Deutsche Bank AG v Highland Crusader Offshore Partners LP

JurisdictionEngland & Wales
Neutral Citation[2009] EWCA Civ 725
Date2010
Year2009
CourtCourt of Appeal (Civil Division)
Court of Appeal Deutsche Bank AG and another v Highland Crusader Offshore Partners LP and others [2009] EWCA Civ 725 2009 June 9; July 13 Carnwath, Toulson, Goldring LJJ

Conflict of laws - Jurisdiction - Anti-suit injunction - Agreement between parties containing English non-exclusive jurisdiction clause - Defendants prosecuting action in Texas court - Claimants bringing parallel proceedings in England and seeking anti-suit injunction in respect of Texas proceedings - Whether presumption that litigation in non-contractual forum vexatious or oppressive absent special circumstances - Whether anti-suit injunction to be granted

The first claimant was a major German bank with its principal place of business in Frankfurt and an office in London. The second claimant was an associated company registered in the United States of America with its principal place of business in New York. The first to third defendants were a group of companies operating as a major US hedge fund. All investment decisions relating to the defendant companies were made in Dallas. The defendants entered an agreement to buy from the claimants tranches of asset-backed collateralised loan obligations. These agreements took the form of three global master repurchase agreements, a standard form of international finance agreement. The agreements provided for English governing law and the non-exclusive jurisdiction of the English courts. The claimants subsequently made margin calls on the defendants which they did not pay whereupon the claimants served default and valuation notices. The defendants filed proceedings against the claimants in Texas alleging, inter alia, that the claimants had induced them to buy securities by fraudulent or negligent misrepresentation. The claimants issued proceedings in the High Court for amounts due under the default valuation notices and applied for an anti-suit injunction preventing the defendants from continuing the Texas proceedings. The judge granted the claimants’ application, holding that, absent some unforeseeable change since the contractual jurisdiction had been agreed, a party would ordinarily act vexatiously or oppressively in pursuing proceedings in a non-contractual jurisdiction in parallel with proceedings in the contractual jurisdiction.

On the defendants’ application for permission to appeal—

Held, granting the application and allowing the appeal, that where a non-exclusive jurisdiction clause did not clearly indicate whether prior or subsequent parallel proceedings in a non-selected forum were permitted or prohibited, the best interpretation would usually be that, by contracting for non-exclusive jurisdiction, the parties had anticipated and accepted the possibility of parallel proceedings; that, therefore, it was incorrect to start with a general presumption that proceedings brought in the non-contractual forum were vexatious or oppressive unless strong grounds, unforeseeable at the time the contractual jurisdiction was made, or otherwise exceptional, could be demonstrated; that only foreign proceedings which were vexatious and oppressive for some reason independent of the mere presence of the non-exclusive jurisdiction clause should be restrained by an injunction; that although the dispute arose under a contract governed by English law and with an English non-exclusive jurisdiction clause there was little else to connect the dispute with England; that the decision of the Texas court did not breach principles of customary international law and should be respected; and that, in the circumstances, it was not appropriate to grant an ant-suit injunction (post, paras 105106, 112113, 119121, 122, 123).

Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan [2003] 2 Lloyd’s Rep 571, CA distinguished.

Decision of Burton J [2009] EWHC 730 (Comm); [2009] 2 Lloyd’s Rep 61 reversed.

The following cases are referred to in the judgment of Toulson LJ:

Ace Insurance SA-NV v Zurich Insurance Co [2001] EWCA Civ 173; [2001] All ER (Comm) 802; [2001] 1 Lloyd’s Rep 618, CA

Airbus Industrie GIE v Patel [1999] 1 AC 119; [1998] 2 WLR 686; [1998] 2 All ER 257; [1998] 1 Lloyd’s Rep 631, HL(E)

Amchem Products Inc v British Columbia (Workers’ Compensation Board) [1993] 1 SCR 897

Amoco v TGL (unreported) 26 June 1996, Waller J

Antec International Ltd v Biosafety USA Inc [2006] EWHC 47 (Comm)

Barclays Bank plc v Homan [1993] BCLC 680; sub nom In re Maxwell Communications Corpn plc (No 2) [1992] BCC 757, Hoffmann J and CA

Berisford (S & W) plc v New Hampshire Insurance Co [1990] 2 QB 631; [1990] 3 WLR 688; [1990] 2 All ER 321; [1990] 1 Lloyd’s Rep 454

BP plc v National Union Fire Insurance Co [2004] EWHC 1132 (Comm)

Breams Trustees Ltd v Upstream Downstream Simulation Services Inc [2004] EWHC 211 (Ch)

British Aerospace plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368

Cannon Screen Entertainment Ltd v Handmade Films (Distributors) Ltd (unreported) 11 July 1989, Hobhouse J

CEL Group Ltd v Nedloyd Lines (UK) Ltd [2003] EWCA Civ 1716; [2004] 1 All ER (Comm) 689; [2004] 1 Lloyd’s Rep 381, CA

Continental Bank NA v Aeakos Cia Naviera SA [1994] 1 WLR 588; [1994] 2 All ER 540; [1994] 1 Lloyd’s Rep 505, CA

Credit Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd (formerly MLC Emerging Markets Ltd) [1999] 1 All ER (Comm) 237; [1999] 1 Lloyd’s Rep 767

Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749; [2002] 1 All ER (Comm) 97; [2002] 1 Lloyd’s Rep 425, HL(E)

Du Pont (E I) de Nemours & Co v Agnew [1987] 2 Lloyd’s Rep 585, CA

Du Pont (E I) de Nemours & Co v Agnew (No 2) [1988] 2 Lloyd’s Rep 240, CA

Evialis v SIAT [2003] EWHC 863 (Comm); [2003] 2 Lloyd’s Rep 377

Gulf Oil Corpn v Gilbert (1947) 330 US 501

HIT Entertainment Ltd v Gaffney International Licensing Pty Ltd [2007] EWHC 1282 (Ch)

Laker Airways Ltd v Sabena, Belgian World Airlines (1984) 731 F 2d 909

Mercury Communications Ltd v Communication Telesystems International [1999] 2 All ER (Comm) 33

Perry v Del Rio (2001) 66 SW 3d 239

Royal Bank of Canada v Coöperatieve Centrale Raiffeisen- Boerenleenbank BA [2003] EWHC 2913 (Comm); [2004] EWCA Civ 7; [2004] 2 All ER (Comm) 847; [2004] 1 Lloyd’s Rep 471, CA

Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan [2002] EWCA Civ 1643; [2003] 2 Lloyd’s Rep 571, CA

Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871; [1987] 3 WLR 59; [1987] 3 All ER 510, PC

Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460; [1986] 3 WLR 972; [1986] 3 All ER 843; [1987] 1 Lloyd’s Rep 1, HL(E)

Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107; [2002] ICR 94; [2002] 2 All ER 960 (Note); [2002] 1 All ER (Comm) 320 (Note), HL(E)

The following additional cases were cited in argument:

Aggeliki Charis Cia Maritima SA v Pagnan SpA (The Angelic Grace) [1994] 1 Lloyd’s Rep 168; [1995] 1 Lloyd’s Rep 87, CA

Airbus Industrie GIE v Patel [1997] 2 Lloyd’s Rep 8 , CA

American International Speciality Lines Insurance Co v Abbott Laboratories [2002] EWHC 2714 (Comm); [2003] 1 Lloyd’s Rep 267

Ashville Investments Ltd v Elmer Contractors Ltd [1989] QB 488; [1988] 3 WLR 867; [1988] 2 All ER 577; [1988] 2 Lloyd’s Rep 73 (Note), CA

Cavell USA Inc v Seaton Insurance Co [2008] EWHC 3043 (Comm); [2009] Lloyd’s Rep IR616

Fiona Trust and Holding Corpn v Privalov [2007] UKHL 40; [2007] Bus LR 1719; [2007] 4 All ER 951; [2007] 2 All ER (Comm) 1053; [2008] 1 Lloyd’s Rep 254, HL(E)

Horn Linie GmbH & Co v Panamericana Formas e Impresos SA (The Hornbay) [2006] EWHC 373 (Comm); [2006] 2 All ER (Comm) 924; [2006] 2 Lloyd’s Rep 44

JP Morgan Securities Asia Private Ltd v Malaysian Newsprint Industries SDN BHD [2001] 2 Lloyd’s Rep 41

Midland Bank plc v Laker Airways Ltd [1986] QB 689; [1986] 2 WLR 707; [1986] 1 All ER 526, CA

National Westminster Bank plc v Rabobank Nederland [2007] EWHC 1056 (Comm)

National Westminster Bank plc v Utrecht-America Finance Co [2001] EWCA Civ 658; [2001] 3 All ER 733; [2001] 2 All ER (Comm) 7, CA

Royal Bank of Canada v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA [2003] EWHC 2913 (Comm)

APPLICATIONS for permission to appeal

In October 2007 the claimants, Deutsche Bank AG and Deutsche Bank Securities Inc, entered into agreements with the defendant companies, Highland Crusader Offshore Partners LP, Highland Credit Strategies Master Fund LP and Highland Credit Opportunities CDO LP (collectively “Highland”), pursuant to which Highland agreed to buy from the claimants tranches of asset-backed collateralised loan obligations. The agreements took the form of global master repurchase agreements (“GMRAs”). Those agreements contained non-exclusive jurisdiction clauses in favour of the courts of England. On 30 September 2008 the claimants made margin calls on the defendants which the defendants did not pay. The claimants accordingly served default and valuation notices. On 16 October 2008 the defendants filed proceedings against the claimants in the District Court of Dallas County, Texas alleging, inter alia, that the claimants had induced them to buy securities by fraudulent or negligent misrepresentation.

By a claim form dated 7 November 2008, the first claimant issued proceedings against the defendants in the Commercial Court for US$70m plus interest representing amounts due under the default valuation notices. On 21 November 2008 the defendants filed an acknowledgement of service in the English action and notified their intention to dispute jurisdiction.

By an application dated 16 December 2008 the defendants applied for an extension of time to dispute jurisdiction. Tomlinson J dismissed the application.

By an application dated 27 February 2009, the first claimant applied to join the second claimant in the English action and for an anti-suit injunction. By order dated 3 April 2009 Burton J granted those applications.

By an appellant’s notice the defendants sought permission to appeal from the orders of Tomlinson and Burton JJ. The main ground for appealing against the anti-suit injunction was that the Burton J had erred in principle in holding that, where there was a contractual...

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