Summary

On its proper interpretation, a standard form clause in a contract which conferred exclusive jurisdiction on the English courts obliged the parties not to begin, or continue, any relevant proceedings in any forum other than the English court. The continuation of proceedings begun elsewhere would, on the face of it, be a continuing breach.

Facts

Three defendants in an action for breach of contract sought summary judgment under CPR r.24.2 on the basis that the claims were statute-barred under the Limitation Act 1980.

The claimant was an English derivates broker and the defendants were former clients who had issued proceedings against it in Germany in May 2008. Those proceedings were ongoing. In July 2017, the claimant brought the instant claim for breach of contract, alleging that the defendants had brought the German proceedings in breach of a clause in its terms of business conferring exclusive jurisdiction on the English courts.

The defendants submitted that the exclusive jurisdiction clause prohibited the issue, but not the continued pursuit, of proceedings other than in England. They argued that, for limitation purposes, time began to run from the date of issue, and that the claimant's action had therefore become time-barred six years after the German proceedings were issued.

Held

Extent of the obligation created by the exclusive jurisdiction clause - An express agreement to submit to the exclusive jurisdiction of the English courts contained, by implication, a concomitant agreement not to pursue any claims within the scope of that submission in any other forum, AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] UKSC 35 followed. In the instant case, that implied agreement prohibited both the issue, and the continued pursuit, of proceedings. The clause had to be viewed in its commercial context. In that regard, the principles set out in Fiona Trust & Holding Corp v Privalov [2007] UKHL 40 in relation to arbitration clauses applied equally to jurisdiction clauses, Fiona Trust applied. Applying those principles, it was clear that the instant clause obliged the defendants to pursue any relevant claims in England, and not elsewhere. The clause was in fairly standard form: the parties were not to begin, or continue, any relevant proceedings elsewhere, and they had to bring to an end any relevant proceedings begun elsewhere. The description of the English court's jurisdiction as "exclusive" clearly indicated that the parties intended that proceedings falling within the scope of the clause should take place only in the English courts. The mere existence of proceedings elsewhere was, prima facie, a continuing breach. While proceedings were taking place in some other forum, the English courts could not be said to have exclusive jurisdiction (see paras 23-25, 32-34 of judgment). The clear commercial purpose of the clause was to protect the claimant against having to deal with proceedings brought by clients in any forum other than the English courts, and one of its purposes was to give the claimant a strong prima facie right to an anti-suit injunction. That purpose would be defeated if the clause prevented clients from starting proceedings elsewhere, but thereafter allowed them to continue to prosecute such proceedings without committing any further breach (paras 36-37). Whether a contractual obligation should be interpreted as a continuing one depended on its nature. However, an obligation to maintain a negative state of affairs (i.e. that there should be no relevant proceedings otherwise than before the English courts) was a classic example of a continuing obligation (paras 28-31, 38-39).

Waiver by delay - The claimant's delay in bringing the instant proceedings did not amount to a waiver of the defendants' breach, Sanders, Executrix v John James Coward 153 E.R. 756 not applied (para.42).

Successive breaches - Because successive breaches were independent of one another, each step taken by the defendants in pursuit of the German claims was capable of amounting to a further, and independent, breach (para.43).

Particulars of claim - Relying on London Congregational Union Inc v Harriss [1988] 1 All E.R. 15, the defendants complained that the particulars did not identify any particular step taken within the limitation period and therefore failed to disclose an in-time cause of action. However, London Congregational was not authority for the proposition that a claimant had to plead the precise moment at which the cause of action arose. It simply held that when limitation was in issue, the claimant had to plead facts which showed, on the balance of probabilities, that the cause of action had arisen within the limitation period, London Congregational explained. As long as such facts were pleaded, it did not matter that the precise moment at which the cause of action arose could not be identified. The claimant had pleaded a continuing breach and identified with sufficient precision the steps alleged to have been taken within the limitation period (paras 44-45). The claimant could, however, be criticised for failing to plead its interpretation of the jurisdiction clause. Although it was complaining of breaches of the implied term, it had pleaded only the express term, which meant that the statements of case did not identify the real issues between the parties. However, that defect was capable of cure and was not, of itself, a reason for giving summary judgment to the defendants (para.46).

Conclusion - On its true interpretation, the exclusive jurisdiction clause obliged the parties not to begin, or continue, any relevant proceedings in any forum other than the English court. Therefore, to the extent that the claimant's allegations of breach referred to events occurring no more than six years before the instant action was begun, they were not time-barred (para.47).

Application refused