HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION COMMERCIAL
COURT 10 May 2005 – Konkola Copper Mines v. Coromin
Mr Justice Colman:
Introduction
This is an application to stay Part 20 proceedings against the applicant
reinsurers pending the determination of issues which are said to affect the
reinsurers’ liability to the Part 20 claimants.
I refer to the applicants as “the Reinsurers”, to the Part 20 claimants
as “Coromin” and to the claimants in the main proceedings as “KCM”.
Coromin were co-defendants in the main proceedings with five insurance
companies all incorporated in Zambia. I refer to them as “the Local
Insurers”.
Reinsurers had initially launched an application for a stay of the Part 20
proceedings on the grounds of forum non convenien s. That has not been
pursued.
The claims advanced in the main proceedings against Coromin and the
Local Insurers can be outlined as follows.
KCM is incorporated in Zambia and is the owner and operator of Nchanga
open pit copper mine in Zambia. The second claimant, ARH Limited SA
(“ARH”) is incorporated in Luxembourg. It purchased KCM in March 2000
and owned and controlled it until August 2002. It is assignee of certain
of KCM’s rights to insurance claims the subject of these proceedings,
notice of such assignment having been given to the defendant. ARH
is an indirect wholly owned subsidiary of Anglo American plc (“Anglo
American”). That company is incorporated in England with its head office
in London.
Coromin is an insurance company incorporated in Bermuda. It was
originally set up as a captive to insure and reinsure risks relating to the
operation of Anglo American and other companies within that Group. It is
now separately advised and represented in these proceedings and is not
controlled as regards the conduct of its defence or of its Part 20 claim by
Anglo American, KCM or ARH.
The Reinsurers of Coromin are either Lloyd’s Syndicates or reinsurers
domiciled in England, or other European Union states or Switzerland. For
the purpose of effecting reinsurance cover in the present case Coromin
employed as their brokers Aon London.
On 8 April 2001 an avalanche of rock and mud very substantially
damaged the Nchanga mine killing ten miners. The claims in these
proceedings are directed to recovering an indemnity in respect of the
losses suffered by KCM.
Until a few days before the commencement of the hearing of this
application, a qualification which I explain later in this judgment, KCM
claimed its losses in the main proceedings primarily against Coromin
under a Combined Commercial Insurance Policy (“the CCIP”) and/or a
contract called Coromin Limited Global Master All Risks Policy, to which I
refer as the “Coromin Policy”. (...)
KCM also advanced in these proceedings an alternative claim. This
was against the Local Insurers. It was advanced under a Local Market
Insurance Contract, “the Zambian Contract” effected through the brokers
Aon Zambia, under which the Local Insurers provided property damage
and business interruption insurance expressed as “assets all risks” cover
“limited to specified insurance perils as follows: fire, lightning, explosion,
flood, collapse including shaft collapse”. The claim advanced by KCM
under the Zambian Contract was for US$ 47,886,704. It was on the basis
that the losses had been caused by a „collapse“ within the meaning of the
specified perils.
Finally, KCM included an alternative claim against Coromin. (...)
By way of defence Coromin pleaded that it never became a party to any
direct contract of insurance with KCM or alternatively any such contract
would be illegal and void and/or unenforceable in English Law because
it was contrary to public policy as being illegal under the law of Zambia
which was the place of performance. Coromin went on to plead that KCM
was directly insured by the Local Insurers and that they in turn were
reinsured by Coromin to the extent of 90%.
By its Part 20 claim against the Reinsurers Coromin pleaded that it
was not a direct insurer of KCM and that it was a reinsurer of the Local
Insurers who had directly insured KCM to the extent of 90% of the
risk. Coromin further pleaded that it was entitled to be indemnified by
Reinsurers if Coromin were liable as a direct insurer of KCM for the whole
risk or as a direct insurer of KCM for its liability under the DIC clause or
if Coromin were liable as a reinsurer of the Local Insurers in respect of
their cover of KCM under the Zambian Contract. In other words, Coromin
claimed to be indemnified by the Reinsurers whether they were directly
liable as insurers of KCM or liable as reinsurers of the Local Insurers.
