Deutsche Bank AG v Highland Crusader Offshore Partners LP
| Jurisdiction | England & Wales |
| Neutral Citation | [2009] EWCA Civ 725 |
| Date | 2010 |
| Court | Court of Appeal (Civil Division) |
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 105–106, 112–113, 119–121, 122, 123).
The following cases are referred to in the judgment of Toulson LJ:
Ace Insurance SA-NV v Zurich Insurance Co
Airbus Industrie GIE v Patel [
Amchem Products Inc v British Columbia (Workers’ Compensation Board) [
Amoco v TGL (unreported) 26 June 1996, Waller J
Antec International Ltd v Biosafety USA Inc
Barclays Bank plc v Homan [
Berisford (S & W) plc v New Hampshire Insurance Co [
BP plc v National Union Fire Insurance Co
Breams Trustees Ltd v Upstream Downstream Simulation Services Inc
British Aerospace plc v Dee Howard Co [
Cannon Screen Entertainment Ltd v Handmade Films (Distributors) Ltd (unreported) 11 July 1989, Hobhouse J
CEL Group Ltd v Nedloyd Lines (UK) Ltd
Continental Bank NA v Aeakos Cia Naviera SA [
Credit Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd (formerly MLC Emerging Markets Ltd) [
Donohue v Armco Inc
Du Pont (E I) de Nemours & Co v Agnew [
Du Pont (E I) de Nemours & Co v Agnew (No 2) [
Evialis v SIAT
Gulf Oil Corpn v Gilbert (
HIT Entertainment Ltd v Gaffney International Licensing Pty Ltd
Laker Airways Ltd v Sabena, Belgian World Airlines (
Mercury Communications Ltd v Communication Telesystems International [
Perry v Del Rio (
Royal Bank of Canada v Coöperatieve Centrale Raiffeisen- Boerenleenbank BA
Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan
Société Nationale Industrielle Aerospatiale v Lee Kui Jak [
Spiliada Maritime Corpn v Cansulex Ltd [
Turner v Grovit
The following additional cases were cited in argument:
Aggeliki Charis Cia Maritima SA v Pagnan SpA (The Angelic Grace) [
Airbus Industrie GIE v Patel [
American International Speciality Lines Insurance Co v Abbott Laboratories
Ashville Investments Ltd v Elmer Contractors Ltd [
Cavell USA Inc v Seaton Insurance Co
Fiona Trust and Holding Corpn v Privalov
Horn Linie GmbH & Co v Panamericana Formas e Impresos SA (The Hornbay)
JP Morgan Securities Asia Private Ltd v Malaysian Newsprint Industries SDN BHD [
Midland Bank plc v Laker Airways Ltd [
National Westminster Bank plc v Rabobank Nederland
National Westminster Bank plc v Utrecht-America Finance Co
Royal Bank of Canada v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA
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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