Winnetka Trading Corp v Julius Baer International Ltd & Ors

A non-exclusive jurisdiction clause creates a strong prima facie case that the chosen court is the appropriate forum. The English court will ordinarily hold parties to that choice unless overwhelming or very strong reasons justify departure. Foreseeable convenience factors ordinarily carry little weight. Comity requires respectful consideration of a foreign court’s decision, but the English court must reach its own conclusion. Article 2 of Council Regulation 44 of 2001 does not prevent parties from agreeing that a court in a non-member state should determine their disputes. A party benefiting from the jurisdiction clause may obtain a stay extending to a closely connected claim against another defendant where the proceedings could expose it to consequential liability.

Winnetka brought English proceedings against Julius Baer International Ltd and Bank Julius Baer & Company Ltd concerning alleged failures to deliver share certificates after investment instructions were executed.

The agreements contained Guernsey governing-law and jurisdiction provisions. The Royal Court of Guernsey granted BJB an anti-suit injunction after provisionally treating the clauses as incorporated and construing the investment management agreement as conferring exclusive Guernsey jurisdiction.

The defendants applied for a general stay of the English proceedings. Winnetka disputed the incorporation and exclusivity of the clauses, relied on Article 2 of Council Regulation 44 of 2001 in respect of the English-domiciled defendant, and argued that the claim against that defendant could not be stayed.

1. Disposition. The English proceedings were stayed, subject to undertakings by BJB and JBIL concerning determination in Guernsey of a preliminary issue on incorporation of the jurisdiction clauses.
2. Although comity required respectful weight to be given to the Guernsey order, it did not require automatic enforcement. The court had to reach its own conclusion on whether a stay was appropriate.
3. A non-exclusive jurisdiction clause in favour of a named court creates a strong prima facie case that disputes should be heard there. Contractual choice will ordinarily be respected unless overwhelming or very strong reasons justify departure. Foreseeable convenience factors will ordinarily be disregarded.
4. The court provisionally considered that the investment management agreement was non-exclusive, but Guernsey remained the parties’ chosen jurisdiction and had assumed jurisdiction. No compelling reason justified departure from that choice.
5. Article 2 of Council Regulation 44 of 2001 did not compel the English court to retain the claim against the English-domiciled defendant. Owusu v Jackson concerned forum non conveniens and did not decide the effect of a jurisdiction agreement. Article 2 did not deprive competent parties of their contractual autonomy to select a non-member-state court.
6. Following Donohue v Armco, BJB’s jurisdiction agreement could justify restraining proceedings against JBIL. BJB had a sufficient interest because, on Winnetka’s pleaded case, JBIL’s alleged agency relationship could expose BJB to indemnity or consequential liability. The close connection between the claims made it appropriate to stay proceedings against both defendants.
7. The stay was conditional on BJB and JBIL not opposing a Guernsey preliminary issue concerning incorporation and not arguing that commencement of that issue amounted to submission to Guernsey jurisdiction.