The Reinsurers’ position in response to Coromin’s Part 20 claim is that,
whereas they accept that they reinsured Coromin, they maintain that
the applicable wording of that reinsurance incorporated what has been
conveniently called “the KCM wording”. That wording had, at least for
present purposes, two salient characteristics:
i) the basis of cover was the specified perils as in the Zambian Contract;
ii) there was a Zambian Law and Jurisdiction Clause.
(...)
The Submissions of the Reinsurers
The Reinsurers’ primary submission is that the contract of reinsurance
between them and Coromin included an exclusive Zambian Jurisdiction
Clause. Whereas it is common ground between the Reinsurers and
Coromin that there was a contract of reinsurance between them covering
the KCM liabilities of Coromin at the time when the loss occurred, there is
a dispute as to its terms. (...)
The Reinsurers submit that, on the basis that the Zambian Law and
Jurisdiction clause applied to the contract of reinsurance, it was an
exclusive jurisdiction clause and, accordingly, effect should be given to
it by this court granting a stay of the Part 20 proceedings against the
Reinsurers, thereby reflecting the approach of the House of Lords in
Donohue v. Armco ([2002] 1 Lloyd’s Rep 425).
(...)
Coromin’s Further Submissions
On behalf of Coromin Mr Simon Bryan further submits that, while
accepting that this court cannot determine conclusively on this application
that the reinsurance contract between Coromin and the Reinsurers
incorporated an English Law and exclusive Jurisdiction Clause as in the
CCIP, he can at least show a good arguable case to that effect.
Further, Coromin submit that, even if it is established that the Reinsurers
have a sufficiently strong case that the reinsurance of Coromin contained
a Zambian exclusive jurisdiction clause as distinct from an English
exclusive jurisdiction clause, it is not open to the English court to stay
the English Part 20 proceedings because the Reinsurers are either Lloyd’s
syndicates or English market companies domiciled in the EU or companies
domiciled in Switzerland which is a party to the Lugano Convention.
It is common ground that the English courts had jurisdiction over all
the Reinsurers by reason of their domicile, as distinct from any binding
exclusive English jurisdiction clause. In respect of those Reinsurers
domiciled in England, Article 2 of the Judgments Regulation provided for
mandatory jurisdiction thus:
“1. Subject to this Regulation, persons domiciled in a Member State shall,
whatever their nationality, be sued in the Courts of a Member State.”
As regards the Swiss-domiciled Reinsurers, they are subject to English
jurisdiction, regardless of an exclusive English jurisdiction clause, on the
grounds of Article 6 of the Regulation:
“A person domiciled in a Member Stated may also be sued:
2. as a third party in an action on a warranty or guarantee or in any other
third party proceedings, in the court seised of the original proceedings,
unless these were instituted solely with the object of removing him from
the jurisdiction of the court which would be competent in his case.”
It is submitted on behalf of Coromin that the decision of the European
Court in Owusu  leads to the conclusion that the English courts are
precluded from staying the English Part 20 proceedings so as to give
effect to the alleged Zambian exclusive jurisdiction clause. Put shortly, the
argument is that, given that it would not be open to this court to stay the
Part 20 proceedings in favour of the Zambian courts on the grounds of
forum non conveniens , by parity of reasoning it is not open to this court
to stay these proceedings on the grounds of a foreign jurisdiction clause
given that Zambia is not a member of the EU and therefore bound by the
Judgments Regulation nor a party to the Lugano Convention.
(...)
Discussion: Evidence as to the applicable Jurisdiction Clause
The Reinsurers apply for a stay of proceedings properly commenced in
the English courts. Accordingly, as a starting point, this court must be
satisfied that they have established to the appropriate evidential standard
of proof that Coromin is party to an exclusive Zambian jurisdiction clause.
(...)
The Reinsurers submit that the only relevant reinsurance of Coromin
in respect of the KCM risk was that in (iv). There is thus an issue
directly relevant to the existence of binding jurisdiction clauses. English
jurisdiction does not depend on it being established that there is a
binding English jurisdiction clause because it can be securely grounded on
domicile of the Reinsurers, but Zambian Jurisdiction does depend on the
establishment of the Zambian Jurisdiction clause, the case on forum non
conveniens  now having been abandoned.
How then should this court approach the evidential standard required
in order to assume for present purposes the applicability of a Zambian
Jurisdiction Clause? Neither the Reinsurers nor Coromin assert that there
is double reinsurance of Coromin. This is a case where there must either
be assumed for present purposes, albeit without conclusively deciding the
point, to be a binding Zambian Jurisdiction Clause or a binding English
Jurisdiction Clause.
