Commercial Court in England finds forum non conveniens waiver clause does not necessarily preclude stay on grounds of forum non conveniens

In Standard Chartered Bank (Hong Kong) Limited and another v Independent Power Tanzania Limited and others [2015] EWHC 1640 (Comm), the Commercial Court in England has held that a non-exclusive jurisdiction clause combined with a forum non conveniens (FNC) waiver clause does not preclude the court from granting a stay of English proceedings in favour of another jurisdiction. The court will however only grant a stay if there are very strong or exceptional grounds which were unforeseen and unforeseeable at the time the agreement was made. Although not binding in Hong Kong, English cases still hold persuasive value and this case is likely to be considered by the Hong Kong courts if a similar dispute was to arise in Hong Kong. 

An FNC waiver clause is essentially an agreement that a defendant will not argue that proceedings commenced in the chosen court or courts are inconvenient and that there is some other more suitable court (the forum conveniens) in which the case should be heard. The question in the present case was what the court’s approach should be if, despite such a clause, the defendant seeks a stay of the English proceedings arguing another court is the appropriate forum to hear the claim.

The Court of Appeal in National Westminster Bank Plc v Utrecht-America Finance Co [2001] CLC 1372 took the view that the court was precluded from granting a stay in these circumstances, but that aspect of the decision was not binding and a number of subsequent first instance decisions have held there remains a discretion to stay. Flaux J in the present case followed those later authorities.

Although it appears the possibility of a stay is not precluded, the circumstances in which a stay will be ordered will be very rare. On the facts of this case, the stay was refused. To read more, see the litigation blog.