HIT Entertainment Ltd & Ors v Gaffney International Licensing Pty Ltd & Anor

Where parties agree to the non-exclusive jurisdiction of the English courts, the contractual choice creates a strong prima facie case for retaining jurisdiction. The court should hold the parties to that bargain unless the defendant shows an unforeseeable matter, or a matter going beyond convenience and engaging the interests of justice.

Ordinary difficulties arising from documents and witnesses located abroad remain matters of convenience. They do not justify a conventional forum non conveniens balancing exercise and do not establish that justice cannot be done. The effect of article 23 of the relevant European jurisdiction Regulation was left undecided because the defendants failed to satisfy the contractual test.

The claimants, companies involved in children's entertainment merchandising, sued their Australian licensing agent and its director concerning alleged breaches of licensing agreements. The agreements were governed by English law and contained non-exclusive English jurisdiction clauses.

The defendants sought a stay in favour of Victoria, Australia, relying on the location of documents, witnesses and business operations. The claimants argued that article 23 of European Council Regulation No 44 of 2001 deprived the court of jurisdiction to entertain the application, or alternatively that the jurisdiction clauses prevented the defendants from relying on foreseeable matters of convenience.

The central issues were whether the defendants had shown a sufficient reason to escape their contractual submission to English jurisdiction and, if so, whether article 23 affected the court's power to grant a stay.

1. The application for a stay was dismissed. The defendants had not shown any reason sufficient to release them from the non-exclusive jurisdiction clauses.

2. The court accepted the principles summarised by Gloster J in Amtech International Limited v Biosafety USA [2006] EWHC 47. A freely negotiated clause conferring non-exclusive English jurisdiction creates a strong prima facie case that England is the appropriate forum. The general rule is that the contractual choice will be respected unless there are overwhelming or very strong reasons to depart from it.

3. Foreseeable matters of convenience do not constitute such reasons. The location of documents and witnesses in Australia, the possible need to take evidence on commission, and the disruption to the defendants' Australian business were all foreseeable when the agreements were made. The court therefore was not required to undertake an ordinary Spiliada-type balancing exercise.

4. The exception recognised in Ace Insurance SA-NZ v Zurich Insurance Company [2001] 1 Lloyd's Rep 618 extends beyond unforeseeability to a matter going beyond convenience and engaging justice. The defendants' difficulty in obtaining live evidence from third-party witnesses did not satisfy that exception. It was an increased difficulty in presenting the defence, not an inability to obtain justice.

5. The defendants had not established that they would be unable properly to defend the proceedings in London. Their case therefore remained within the established rule that a party cannot escape its contractual submission merely because litigation is more difficult or inconvenient in the chosen forum.

6. Because the defendants failed on the contractual jurisdiction issue, the court found it unnecessary and inappropriate to decide whether article 23 of European Council Regulation No 44 of 2001 affected the availability of a forum non conveniens stay. That question was left for a case in which it mattered.

First-instance decision. No prior appellate decision is stated in the judgment.