(...)
In these circumstances, I am not persuaded that the Reinsurers have
indeed shown a strong enough case that such reinsurance of Coromin as
they underwrote was subject to Zambian Law and Jurisdiction so as to
engage the jurisdiction of this court to stay these Part 20 proceedings.
The case advanced by Coromin for the Reinsurers being reinsurers of
Coromin’s liability to KCM only under the global all risks policy appears
at this stage to be stronger than the Reinsurers’ case that they reinsured
Coromin’s liability to the Local Insurers subject to the Zambian Law and
Jurisdiction Clause. Accordingly, on my provisional view of the evidence
adduced on this application, I do not consider that the Reinsurers have
shown a good arguable case that they can invoke the Zambian Law and
Jurisdiction clause against Coromin.
Had I concluded that the Reinsurers had established a good arguable case
that Coromin was bound by the Zambian Law and Jurisdiction clause,
it would have been necessary first to determine whether that was an
exclusive jurisdiction clause. (...)
There was thus an exclusive Zambian jurisdiction clause in the unsigned
three month policy wording.
Does the English Court have Jurisdiction to stay the Part 20
Proceedings?
Coromin’s challenge to this application on the grounds of want of
jurisdiction raises a point of far-reaching importance in relation to the
work of the Commercial Court. If that submission is correct the effect
will be to remove from this court a frequently-used power to protect the
enforcement of jurisdiction agreements in commercial contracts either
by staying proceedings in this court in favour of proceedings in a non-EU
state or by granting anti-suit injunctions to restrain proceedings in non-
EU courts where there is a binding exclusive English jurisdiction clause. I
have used the description “non-EU” to include non-parties to the Brussels,
Lugano and San Sebastian Conventions.
Put shortly, Coromin’s argument is as follows.
In Owusu  the ECJ decided that it was not open to the English court to
decline to exercise jurisdiction over a claim for breach of contract against
a defendant domiciled in England by application of forum non conveniens
principles. The claim was brought by an English-domiciled claimant for
breach of an implied term in a contract of letting of a holiday villa in
Jamaica, owned by the defendant, to the effect that the adjacent beach
would be reasonably safe and free from hidden dangers. The claimant
was rendered tetraplegic after striking his head against a submerged
sandbank while swimming. The claimant also joined other defendants in
Jamaica, claiming against them in tort for breach of a duty of care. The
defendants, including Mr Jackson, applied to the English court to decline
to exercise jurisdiction on the grounds that Jamaica was clearly the more
appropriate forum having regard to the location of the evidence and of
most of the defendants. The trial judge declined so to order, holding
that, having regard to the decision of ECJ in Group Josi , if a defendant
were sued in a contracting state in which he was domiciled by a claimant
domiciled in a non-Contracting State, Article 2 applied so as to confine
jurisdiction to the state of the defendant’s domicile. The decision of the
Court of Appeal in In re Harrods (Buenos Aires) Ltd  ([1992] Ch 72) was
wrong. He could not therefore stay the English proceedings against Mr
Jackson and he declined to stay the proceedings against the Jamaican
defendants because, if he did so, there would be parallel proceedings in
England and Jamaica. On appeal to the Court of Appeal questions were
referred to the ECJ. The only material one is as follows:
“Is it consistent with the Brussels Convention (...), where a claimant
contends that jurisdiction is founded on Article 2, for a court of a
Contracting State to exercise a discretionary power, available under its
national law, to decline to hear proceedings brought against a person
domiciled in that State in favour of the courts of a non-Contracting State:
(a) if the jurisdiction of no other Contracting State under the 1968
Convention is in issue;
(b) if the proceedings have no connecting factors to any other Contracting
State?”
The ECJ decided that the answer to that question was:
“(...) the Brussels Convention precludes a court of a Contracting State
from declining the jurisdiction conferred on it by Article 2 of that
convention on the ground that a court of a non-Contracting State would
be a more appropriate forum for the trial of the action even if the
jurisdiction of no other Contracting State is in issue or the proceedings
have no connecting factors to any other Contracting State.”
(...)
