Konkola Copper Mines Plc v Coromin

When a party seeks a stay in favour of a foreign court, it must establish a sufficiently strong evidential basis that an applicable exclusive jurisdiction agreement exists. At the interlocutory stage the court forms a provisional view on limited evidence and avoids finally determining issues reserved for trial.

An exclusive jurisdiction clause normally creates mandatory obligations to litigate in the chosen court. Its enforcement remains discretionary, however. The court must consider all the circumstances, including the risk of inconsistent decisions, procedural fragmentation, delay, limitation issues and the possibility of joining parties who are not bound by the clause. The wider interests of justice may provide strong cause to refuse a stay.

Konkola Copper Mines plc applied to stay Coromin’s Part 20 claim against its reinsurers. The proposed stay was sought in favour of Zambia on the basis that the reinsurance contract incorporated a Zambian law and jurisdiction clause.

The underlying dispute concerned damage caused by an avalanche at a Zambian copper mine. KCM pursued claims in England against Coromin under alleged all-risks cover and in Zambia against local insurers under specified-perils cover. Coromin sought indemnity from the reinsurers and proposed joining its brokers, Aon, if the reinsurance did not respond.

The issues were whether the reinsurers had shown a good arguable case that the Zambian clause applied, whether the clause was exclusive, whether European jurisdictional rules prevented a stay, and whether a stay was justified in the interests of justice.

1. The application was dismissed. The reinsurers did not establish a sufficiently strong case that the reinsurance of Coromin’s KCM liabilities was subject to the Zambian law and jurisdiction clause. The documents more strongly supported the possibility that the reinsurers had covered Coromin’s liability under the global all-risks policy, subject to English law and jurisdiction.
2. Where a stay is sought in favour of a foreign court, the court should adopt a broadly similar approach to the good arguable case standard used when jurisdiction depends on service out. The court forms only a provisional view on limited interlocutory material and should avoid finally determining substantive issues requiring full disclosure, oral evidence and cross-examination.
3. Had the clause been applicable, it would have been exclusive. Read as a whole, its terms imposed mutual mandatory obligations to submit disputes to the competent courts of Zambia, rather than merely requiring a party to consent if proceedings were brought there.
4. The decision in Andrew Owusu v NB Jackson did not prevent the English court from enforcing a valid jurisdiction agreement in favour of a non-Convention state. The prohibition on forum non conveniens stays under the European jurisdictional regime did not eliminate the common-law discretion governing foreign jurisdiction clauses. The approach in The El Amria, confirmed in Donohue v Armco Inc, remained applicable.
5. In any event, strong cause existed to refuse a stay. The stay would risk inconsistent decisions concerning coverage and the reinsurance structure, cause substantial delay, and jeopardise Coromin’s ability to join Aon before limitation expired. The interests of justice and the overriding objective required the English proceedings to continue with normal expedition, including the reinsurers and any necessary third parties.