Nancy Jong v HSBC Private Bank (Monaco) SA (1) (Defendant/Applicant) HSBC Private Bank (UK) Ltd (2) and Another
| Jurisdiction | England & Wales |
| Judge | Judge Purle |
| Judgment Date | 28 November 2014 |
| Neutral Citation | [2014] EWHC 4165 (Ch) |
| Date | 28 November 2014 |
| Court | Chancery Division |
| Docket Number | Case No: HC-2014-000284 |
[2014] EWHC 4165 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
7 The Rolls Building,
Fetter Lane, London, EC4A 1NL
His Honour Judge Purle QC
(Sitting as a Judge of the High Court)
Case No: HC-2014-000284
Mr. Jeffrey Chapman QC and Ms. Marianne Butler (instructed by Olswang LLP) for the Claimant/Respondent
Mr. David Quest QC and Ms. Laura John (instructed by DLA Piper UK LLP) for the First Defendant/Applicant
The application before me is to set aside the order of the master giving permission to serve these proceedings out of the jurisdiction on the first defendant HSBC Private Bank (Monaco) SA (HSBC Monaco) in Monaco. That order was made on 30th January 2014. The proceedings were issued on 1st May 2013, at which time HSBC Monaco was the only defendant. However, a week or so before the application to the master, two additional defendants were added, both being English companies, namely HSBC Private Bank (UK) Limited and HSBC Holdings plc. I shall call these the English defendants. It will be seen that all the defendants are members of the HSBC Group of companies.
One of the advantages of joining the English defendants is that they can be sued in this jurisdiction as of right and the proceedings against them cannot be stayed on forum conveniens grounds (see Owusu v Jackson [2005] ECR I-1383). Another advantage is that their presence opened up a gateway for permission to serve out of the jurisdiction upon HSBC Monaco. There were other gateways relied upon, but I need not consider them because it is conceded by HSBC Monaco that one way or another the claimant ("Ms. Jong") has passed through a relevant gateway. I shall assume for present purposes that all three gateways she relies upon were properly open to her, whilst noting that that is a matter of dispute so far as Mr. Quest, who appears for HSBC Monaco, is concerned.
The real issue before me is whether or not service out of the jurisdiction was justified as a matter of discretion. It is accepted that there is a properly arguable case against HSBC Monaco. What is in issue is whether Monaco is, as is contended by HSBC Monaco, the more appropriate jurisdiction.
The claim arises out of foreign exchange (or forex as it is known for short) dealings between Ms. Jong and HSBC Monaco, in Monaco. Ms. Jong, who had previous connections through a family trust with Monaco, chose to open, as she was fully entitled to do, an account with HSBC Monaco in Monaco and to conduct her foreign exchange dealings through that account. With the minor exceptions of a few trades conducted for administrative reasons via Geneva, all the dealings which ensued over a period of approximately three years were with HSBC Monaco in Monaco, though very often the contract would be initiated by telephone from Ms. Jong in London, where she has a residence.
There is an issue between the parties as to the extent to which standard terms and conditions of HSBC Monaco applied to their dealings. That is relevant for this reason. One of the standard terms is in the following form:
"Any litigation between the client and the bank shall be submitted to the exclusive jurisdiction of the competent Monaco courts at the offices of the bank location where the account is open. Nevertheless the bank reserves the right to take action at the place of the client's residence or in any other court which would have been competent in the absence of the preceding election of jurisdiction".
That means that HSBC Monaco is entitled, if it wishes (as it does) to do so, to insist as a matter of contract upon Monaco as the exclusive jurisdiction. HSBC Monaco has the right to sue elsewhere, but has not exercised that right. The court is not bound to accede to HSBC Monaco's wish to enforce the exclusive jurisdiction clause, but it is clearly a relevant factor.
Although there is, as I have said, a dispute as to whether, and if so to what extent, that clause was incorporated, for the purposes of the jurisdiction hearing before me it was accepted that I should proceed on the basis that that clause did apply from a date in 2007. The result is that well in excess of 90% of all the transactions with which this case is concerned (in number and value) are for the purposes of this application to be treated as caught by the jurisdiction clause. Were HSBC Monaco the only defendant, that would almost certainly be conclusive of the issue as to where these proceedings are more conveniently to be heard. However, there are the two English defendants who have now been sued alongside HSBC Monaco. That engages wider discretionary considerations.
The importance of an exclusive jurisdiction clause is has been recognised repeatedly and often enforced by the courts (see Donohue v Armco Inc. [2002] 1 All ER 749), but there may be exceptions to their enforcement where justice so requires. One such exception has in many cases been held to arise where there are multiple defendants, some of whom cannot be sued in the foreign jurisdiction otherwise covered by the exclusive jurisdiction clause. Factually that is not this case because the two English defendants could be sued in Monaco for the very simple reason that they are willing to submit to the jurisdiction of the courts there. Ms. Jong does not wish to sue in Monaco, however.
There have been some cases (I refer to Pacific International Sports Clubs Ltd. v Soccer Marketing International Ltd. [2009] EWHC 1389 as one) where the courts have set aside permission to serve out of the jurisdiction so as to enforce an exclusive jurisdiction clause, even when there are other defendants within the jurisdiction. What the court in such a case often does is look at the importance of the defendants and the reality of the claims made against the local defendants. It is not suggested, at least not yet at this stage of the proceedings, that there are no viable claims of any kind against the English defendants, though Mr. Quest for HSBC Monaco has addressed me in unflattering terms as to their sustainability.
What Mr. Quest effectively invites me to infer is that the claims made against the English defendants have been introduced so as to bolster the claim that this court should exercise jurisdiction, but that the real defendant is HSBC Monaco, the two English defendants having at best a subsidiary role to play.
That involves looking at the claims against the various defendants. So far as HSBC Monaco is concerned, it is sued in broad outline for the way in which it either did or did not give effect to Ms. Jong's instructions over the period of forex trading in question. It is said that they failed to give effect to her instructions in some respects by not executing trades which they had agreed to execute or that they executed trades for which they had no instructions at all from Ms. Jong. These are essentially factual allegations which go to the state of account between the parties and, unsurprisingly, what is sought is an account. The volume of dealings was very substantial, running into hundreds of millions of pounds. The losses are somewhat less but are said to be £20 million or more.
The issues arising out of that claim are largely factual. Various provisions of Monaco law...
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