The Court has thus held that the principle of legal certainty requires,
in particular, that the jurisdictional rules which derogate from the
general rule laid down in Article 2 of the Brussels Convention should be
interpreted in such a way as to enable a normally well-informed defendant
reasonably to foresee before which courts, other than those of the State
in which he is domiciled, he may be sued.
Application of the forum non conveniens  doctrine, which allows the court
seised a wide discretion as regards the question whether a foreign court
would be a more appropriate forum for the trial of an action, is liable
to undermine the predictability of the rules of jurisdiction laid down by
the Brussels Convention, in particular that of Article 2, and consequently
to undermine the principle of legal certainty, which is the basis of the
Convention.
(...)
Coromin submit that the mandatory nature of Article 2 coupled with
the purpose of the jurisdictional rules being to achieve (i) jurisdictional
uniformity between the courts of Contracting States and (ii) certainty and
predictability as to the basis on which courts of Contracting States will
exercise jurisdiction preclude the exercise by the English courts of their
discretionary jurisdiction to stay proceedings in order to give effect to
jurisdiction clauses referring disputes exclusively to the courts of non-
Contracting States.
(...)
It is further argued that the reasoning in the judgment of the ECJ in
Osuwu , supra, strongly rests on the purpose of certainty and predictability
of the jurisdictional rules in the Convention and, in contrast, on the
intrinsic uncertainty and unpredictability of the forum non conveniens
principle. It is then submitted that the English courts’ discretionary stay
jurisdiction in the use of a foreign jurisdiction clause in respect of the
courts of a non-member state is equally unpredictable and uncertain.
In support of this proposition Mr Bryan relies on The El Amria  ([1981] 2
Lloyd’s Rep 119) which has stood for many years as a reference case as
regards the enforcement of foreign jurisdiction clauses. Brandon LJ. there
formulated at p. 123-124 the applicable approach as being that previously
stated by him in The Eleftheria  ([1970] p94 and p99) as follows:
“(1) Where plaintiffs sue in England in breach of an agreement to refer
disputes to a foreign court, and the defendants apply for a stay, the
English court, assuming the claim to be otherwise within its jurisdiction, is
not bound to grant a stay but has a discretion whether to do so or not.
(2) The discretion should be exercised by granting a stay unless strong
cause for not doing so is shown.
(3) The burden of proving such strong cause is on the plaintiffs.
(4) In exercising its discretion the court should take into account all the
circumstances of the particular case.
The following matters, where they arise, may properly be regarded: (a)
in what country the evidence on the issues of fact is situated, or more
readily available, and the effect of that on the relative convenience and
expense of trial as between the English and foreign courts. (b) Whether
the law of the foreign court applies, and if so, whether it differs from
English law in any material respects. (c) With what country either party is
connected, and how closely. (d) Whether the defendants genuinely desire
trial in the foreign country, or are only seeking procedural advantages. (e)
Whether the plaintiffs would be prejudiced by having to sue in the foreign
court because they would (i) be deprived of security for their claim; (ii)
be unable to enforce any judgment obtained; (iii) be faced with a time-
bar not applicable in England; or (iv) for political, racial, religious or other
reasons unlikely to get a fair trial.”
It is submitted that the granting of a stay to give effect to a foreign
jurisdiction clause is clearly a discretionary exercise which can take into
account a broad spectrum of circumstances and is therefore of uncertain
result. The approach is not dissimilar to a forum non conveniens  analysis
albeit the concept of „strong cause“ gives substantial weight to the
applicability of the jurisdiction clause. The decision of the House of Lords
in Donohue v. Armco Inc  ([2002] 1 Lloyd’s Rep 425) adopts substantially
the same approach as Brandon LJ, Lord Bingham substituting „strong
reasons“ for „strong cause“ and taking into account as a highly material
fact, the risk of proliferation of litigation.
Owusu: Discussion
The present case shares with Owusu  two important features.
First, the material choice as to jurisdiction was between the courts of a
Convention State and the courts of a non-Convention State. Secondly, the
methodology for resolving that choice was either the strict jurisdictional
regime of the Convention (Article 2) or the discretionary regime of
the Common Law. The ECJ rejected the latter methodology in Owusu
because (i) there was no principle of application of the Convention which
confined it to resolving jurisdictional location as between the courts only
of the states of Contracting Parties but extended to situations where
the choice involved the courts of non-Contracting Parties. Second, the
discretionary methodology of the Common Law was disallowed because
it was inconsistent with the objectives underlying the Convention to the
effect that jurisdiction should be certain and predictable. This second
consideration goes to the intrinsic character of the methodology (...). (...)
