Konkola Copper Mines Plc & Anor v Coromin Ltd & Ors

A temporary case-management stay pending related foreign proceedings requires rare and compelling circumstances. A stay should ordinarily be refused where it would expose a defendant to an English claim while preventing its closely connected indemnity claim from proceeding, particularly where that separation risks inconsistent decisions.

Even where a foreign exclusive jurisdiction clause is assumed to apply, the court may decline to enforce it for strong reasons. The interests of justice may favour a single English proceeding in which the principal parties can participate and interwoven insurance, reinsurance and professional-negligence issues can be determined together.

Konkola Copper Mines plc claimed an indemnity in England from Coromin Limited under an alleged all-risks insurance. Coromin denied that insurance but brought Part 20 indemnity proceedings against its reinsurers and, alternatively, proceedings against its broker, Aon Limited. Separate proceedings against local insurers were being pursued in Zambia on named-perils cover, for which liability depended upon whether damage to the mine resulted from collapse or landslip.

The reinsurers sought a permanent stay of the Part 20 claim under an alleged Zambian jurisdiction clause or a temporary case-management stay pending determination of the Zambian proceedings. Colman J refused both forms of stay in [2005] EWHC 898 (Comm). The central issue on appeal was whether that discretionary decision could be disturbed.

1. Appeal dismissed. Rix LJ, with whom Richards LJ and Sir Anthony Clarke MR agreed, held that Colman J had been entitled to refuse both a temporary case-management stay and a permanent stay based upon the alleged Zambian jurisdiction clause.

2. A case-management stay was possible only in rare and compelling circumstances. Those circumstances were absent. Coromin was defending a subsisting English insurance claim and sought to pass any liability to the reinsurers or, alternatively, to Aon. Staying its Part 20 claim would unfairly expose it to KCM’s claim and create a danger of inconsistent decisions within the English proceedings. The claims against the reinsurers and Aon were closely intertwined and had to proceed, or be stayed, together.

3. The possible speed, outcome and practical effect of the Zambian proceedings were speculative. It was uncertain whether the foreign parties could or would be joined there. KCM had also made clear that it intended to pursue its English all-risks claim. The court therefore could not treat the Zambian claim as the controlling proceeding.

4. Even assuming that the reinsurers had the much better argument that an exclusive Zambian jurisdiction clause applied, Colman J had strong reasons for declining to enforce it. English jurisdiction over the reinsurers was otherwise established. Refusing a stay enabled the interwoven claims among KCM, Coromin, the reinsurers and Aon to be determined in proceedings in which they could all participate. It also reduced the danger of conflicting decisions.

5. The court did not finally determine which contractual wording or jurisdiction clause applied. Nor did it decide the proper burden or standard of proof where established jurisdiction is challenged through a foreign jurisdiction clause whose existence forms part of the ultimate merits. Rix LJ considered it persuasive that the challenger bore the burden and had to make a sufficiently good arguable case to displace established jurisdiction, but the point remained open.

1. Court of Appeal (Civil Division): The reinsurers’ appeal was dismissed. Permission to appeal was extended to the case-management grounds, but the refusal of both permanent and temporary stays was upheld.
2. Commercial Court: In [2005] EWHC 898 (Comm) , Colman J refused a permanent stay based on an alleged Zambian jurisdiction clause and refused a temporary case-management stay.