimants/Respondents
Graham Chapman KC and Seohyung Kim (instructed by Signature Litigation LLP) for the Defendant/Applicant
Hearing date: 13 September 2023
Draft judgment circulated: 18 October 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 27 October 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
| (A) INTRODUCTION | 3 |
| (B) PARTIES | 3 |
| (C) FACTS | 4 |
| (1) The 2003 Framework Agreement | 4 |
| (2) The 2006 Framework Agreement | 6 |
| (3) SocGen engages Clifford Chance | 7 |
| (4) The 2009 Framework Agreement | 8 |
| (5) Application of the agreed maximum hourly rates, and reporting | 9 |
| (6) The 2012 Framework Agreement | 9 |
| (7) Subsequent work on the Goldas Dispute | 13 |
| (8) The 2015 Framework Agreement | 14 |
| (9) Strike-out of the Goldas claim | 14 |
| (10) The dispute between SocGen and Clifford Chance | 15 |
| (D) PRINCIPLES RELEVANT TO MAIN JURISDICTION ISSUE | 15 |
| (1) The construction of contracts and apparent mandate in French law | 15 |
| (2) Implied retainers | 16 |
| (3) The construction of jurisdiction clauses | 18 |
| (4) Staying proceedings commenced in breach of an exclusive jurisdiction clause | 20 |
| (E) APPLICATION TO THE FACTS | 22 |
| (1) The position when CC LLP was first instructed | 23 |
| (2) Effect of the 2009 Framework Agreement | 25 |
| (3) Effect of the 2012 and 2015 Agreements | 26 |
| (4) The position of CC Europe | 29 |
| (F) FORUM NON CONVENIENS | 30 |
| (1) Principles | 30 |
| (2) Application | 31 |
| (G) CONCLUSION | 33 |
(A) INTRODUCTION
The Defendant (“ SocGen”) applies to challenge the court's jurisdiction to hear this claim, on the basis that:
i) it falls within an exclusive jurisdiction clause in favour of the High Court of Paris; alternatively
ii) the French court and not the English court is the most appropriate forum for the determination of the claim.
The substantive dispute relates to a professional negligence claim brought by SocGen against the Claimants (to whom I shall refer collectively as “ Clifford Chance”) alleging that they negligently handled a dispute between SocGen and Goldas Kuyumculuk Sanayi Ithalat Ihracat AS and other companies in the same group (together “ Goldas”, and the “ Goldas Dispute”).
In the present proceedings before this court, the First Claimant (“ CC LLP”) and the Second Claimant (“ CC Europe”) seek declarations that they are not liable to SocGen in professional negligence, and that CC Europe was not retained by SocGen at all.
SocGen has subsequently commenced proceedings against CC LLP and CC Europe in the High Court of Paris, seeking damages in excess of €140 million. The first hearing in that court is due to take place in March 2024.
I have reached the conclusion, for the reasons which follow, that SocGen's challenge to the court's jurisdiction should be dismissed.
(B) PARTIES
SocGen is an international bank which was founded and is headquartered in France. It is registered in England as an overseas company, and has a large number of subsidiaries, both in France and abroad, as part of its group (“ SocGen Group”).
CC LLP is a limited liability partnership incorporated under the laws of England and Wales. It carries on its legal practice from London and through overseas branches in Abu Dhabi, Amsterdam, Beijing, Brussels, Dubai and Shanghai. CC LLP also controls a large number of other subsidiary entities through which it, amongst other things, provides legal services in other jurisdictions.
CC LLP was incorporated on 1 November 2006. Between January 2000 and December 2006, the principal Clifford Chance entity was Clifford Chance Limited Liability Partnership (“ CC USA”), a limited liability partnership incorporated under the laws of the State of New York in the United States of America. CC LLP replaced CC USA as the principal Clifford Chance entity in December 2006.
CC Europe is one of the subsidiary entities controlled by CC LLP and is the legal entity through which Clifford Chance currently provides legal services in France. It is a limited liability partnership incorporated under the laws of England and Wales.