There is, however, a difference between the Convention methodology
potentially applicable in circumstances where the defendant is domiciled
in a Member State but there is no applicable jurisdiction clause and
it is only forum non conveniens  which would provide a basis for any
other forum in a non-Contracting State and that potentially applicable
where there is a foreign jurisdiction clause relating to a non-Contracting
state. In the former case there is simply no provision in the Convention
that deals with forum non conveniens , whereas in the latter case there
is Article 17 (Convention) / Article 23 (Judgments Regulation) which
provides for the court in a member state selected by the jurisdiction
clause to have exclusive jurisdiction. It could therefore be said that those
provisions reflect an underlying policy to give effect at least to jurisdiction
agreements relating to courts within Member States in preference to the
domicile rule. The question therefore arises why Article 2 should not also
yield to an analogous rule in relation to jurisdiction clauses which do not
relate to the courts of Member States.
There is authority in support of the proposition that the court of a Member
State can give effect to a jurisdiction clause in favour of the court of a
non-Member State provided that such clause is valid so as to deprive the
Member State of jurisdiction in accordance with that State’s own conflicts
rules. Thus in the Schlosser Report at para. 176 it is stated:
“(a) In cases where parties agree to bring their disputes before the courts
of a State which is not a party to the 1968 Convention there is obviously
nothing in the 1968 Convention to prevent such courts from declaring
themselves competent, if their law recognises the validity of such an
agreement. The only question is whether and, if so, in what form such
agreements are capable of depriving Community courts of jurisdiction
which is stated by the 1968 Convention to be exclusive or concurrent.
There is nothing in the 1968 Convention to support the conclusion that
such agreements must be admissible in principle. However, the 1968
Convention does not contain any rules as to their validity either. If a
court within the Community is applied to despite such an agreement, its
decision on the validity of the agreement depriving it of jurisdiction must
be taken in accordance with its own lex fori.  In so far as the local rules
of conflict of laws support the authority of provisions of foreign law, the
latter will apply. If, when these tests are applied, the agreement is found
to be invalid, then the jurisdictional provisions of the 1968 Convention
become applicable.”
The sense of this observation appears to be that, in cases where there has
been an agreement to refer disputes to a court in a non-Member State,
the court seised should apply its own conflicts rules to determine two
aspects of such an agreement.
i) whether it is valid in the sense of being enforceable;
ii) whether effect should be given to it in the case in question.
Although this passage speaks of the “decision on the validity” of such an
agreement, the last two sentences refer to applicability and do appear
to relate to the conflict rules which decide when such an agreement,
having been held to be valid, should be enforced. However, it is further
indicated that, if the court seised holds that effect should not be given to
the agreement, then the jurisdictional rules of the Convention must be
applied. These clearly primarily include the domicile rule.
This passage was referred to by the ECJ in Coreck Maritime . In that
case the holders of bills of lading and cargo owners and their insurers
brought claims against the shipowners and time charterers of a vessel
in the Rotterdam court for damage to a cargo of groundnut kernels. The
shipowners were domiciled in Russia and the time charterers, Coreck,
were domiciled in Hamburg. The bills of lading contained a jurisdiction
clause – “any dispute arising under this Bill of Lading shall be decided
in the country where the carrier has his principal place of business (...)”
Coreck submitted that the Rotterdam court should decline jurisdiction
on two distinct grounds: (i) Article 2 and (ii) Article 17. As to (i) it was
domiciled in Hamburg where it had its principal place of business and,
as to (ii), there was a binding agreement in the bills of lading as to
jurisdiction. The Rotterdam court refused to decline jurisdiction and
its decision was upheld on appeal. The Dutch court held that because
there were two possible carriers it was uncertain which was the relevant
principal place of business. This conclusion was upheld on appeal but
the Dutch High Court on appeal put a number of questions to the ECJ
including:
“(2) Does Article 17 of the Brussels Convention also govern the validity,
as against a third party holding a bill of lading, of a clause which specifies
as the forum having jurisdiction to settle disputes „under this Bill of
Lading“ the courts of the place where the carrier has his „principal place
of business“ and which is laid down in a bill of lading also containing an
„identity of carrier“ clause, that bill of lading being issued for the purposes
of the carriage of the goods, where
(a) the shipper and one of the possible carriers are not established in a
Contracting State and
(b) the second possible carrier is indeed established in a Contracting State
but it is not certain whether his „principal place of business“ is situated in
that State or in a State which is not a party to the Convention?”
