CNA Insurance Company Ltd & Ors

A party that has submitted to the jurisdiction of the English court, conducted the proceedings there for a substantial period and agreed that they should take precedence over foreign proceedings cannot ordinarily withdraw that choice by narrowing its claim and commencing proceedings abroad. A late jurisdictional challenge will be permitted only in exceptional circumstances. Where foreign proceedings breach an agreement, an anti-suit injunction will ordinarily be granted unless there is a strong reason not to do so. Even without breach, pursuing foreign proceedings may be unconscionable where it undermines the parties’ agreed procedural position and the legitimate conduct of the English proceedings.

The insurers sought an anti-suit injunction restraining Office Depot Inc from pursuing proceedings in the Florida Federal Court concerning insurance cover for an Oldham warehouse. The defendants sought a stay of the English proceedings.

The defendants had initially challenged jurisdiction under Civil Procedure Rules 1998 Part 11, but withdrew those challenges, submitted to the English jurisdiction and agreed that the English proceedings would take precedence over proceedings in Florida. After substantial progress in England, they abandoned claims under other policies and sought to pursue only claims under period 5 difference-in-condition policies in Florida. The central issues were whether the stay application was permissible or justified, whether it breached the June 2004 Agreement, and whether the Florida proceedings were unconscionable.

1. The stay application was refused and the anti-suit injunction was granted. The defendants had submitted to the jurisdiction of the English court through their pleadings and their unequivocal statements at the May 2004 hearing. Their later attempt to proceed in Florida concerned the very issues which they had submitted should be determined in England.
2. The June 2004 Agreement required the English proceedings to take precedence over the Florida proceedings. Its purpose would be defeated if the defendants could evade the agreed stay of the Florida State Court action by commencing a second action in the Florida Federal Court. Proceeding in Florida therefore constituted a breach of contract.
3. CPR Part 11 required jurisdiction challenges to be made promptly and within a defined period. Although the court had jurisdiction to extend time or permit a stay application through case-management powers, no exceptional circumstances justified doing so after nearly two years, substantial costs, the withdrawal of the earlier challenges and submission to jurisdiction. The approach in Reichhold Norway A.S.A. v Goldman Sachs [2000] 1 WLR 173 did not assist the defendants.
4. Under Articles 12 and 60 of Council Regulation (EC) 44/2001, and Owusu v Jackson (Case C-281/02), a stay could not in any event be granted in respect of the insurers’ claim against ODUK on jurisdictional grounds. Any stay would effectively be permanent and jurisdictional in substance.
5. Even if Florida might originally have been the more appropriate forum for the limited period 5 claim, the parties’ conduct, the substantial development of the English proceedings, the evidence already assembled and the English factual issues concerning the Oldham warehouse made England the appropriate forum. It was unconscionable to permit the defendants to proceed in Florida merely by abandoning other parts of their claim.
6. The court applied the principles in Donohue v Armco [2002] 1 Lloyds Rep 425 (HL), Turner v Grovit [2001] UKHL 65 and Glencore International v Exter Shipping [2002] EWCA 528. The injunction restrained pursuit of the coverage disputes in Florida, but did not prevent later pursuit of good-faith claims after the English coverage disputes had been determined.