Ness Global Services Ltd v Perform Content Services Ltd
| Jurisdiction | England & Wales |
| Judge | Stephen Houseman |
| Judgment Date | 10 December 2020 |
| Neutral Citation | [2020] EWHC 3394 (Comm) |
| Docket Number | Case No: LM-2020-000064 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 3394 (Comm)
Mr Stephen Houseman QC sitting as a Deputy Judge of the High Court
Case No: LM-2020-000064
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LONDON CIRCUIT COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Anna Dilnot (instructed by Cleary Gottlieb Steen & Hamilton LLP) for the Claimant
Ricky Diwan QC (instructed by Addleshaw Goddard LLP) for the Defendant
Hearing dates: 30 November & 1 December 2020
Draft Judgment circulated on 8 December 2020
Approved Judgment
Stephen Houseman QC SITTING AS A DEPUTY JUDGE OF THE HIGH COURT
INTRODUCTION
This is an application by the Defendant (“ Perform”) under CPR Part 11 seeking to stay these proceedings brought against it by the Claimant (“ Ness”).
The stay is sought pursuant to Article 33, alternatively Article 34, of Regulation (EU) No.1215/2012 of 12 December 2012 — referred to variously as the ‘Recast Brussels Regulation’ or ‘Brussels Recast Regulation’ or ‘Recast Brussels I’ (“ Regulation”) — on the basis of prior-commenced proceedings pending in New Jersey, USA. I refer to the stay application as the “ Jurisdiction Application”.
Both Perform and Ness are UK-registered companies with offices in London. It is common ground that Perform is domiciled in this jurisdiction for the purposes of the Regulation. The present proceedings were commenced by Ness and served upon Perform in this jurisdiction as of right, i.e. as a defendant domiciled within this jurisdiction, on 9 April 2020.
Five weeks or so prior to commencement of these proceedings, Perform commenced proceedings against both Ness and its parent company, Ness Technologies Inc. (“ Ness Inc”), before the Superior Court of New Jersey by Complaint filed on 4 March 2020 (“ NJ Proceedings”). As addressed further below, the subject-matter of the NJ Proceedings and this subsequent action overlap substantially. Ness accepts, so far as relevant, that the NJ Proceedings involve the same cause of action (save for the addition of non-contractual claims) and are between the same parties (save for the addition of Ness Inc as co-defendant) as the present proceedings.
Both sets of proceedings are based on the same facts and matters that are said to constitute the basis for termination by both sides of a written agreement called the Development Center Agreement dated 28 February 2019 (“ DCA”). The parties to the DCA are — or, in so far as terminated, were — Perform, Ness and Ness Inc (as guarantor of Ness). Clause 20(f) of the DCA contains an express choice of English law and a non-exclusive submission by all parties to the jurisdiction of the Courts of England and Wales.
It is by reference to the NJ Proceedings, being ‘first seised’ in this comparative procedural context, that Perform sought a stay of this action pursuant to Article 33 or Article 34 of the Regulation. These provisions confer power on a ‘second seised’ court of a Member State to stay proceedings before it by reference to prior-commenced proceedings pending before the courts of a “ third State”, i.e. a Non-Member State.
Ness resists the Jurisdiction Application on a number of grounds. Prominent amongst these is the threshold issue as to the applicability of Article 33 or Article 34 in circumstances where (as it says) the jurisdictional basis of the ‘second seised’ proceedings against a local-domiciled defendant is founded (also or instead) upon a non-exclusive jurisdiction agreement covering the relevant dispute by operation of Article 25 of the Regulation.
Article 25 acknowledges the existence of a distinction between exclusive and non-exclusive jurisdiction agreements, or more accurately the corresponding prorogated jurisdiction conferred upon the courts of a Member State by such agreements. English private international law also, perhaps notoriously, draws its own domestic distinction between these different types of jurisdiction agreements. This distinction featured heavily in the parties' legal analysis. I use ‘EJA’ and ‘Non-EJA’ as convenient labels, recognising that the latter embraces different forms of agreement the proper characterisation and effect of which depends upon the contractual language according to the relevant applicable law.
The issues were identified and analysed with conspicuous skill and clarity by both counsel. I am grateful to them. At my request, they supplied an agreed form of wording used as the basis of the final paragraph of this judgment.
RELEVANT BACKGROUND
The background that matters is relatively brief and uncontentious.