The ECJ decided that it was for the Dutch court to determine the validity
and effect of the jurisdiction clause by reference to its own conflicts rules.
Specifically it said this:
“As the wording of the first sentence of the first paragraph of Article 17 of
the Convention itself makes clear, that provision only applies where the
twofold condition is satisfied that, first, at least one of the parties to the
contract is domiciled in a Contracting State and, secondly, the jurisdiction
clause designates a court of the courts of a Contracting State. So, that
rule, which owes its existence to the fact that the Convention is intended
to facilitate the mutual recognition and enforcement of judicial decisions,
lays down a requirement as to precision which the jurisdiction clause must
satisfy.
In relation to the first condition, the first paragraph of Article 53 of the
Convention provides that the seat of a company is to be treated as its
domicile for the purposes of the Convention. Under that provision, the
court seised must, in order to determine that seat, apply its rules of
private international law. Consequently, the criteria for identifying the
seat of a legal person and particularly for determining the significance
of the principal place of business in that process must be established by
the national law which is applicable under the conflict of laws rules of the
court seised.
As to the second condition, Article 17 of the Convention does not apply
to clauses designating a court in a third country. A court situated in a
Contracting State must, if it is seised notwithstanding such a jurisdiction
clause, assess the validity of the clause according to the applicable law,
including conflict of laws rules, where it sits.”
It is to be observed that no question was addressed to the ECJ as to
whether effect should be given to the domicile rule (relied on by Coreck) if
it were decided that (i) there was a valid jurisdiction clause and (ii) Article
17 did not apply because the designated jurisdiction was in a non-Member
State.
Accordingly, this decision does not go far enough to solve the problem in
the present case.
In Arkwright Mutual Insurance Co v. Bryanston Insurance Co Ltd  ([1990]
2 QB 649) Potter J. had to consider an argument that in the judgment
of Hobhouse J. in Berisford (S&W) Plc v. New Hampshire Insurance Co
([1990] 2 QB 631 at p642-643), that judge had illogically considered
that where the Convention provided grounds for jurisdiction there was no
discretion to stay on the grounds of forum non conveniens  whereas there
was a discretion to stay on the grounds of a foreign jurisdiction clause.
Hobhouse J. had observed:
“Further the Convention does not preclude the courts of a contracting
state from applying principles such as those stated in the Aratra Potato
Co, case ( The El Amria  [1981] 2 Lloyd’s Rep 119) where its jurisdiction
is being sought to be excluded in favour of a non-contracting state.
Professor Schlosser says, at para. 176:
‘If a court within the Community is applied to despite such an agreement,
its decision on the validity of the agreement depriving it of jurisdiction
must be taken in accordance with its own lex fori.’”
At p. 660 Potter J in considering this observation in the course of deciding
whether similar reasoning applied to a stay on the grounds of lis alibi
pendens, stated:
“Third, Mr Ruttle suggests that Hobhouse J. overlooked the illogicality
of recognising (as he did) a discretion to stay on the basis of a foreign
jurisdiction clause while refusing (as he did) to recognise a general
discretion to stay on grounds of forum non conveniens . This criticism does
not seem to me to be justified. While the judge did not deal with it in
terms, it seems clear that he took the view that, far from being logical,
the distinction is to be found within the Convention itself. The Convention
clearly recognises the concept of jurisdiction by consent (see Article 17).
Further, the report of Professor Schlosser indicates the logic and propriety
of giving effect to pre-dispute agreements of the parties which deprive
community courts of jurisdiction (whether stated by the convention to
be exclusive or concurrent), according to the lex fori  and/or local rules of
conflict of laws; however it gives no indication in favour of discretionary
stays on other grounds. The only indication which can be gleaned from
the Schlosser report seems to me to be unfavourable towards the exercise
of such a discretion, albeit it is not specifically dealt with: see paras 176
et seq of the Schlosser report, discussed by Hobhouse J. at p. 643.”
