Highland Crusader Offshore Partners LP & Ors v Deutsche Bank AG & Anor

A non-exclusive jurisdiction clause ordinarily accepts the possibility of parallel proceedings. Its effect depends on its wording. Foreign proceedings are not presumptively vexatious or oppressive merely because proceedings have also begun in the nominated forum. The applicant for an anti-suit injunction must establish an independent justification for restraint.

On forum non conveniens grounds, the applicant must generally establish that England is clearly the more appropriate forum and that justice requires restraint. Comity remains a separate restraint on intervention. A foreign court's reasonable acceptance of jurisdiction should ordinarily be respected, particularly where the parties and dispute have substantial connections with that jurisdiction. Agreement to English non-exclusive jurisdiction ordinarily prevents a forum challenge based on foreseeable circumstances, but does not establish the inferiority of another forum.

The three Highland appellants were hedge fund companies whose investment decisions were made in Dallas. Deutsche Bank AG, a German bank acting through its London branch, financed their purchases of asset-backed securities through Global Master Repurchase Agreements. Deutsche Bank Securities Inc, its associated US company, participated as agent. The agreements selected English law and submitted the parties to English jurisdiction, while expressly preserving proceedings in other countries of competent jurisdiction.

After disputed margin calls and default notices, Highland sued both Deutsche Bank companies in Texas. Its claims included alleged misrepresentations by an employee of Deutsche Bank Securities Inc, improper valuations, fraud and breach of contract. Deutsche Bank AG subsequently claimed payment in the Commercial Court. The Texas court refused the banks' application to dismiss or stay the Texas proceedings.

Tomlinson J refused Highland an extension of time to challenge English jurisdiction. Burton J permitted Deutsche Bank Securities Inc to join the English action and granted an anti-suit injunction restraining Highland's Texas proceedings. Highland sought permission to appeal those decisions. The principal issue was whether parallel foreign proceedings were presumptively vexatious or oppressive under a non-exclusive English jurisdiction clause, and how comity affected the injunction.

The court unanimously allowed the appeal against the anti-suit injunction and set it aside. Permission to appeal the refusal of an extension of time and the joinder order was refused. Toulson LJ delivered the principal judgment, with which Carnwath and Goldring LJJ agreed.

1. The effect of a non-exclusive jurisdiction clause depended first on its wording. Such a clause ordinarily contemplated the possibility of parallel proceedings. Some clauses might restrict parallel proceedings in particular circumstances, but that required individual contractual interpretation. The express reservation in paragraph 17 of the agreements prevented reliance on that paragraph alone as establishing vexation or oppression.

2. There was no general presumption that proceedings outside the nominated forum were vexatious or oppressive unless justified by unforeseeable or exceptional circumstances. Agreement to English non-exclusive jurisdiction ordinarily prevented a challenge to English proceedings on foreseeable forum grounds. It did not establish that another forum was inappropriate. Burton J had therefore misdirected himself.

3. Sabah Shipyard (Pakistan) Limited v Islamic Republic of Pakistan, [2002] EWCA Civ 1643, was best understood as protecting a contractual right to litigate in England against foreign proceedings seeking to prevent its exercise. Alternatively, its particular facts established oppression. It did not establish a general presumption against parallel proceedings. Later first-instance reasoning adopting that presumption was wrong, although the court did not question the outcomes of the stay or service applications in those cases.

4. The court could restrain foreign proceedings when justice required it. In an alternative-forum case, the applicant generally had to establish that England was clearly the more appropriate forum and that justice required restraint. Parallel litigation and a preference for England did not themselves suffice. Comity required caution and recognition that courts applying different legal policies might reasonably assess connecting factors differently.

5. On exercising the discretion afresh, the court attached little weight to which proceedings began first. More important was the Texas court's refusal to decline jurisdiction after argument on the competing forum considerations. Highland and the disputed transactions had substantial Dallas connections. That court's acceptance of jurisdiction should be respected. This was not an exceptional case warranting intervention, whatever view the English court might take of the rival forums.

6. The alleged fraud could not be dismissed without examining evidence. There was at least a good arguable case that the contractual no-action clause did not exclude deliberate deception and conspiracy claims. It therefore supplied no sustainable contractual basis for restraint. The English proceedings would continue. Joinder was plainly convenient given the allegations of joint liability, and the refusal to extend time disclosed no serious basis for challenge.

• Court of Appeal (Civil Division): In [2009] EWCA Civ 725 , permission to appeal the anti-suit injunction was granted, the appeal allowed and the injunction set aside. Permission to appeal the extension-of-time and joinder decisions was refused.
• High Court, Commercial Court: Burton J permitted Deutsche Bank Securities Inc to join the English proceedings following the hearing on 2 April 2009. On 3 April 2009 he restrained further prosecution of the Texas proceedings and required Highland to seek their stay pending the English proceedings.
• High Court, Commercial Court: On 29 January 2009 Tomlinson J refused Highland an extension of time to challenge English jurisdiction.