A Collection is a selection of features, articles, comments and opinions on any given theme or topic. It allows you to stay up‑to‑date with what interests you most.
Login here to access your saved articles and followed authors.
We have sent you an email so you can reset your password.
Sorry, we had a problem.
Tags related to this article
Published 1 July 2015
The substance of the claim pursued by the First Claimant (referred to as "SCBHK") and the Second Claimant (referred to as "SCBMB") (which are both wholly owned subsidiaries of Standard Chartered Bank) was for monies owed in relation to a Facility Agreement originally dated 28 June 1997 ("the Agreement").
The Agreement was intended to finance the construction of a power plant in Tanzania, which was subsequently restructured several times at the requests of the First and Second Defendants (referred to as "IPTL" and "VIP").
IPTL was a joint venture vehicle, which had been created after VIP had entered in a joint venture with a Malaysian company called Mechmar.
This enabled IPTL to enter into a Power Purchase Agreement ("PPA") with Tanzania Electrical Supply CO Limited ("TANESCO"). The Agreement included a non-exclusive jurisdiction clause and enabled parallel proceedings in different jurisdictions.
The Claimants alleged that IPTL was in breach of its obligations under the Agreement, and that this put VIP in breach of a separate Shoulders Support Deed whereby VIP had purported to unlawfully transfer its shareholding to Pan African Power Solutions.
This Judgment deals with the Defendants' application for a stay of the proceedings in England, and for an Order removing the permission previously granted to the Claimants to serve out of the jurisdiction..
The background to the claim is very complex. There have been numerous concurrent proceedings in Tanzania, New York and England as well as several Arbitrations since the original proceedings commenced in 1998.
VIP has sought to wind up IPTL in Tanzania and appoint a provisional liquidator, whilst SCBHK has sought to resist the various applications made by VIP and has tried to have an administrator appointed to stop IPTL being wound up.
By way of background it should be noted that:
Here the Commercial Court was being asked by the Defendants (all corporate entities incorporated in Tanzania) to stay the proceedings because:
The Judge provided a very detailed review of the recent cases. He clarified the previous case law reconciling the obiter comments in National Westminster Bank v Utrecht-America (2001) and confirmed the reasoning applied in the decision in Deutsche Bank v Sebastian Holdings (2009), that a stay is possible where the underlying reasons for the proposed stay were unforeseen and unforeseeable at the time of the contract where there is a non-exclusive English jurisdiction clause and a FNC waiver in the contract.
The Judge noted that in the present case that the FNC waiver provided that "each party irrevocably waives any objection which it may at any time have" when choosing the venue for the hearing. The Judge decided that there were no grounds to make such an Order on Case Management grounds. He did not find any strong or exceptional reason to justify such an Order and held that there were no grounds for him to exercise his discretion.
The Defendants sought to argue that the Claimants were bound by the New York decision which had decided the issues as there was no privity of interest between the Claimants and SCB. However, the Judge also noted that the Claimants were not involved in the New York proceedings and that the New York proceedings were in fact concerned with an action in tort and not deciding upon a breach of contract claim which involved SBC. There were no grounds for an issue estoppel. The Claimants were therefore not bound by the New York proceedings as the issues involved were not identical. He also held that the application could not be allowed on the basis of an abuse of process, inter alia, because the proceedings were not a collateral attack on the judgments of a foreign court since these proceedings were considering a different application to that before the New York court.
This is a useful case in reviewing past cases considering challenges to non-exclusive jurisdiction clauses with FNC waivers. Here the Court has helpfully set out the case law and held that a stay may be granted where the grounds were unforeseen or unforeseeable at the time of the agreement. It is also a useful reminder of how the Courts approach privity of interest in a contract and tort dispute, and the principles underpinning issue estoppel.
Jade Kowalski, Shehana Cameron Perera
Jonathan Brogden, Aleksandra Chadzynski, Polly Jackson
Julian Bubb Humfryes, Jonathan Brogden
Julian Bubb Humfryes, John Bramhall
Richard Highley, Francesca Muscutt
Suzanne Wharton, Naomi Park
Ceri Fuller, Zoë Wigan