General Motors Corporation v Royal & Sun Alliance Insurance Plc & Ors

A consent order may constitute an exclusive jurisdiction agreement when construed in its commercial and procedural context, even if it does not expressly use the word “exclusive”. An undertaking not to challenge the jurisdiction of the chosen court may therefore carry a positive obligation to conduct the dispute there. Where parties have agreed exclusive jurisdiction, an anti-suit injunction ordinarily follows unless the party seeking to litigate elsewhere establishes strong reasons for refusing relief. The emergence of another potentially available forum, and a waiver of one jurisdictional objection, will not ordinarily constitute such a reason.

General Motors Corporation brought proceedings in England against Royal & Sun Alliance Insurance Plc and its parent concerning insurance coverage and alleged parent-company liability. The proceedings followed related litigation in Michigan and Delaware. By consent order, the parties undertook to be bound by the outcome of specified Michigan coverage proceedings, not to challenge the jurisdiction of the English court, and to procure dismissal of the Michigan claims against the defendants.

GM later commenced proceedings in Delaware and applied to discontinue the English proceedings. The defendants sought an anti-suit injunction. The central issues were whether the consent order created an exclusive jurisdiction agreement and, if so, whether GM had shown strong reasons to permit the Delaware proceedings to continue.

1. Construction of the consent order. The order had to be construed against the background of the duplicated Michigan proceedings, their bifurcation, the stay of the parent-company claims, and the parties’ mutual advantages in awaiting the Michigan coverage decision. In that context, the undertakings and dismissal arrangement formed a package intended to settle the parent-company dispute in England while making the parties bound by the specified Michigan outcome.
2. The undertaking not to challenge the English court’s jurisdiction was not merely negative. Its commercial purpose was to establish England as the forum for the parent-company claims. The consent order therefore constituted an exclusive jurisdiction agreement, notwithstanding the absence of an express reference to exclusivity.
3. Anti-suit relief. Under [2007] 1 Lloyd’s Rep 669, once exclusive jurisdiction was established, the defendants were entitled to an anti-suit injunction unless GM demonstrated strong reasons for refusing it. The burden was particularly heavy because GM had itself selected the English jurisdiction.
4. Royal’s later undertaking to the Delaware Insurance Department not to rely on lack of personal jurisdiction did not provide a strong reason. It arose after the Delaware proceedings began and did not prevent reliance on other jurisdictional objections, including forum non conveniens or subject-matter jurisdiction. The availability of another forum therefore did not displace the exclusive jurisdiction agreement.
5. The court accepted the defendants’ primary case. The application for an anti-suit injunction was therefore justified, while the application to discontinue the English proceedings could not be reconciled with the jurisdictional undertaking.