At p. 663 Potter J. further distinguished between the approach of the
Convention to broad discretionary concepts such as forum non conveniens
and that to the more certain character of jurisdiction clauses:
“In the case of articles 16 and 17, the Convention deals with particular
features of the action concerned in respect of which it recognises as a
matter of principle that (a) the status and/or nature of the subject matter
of the action and (b) the free agreement or consent of the parties as
to forum, transcend and otherwise mandatory system and structure
of the Convention founded on the defendant’s domicile and make it
appropriate for one particular jurisdiction only to hear the case. In the
case of article 21 ( lis pendens ), the Convention does not identify the
peculiar suitability of any particular court to hear the action by reference
to its subject matter or the choice of the parties; nor does it identify
any discretion based on cost, convenience or “real connection”. It simply
requires any Community court to decline jurisdiction or stay an action
where another Community court is already seised of it. This seems to
me no more than a simple order of priority, imposed as a necessary
aspect of the certain and orderly regime of jurisdiction and enforcement
in and between the courts of the Community. It does not seem to me
a persuasive reason for holding that the Convention contemplates or
legitimises an additional and discretionary power, based largely on cost
and convenience, to stay in favour of a non-Community court against a
plaintiff who has come to a court within the Community to try his dispute
in accordance with a right apparently given and a requirement apparently
imposed by the Convention on the basis of the defendants’ domicile. In
this respect I construe the Convention as less concerned with comity than
with certainty.”
This characteristic of cases involving foreign jurisdiction clauses is, in
my judgment, an important feature of such cases which distinguishes
them from forum non conveniens  cases. The Convention by Article
17 recognises that character of certainty and party autonomy by
superimposing it on the domicile rule. The Schlosser Report contemplates
that the Convention will continue to apply unless the effect of the
conflicts rules of the court seised leads to the application of a jurisdiction
agreement relating to a non-Member State. However, it does not suggest
that the methodology of the local conflicts rules for deciding whether
to give effect to the jurisdiction agreement must have any particular
characteristic. In particular, there is nothing in Schlosser which suggests
that it is necessary to evaluate the intrinsic quality of those rules by
reference to certainty or predictability of application or to the general
objectives of the Convention. It may be that Professor Schlosser had
not directed his mind to the fact that under English conflicts rules there
was residual discretion whether to enforce perfectly valid and binding
jurisdiction agreements in accordance with the principles in The El Amria,
supra , by reference to considerations in some respects similar to those
applicable to the forum non conveniens  doctrine. Nevertheless, I do
not consider that it is now open either to the English courts or to the
ECJ to re-write Schlosser so as to import ground rules analogous to the
considerations in Owusu  which should govern the methodology of the
conflicts rules of the court seised. In as much as the Convention is to be
interpreted in accordance with the Schlosser Report, it is by reference to
that construction alone that the English courts need be concerned.
I note that it has been held by the Cour d’Appel of Versailles (FR) in Bruno
v. Societe Citibank  (1991, referred to in Dicey & Morris, The Conflict of
Laws, 13th Ed., para. 12-090 no. 66), that if a defendant is domiciled
in a Contacting State, a jurisdiction clause conferring jurisdiction on the
courts of a non-Contracting State is ineffective and the domicile rule in
Article 2 prevails. This approach necessarily involves that because the
Convention makes no express provision for such jurisdiction clauses, the
only jurisdiction clauses to which effect can be given are those which
are within Article 17. However, this very formalistic approach cannot
be based on the need to avoid uncertainty, so much emphasised by the
ECJ in Owusu, supra , but on the implicit assumption that the courts
of Contracting States should respect party autonomy only if that is
expressed in terms of jurisdiction in the Courts of Contracting States, a
limitation which, apart from being inconsistent with the passage from
Schlosser at para. 176, would appear to have no conceptual foundation.
I therefore hold that Owusu  has not disturbed the approach to the
applicability of foreign jurisdiction clauses explained in The El Amria
confirmed in Donohue v. Armco, supra . The view expressed in Dicey &
Morris 13th Ed., para. 12-090 is therefore, in my judgment, correct.
The Exercise of the Discretion to Stay
The conclusion has already been reached that the Reinsurers have not
made out a sufficiently strong case in the circumstances of this case to
cross the evidential threshold necessary to qualify for a stay. (...)