Konkola Copper Mines Plc & Anor v Coromin Ltd. & Ors No.2

An exclusive jurisdiction clause should ordinarily be enforced unless strong cause or strong reasons justify departure. The risk of inconsistent decisions may be a powerful consideration, but it will not normally constitute strong cause where the risk was foreseeable when the parties freely adopted different jurisdiction clauses for related contracts. A party cannot rely on procedural inconvenience created by its own contractual structure to escape that bargain. Where a claimant seeks to join foreign defendants only as necessary or proper parties, and the claim against them has no substantial connection with England, using that jurisdiction to consolidate related proceedings may amount to a serious misuse of the jurisdiction.

The claimants sought to maintain proceedings in England against Zambian insurers in respect of losses arising from a mine disaster. The insurers had provided cover under a Zambian contract containing a “Local Law and Jurisdiction Clause”. In an earlier judgment, the insurers had agreed to stays of their applications to set aside service, subject to admissions concerning the proportions of risk they had insured. They later breached those arrangements in related Zambian proceedings.

The stays were lifted, restoring the insurers’ applications to set aside service outside the jurisdiction. The central issues were whether the clause required disputes under the Zambian contract to be determined exclusively in Zambia, and whether the risk of inconsistent decisions arising from parallel insurance contracts amounted to strong cause for allowing the English proceedings to continue.

1. The stays. The insurers’ breaches of the consent orders engaged the claimants’ entitlement to lift the stays. Lifting the stays restored the parties to their pre-settlement position; it did not itself make the insurers parties to the English proceedings. The NR Defendants, although in contempt, were permitted to argue the jurisdiction issue because the broken order had settled an issue concerning the court’s jurisdiction, and excluding them would be disproportionate.
2. Construction of the jurisdiction clause. The expression “Local Law and Jurisdiction Clause” in the cover note was sufficiently certain to mean that the Zambian contract was governed by Zambian law and that disputes under it were to be determined by the Zambian courts. In the context, “Local” plainly referred to Zambia. A non-exclusive clause would add nothing to the statutory position under section 79 of the Zambian Insurance Act. The clause was therefore exclusive.
3. Strong cause. The risk of conflicting decisions is a consideration of considerable weight, but each case depends on its facts. The authorities concerned circumstances in which the risk arose adventitiously, through events or parties not contemplated when the exclusive jurisdiction clause was agreed. That distinction was decisive.
4. The claimants had knowingly created a double-insurance structure involving different law and jurisdiction clauses. The possibility of inconsistent decisions concerning cover and the operation of the DIC and Other Insurance clauses was therefore foreseeable. The claimants could not rely on that foreseeable consequence, or on the resulting procedural inconvenience, as strong cause for breaking the jurisdiction bargain.
5. The claims against the Zambian insurers had no real connection with England. Their joinder was sought only because they were said to be necessary or proper parties under CPR 6.20(3), in circumstances analogous to joinder under CPR 19.2(2). Permitting joinder to avoid fragmentation would be a serious misuse of that jurisdiction. The orders permitting service outside the jurisdiction were set aside.

Not stated in the judgment.