Standard Bank Plc & Anor v Agrinvest International Inc & Ors

An English court will ordinarily enforce an exclusive jurisdiction agreement by restraining proceedings brought in another forum, unless the party suing abroad shows strong reasons for departing from the contractual bargain. The court must construe the clause in its commercial context; words such as “irrevocably” and an agreement that claims “may be heard and determined” in England may create a mutual obligation to submit disputes to the English courts.

Against persons who are not parties to the agreement, an anti-suit injunction requires unconscionable, vexatious or oppressive conduct, a legitimate interest in protecting English proceedings and a clear need for protection, having regard to international comity. An injunction may also protect a declaration of non-liability. An unexercised option cannot give rise to liability for refusing to implement it.

The claimants, a London bank and its parent company, brought a Part 8 claim against the defendants. They sought permanent anti-suit injunctions restraining proceedings in Mississippi and Egypt, together with declarations concerning applicable law, exclusive jurisdiction, limitation and non-liability.

The bank was party to a Master Sale Agreement containing English law and jurisdiction provisions. The parent company and two of the defendants were not parties to that agreement. The Egyptian proceedings sought monetary relief and declarations relating to transactions governed by the agreement and to a separate option agreement concerning Kenyan Government promissory notes. The central issues were whether the Master Sale Agreement conferred exclusive jurisdiction, whether relief could be granted against non-parties, and whether the option claim could proceed.

1. Exclusive jurisdiction. Clause 19.2 of the Master Sale Agreement was construed as an exclusive jurisdiction clause. Although its first limb imposed an intransitive obligation to submit to the English courts, the second limb, read with the governing-law clause, the commercial context and the word “irrevocably”, imposed a mutual obligation to submit disputes relating to the agreement to England. The defendants had shown no strong reason to avoid the bargain. An injunction was therefore granted against Agrinvest in respect of its Mississippi and Egyptian claims relating to the Master Sale Agreement.
2. Non-parties and protection of English proceedings. The parent company and the individual defendants were not parties to the Master Sale Agreement. Relief against them required the foreign proceedings to be unconscionable, vexatious or oppressive. The Egyptian proceedings sought to subvert or frustrate the English monetary proceedings, included claims by persons without contractual rights, and relied on Egyptian law contrary to the contractual choice of English law. There was a clear need to protect the English proceedings. Injunctions were granted accordingly.
3. Option agreement. The option agreement was governed by English law, but contained no jurisdiction agreement. Since Agrinvest had never exercised the option, the bank could not be liable for refusing to implement it. The court made a declaration of non-liability and granted an anti-suit injunction to protect that declaration, applying the approach in Trafigura Beheer BV v Kookmin Bank Co. [2006] EWHC 1921 (Comm).
4. Declarations and costs. Declarations were granted concerning applicable law, exclusive jurisdiction, limitation and the parent company’s non-party status, subject to corrections. The declaration of exclusive jurisdiction excluded claims for breach of the option agreement. The defendants were ordered to pay costs, with an interim payment of £25,000.