CC Europe was incorporated on 24 March 2005. Before that, Clifford Chance provided legal services in France through a different entity, Clifford Chance SELAFA (“ CC Selafa”). CC Selafa is a limited liability company for self-employed French advocates in Paris, incorporated under the laws of France, and was at all material times regulated by the Avocats du Barreau de Paris (the Paris Bar). The legal practice of CC Selafa was transferred to CC Europe on 6 July 2005, on which date CC Selafa and CC Europe entered into a business lease under which CC Selafa leased the Paris practice to CC Europe. Since then, Clifford Chance's legal practice in France has been conducted through CC Europe.
(C) FACTS
(1) The 2003 Framework Agreement
Framework Agreement No. 2634 (“ the 2003 Framework Agreement”) was agreed between CC Selafa and SocGen for a period of three years from 1 January 2003 to 31 December 2005, “ renewable with the agreement of both parties” (Article 2).
The agreement stated that it was made between CC Selafa, “hereinafter referred to as the “Firm””. Article 1.1 stated (in translation, prepared at the time of the original document):
“The Contract applies to the relations between the Société Générale and its subsidiaries (hereinafter “SG Group” or “SG”, see list in appendix 1) and the firm Clifford Chance (hereinafter “Law Firm” or “Firm”) both in France and abroad.”
The agreement was executed by SocGen and CC Selafa. Appendix 1 listed SocGen's subsidiaries worldwide.
Article 1.2 stated that:
“This Contract defines the principles of SG Group's purchasing policy in the area of the services provided by the Firm. They relate to all dealings which any entity of SG Group (Head Office, branches and subsidiaries in France and abroad) may have as a client of the Firm.”
Article 1.4 provided for SocGen to appoint an in-house lawyer to be responsible, on behalf of the SocGen group, “for relations with the Firm, on a worldwide basis”, as well as appointing in-house lawyers in all regions and/or major countries of the world to be responsible for relations with the Firm. Similarly, clause 1.5 of the 2003 Framework Agreement required “ the Firm” to appoint a partner to assume overall responsibility for the relationship with SocGen, and also a lawyer to be SocGen's point of contact “ in each of the countries where the Firm has an office”. Annex 4 contained a list of contacts for each of the offices of Clifford Chance (including in England).
Article 3.3 included the following:
“In order to efficiently advise the SG Group, the Firm must make all prior inquiries regarding the nature and scope of the engagement with which it is entrusted; in so doing it must ensure that it has received or provided all necessary relevant written information (engagement letter). …”
Article 3.4 stated that:
“Each time the Firm is appointed in a matter, it undertakes to submit to both the SG Group entity which instructed it and to the SG in-house lawyer in charge of the matter, and if needs be, in matters where no SG in-house lawyer is directly involved, to the SocGen representative handling the affair, a detailed cost estimate (see article 7) together with a detailed invoice (see article 10).”
Article 5 provided, inter alia, that “the [F]irm must appoint a partner responsible for each new matter”. (The capitalisation is not present in the translation but is in the original French.) Article 6 provided for the Firm to keep SocGen's relevant instructing individual regularly informed.
Articles 7 and 8 dealt further with fees. Article 7.1 stated:
“The method of determining the fees to be charged will be a matter of negotiations between the Firm and the SG in-house lawyer in charge of the file, and in principle with the SG sourcing correspondent for matters which may exceed EUR 300,000.
a. In the case of lump-sum fees, the amount must be approved by the SG in-house lawyer in charge of the matter and by the representative of the business or product line before the Firm commences any work; furthermore, any conditions which might be associated with such lump-sum fees must be expressed clearly and precisely;
b. When fees are to be charged on the basis of time spent on a matter, the Firm must provide a detailed estimate of the time it expects to devote to the matter together with the fees that will be charged (see appendix 4).”
Article 8 set out the preferential pricing terms available to SocGen, under which the maximum hourly rates for each type of fee earner in France, the United Kingdom and the United States were agreed. Appendix 6 set out the maximum hourly rates for a number of other Clifford Chance offices in Europe, Asia and the Middle East. Appendix 7 was a prescribed pro forma for annual and half-yearly reporting on all engagements, including a column for the “ Law firm office” to be stated.
Article 10 provided that, unless otherwise agreed, the SocGen Group expected to be invoiced on a monthly basis. Invoices were required to contain at least the information detailed in Appendix 3. That appendix required a range of information including reference to the matter, name of responsible...
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