Perform is an English-registered company which provides products and services in the sports data and analytics sector. Ness is an English-registered company which provides software development services, including the design and construction of offshore software and development centres.
Both Perform and Ness belong to corporate groups with significant international operations that are each headquartered in the USA. Perform is part of the Stats Perform group with global headquarters in Chicago, Illinois. Ness is part of the Ness Group with global headquarters in Teaneck, New Jersey.
Pursuant to the DCA, and summarising for present purposes, Ness undertook to set up and operate an offshore extended development centre in Kosice, Slovakia (defined in the DCA as the “EDC”) and to provide a range of services during the term of the DCA. As noted above, Ness Inc guaranteed the liabilities of its subsidiary, Ness, pursuant to the DCA (clause 19).
Clause 20(f) of the DCA provides as follows:
“ Governing Law and Jurisdiction. The Agreement shall be governed by and construed in accordance with the laws of England and Wales and the parties hereby irrevocably submit to the non-exclusive jurisdiction of the Courts of England and Wales as regards any claim, dispute or matter arising under or in connection with this Agreement.”
Pausing there, the parties to the DCA appear to have made an informed and mindful choice of “ non-exclusive” jurisdiction for the purposes of their mutual and respective irrevocable submissions to the jurisdiction of the Courts of England and Wales. By doing so, they embraced the possibility of more than one set of legal proceedings being lawfully commenced and pursued in different jurisdictions in relation to their relationship or any dispute between them. They consensually legitimised multi-jurisdictional litigation.
A dispute emerged between the parties in late 2019 or early 2020, following an inspection by Dr Sun (Group CTO of Stats Perform) of the EDC in Slovakia in mid-December 2019 and subsequent “commit data” analysis performed by Stats Perform engineers (based in the USA) as to various performance criteria or indicia within the scope of the DCA. Perform stopped paying invoices submitted by Ness.
Perform sent a formal notice on 15 January 2020 to Ness requiring various identified (alleged) breaches to be remedied pursuant to clause 15 of the DCA. Ness retaliated by sending a Notice of Dispute on 21 February 2020 to Perform in respect of unpaid invoices totalling €1,023,227.70 and threatening the commencement of legal proceedings in accordance with clause 20(f). This letter/notice was signed and sent by Mark L. Shwartz, Chief Legal Officer and Corporate Secretary of the Ness Group, on Ness Inc branded paper.
Perform's next move was to commence the NJ Proceedings. On 4 March 2020 it filed a complaint in the Superior Court of New Jersey against both Ness and Ness Inc seeking damages (including punitive damages) and declaratory relief. Damages are sought on the basis of breach of the DCA, common law fraud and negligent misrepresentation on the part of Ness as regards the provision of services and rendering of invoices. The non-contractual claims are advanced on the basis of local legal principles, not English law. The declaratory relief sought is to the effect that Perform is entitled to terminate the DCA for “Cause” pursuant to clause 15(c) thereof.
There is no suggestion that Perform commenced the NJ Proceedings as an act of ‘forum shopping’ or in a way that is vexatious or oppressive. Perform did not breach clause 20(f) by commencing and pursuing the NJ Proceedings.
As noted above, Ness commenced these proceedings against Perform some five weeks later on 9 April 2020. Mr Shwartz signed the statement of truth on the Claim Form and the Particulars of Claim. Ness brings a debt claim, with damages in the alternative, in respect of unpaid invoices pursuant to the DCA totalling €1,284,134.70 plus contractual or statutory interest. Ness also seeks declaratory relief to the effect that (a) Perform gave notice to terminate without cause triggering a liability to pay a Termination Amount of €884,559.66 pursuant to clause 15 of the DCA and (b) Ness is entitled to terminate the DCA at common law for Perform's repudiation thereof.
As already observed, there is substantial overlap between the claims advanced in each set of proceedings such that it is fair to describe them as flipsides of the same coin or mirror image claims. The invoices alleged in the NJ Proceedings to have been fraudulently or negligently submitted by Ness are essentially the same as those founding the debt claim pursued by Ness in this action. The parties' respective claims for declaratory relief form the kind of tit-for-tat termination tussle that is familiar to commercial litigators within the context of a single set of proceedings. It is on this basis that Ness realistically accepts that the NJ Proceedings involve the same cause of action and are between the same parties for the...
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