Jurisdiction clause in bank's terms interpreted as granting exclusive jurisdiction to English courts in claims by hedge fund

The High Court has interpreted a jurisdiction clause as granting exclusive jurisdiction to the English courts in respect of claims made by a hedge fund. It therefore granted an anti-suit injunction restraining proceedings commenced in New York: BNP Paribas SA v Anchorage Capital Europe LLP and others [2013] EWHC 3073.

The court reached this conclusion despite the absence of the word "exclusive" in the clause in question; the essential question was whether on its proper construction the clause obliged the parties to resort to the jurisdiction of the English courts. A jurisdiction clause will normally be expressed to be "exclusive" where the parties intend to confer exclusive jurisdiction on a particular country's courts. This decision shows, however, that the absence of the word need not be determinative.

Exclusive vs non-exclusive

The jurisdiction clause, contained in the Bank's 'London Terms of Business for Professional Clients or Eligible Counterparties', provided:

'This agreement shall be governed by, and construed in accordance with, English law and you irrevocably submit to the jurisdiction of the English courts in respect of any matter arising out of this Agreement, or our services to or Transactions with you under this Agreement.'

The Bank argued that the clause was exclusive (an interpretation supported in New York proceedings by Lord Collins instructed as its English law expert) whilst Anchorage maintained the clause was non-exclusive (supported by Professor Briggs). In part, the argument centred on whether the verb 'submit' was used transitively or intransitively, in other words whether the Anchorage defendants were submitting to the jurisdiction in respect of certain matters (intransitive and, it was argued, non-exclusive) or submitting disputes in respect of certain matters to the jurisdiction of the court (transitive, and therefore exclusive). Put another way, were the Anchorage defendants merely agreeing that England was a suitable forum or were they agreeing that all disputes had to be referred to it?

Males J, in common with the leading textbooks, was unimpressed with the distinction between transitive and intransitive clauses. The true question was whether on its proper construction the clause obliged the parties to resort to the jurisdiction of the English courts, irrespective of whether the word 'exclusive' was used. In his judgment, the clause was clearly exclusive so far as claims by the hedge fund were concerned (the Bank was not constrained by the contract as to where it could litigate) and he granted an anti-suit injunction to restrain Anchorage from pursuing the proceedings it had commenced in New York.

Good arguable case

The case is also of interest for the judge's comments concerning the test of a "good arguable case". Where (as here) a claimant seeks to establish jurisdiction under the Brussels Regulation, it must show a good arguable case that jurisdiction is available under the Regulation. This has been interpreted to mean that, on the material available at this preliminary stage, the claimant must have "much the better of the argument".

Here there was some uncertainty over which of the defendants was the proper party to alleged contracts for the purchase of the subordinate private placement notes in issue. The question therefore was whether there was any inconsistency in concluding there was a good arguable case against more than one defendant, particularly if the test of good arguable case means that the claimant must have much the better of the argument on the point. The judge concluded that there was not; the test of good arguable case was sufficiently flexible to allow for a conclusion that there is a good arguable case that each of two defendants is liable on a contract, even if ultimately only one of them can be.