The High Court distinguished the Supreme Court decision of Lungowe v Vedanta Resources plc (Vedanta),1 giving more weight to the desirability of avoiding multiplicity of actions and the risk of inconsistent judgments when concluding that England was clearly the proper place to bring claims against a defendant against whom proceedings had previously been issued in Singapore. The presence of an exclusive English jurisdiction clause between the claimant and the anchor defendants made England the only jurisdiction where a single composite forum for all claims against all parties could be achieved: E, D & F Man Capital Markets Ltd v Come Harvest Ltd & ors [2019] EWHC 1661 (Comm)
In 2016, the claimant (MCM) entered into various commodities agreements (the Master Agreements) with two Hong Kong companies, Come Harvest (D1) and Mega Wealth (D2). The Master Agreements were governed by English law and contained exclusive English jurisdiction clauses. Under the Master Agreements, subsequent contracts were entered by which D1 and D2 sold nickel to MCM and MCM made payments upon provision of warehouse receipts. The warehouses which stored the nickel were located in Malaysia, Singapore and South Korea. A dispute arose as to the authenticity of these receipts, the majority of which had been issued to the order of a Singaporean entity (Straits).
In May 2017, MCM commenced pre-action disclosure proceedings against Straits in Singapore (the Singapore proceedings). Subsequently, MCM issued proceedings against D1 and D2 in the English courts. MCM had indicated to the Singaporean court that it intended to commence substantive proceedings against Straits there.2 MCM did not reveal the existence of the English proceedings to Straits or to the Singapore court until March 2018. After documentation came to light which appeared to implicate Straits in the alleged fraud, in September 2018 MCM sought to join Straits to the English proceedings. Although the Singapore proceedings were still on foot at this time, MCM accepted as part of its application that it would discontinue the Singapore appeal if so required, and ultimately did so in February 2019.
On 23 November 2018, the English court granted MCM permission to serve proceedings out of the jurisdiction on Straits in Singapore. Straits then challenged the jurisdiction of the English court.
Jurisdiction challenge
The challenge came before Daniel Toledano QC (sitting as a deputy Judge of the High Court). The judge formulated the issue as being whether MCM was entitled to change its mind so as to pursue Straits in England or whether its conduct (ie conveying the impression to the Singapore court that it intended to bring substantive proceedings against Straits in Singapore) precluded such a change of mind or had the effect of rendering Singapore and not England the proper place in which to pursue Straits.
Grant of permission to serve out of the jurisdiction
To obtain permission to serve out, MCM needed to satisfy the court (on paper and without notice) of three matters (as restated in AK Investments v Kyrgyz Mobil3):
− there is a serious issue to be tried on the merits in relation to each alleged cause of action;
− there is a good arguable case that each cause of action falls within one or more jurisdictional gateway/s; and
− in all the circumstances, the court ought to exercise its discretion to permit service out of the jurisdiction. The court will only do so if it is satisfied that England is the proper place in which to bring the claim.
The principal gateway relied upon by MCM was that Straits was a “necessary and proper party” to a claim that had been served on D1 and D2 (and that is reasonable for the court to try)4. Straits accepted that the first and second limbs had been satisfied. The jurisdiction challenge focused on the third limb of this test.
Proper place in which to bring the claim – consider all defendants
CPR 6.37(3) provides that “The court will not give permission unless satisfied that England and Wales is the proper place in which to bring the claim”. This gives expression to the well-established forum conveniens test whereby the court must consider the interests of all parties and the ends of justice in identifying a suitable forum.5 In Vedanta, the Supreme Court found that the forum conveniens test is applicable to a case as a whole. In other words, the court should consider the interests of all parties, including any anchor defendants.
Multiplicity of proceedings – are they a trump card?
In Vedanta, the Supreme Court held that the risk of irreconcilable judgments by different courts is not a “trump card” in favour of having proceedings all in one place if that risk arises purely from a party’s choice to sue one of the parties in England rather than, as was possible in that case, against both of the parties in Zambia.
Straits sought to rely on this concept of choice, claiming MCM exercised a choice at the outset to commence the Singapore proceedings and should have been held to this choice which it said continued to exert a “gravitational pull” towards Singapore. Straits even suggested MCM could have requested that D1 and D2 forgo their rights under the exclusive English jurisdiction clauses so all claims against all parties could be brought in Singapore.
The court rejected Straits’ submissions, holding that MCM never had a straightforward choice that would have enabled it to sue all parties in Singapore. Rather, it was at all times bound by the English exclusive jurisdiction clauses in the Master Agreements in relation to claims against D1 and D2 (the anchor defendants). There was no evidence to suggest that either party would have been willing to give up their rights under those exclusive jurisdiction clauses. MCM was therefore entitled to conclude it had no choice but to sue D1 and D2 in England. The court found there was real force in its submission that England was the proper place for all claims against all parties because it was the only jurisdiction where a single composite forum could be achieved. This was a case where a single overarching conspiracy was alleged against D1 and D2 and Straits and those claims needed to be considered together. The multiplicity point was “a factor of great significance” in the present case which pointed “strongly” to England as the proper place for resolving the claims against Straits.
In contrast, in Vedanta, the claimants did have a straightforward choice between Zambia and England for all claims against all parties. The dispute was overwhelmingly Zambian in focus and nature and the UK domiciled defendant offered to submit to the jurisdiction of the Zambian courts to enable the whole case to be tried there.
Change of mind allowed
As to MCM’s change of heart on forum, the court concluded that MCM need not be stuck with its originally contemplated choice of Singapore for claims against Straits. The court was only concerned with whether, as at the date permission was granted, MCM had demonstrated that England was the proper forum. By that date, MCM had already changed its mind and indicated that it wished to bring all claims against all parties in England.
Governing law and other factors
The parties had made submissions on the applicable governing law of the claims, as this can be a factor when evaluating the proper forum. However in this case, although the court concluded that English law governed the claims, this was largely academic as the case was more likely to turn on factual rather than legal issues. Moreover, the court stated that it would have reached the same conclusion on forum even if some or all of the claims against Straits were governed by Singapore, Malaysian or Korean law.
There was a related dispute about the use by MCM in the English permission application of material disclosed subject to restrictions in the Singapore proceedings. The court accepted this was an error on MCM’s part and noted the material had been redacted in any event.
Comment
This case highlights the scope of the court’s discretion in deciding whether to grant permission to serve out of the jurisdiction. Even though the claimant had made a previous representation that it would not be pursuing Straits in England, avoiding multiplicity of proceedings and the risk of inconsistent judgments proved critical to the court’s decision to allow service out. The case is a useful reminder that the court will assess forum conveniens factors as a whole, meaning, as in the present case, the fact the anchor defendants are subject to an English jurisdiction clause may be decisive.
This decision also illustrates what appears to be the constructive interplay between senior courts of two common law jurisdictions, England and Singapore. The English judgment references Singaporean rules and authority and cites the Singapore court’s decision to refuse to grant Straits an anti-suit injunction, on the basis the Singaporean court was not persuaded that Singapore was clearly the more appropriate forum.
Footnotes:
1 [2019] UKSC 20.
2 See Singapore Rules of Court O. 24 r. 6 and Dorsey James Michael v World Sport Group Pte Ltd [2014] SGCA 4.
3 [2011] UKPC 7.
4 MCM also relied on two alternative gateways: unlawful means conspiracy (the tort claims gateway 9) and constructive trust (the trust claims gateway 15).
5 Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, per Lord Collins JSC at para [88].
